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What changed in ACADIA PHARMACEUTICALS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ACADIA PHARMACEUTICALS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+604 added−491 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in ACADIA PHARMACEUTICALS INC's 2025 10-K

604 paragraphs added · 491 removed · 390 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

133 edited+80 added−45 removed140 unchanged
Biggest changeCoverage and Reimbursement Sales of our products and our product candidates, if approved, depend and will depend, in part, on the extent to which such products will be covered by third-party payors, such as government health care programs, commercial insurance and managed healthcare organizations. These third-party payors are increasingly limiting coverage and/or reducing reimbursements for medical products and services.
Biggest changeThese third-party payors are increasingly limiting coverage and/or reducing reimbursements for medical products and services. A third-party payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved.
The term “remuneration” has been broadly interpreted to include anything of value. • Federal false claims and false statement laws, including the federal civil False Claims Act, and civil monetary penalties laws, prohibit, among other things, any person or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent. 14 • The U.S. federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), created additional federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors or making any false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and their implementing regulations, imposes obligations on covered entities, including certain healthcare providers, health plans, and healthcare clearinghouses, and their respective business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity as well as their covered subcontractors, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.
The term “remuneration” has been broadly interpreted to include anything of value. • Federal false claims and false statement laws, including the federal civil False Claims Act, and civil monetary penalties laws, prohibit, among other things, any person or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent. • The U.S. federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), created additional federal criminal statutes that prohibit among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors or making any false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. 14 • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and their implementing regulations, imposes obligations on covered entities, including certain healthcare providers, health plans, and healthcare clearinghouses, and their respective business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity as well as their covered subcontractors, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.
Either party may terminate the manufacturing agreement prior to expiration upon an uncured material breach by the other party, upon the dissolution or liquidation of the other party, the commencement of insolvency procedures that are not dismissed within a certain period of time, the appointment of any receiver, trustee or assignee to take possession of the properties of the other party or the cessation of all or substantially all of the other party's business operations, upon certain continuing patent infringement, regulatory litigation or other legal proceedings involving the manufacture of our API, upon a continuing force majeure affecting the other party, or if no services are currently being 20 provided under the manufacturing agreement.
Either party may terminate the manufacturing agreement prior to expiration upon an uncured material breach by the other party, upon the dissolution or liquidation of the other party, the commencement of insolvency procedures that are not dismissed within a certain period of time, the appointment of any receiver, trustee or assignee to take possession of the properties of the other party or the cessation of all or substantially all of the other party’s business operations, upon certain continuing patent infringement, regulatory litigation or other legal proceedings involving the manufacture of our API, upon a continuing force majeure affecting the other party, or if no services are currently being provided under the manufacturing agreement.
Once the MA is obtained in all EU Member States and study results are included in the product information, even when negative, the product is eligible for a six-month extension to the Supplementary Protection Certificate, if any is in effect at the time of authorization or, in the case of orphan medicinal products, a two-year extension of orphan market exclusivity.
Once the MA is obtained in all EU Member 19 States and study results are included in the product information, even when negative, the product is eligible for a six-month extension to the Supplementary Protection Certificate, if any is in effect at the time of authorization or, in the case of orphan medicinal products, a two-year extension of orphan market exclusivity.
We have retained third-party logistics service providers to perform a variety of functions related to the distribution of NUPLAZID, including warehousing, customer service, order-taking, invoicing, collections, and shipment and returns processing. We have contracted with manufacturers to produce supplies of trofinetide to support the development program and for commercial sale. We have contracted with Corden Pharma Bergamo S.p.A.
We have retained third-party logistics service providers to perform a variety of functions related to the distribution of NUPLAZID, including warehousing, customer service, order-taking, invoicing, collections, and shipment and returns processing. DAYBUE (trofinetide) We have contracted with manufacturers to produce supplies of trofinetide to support the development program and for commercial sale. We have contracted with Corden Pharma Bergamo S.p.A.
To support the application, the MA holder must provide the EMA or the competent authority with a consolidated version of the Common Technical Document providing up-to-date data concerning the quality, safety and efficacy of the product, including all variations introduced since the MA was granted, at least nine months before the MA ceases to be valid.
To support the application, the MA holder must provide the EMA or the competent authority with 18 a consolidated version of the Common Technical Document providing up-to-date data concerning the quality, safety and efficacy of the product, including all variations introduced since the MA was granted, at least nine months before the MA ceases to be valid.
This Health Technology Assessment (HTA) of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU Member States, including those representing the larger markets. The HTA 19 process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country.
This Health Technology Assessment (HTA) of medicinal products is becoming an increasingly common part of the pricing and reimbursement procedures in some EU Member States, including those representing the larger markets. The HTA process is the procedure to assess therapeutic, economic and societal impact of a given medicinal product in the national healthcare systems of the individual country.
Atypical antipsychotics are associated with a number of off-target and dose-limiting side effects, such as extrapyramidal symptoms, orthostatic hypotension, hematologic abnormalities, and metabolic, gastrointestinal and sedative effects. These off-target toxicities are associated with increased risk for falls, infection, aspiration pneumonia, and other serious complications in this vulnerable patient population.
Atypical antipsychotics are associated with a number of off-target and dose-limiting side effects, such as 7 extrapyramidal symptoms, orthostatic hypotension, hematologic abnormalities, and metabolic, gastrointestinal and sedative effects. These off-target toxicities are associated with increased risk for falls, infection, aspiration pneumonia, and other serious complications in this vulnerable patient population.
Acadia will lead further clinical development, regulatory submissions, and global commercialization efforts for ACP-711 while also providing financial support for Saniona’s ongoing Phase 1 study and preparations for Phase 2. Essential tremor is a neurological disorder that causes involuntary shaking in the hands, head, voice, and sometimes the legs.
Acadia will lead further clinical development, regulatory submissions, and global commercialization efforts for ACP-711 while also providing financial support for Saniona’s ongoing Phase 1 study and preparations for Phase 2. Essential tremor is a disorder that causes involuntary shaking in the hands, head, voice, and sometimes the legs.
If any product candidate is approved by the FDA or comparable foreign regulatory authorities for commercial sale, we will need to contract with a third party, which may be an existing service provider or a new service provider, to manufacture such product for commercial sale in the U.S. and/or other applicable jurisdictions.
Other Products If any product candidate is approved by the FDA or comparable foreign regulatory authorities for commercial sale, we will need to contract with a third party, which may be an existing service provider or a new service provider, to manufacture such product for commercial sale in the U.S. and/or other applicable jurisdictions.
We plan to execute on this strategy by enhancing the growth of the commercial products in our core franchises while expanding our pipeline of product candidates through business development, partnerships and collaborations. 3 Key elements of our strategy are to: • Maximize growth of our successful commercialization of NUPLAZID for Parkinson’s disease psychosis in the United States.
We plan to execute on this strategy by enhancing the growth of the commercial products in our core franchises while expanding our pipeline of product candidates through business development, partnerships and collaborations. Key elements of our strategy are to: • Maximize growth of our successful commercialization of NUPLAZID for Parkinson’s disease psychosis in the United States.
We are building targeted capabilities beyond the United States including in the European Union, Japan and Canada in order to meet patient needs on a global scale. 4. Patient Empowerment . We seek to engage with patients, caregivers and advocacy organizations and incorporate their feedback into our drug development and commercialization efforts.
We are building targeted capabilities beyond the United States including in the European Union, and Japan in order to meet patient needs on a global scale. 4. Patient Empowerment . We seek to engage with patients, caregivers and advocacy organizations and incorporate their feedback into our drug development and commercialization efforts.
We cannot predict what healthcare reform initiatives may be adopted in the future. Europe / Rest of World Government Regulation Outside of the United States, our ability to market a product is contingent upon receiving a marketing authorization from the appropriate regulatory authorities.
We cannot predict what healthcare reform initiatives may be adopted in the future. 16 Europe / Rest of World Government Regulation Outside of the United States, our ability to market a product is contingent upon receiving a marketing authorization from the appropriate regulatory authorities.
Individual EU Member States retain the power to authorize the conduct of clinical trials on their territory. The CTR foresaw a three-year transition period that ended on January 31, 2025. Since this date, all new or ongoing trials are subject to the provisions of the CTR.
Individual EU Member States retain the power to authorize the conduct of clinical trials on their territory. 17 The CTR foresaw a three-year transition period that ended on January 31, 2025. Since this date, all new or ongoing trials are subject to the provisions of the CTR.
Under the manufacturing agreement, Acadia GmbH has agreed to purchase specified percentages of our commercial requirements of the pimavanserin API at a predefined price. The parties may also agree in the future on additional services under the manufacturing agreement with respect to non-commercial supply or development activities.
Under the manufacturing agreement with Siegfried, Acadia GmbH has agreed to purchase specified percentages of our commercial requirements of the pimavanserin API at a predefined price. The parties may also agree in the future on additional services under the manufacturing agreement with respect to non-commercial supply or development activities.
The initial term of the manufacturing agreement ended in the first quarter of 2023, but the agreement automatically renewed for a two-year term and will automatically renew for subsequent two-year terms unless either party provides timely notice of its intent not to renew, or unless the manufacturing agreement is terminated early pursuant to its terms.
The initial term of the manufacturing agreement ended in the first quarter of 2023, but the agreement automatically renewed for two-year terms and will automatically renew for subsequent two-year terms unless either party provides timely notice of its intent not to renew, or unless the manufacturing agreement is terminated early pursuant to its terms.
We licensed worldwide intellectual property rights related to pimavanserin in certain indications to Acadia Pharmaceuticals GmbH, our wholly-owned Swiss subsidiary (Acadia GmbH). Our active pharmaceutical ingredient (API) has been manufactured in Switzerland for over 10 years and we anticipate continuing to manufacture in Switzerland.
NUPLAZID (pimavanserin) We licensed worldwide intellectual property rights related to pimavanserin in certain indications to Acadia Pharmaceuticals GmbH, our wholly-owned Swiss subsidiary (Acadia GmbH). Our active pharmaceutical ingredient (API) has been manufactured in Switzerland for over 10 years and we anticipate continuing to manufacture in Switzerland.
We intend to make trofinetide available in markets outside the U.S. where Rett syndrome remains a significant unmet medical need as DAYBUE is the only currently approved treatment for Rett syndrome worldwide, and is currently only approved in the United States and Canada.
We intend to make trofinetide available in markets outside the U.S. where Rett syndrome remains a significant unmet medical need as DAYBUE is the only currently approved treatment for Rett syndrome worldwide, and is currently only approved in the United States, Canada and Israel.
Before marketing in the United States, any new drug developed by us must undergo rigorous preclinical testing, clinical trials and an extensive regulatory clearance process implemented by the FDA under the Federal Food, Drug, and Cosmetic Act, as amended.
Before marketing in the United States, any new drug developed by us 11 must undergo rigorous preclinical testing, clinical trials and an extensive regulatory clearance process implemented by the FDA under the Federal Food, Drug, and Cosmetic Act, as amended.
The initial term of the manufacturing agreement will end in November 2027, but the agreement will automatically renew for subsequent two-year terms unless either party provides timely notice of its intent not to renew, or unless the manufacturing agreement is terminated early pursuant to its terms.
The initial term of the manufacturing agreement will end in November 2027, but the agreement will automatically renew for subsequent two-year terms unless either party provides timely notice of its intent not to renew, or unless the manufacturing agreement is 23 terminated early pursuant to its terms.
We intend to accelerate the growth of NUPLAZID by 1) activating consumers with our direct-to-consumer campaigns, 2) leveraging real world evidence, and 3) increasing field force efficiency with greater use of information technology tools.
We intend to accelerate the growth of NUPLAZID by 1) increasing field force size and efficiency with greater use of information technology tools, 2) leveraging real world evidence, and 3) activating consumers with our direct-to-consumer campaigns.
The maximum timeframe for the evaluation of an MAA under the centralized procedure is 210 days, excluding clock stops when additional information or written or oral explanation 17 is to be provided by the applicant in response to questions of the CHMP.
The maximum timeframe for the evaluation of an MAA under the centralized procedure is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP.
However, the FDA is not legally required to complete its review within these periods, these 12 performance goals may change over time and the review is often extended by FDA requests for additional information or clarification.
However, the FDA is not legally required to complete its review within these periods, these performance goals may change over time and the review is often extended by FDA requests for additional information or clarification.
NUPLAZID is available in 34 mg capsule and 10 mg tablet dosage forms. Parkinson’s disease is the second most common neurodegenerative disorder after Alzheimer’s disease.
NUPLAZID is available in 34 mg capsule and 10 mg tablet dosage forms. 5 Parkinson’s disease is the second most common neurodegenerative disorder after Alzheimer’s disease.
The composition of matter patent covering pimavanserin and salts thereof currently has an expiration date in 2030, including a patent term extension approved by the U.S. Patent and Trademark Office. The patents covering the polymorph form and the use of pimavanserin or NUPLAZID for our approved indication are currently set to expire between 2024 and 2028.
The composition of matter patent covering pimavanserin and salts thereof currently has an expiration date in 2030, including a patent term extension approved by the U.S. Patent and Trademark Office. The patents covering the polymorph form and the use of pimavanserin or NUPLAZID for our approved indication are currently set to expire between 2026 and 2028.
The FDA approval of DAYBUE for the treatment of Rett syndrome was based on the positive results from our pivotal Phase 3 LAVENDER ™ study which demonstrated statistically significant and clinically meaning improvement over placebo for both co-primary endpoints in the study as well as the key secondary endpoint of the study.
The FDA approval of DAYBUE for the treatment of Rett syndrome was based on the positive results from our pivotal Phase 3 LAVENDER ™ study which demonstrated statistically significant and clinically meaningful improvement over placebo for both co-primary endpoints in the study as well as the key secondary endpoint of the study.
Ten of these are Orange Book-listed patents that relate to pimavanserin, NUPLAZID and our approved indication, and cover the general formula of the compound, the composition of matter, with claims specifically directed to pimavanserin and salts thereof, the specific polymorph form of pimavanserin, the approved formulations, and the use thereof for treating our approved indication.
Nine of these are Orange Book-listed patents that relate to pimavanserin, NUPLAZID and our approved indication, and cover the general formula of the compound, the composition of matter, with claims specifically directed to pimavanserin and salts thereof, the specific polymorph form of pimavanserin, the approved formulations, and the use thereof for treating our approved indication.
Trofinetide We currently hold the exclusive licenses to 8 U.S. patents from Neuren that relate to trofinetide, methods of manufacturing and methods of use of trofinetide. We also hold a U.S. patent to crystalline trofinetide. Three of the U.S. patents are listed in the Orange Book, including a patent claiming the use of trofinetide for treating Rett syndrome.
Trofinetide We currently hold the exclusive licenses to 7 U.S. patents from Neuren that relate to trofinetide, methods of manufacturing and methods of use of trofinetide. We also hold a U.S. patent to crystalline trofinetide. Three of the U.S. patents are listed in the Orange Book, including a patent claiming the use of trofinetide for treating Rett syndrome.
Interactions between pharmaceutical companies and health care professionals are governed by strict laws, such as national anti-bribery laws of European countries, national sunshine rules, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.
Interactions between pharmaceutical companies and healthcare professionals are governed by strict laws, such as national anti-bribery laws of European countries, national sunshine rules, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.
The patents cover the general formula of the compound, the composition of matter (with claims specifically directed to ACP-204 and salts thereof), and the use thereof for treating certain indications, including ADP and LBDP. The composition of matter patent covering ACP-204 and salts thereof currently has an expiration date in 2038. These patent terms include adjustments made by the U.S.
The patents cover the general formula of the compound, the composition of matter (with claims specifically directed to remlifanserin and salts thereof), and the use thereof for treating certain indications, including ADP and LBDP. The composition of matter patent covering remlifanserin and salts thereof currently has an expiration date in 2038. These patent terms include adjustments made by the U.S.
In addition, we may terminate the agreement prior to expiration upon timely notice to CoreRx in event (i) any regulatory authority takes an enforcement or other regulatory action against CoreRx’s facility which affects CoreRx’s ability to process trofinetide products, (ii) any regulatory authority takes an action or raises any objection that prevents us from manufacturing, importing, exporting, purchasing or selling trofinetide products, or (iii) we determine to discontinue commercialization of trofinetide products in the U.S. due to safety or efficacy reasons.
In addition, we may terminate the agreement prior to expiration upon timely notice to Bend in the event (i) any regulatory authority takes an enforcement or other regulatory action against Bend’s facility which affects Bend’s ability to process trofinetide products, (ii) any regulatory authority takes an action or raises any objection that prevents us from manufacturing, importing, exporting, purchasing or selling trofinetide products, or (iii) we determine to discontinue commercialization of trofinetide products in the U.S. due to safety or efficacy reasons.
If we are found to be in violation of any of these laws or any other federal or state regulations, we may be subject to significant administrative, civil and/or criminal penalties, damages, fines, disgorgement, imprisonment, exclusion from federal health care programs, additional reporting requirements and/or oversight, and the curtailment or restructuring of our operations.
If we are found to be in violation of any of these laws or any other federal or state regulations, we may be subject to significant administrative, civil and/or criminal penalties, damages, fines, disgorgement, imprisonment, exclusion from federal healthcare programs, additional reporting requirements and/or oversight, and the curtailment or restructuring of our operations.
We completed Phase 1 studies of ACP-204 in over 200 patients; data to date support its target product profile as a potential treatment for ADP. In the fourth quarter of 2023, we initiated the Phase 2 RADIANT study of ACP-204 for the treatment of hallucinations and delusions associated with ADP.
We completed Phase 1 studies of remlifanserin in over 200 patients; data to date support its target product profile as a potential treatment for ADP. In the fourth quarter of 2023, we initiated the Phase 2 RADIANT study of remlifanserin for the treatment of hallucinations and delusions associated with ADP.
The initial term of the manufacturing agreement ended in December 2024, but the agreement automatically renewed for a two-year term and will automatically renew for subsequent two-year terms unless either party provides timely notice of its intent not to renew, or unless the manufacturing agreement is terminated earlier pursuant to its terms.
The initial term of the manufacturing agreement ended in December 2021, but the agreement automatically renewed for two-year terms, and will automatically renew for subsequent two-year terms unless either party provides timely notice of its intent not to renew, or unless the manufacturing agreement is terminated earlier pursuant to its terms.
We are a party to various license agreements that give us rights to use certain technologies in our research and development, subject to certain limitations. 10 Pimavanserin We currently hold 26 U.S. patents that relate to pimavanserin, NUPLAZID and methods of use of pimavanserin.
We are a party to various license agreements that give us rights to use certain technologies in our research and development, subject to certain limitations. Pimavanserin We currently hold 25 U.S. patents that relate to pimavanserin, NUPLAZID and methods of use of pimavanserin.
Marketing Much like the Anti-Kickback Statute prohibition in the United States, as described below, the provision of benefits or advantages to physicians and other health care professionals to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the EU.
Much like the Anti-Kickback Statute prohibition in the United States, as described below, the provision of benefits or advantages to physicians and other healthcare professionals to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the EU.
Our failure to compete effectively could have a material adverse effect on our business. Intellectual Property We currently hold approximately 54 issued U.S. patents and a significant number of related issued foreign patents. We have also exclusively licensed rights to an additional 23 issued U.S. patents, and a number of related foreign patents.
Our failure to compete effectively could have a material adverse effect on our business. Intellectual Property We currently hold approximately 49 issued U.S. patents and a significant number of related issued foreign patents. We have also exclusively licensed rights to an additional 33 issued U.S. patents, and a number of related foreign patents.
In addition to these commercial products, we have a portfolio of product candidates and research programs that are designed to address significant unmet medical needs in CNS disorders and rare diseases.
In addition to these commercial products, we have a portfolio of product candidates and research programs that are designed to address significant unmet medical needs in neurological and rare diseases.
Based on 2024 claims data, we estimate that between 5,500 and 5,800 people are diagnosed with Rett Syndrome in the U.S. We estimate a prevalent population of 6,000 to 9,000 people in the U.S. In March 2023, the FDA approved DAYBUE for the treatment of Rett syndrome, making it the first and only drug approved for this condition.
Based on 2024 claims data, we estimate that approximately 6,000 people are diagnosed with Rett Syndrome in the U.S. We estimate a prevalent population of 6,000 to 9,000 people in the U.S. 6 In March 2023, the FDA approved DAYBUE for the treatment of Rett syndrome, making it the first and only drug approved for this condition.
Our experienced commercial team is comprised of rare disease field-based specialists, patient access services, commercial operations, and sales force planning and management. In addition, our commercial infrastructure includes capabilities in manufacturing, health outcomes, medical affairs, quality control, and compliance.
The sales force is supported by an experienced sales leadership team. Our experienced commercial team is comprised of rare disease field-based specialists, patient access services, commercial operations, and sales force planning and management. In addition, our commercial infrastructure includes capabilities in manufacturing, health outcomes, medical affairs, quality control, and compliance.
Our neuroscience franchise is anchored by the commercial product NUPLAZID (pimavanserin), which is the first and only drug approved by the U.S. Food and Drug Administration (FDA) for the treatment of hallucinations and delusions associated with PDP.
Our neurological disease franchise is anchored by the commercial product NUPLAZID (pimavanserin), which is the first and only drug approved by the U.S. Food and Drug Administration (FDA) for the treatment of hallucinations and delusions associated with Parkinson’s disease psychosis (PDP).
The programs are currently in various stages of discovery. Competition We face, and will continue to face, intense competition from pharmaceutical and biotechnology companies, as well as numerous academic and research institutions and governmental agencies, both in the United States and abroad. We compete, or will compete, with existing and new products being developed by our competitors.
Competition We face, and will continue to face, intense competition from pharmaceutical and biotechnology companies, as well as numerous academic and research institutions and governmental agencies, both in the United States and abroad. We compete, or will compete, with existing and new products being developed by our competitors.
By way of example, in March 2010, Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the ACA) was signed into law, which intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add transparency requirements for the healthcare and health insurance industries, impose taxes and fees on the health industry and impose additional health policy reforms. 15 There have been amendments and executive, judicial and Congressional challenges to certain aspects of the ACA.
By way of example, in March 2010, Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the ACA) was signed into law, which intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add transparency requirements for the healthcare and health insurance industries, impose taxes and fees on the health industry and impose additional health policy reforms.
(Patheon), a subsidiary of Thermo Fisher Scientific Inc., to manufacture NUPLAZID 10 mg tablet and 34 mg capsule drug product for commercial use in the United States. We have also contracted with a second contract manufacturing organization to manufacture NUPLAZID 34 mg drug product for commercial use in the United States.
We have contracted with Patheon Pharmaceuticals Inc. (Patheon), a subsidiary of Thermo Fisher Scientific Inc., to manufacture NUPLAZID 10 mg tablet and 34 mg capsule drug product for commercial use in the United States.
For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients, authorization through the centralized procedure is optional on related approval.
For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients, authorization through the centralized procedure is optional on related approval. Under the centralized procedure, the EMA’s CHMP conducts the initial assessment of a product.
A third-party payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage for a drug product does not ensure that other payors will also provide coverage for the drug product. Coverage policies and third-party payor reimbursement rates may change at any time.
Further, one payor’s determination to provide coverage for a drug product does not ensure that other payors will also provide coverage for the drug product. Coverage policies and third-party payor reimbursement rates may change at any time.
Our neuro-rare disease franchise is anchored by the commercial product DAYBUE, which is the first and only drug approved for the treatment of Rett syndrome. Net product sales from these two commercial products totaled $957.8 million for 2024, compared with $726.4 million for 2023.
Our rare disease franchise is anchored by the commercial product DAYBUE, which is the first and only drug approved for the treatment of Rett syndrome. Net product sales from these two commercial products totaled $1,071.5 million for 2025, compared with $957.8 million for 2024.
As the first and only drug approved by the FDA for the treatment of hallucinations and delusions associated with PDP, NUPLAZID provides an innovative approach to the treatment of PDP without compromising motor control and potentially avoiding many of the debilitating side effects of existing antipsychotics. In connection with the FDA approval of NUPLAZID, we agreed to four post-marketing commitments.
As the first and only drug approved by the FDA for the treatment of hallucinations and delusions associated with PDP, NUPLAZID provides an innovative approach to the treatment of PDP without compromising motor control and potentially avoiding many of the debilitating side effects of existing antipsychotics.
Four of such customers, each based in the United States, accounted for approximately 73% of our NUPLAZID product revenue and 48% of our total product revenue for the year ended December 31, 2024.
Four of such customers, each based in the United States, accounted for approximately 79% of our NUPLAZID product revenue and 44% of our total product revenue for the year ended December 31, 2025.
We believe that with an approximate 20% current market share of the 130,000 Parkinson’s disease patients that are treated with an atypical antipsychotic annually in the United States, we have ample opportunity to grow sales of NUPLAZID while delivering increasing annual cash flow to reinvest in overall corporate growth. • Drive new patient adoption of DAYBUE for the treatment of patients with Rett syndrome in the United States.
We believe that with an approximate 25% current market share of the 130,000 Parkinson’s disease patients that are treated with an atypical antipsychotic annually in the United States, we have ample opportunity to grow sales of NUPLAZID while delivering increasing annual cash flow to reinvest in overall corporate growth.
We sell DAYBUE to a single wholesale distributor with specialty pharmacy service, which performs a variety of functions related to the distribution of DAYBUE, including warehousing, customer service, order-taking, shipment and returns processing.
We sell DAYBUE in the U.S. to a single wholesale distributor with specialty pharmacy service, which performs a variety of functions related to the distribution of DAYBUE, including warehousing, customer service, order-taking, shipment and returns processing. We sell DAYBUE outside of the U.S. through third party distributors.
ACP-2591 ACP-2591 is a cGP analogue for which we obtained global rights to evaluate for use in Rett syndrome and Fragile X syndrome from Neuren as part of our expanded licensing agreement in July 2023. ACP-2591 is currently in Phase 1 development . ACP-271 ACP-271 is a GPR88 agonist being evaluated in neurology and is currently in the IND-enabling stage.
ACP-2591 ACP-2591 is a cGP analogue for which we obtained global rights to evaluate for use in Rett syndrome and Fragile X syndrome from Neuren as part of our expanded licensing agreement in July 2023. ACP-2591 is currently in Phase 1 development .
(Corden), to manufacture the API for trofinetide products. Under the manufacturing agreement with Corden, we have agreed to purchase from Corden the API for trofinetide products at specified price per volume and a specified percentage of our commercial requirements of trofinetide API for the United States and Canada market.
Under the manufacturing agreement with Corden, we have agreed to purchase from Corden the API for trofinetide products at specified price per volume and a specified percentage of our commercial requirements of trofinetide API for the United States and Canada market. We and Corden may also agree in the future on additional services under the manufacturing agreement.
Our intangible assets, comprised of right-of-use assets and other intangibles acquired, totaled $166.4 million, $117.3 million and $55.6 million as of December 31, 2024, 2023 and 2022, respectively. Employees and Human Capital Employees. At December 31, 2024, we had a total of 654 employees, 653 of whom were full-time.
Our intangible assets, comprised of right-of-use assets and other intangibles acquired, totaled $156.2 million, $166.4 million and $117.3 million as of December 31, 2025, 2024 and 2023, respectively. Employees and Human Capital Employees. At December 31, 2025, we had a total of 798 employees, 796 of whom were full-time.
We have a deep and diverse early-stage portfolio of product candidates that includes disclosed and undisclosed programs focused on neuropsychiatric and neuro-rare diseases that we believe represent significant opportunities to continue to build on our current growth. We continue to look to add product candidates to the portfolio through business development.
We have a deep and diverse early-stage portfolio of product candidates that includes disclosed and undisclosed programs focused on neurological and rare diseases that we believe represent significant opportunities to continue to build on our current growth.
We continue to file and prosecute patent applications directed to ACP-711 worldwide. Government Regulation Our business activities, including the manufacturing and marketing of our products and any future approved products and our ongoing research and development activities, are subject to extensive regulation by numerous governmental authorities in the United States and other countries.
Government Regulation Our business activities, including the manufacturing and marketing of our products and any future approved products and our ongoing research and development activities, are subject to extensive regulation by numerous governmental authorities in the United States and other countries.
Any such approved importation plans, if implemented, may result in lower drug prices for products covered by those programs. We expect that healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and lower reimbursement, and additional downward pressure on the price that we receive for our products and any future approved products.
We expect that healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and lower reimbursement, and additional downward pressure on the price that we receive for our products and any future approved products.
At this time, the fastest growing neurological disorder in the world is Parkinson’s disease. The development of psychosis in patients with Parkinson’s disease substantially contributes to the burden of Parkinson’s disease and deeply affects their quality of life.
At this time, the fastest growing neurological disorder in the world is Parkinson’s disease. The development of psychosis in patients with Parkinson’s disease substantially contributes to the burden of Parkinson’s disease and deeply affects their quality of life. PDP is associated with a diminished quality of life, nursing home placement, and increased caregiver stress and burden.
Antisense Oligonucleotide (ASO) Programs In January 2022, we entered into a license and collaboration with Stoke Therapeutics, Inc. (Stoke) to discover, develop and commercialize novel RNA-based medicines for the potential treatment of severe and rare genetic neurodevelopmental diseases of the CNS. The collaboration includes three programs: SYNGAP1 syndrome, Rett syndrome (MECP2) and an undisclosed CNS target of mutual interest.
Antisense Oligonucleotide (ASO) Program In January 2022, we entered into a license and collaboration with Stoke Therapeutics, Inc. (Stoke) to discover, develop and commercialize novel RNA-based medicines for the potential treatment of severe and rare genetic neurodevelopmental diseases of the central nervous system (CNS). The collaboration includes a discovery program for SYNGAP1 syndrome.
The initial term of the manufacturing agreement ended in December 2021, but the agreement automatically renewed twice, each time for a two-year term, and it will automatically renew for subsequent two-year terms unless either party provides timely notice of its intent not to renew, or unless the manufacturing agreement is terminated earlier pursuant to its terms.
The initial term of the manufacturing agreement ended in the first quarter of 2023, but the agreement automatically renewed for two-year terms and will automatically renew for subsequent two-year terms unless either party provides timely notice of its intent not to renew, or unless the manufacturing agreement is terminated early pursuant to its terms.
Long-Lived Assets Our tangible long-lived assets are comprised of intangible assets and property and equipment. Our property and equipment totaled $4.2 million, $4.6 million, and $6.0 million as of December 31, 2024, 2023 and 2022, respectively. All of our tangible long-lived assets are located in the United States.
Our property and equipment totaled $7.5 million, $4.2 million, and $4.6 million as of December 31, 2025, 2024 and 2023, respectively. A majority of our tangible long-lived assets are located in the United States.
In the European Union, where we estimate a prevalent population of 9,000 to 12,000 Rett syndrome patients, we filed our marketing authorization application (MAA) with the European Medicines Agency (EMA) in January 2025 and are building out our launch team in anticipation of a potential approval in the first quarter of 2026.
In the European Union, where we estimate a prevalent population of 9,000 to 12,000 Rett syndrome patients, we filed our marketing authorization application (MAA) with the European Medicines Agency (EMA) in January 2025.
We continue to prosecute patent applications directed to pimavanserin, formulations of pimavanserin, methods of manufacturing, and to methods of treating various diseases using pimavanserin, either alone or in combination with other agents, worldwide.
We also have foreign patents that cover manufacturing of pimavanserin in Europe and Asia. 10 We continue to prosecute patent applications directed to pimavanserin, formulations of pimavanserin, methods of manufacturing, and to methods of treating various diseases using pimavanserin, either alone or in combination with other agents.
However, if the conditions are not fulfilled within the timeframe set by the EMA and approved by the European Commission, the MA will cease to be renewed. 18 An MA may also be granted “under exceptional circumstances” where the applicant can show that it is unable to provide comprehensive data on efficacy and safety under normal conditions of use even after the product has been authorized and subject to specific procedures being introduced.
An MA may also be granted “under exceptional circumstances” where the applicant can show that it is unable to provide comprehensive data on efficacy and safety under normal conditions of use even after the product has been authorized and subject to specific procedures being introduced.
Under the manufacturing agreement with Patheon described above, we also have the right to purchase trofinetide products for commercial use. In addition, we have contracted with CoreRx Inc. (CoreRx) to manufacture trofinetide products for commercial use. We and CoreRx may also agree in the future on additional services under the agreement.
In addition, we have contracted with Bend Biosciences, formerly known as CoreRx Inc., (Bend) to manufacture trofinetide products for commercial use. We and Bend may also agree in the future on additional services under the agreement.
The FDA may conclude that we or our collaborators or contract manufacturers are not in compliance with applicable cGMP requirements and other FDA regulatory requirements, which may result in delay or failure to approve applications, warning letters, product recalls and/or imposition of fines or penalties. 13 If a product is approved, we must also comply with post-marketing requirements, including, but not limited to, compliance with advertising and promotion laws enforced by various government agencies, including the FDA’s Office of Prescription Drug Promotion, and through such laws as federal and state anti-fraud and abuse laws, including anti-kickback and false claims laws, healthcare information privacy and security laws, post-marketing safety surveillance, and disclosure of payments or other transfers of value to healthcare professionals and entities.
If a product is approved, we must also comply with post-marketing requirements, including, but not limited to, compliance with advertising and promotion laws enforced by various government agencies, including the FDA’s Office of Prescription Drug Promotion, and through such laws as federal and state anti-fraud and abuse laws, including anti-kickback and false claims laws, healthcare information privacy and security laws, post-marketing safety surveillance, and disclosure of payments or other transfers of value to healthcare professionals and entities.
Many of our competitors and their collaborators have significantly greater experience than we do in the following: • identifying and validating targets; • screening compounds against targets; • preclinical studies and clinical trials of potential pharmaceutical products; • obtaining FDA and other regulatory approvals; and • commercializing pharmaceutical products.
Many of our competitors and their collaborators have significantly greater experience than we do in the following: • identifying and validating targets; • screening compounds against targets; • preclinical studies and clinical trials of potential pharmaceutical products; • obtaining FDA and other regulatory approvals; and • commercializing pharmaceutical products. 9 In addition, many of our competitors and their collaborators have substantially greater advantages in the following areas: • capital resources; • research and development resources; • manufacturing capabilities; • sales and marketing; and • production and testing facilities.
In addition, we are investing in the development of four core strategic capabilities to support and accelerate our growth over the long term. These capabilities form the foundation of our operational strategy and are designed to enhance our competitive position, drive innovation, and meet the evolving needs of patients worldwide.
These capabilities form the foundation of our operational strategy and are designed to enhance our competitive position, drive innovation, and meet the evolving needs of patients worldwide. The four core capabilities in which we are investing are: 1. Precision Medicine .
We plan to initiate a Phase 2 study in LBDP in the third quarter of 2025. ACP-711 as a Treatment for Essential Tremor In November 2024, we entered into an exclusive worldwide license agreement with Saniona A/S (Saniona) for the development and commercialization of ACP-711 (formerly SAN711). We intend to study ACP-711 as a potential treatment for essential tremor.
ACP-711 as a Treatment for Essential Tremor In November 2024, we entered into an exclusive worldwide license agreement with Saniona A/S (Saniona) for the development and commercialization of ACP-711 (formerly SAN711). We intend to study ACP-711 as a potential treatment for essential tremor. ACP-711 is a highly selective GABA A -α3 positive allosteric modulator.
With the completion of the trial, we believe we now have completed the FDA’s requirements to qualify for a pediatric exclusivity for pimavanserin. If the pediatric exclusivity is granted, exclusivity of the NUPLAZID franchise would be extended by six months. We do not intend to further explore pimavanserin in these or any additional indications.
The trial did not meet either of its primary or secondary endpoints. With the completion of the trial, we believe we now have completed the FDA’s requirements to qualify for a pediatric exclusivity for pimavanserin. If the pediatric exclusivity is granted, exclusivity of the NUPLAZID franchise would be extended by six months.
Under the manufacturing agreement with Patheon, we have agreed to purchase from Patheon a specified percentage of our commercial requirements of NUPLAZID for the United States. Under the agreement, Patheon will also perform specified validation services.
Patheon may terminate the manufacturing agreement if we assign the manufacturing agreement or any of our rights under the manufacturing agreement to a Patheon competitor. • Under the manufacturing agreement with Catalent, we have agreed to purchase from Catalent NUPLAZID for commercial use in the United States. Under the agreement, Catalent will also perform specified validation services.
We also may terminate the manufacturing agreement for any other reason on three years’ prior notice to Patheon. Patheon may terminate the manufacturing agreement if we assign the manufacturing agreement or any of our rights under the manufacturing agreement to a Patheon competitor.
We also may terminate the manufacturing agreement for any other reason on three years’ prior notice to Patheon.
We plan to achieve this by 1) substantially increasing our field force and increasing their utilization of predictive analytics, 2) launching branded direct-to-consumer campaigns, and 3) deploying an omni-channel strategy to bring DAYBUE clinical data to life by leveraging the growing body of real world experience, including updated data from the ongoing LOTUS study.
We plan to achieve this by 1) increasing field force size, 2) increasing field force efficiency with greater use of information technology tools following an increase in field force size in 2025, 3) continuing branded direct-to-consumer campaigns, and 4) deploying an omni-channel strategy to bring DAYBUE clinical data to life by leveraging the growing body of real world experience, including updated data from the ongoing LOTUS study.
Under the license agreement with Neuren, we continue to file and prosecute patent applications directed to trofinetide, formulations of trofinetide, methods of manufacturing and methods of treating Rett syndrome using trofinetide.
Under the license agreement with Neuren, we continue to file and prosecute patent applications directed to trofinetide, formulations of trofinetide, methods of manufacturing and methods of treating Rett syndrome using trofinetide. Remlifanserin ( formerly ACP-204) We currently hold two U.S. patents that relate to remlifanserin and methods of use of remlifanserin.
In addition, the U.S. government, state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results.
In addition, the U.S. government, state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. For example, the U.S.
Guidelines from the EMA detail the type of quantity of supplementary data to be provided for different types of biological product. Pricing, Coverage and Reimbursement In the EU, pricing and reimbursement schemes vary widely from country to country.
Guidelines from the EMA detail the type of quantity of supplementary data to be provided for different types of biological product.
Under the centralized procedure, the EMA’s Committee for Medicinal Products for Human Use (CHMP) conducts the initial assessment of a product. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing MA.
The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing MA.
By utilizing these tools, we hope to generate, analyze, and apply data in innovative ways to enhance the efficiency and effectiveness of our operations in ways that ultimately drive growth and improve patient outcomes. 4 3. Globalization .
We plan to leverage advanced technologies, including artificial intelligence (AI) and machine learning (ML) throughout our business from discovery through commercialization. By utilizing these tools, we hope to generate, analyze, and apply data in innovative ways to enhance the efficiency and effectiveness of our operations in ways that ultimately drive growth and improve patient outcomes. 3. Globalization .
Patent and Trademark Office, but not extensions. We also hold issued foreign patents in Australia, China and Japan. We continue to file and prosecute patent applications directed to ACP-204 worldwide. 11 ACP-711 We currently hold the exclusive licenses to one U.S. patent that relates to ACP-711 from Saniona A/S, with claims specifically directed to ACP-711 and salts thereof.
Patent and Trademark Office, but not extensions. We also hold issued foreign patents in Europe, Australia, China, Japan, Mexico and other countries. We continue to file and prosecute patent applications directed to remlifanserin worldwide. ACP-211 We currently hold five U.S. patents that relate to ACP-211 with claims specifically and generally directed to ACP-211 and salts thereof.
In addition, Saniona is eligible to receive tiered royalties of mid-single digits to low double digits on net sales of commercial products 8 that may result from development of ACP-711.
Under the terms of the license agreement, Saniona received $28 million upfront plus potential milestone payments of up to $582 million. In addition, Saniona is eligible to receive tiered royalties of mid-single digits to low double digits on net sales of commercial products that may result from development of ACP-711.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOnce a clinical trial has begun, it may be delayed, suspended or terminated due to a number of factors, including: • competition for internal and external resources, including clinical sites and study patients, that we may choose to allocate to other programs; • ongoing discussions with regulatory authorities regarding the scope or design of our clinical trials or requests by them for supplemental information with respect to our clinical trial results; • imposition of clinical holds by regulatory authorities or institutional review boards; • failure to conduct clinical trials in accordance with regulatory requirements; • inability to monitor patients adequately during or after treatment; • difficulty monitoring multiple study sites; • patient enrollment, which is a function of many factors, most of which is outside our control, including the size of the patient population, the nature of the protocol, the proximity of patients to clinical trial sites, the availability of effective treatments for the relevant disease and the eligibility criteria for the clinical trial; • lower than anticipated screening or retention rates of patients in clinical trials; • serious adverse events or side effects experienced by participants; and • insufficient supply or deficient quality of product candidates or other materials necessary for the conduct of our clinical trials.
Biggest changeOnce a clinical trial has begun, it may be delayed, suspended, varied or terminated due to a number of factors, including: • competition for internal and external resources, including clinical sites and study patients, that we may choose to allocate to other programs; • ongoing discussions with regulatory authorities regarding the scope or design of our clinical trials or requests by them for supplemental information with respect to our clinical trial results; • imposition of clinical holds by regulatory authorities, institutional review boards or Ethics Committees; • failure to conduct clinical trials in accordance with regulatory requirements or other irregularities in clinical trial conduct; • inability to monitor patients adequately during or after treatment; • difficulty monitoring multiple study sites; • patient enrollment, which is a function of many factors, most of which is outside our control, including the size of the patient population, the nature of the protocol (including limitations in the protocol that further limit the size of the potential trial population such as, for example, our Phase 2 RADIANT study, which is subject to certain defined enrollment criteria that has caused enrollment to take longer than expected), the proximity of patients to clinical trial sites, the availability of effective treatments for the relevant disease and the eligibility criteria for the clinical trial; • lower than anticipated screening or retention rates of patients in clinical trials; • serious adverse events or side effects experienced by participants; and • insufficient supply or deficient quality of product candidates or other materials necessary for the conduct of our clinical trials. 34 In addition, enrollment and retention of patients in, or the ability to receive results from, clinical trials could be disrupted by geopolitical or macroeconomic developments.
However, there is no assurance that FDA will confirm that such requirements have been met and that the pediatric exclusivity will be granted. An unfavorable outcome in any of our ongoing or future development efforts for trofinetide or in the post-marketing studies for DAYBUE could be a major set-back for the programs and for us, generally.
However, there is no assurance that the FDA will confirm that such requirements have been met and that the pediatric exclusivity will be granted. An unfavorable outcome in any of our ongoing or future development efforts for trofinetide or in the post-marketing studies for DAYBUE could be a major set-back for the programs and for us, generally.
In connection with our January 2016 public offering of common stock, we entered into a formal registration rights agreement with the Baker Entities to provide for these rights.
In connection with our January 2016 public offering of common stock, we entered into a formal registration rights agreement with the Baker Entities to provide for these rights (2016 Registration Rights Agreement).
Our business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline because of many factors, some of which are outside our control, including, but not limited to, the following: • the extent to which patients, caregivers and physicians recognize and diagnose the indications for which our products are approved and accept and adopt our products as a treatment for such indications; • the scope and terms of the FDA’s approval of our products, including the inclusion of a boxed warning for NUPLAZID or other warnings and precautions for our products; • physicians may not prescribe our products and patients may be unwilling to use our products, due to a number of factors, including if coverage is not provided, coverage changes in the future, reimbursement is inadequate to cover a significant portion of the cost, negative or changing perceptions of each product’s clinical profile and clinical benefits or due to the prevalence and severity of any adverse side effects; 23 • the experiences of those adopting our products earlier could have significant impact on future adoption of our products by other physicians, patients and caregivers, either favorably or unfavorably, based on clinical benefits and side effects experienced; • any new clinical data, post-approval studies or real world results, including in jurisdictions other than the U.S., could result in the FDA making changes to the product label or withdrawal from the market, and could impact regulatory approvals for other indications in the U.S. or other jurisdictions, if any, any of which could result in significant expense and delay or limit our ability to generate sales revenues; • our products are becoming available to a larger number of patients and patients’ experiences and results with our products may not be consistent with, or may be more negative when compared to, the experiences and results of those treated in our clinical trials; • successful expansion and development of our commercial team and sales forces; and • any negative publicity related to our products.
Our business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline because of many factors, some of which are outside our control, including, but not limited to, the following: • the extent to which patients, caregivers and physicians recognize and diagnose the indications for which our products are approved and accept and adopt our products as a treatment for such indications; • the scope and terms of the FDA’s approval of our products, including the inclusion of a boxed warning for NUPLAZID or other warnings and precautions for our products; • physicians may not prescribe our products and patients may be unwilling to use our products, due to a number of factors, including if coverage is not provided, coverage changes in the future, reimbursement is inadequate to cover a significant portion of the cost, negative or changing perceptions of each product’s clinical profile and clinical benefits or due to the prevalence and severity of any adverse side effects; • the experiences of those adopting our products earlier could have significant impact on future adoption of our products by other physicians, patients and caregivers, either favorably or unfavorably, based on clinical benefits and side effects experienced; • any new clinical data, post-approval studies or real world results, including in jurisdictions other than the U.S., could result in the FDA making changes to the product label or withdrawal from the market, and could impact regulatory approvals for other indications in the U.S. or other jurisdictions, if any, any of which could result in significant expense and delay or limit our ability to generate sales revenues; • our products are becoming available to a larger number of patients and patients’ experiences and results with our products may not be consistent with, or may be more negative when compared to, the experiences and results of those treated in our clinical trials; • successful expansion and development of our commercial team and sales forces; and • any negative publicity related to our products.
The degree of market acceptance by physicians, healthcare professionals, patients, caregivers and third-party payors of our products, and our profitability and growth, will depend on a number of factors, including: • the ability to provide acceptable evidence of safety and efficacy; • the scope of the approved indication(s) for the product; • the inclusion of any warnings or contraindications in the product label; • the relative convenience and ease of administration; • the relative timing, or perceived timing, in which patients experience outcomes; • the prevalence and severity of any actual or expected adverse side effects; • the availability of alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • our ability to increase awareness of our approved products through marketing efforts; • pricing and cost effectiveness, which may be subject to regulatory control; • effectiveness of our or our collaborators’ sales and marketing strategy; • publicity concerning us, our products or competing products and treatments; and • our ability to obtain and maintain sufficient third-party insurance coverage or adequate reimbursement levels.
The degree of market acceptance by physicians, healthcare professionals, patients, caregivers and third-party payors of our products, and our profitability and growth, will depend on a number of factors, including: • the ability to provide acceptable evidence of safety and efficacy; 26 • the scope of the approved indication(s) for the product; • the inclusion of any warnings or contraindications in the product label; • the relative convenience and ease of administration; • the relative timing, or perceived timing, in which patients experience outcomes; • the prevalence and severity of any actual or expected adverse side effects; • the availability of alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • our ability to increase awareness of our approved products through marketing efforts; • pricing and cost effectiveness, which may be subject to regulatory control; • effectiveness of our or our collaborators’ sales and marketing strategy; • publicity concerning us, our products or competing products and treatments; and • our ability to obtain and maintain sufficient third-party insurance coverage or adequate reimbursement levels.
Our clinical trials face a number of risks, and our product candidates may fail regardless of whether our collaborators successfully complete the clinical trials and apply for such required authorizations for a number of reasons, including: • a product candidate may fail to receive the regulatory clearances required to market them as drugs; • a product candidate may be subject to proprietary rights held by others requiring the negotiation of a license agreement prior to marketing; • a product candidate may be difficult or expensive to manufacture on a commercial scale; • a product candidate may have adverse side effects that make their use less desirable; • a product candidate may fail to compete with product candidates or other treatments commercialized by competitors; • a product candidate may not prove to be efficacious or safe; • patients may die or suffer other adverse effects for reasons that may or may not be related to the product candidate being tested; • the results of clinical trials may not be consistent with positive results of earlier trials; and 28 • the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities.
Our clinical trials face a number of risks, and our product candidates may fail regardless of whether our collaborators successfully complete the clinical trials and apply for such required authorizations for a number of reasons, including: • a product candidate may fail to receive the regulatory clearances required to market them as drugs; • a product candidate may be subject to proprietary rights held by others requiring the negotiation of a license agreement prior to marketing; • a product candidate may be difficult or expensive to manufacture on a commercial scale; • a product candidate may have adverse side effects that make their use less desirable; • a product candidate may fail to compete with product candidates or other treatments commercialized by competitors; • a product candidate may not prove to be efficacious or safe; • patients may die or suffer other adverse effects for reasons that may or may not be related to the product candidate being tested; • the results of clinical trials may not be consistent with positive results of earlier trials; and • the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities.
The following factors, in addition to other risk factors described in this section, may have a significant impact on the market price of our common stock: • the success of our commercialization of our products; • the status and cost of development and commercialization of our products and product candidates, if approved, including compounds being developed under our collaborations; • whether we acquire or in-license additional product candidates or products, and the status of development and commercialization of such product candidates, if approved, or products; • the status and cost of development and commercialization of trofinetide for indications other than Rett syndrome and in jurisdictions outside North America; • any other communications or guidance from the FDA or other regulatory authorities that pertain to our products or product candidates; • the status and cost of our PMRs for DAYBUE; 55 • the initiation, termination, or reduction in the scope of our collaborations or any disputes or developments regarding our collaborations; • market conditions or trends related to biotechnology and pharmaceutical industries, or the market in general; • announcements of technological innovations, new products, or other material events by our competitors or us, including any new products that we may acquire or in-license; • disputes or other developments concerning our proprietary and intellectual property rights; • fluctuations in our operating results; • changes in, or failure to meet, securities analysts’ or investors’ expectations of our financial performance; • our failure to meet applicable Nasdaq listing standards and the possible delisting of our common stock from the Nasdaq Stock Market; • additions or departures of key personnel; • discussions of our business, products, financial performance, prospects, or stock price by the financial and scientific press and online investor communities such as blogs and chat rooms; • public concern as to, and legislative action with respect to, genetic testing or other research areas of biopharmaceutical companies, the pricing and availability of prescription drugs, or the safety of drugs and drug delivery techniques; • regulatory developments in the U.S. and in foreign countries; • changes in the structure of healthcare payment systems; • the announcement of, or developments in, any litigation matters; • disruptions caused by geopolitical or macroeconomic developments or other business interruptions, as well as any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy and supply chain; and • economic and political factors, including but not limited to economic and financial crises, wars, terrorism, and political unrest.
The following factors, in addition to other risk factors described in this section, may have a significant impact on the market price of our common stock: • the success of our commercialization of our products; • the status and cost of development and commercialization of our products and product candidates, if approved, including compounds being developed under our collaborations; • whether we acquire or in-license additional product candidates or products, and the status of development and commercialization of such product candidates, if approved, or products; • the status and cost of development and commercialization of trofinetide for indications other than Rett syndrome and in jurisdictions outside North America; • any other communications or guidance from the FDA or other regulatory authorities that pertain to our products or product candidates; • the status and cost of our PMRs for DAYBUE; • the initiation, termination, or reduction in the scope of our collaborations or any disputes or developments regarding our collaborations; • market conditions or trends related to biotechnology and pharmaceutical industries, or the market in general; 61 • announcements of technological innovations, new products, or other material events by our competitors or us, including any new products that we may acquire or in-license; • disputes or other developments concerning our proprietary and intellectual property rights; • fluctuations in our operating results; • changes in, or failure to meet, securities analysts’ or investors’ expectations of our financial performance; • our failure to meet applicable Nasdaq listing standards and the possible delisting of our common stock from the Nasdaq Stock Market; • additions or departures of key personnel; • discussions of our business, products, financial performance, prospects, or stock price by the financial and scientific press and online investor communities such as blogs and chat rooms; • public concern as to, and legislative action with respect to, genetic testing or other research areas of biopharmaceutical companies, the pricing and availability of prescription drugs, or the safety of drugs and drug delivery techniques; • regulatory developments in the U.S. and in foreign countries; • changes in the structure of healthcare payment systems; • the announcement of, or developments in, any litigation matters; • disruptions caused by geopolitical or macroeconomic developments or other business interruptions, as well as any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy and supply chain; and • economic and political factors, including but not limited to economic and financial crises, wars, terrorism, and political unrest.
In addition, the government may assert that a claim including items and services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; • the U.S. federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services.
In addition, the government may assert that a claim including items and services resulting from a violation of the U.S. federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; 51 • the U.S. federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which imposes criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statement, in connection with the delivery of, or payment for, healthcare benefits, items or services.
Federal Food, Drug and Cosmetic Act (FDCA), which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices; 46 • the U.S. federal physician payment transparency requirements, sometimes referred to as the “Physician Payments Sunshine Act”, which was enacted as part of the ACA and its implementing regulations and requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the CMS information related to certain payments and other transfers of value made to physicians (as defined to include doctors of medicine, dentists, optometrists, podiatrists and chiropractors under such law), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members; and • analogous state and local laws and regulations, including: state anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state and local laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities and/or the registration of pharmaceutical sales representatives; and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Federal Food, Drug and Cosmetic Act (FDCA), which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices; • the U.S. federal physician payment transparency requirements, sometimes referred to as the “Physician Payments Sunshine Act”, which was enacted as part of the ACA and its implementing regulations and requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the CMS information related to certain payments and other transfers of value made to physicians (as defined to include doctors of medicine, dentists, optometrists, podiatrists and chiropractors under such law), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members; and • analogous state and local laws and regulations, including: state and foreign anti-kickback and false claims laws, which may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state and local laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities and/or the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for our products or product candidates, if approved; • injury to our reputation; • withdrawal of clinical trial participants; • initiation of investigations by regulators; • costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • loss of revenue; • exhaustion of any available insurance and our capital resources; • the inability to commercialize our products or product candidates, if approved; and • a decline in our stock price.
Regardless of the merits or eventual outcome, liability claims may result in: 58 • decreased demand for our products or product candidates, if approved; • injury to our reputation; • withdrawal of clinical trial participants; • initiation of investigations by regulators; • costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • loss of revenue; • exhaustion of any available insurance and our capital resources; • the inability to commercialize our products or product candidates, if approved; and • a decline in our stock price.
If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans or restrictions on processing personal data; and orders to destroy or not use personal data.
If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans or restrictions on processing personal data; and orders to destroy or not use personal 54 data.
We may be held liable for any resulting damages costs or liabilities, which could exceed our resources, and state or federal or other applicable authorities may curtail our use of certain materials and/or interrupt our business operations. Furthermore, environmental, health and safety laws and regulations are complex, change frequently and have tended to become more stringent.
We may be held liable for any resulting damages costs or liabilities, which could exceed our resources, and state or federal or other applicable authorities may curtail our use of certain materials and/or interrupt our business operations. Furthermore, environmental, 41 health and safety laws and regulations are complex, change frequently and have tended to become more stringent.
The implementation of cost-containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. 45 We are subject, directly and indirectly, to federal, state and foreign healthcare laws and regulations, including healthcare fraud and abuse laws, false claims laws, physician payment transparency laws and health information privacy and security laws.
The implementation of cost-containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. We are subject, directly and indirectly, to federal, state and foreign healthcare laws and regulations, including healthcare fraud and abuse laws, false claims laws, physician payment transparency laws and health information privacy and security laws.
Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no 48 assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs, good clinical practices, international council for harmonization guidelines and good laboratory practices, each of which are regulations and guidelines enforced by regulatory authorities for all of our nonclinical and clinical development and for any clinical trials that we conduct post-approval.
These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMPs, licensing requirements, good clinical practices, international council for harmonization guidelines and good laboratory practices, each of which are regulations and guidelines enforced by regulatory authorities for all of our nonclinical and clinical development and for any clinical trials that we conduct post-approval.
Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data. For example, some of our data processing practices may be challenged under wiretapping laws, if we obtain consumer information from third parties through various methods, including chatbot and session replay providers, or via third-party marketing pixels.
Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data. For example, some of our data processing practices may be challenged under wiretapping laws, if we obtain consumer information from third parties through various methods, including chatbot and session replay providers, cookies or via third-party marketing pixels.
Conflicts may arise in our collaborations due to one or more of the following: • disputes or breaches with respect to payments that we believe are due under the applicable agreements, particularly in the current environment when companies, including large established ones, may be seeking to reduce external payments; • disputes on strategy as to what development or commercialization activities should be pursued under the applicable agreements; • disputes as to the responsibility for conducting development and commercialization activities pursuant to the applicable collaboration, including the payment of costs related thereto; • disagreements with respect to ownership of intellectual property rights; 37 • unwillingness on the part of a collaborator to keep us informed regarding the progress of its development and commercialization activities, or to permit public disclosure of these activities; • delay or reduction of a collaborator’s development or commercialization efforts with respect to our product candidates, if approved; or • termination or non-renewal of the collaboration.
Conflicts may arise in our collaborations due to one or more of the following: • disputes or breaches with respect to payments that we believe are due under the applicable agreements, particularly in the current environment when companies, including large established ones, may be seeking to reduce external payments; • disputes on strategy as to what development or commercialization activities should be pursued under the applicable agreements; 42 • disputes as to the responsibility for conducting development and commercialization activities pursuant to the applicable collaboration, including the payment of costs related thereto; • disagreements with respect to ownership of intellectual property rights; • unwillingness on the part of a collaborator to keep us informed regarding the progress of its development and commercialization activities, or to permit public disclosure of these activities; • delay or reduction of a collaborator’s development or commercialization efforts with respect to our product candidates, if approved; or • termination or non-renewal of the collaboration.
During times of war and other major conflicts, we and the third parties with whom we work may be vulnerable to a 53 heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
During times of war and other major conflicts, we and the third parties with whom we work may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services.
Outside the U.S., reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. Further, one payor’s determination to provide coverage and reimbursement for a product does not ensure that other payors will also provide coverage and reimbursement for the product.
Outside the U.S., reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. 28 Further, one payor’s determination to provide coverage and reimbursement for a product does not ensure that other payors will also provide coverage and reimbursement for the product.
In connection with the FDA approval of DAYBUE, we agreed to the following post-marketing requirements (PMRs): a clinical study of renal impairment in healthy volunteers, nonclinical carcinogenicity studies and nonclinical in vitro and clinical in vivo drug interaction studies. The FDA has released us from one of the five PMRs. In addition, we have fulfilled one of the five PMRs.
In connection with the FDA approval of DAYBUE, we agreed to the following post-marketing requirements (PMRs): a clinical study of renal impairment in healthy volunteers, nonclinical carcinogenicity studies and nonclinical in vitro and clinical in vivo drug interaction studies. The FDA has released us from one of the five PMRs. In addition, we have fulfilled three of the five PMRs.
To the extent we cannot maintain or increase sales of our products, our business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline. We have two products that are approved for commercialization in the U.S.: NUPLAZID and DAYBUE.
To the extent we cannot establish, maintain or increase sales of our products, our business, financial condition and results of operations may be materially adversely affected and the price of our common stock may decline. We have two products that are approved for commercialization in the U.S.: NUPLAZID and DAYBUE.
As a result, if 34 we earn net taxable income, we may be unable to use all or a material portion of our net operating loss carryforwards and other tax attributes, which could potentially result in increased future tax liability to us and adversely affect our future cash flows.
As a result, if we earn net taxable income, we may be unable to use all or a material portion of our net operating loss carryforwards and other tax attributes, which could potentially result in increased future tax liability to us and adversely affect our future cash flows.
A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our products. 54 We may expend significant resources or fundamentally change our business activities and practices (including our clinical trials) to try to protect against security incidents.
A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our products. We may expend significant resources or fundamentally change our business activities and practices (including our clinical trials) to try to protect against security incidents.
Our failure to compete effectively could have a material adverse effect on our business. 52 If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our products, or development or commercialization of our product candidates, if approved.
Our failure to compete effectively could have a material adverse effect on our business. If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our products, or development or commercialization of our product candidates, if approved.
Our employees and personnel use generative artificial intelligence (AI) technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws regulating generative AI.
Our employees and personnel use generative artificial intelligence (AI) technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws and regulations regulating generative AI.
Our strategy includes distributing NUPLAZID in the U.S. and DAYBUE or trofinetide, as applicable, in the U.S., Canada and other jurisdictions in which marketing is approved solely through a limited network of third-party specialty distributors, specialty pharmacies or other third-party partners.
Our strategy includes distributing NUPLAZID in the U.S. and DAYBUE or trofinetide, as applicable, in the U.S. and other jurisdictions in which marketing is approved solely through a limited network of third-party specialty distributors, specialty pharmacies or other third-party partners.
The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions pursuant to our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions.
The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions pursuant to our intercompany arrangements or 38 disagree with our determinations as to the income and expenses attributable to specific jurisdictions.
If a government authority were to conclude that we provided improper advice and/or encouraged the submission of a false claim for reimbursement, we could face action against us by government authorities.
If a government authority were to conclude that we provided improper advice and/or encouraged the submission of a false claim for reimbursement, we could 52 face action against us by government authorities.
Through the process created by the Budget Control Act of 2011, there are automatic reductions of Medicare payments to providers up to 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments, including the Infrastructure Investment and Jobs Act and the Consolidated Appropriations Act of 2023, will remain in effect through 2032 unless additional Congressional action is taken.
For example, through the process created by the Budget Control Act of 2011, there are automatic reductions of Medicare payments to providers up to 2% per fiscal year, which went into effect in April 2013 and, due to subsequent legislative amendments, including the Infrastructure Investment and Jobs Act and the Consolidated Appropriations Act of 2023, will remain in effect through 2032 unless additional Congressional action is taken.
In the future, if we are not able to issue an evaluation of our internal control over financial reporting, as required, or we or our independent registered public accounting firm determine that our internal control over financial reporting is not effective, this shortcoming could have an adverse effect on our business and financial results and the price of our common stock could be negatively affected.
For example, in the future, if we are not able to issue an evaluation of our internal control over financial reporting, as required, or we or our independent registered public accounting firm determine that our internal control over financial reporting is not effective, this shortcoming could have an adverse effect on our business and financial results and the price of our common stock could be negatively affected.
In the past, following periods of volatility in the market price of a particular company’s securities, securities class action litigation has often been brought against that company.
In the past, following periods of volatility in the market price of a particular company’s securities, securities class action litigation has been brought against that company.
In addition, the current administration has proposed substantial reductions in force at various government agencies that, if applied in a material way, could significantly reduce the FDA’s and other agencies’ capacities to perform their functions in a manner consistent with past practices and could negatively impact our business.
In addition, the current administration has enacted substantial reductions in force at various government agencies that, if applied in a material way, could significantly reduce the FDA’s and other agencies’ capacities to perform their functions in a manner consistent with past practices and could negatively impact our business.
Our future capital requirements will depend on, and could increase significantly as a result of, many factors, including: • the costs of acquiring additional product candidates or research and development programs; • the scope, prioritization and number of our research and development programs; • the ability of our collaborators and us to reach the milestones and other events or developments triggering payments under our collaboration or license agreements, or our collaborators’ ability to make payments under these agreements; • our ability to enter into new collaboration and license agreements; • the progress in, and the costs of, our ongoing and planned development activities for pimavanserin, post-marketing studies for DAYBUE to be conducted over the next several years, and ongoing and planned commercial activities for our products; • the costs of our development activities for our product candidates; • the costs of commercializing our products, including the maintenance and development of our sales and marketing capabilities; • the costs of establishing, or contracting for, sales and marketing capabilities for our product candidates; • the amount of U.S. product sales from our products; • the costs of preparing applications for regulatory approvals for DAYBUE in jurisdictions other than the U.S., for NUPLAZID in additional indications other than PDP and for other product candidates, as well as the costs required to support review of such applications; 32 • the costs of manufacturing and distributing our products for commercial use in the U.S.; • our ability to obtain regulatory approval for, and subsequently generate product sales from, NUPLAZID for the negative symptoms of schizophrenia, or from DAYBUE, and our product candidates; • the extent to which we are obligated to reimburse collaborators or collaborators are obligated to reimburse us for costs under collaboration agreements; • the costs involved in filing, prosecuting, enforcing, and defending patent claims and other intellectual property rights; • the costs of maintaining or securing manufacturing arrangements for clinical or commercial production of pimavanserin, trofinetide or other product candidates; and • the costs associated with litigation, including the costs incurred in defending against any product liability claims that may be brought against us related to our products.
Our future capital requirements will depend on, and could increase significantly as a result of, many factors, including: • the costs of acquiring additional product candidates or research and development programs; • the scope, prioritization and number of our research and development programs; • the ability of our collaborators and us to reach the milestones and other events or developments triggering payments under our collaboration or license agreements, or our collaborators’ ability to make payments under these agreements; • our ability to enter into new collaboration and license agreements; • the progress in, and the costs of, our ongoing and planned development activities for pimavanserin, post-marketing studies for DAYBUE to be conducted over the next several years, and ongoing and planned commercial activities for our products; • the costs of our development activities for our product candidates; • the costs of commercializing our products, including the maintenance and development of our sales and marketing capabilities; • the costs of establishing, or contracting for, sales and marketing capabilities for our product candidates; • the amount of U.S. product sales from our products; • the costs of preparing applications for regulatory approvals for DAYBUE in jurisdictions other than the U.S. and for other product candidates, as well as the costs required to support review of such applications; • the costs of manufacturing and distributing our products for commercial use in the U.S.; • our ability to obtain regulatory approval for, and subsequently generate product sales from our product candidates; • the extent to which we are obligated to reimburse collaborators or collaborators are obligated to reimburse us for costs under collaboration agreements; • the costs involved in filing, prosecuting, enforcing, and defending patent claims and other intellectual property rights; • the costs of maintaining or securing manufacturing arrangements for clinical or commercial production of pimavanserin, trofinetide or other product candidates; and 36 • the costs associated with litigation, including the costs incurred in defending against any product liability claims that may be brought against us related to our products.
The success of this strategy depends in large part on the combination of our regulatory, development and commercial capabilities and expertise and our ability to identify, select and acquire or in-license clinically-enabled product candidates for the treatment of CNS disorders and rare diseases, or for therapeutic indications that complement or augment our current products and product candidates, or that otherwise fit into our development or strategic plans on terms that are acceptable to us.
The success of this strategy depends in large part on the combination of our regulatory, development and commercial capabilities and expertise and our ability to identify, select and acquire or in-license clinically-enabled product candidates for the treatment of neurological and rare diseases, or for therapeutic indications that complement or augment our current products and product candidates, or that otherwise fit into our development or strategic plans on terms that are acceptable to us.
Discovery of any issues post-approval, including any safety concerns, such as carcinogenicity, unexpected side effects or drug-drug interaction problems, adverse events of unanticipated severity or frequency, or concerns over misuse or abuse of the product, problems with the facilities where the product is manufactured, tested, packaged or distributed, or failure to comply with regulatory requirements, may result in, among other things, restrictions on our products or on us, including: • withdrawal of approval, addition of warnings or narrowing of the approved indication in the product label; • requirement of a Risk Evaluation and Mitigation Strategy to mitigate the risk of off-label use in populations where the FDA may believe that the potential risks of use may outweigh its benefits; • voluntary or mandatory recalls; • warning letters; • suspension of any ongoing clinical studies; • refusal by the FDA or comparable foreign regulatory authorities to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of product approvals; • restrictions on operations, including restrictions on the marketing or manufacturing of the product or the imposition of costly new manufacturing requirements; or 27 • seizure or detention, or refusal to permit the import or export of products.
Discovery of any issues post-approval, including any safety concerns, such as carcinogenicity, unexpected side effects or drug-drug interaction problems, adverse events of unanticipated severity or frequency, or concerns over misuse or abuse of the product, problems with the facilities where the product is manufactured, tested, packaged or distributed, or failure to comply with regulatory requirements, may result in, among other things, restrictions on our products or on us, including: • withdrawal or variation of approval, addition of warnings or narrowing of the approved indication in the product label; • requirement of a Risk Evaluation and Mitigation Strategy to mitigate the risk of off-label use in populations where the FDA may believe that the potential risks of use may outweigh its benefits; • voluntary or mandatory recalls; • warning letters; • suspension, variation or termination of any ongoing clinical studies; • refusal by the FDA or comparable foreign regulatory authorities to approve pending applications or supplements to approved applications filed by us, or suspension, variation or revocation of product approvals; • restrictions on operations, including restrictions on the marketing or manufacturing of the product or the imposition of costly new manufacturing requirements; • material fines or other types of penalties; or • seizure or detention, or refusal to permit the import or export of products.
While we have entered into agreements with each of these distributors and pharmacies to distribute NUPLAZID in the U.S. and DAYBUE in the U.S. and Canada, we will need to enter into similar agreements in any jurisdictions in which trofinetide is approved, and such distributors and pharmacies may not perform as agreed or they may terminate their agreements with us.
While we have entered into agreements with each of these distributors and pharmacies to distribute NUPLAZID in the U.S. and DAYBUE in the U.S. and other jurisdictions in which marketing is approved, we will need to enter into similar agreements in any jurisdictions in which trofinetide is approved, and such distributors and pharmacies may not perform as agreed or they may terminate their agreements with us.
We may not be able to continue or fully exploit our collaborations with outside scientific and clinical advisors, which could impair the progress of our clinical trials and our research and development efforts. We work with scientific and clinical advisors at academic and other institutions who are experts in the field of CNS disorders and rare diseases.
We may not be able to continue or fully exploit our collaborations with outside scientific and clinical advisors, which could impair the progress of our clinical trials and our research and development efforts. We work with scientific and clinical advisors at academic and other institutions who are experts in the field of neurological and rare diseases.
If this were to occur, it could materially and adversely affect our business operations and financial performance. 29 Delays, suspensions and terminations in our clinical trials for our product candidates could result in increased costs to us and delay our ability to generate product revenues.
If this were to occur, it could materially and adversely affect our business operations and financial performance. 33 Delays, suspensions, variations and terminations in our clinical trials for our product candidates could result in increased costs to us and delay our ability to generate product revenues.
We have no manufacturing facilities and only limited experience as an organization in the manufacturing of drugs or in designing drug-manufacturing processes. We have contracted with third-party manufacturers to produce, in collaboration with us, our products and product candidates. We have contracted with Patheon Pharmaceuticals Inc.
We have no manufacturing facilities and only limited experience as an organization in the manufacturing of drugs or in designing drug-manufacturing processes. We have contracted with third-party manufacturers to produce, in collaboration with us, our products and product candidates.
Some of the factors that could cause our operating results to fluctuate from period to period include: • the success of our commercialization of our products; • the impact of geopolitical and macroeconomic developments, general political, health and economic conditions, as well as any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy and supply chain, pandemics or epidemics, economic slowdowns, recessions, inflation, high interest rates and tightening of credit markets on our business; • the status and cost of our PMRs for DAYBUE; • the variation in our gross-to-net adjustments from quarter to quarter, primarily because of the fluctuation in our share of the donut hole for Medicare Part D patients; • the status and cost of development and commercialization of trofinetide for indications other than for the treatment of Rett syndrome; • the status and cost of development and commercialization of our product candidates, if approved, including compounds being developed under our collaborations; • whether we acquire or in-license additional product candidates or products, and the status of development and commercialization of such product candidates, if approved, or products; • whether we generate revenues or reimbursements by achieving specified research, development or commercialization milestones under any agreements or otherwise receive potential payments under these agreements; • whether we are required to make payments due to achieving specified milestones under any licensing or similar agreements or otherwise make payments under these agreements; 33 • the incurrence of preclinical or clinical expenses that could fluctuate significantly from period to period, including reimbursement obligations pursuant to our collaboration agreements; • the initiation, termination, or reduction in the scope of our collaborations or any disputes regarding these collaborations; • the timing of our satisfaction of applicable regulatory requirements; • the rate of expansion of our clinical development, other internal research and development efforts, and pre-commercial and commercial efforts; • the effect of competing technologies and products and market developments; • the costs associated with litigation, including the costs incurred in defending against any product liability claims that may be brought against us related to our products or our product candidates; and • general and industry-specific economic conditions.
Some of the factors that could cause our operating results to fluctuate from period to period include: • the success of our commercialization of our products; • the impact of geopolitical and macroeconomic developments, international tariffs, general political, health and economic conditions, as well as any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy and supply chain, pandemics or epidemics, economic slowdowns, recessions, inflation, high interest rates and tightening of credit markets on our business; • the status and cost of our PMRs for DAYBUE; • the variation in our gross-to-net adjustments from quarter to quarter, primarily because of the fluctuation in our share of the donut hole for Medicare Part D patients; • the status and cost of development and commercialization of our product candidates, if approved, including compounds being developed under our collaborations; • whether we acquire or in-license additional product candidates or products, and the status of development and commercialization of such product candidates, if approved, or products; • whether we are required to make payments due to achieving specified milestones under any licensing or similar agreements or otherwise make payments under these agreements; • the incurrence of preclinical or clinical expenses that could fluctuate significantly from period to period, including reimbursement obligations pursuant to our collaboration agreements; • the initiation, termination, or reduction in the scope of our collaborations or any disputes regarding these collaborations; • the timing of our satisfaction of applicable regulatory requirements; • the rate of expansion of our clinical development, other internal research and development efforts, and pre-commercial and commercial efforts; • the effect of competing technologies and products and market developments; • the costs associated with litigation, including the costs incurred in defending against any product liability claims that may be brought against us related to our products or our product candidates; and • general and industry-specific economic conditions.
The commencement of clinical trials can be delayed for a variety of reasons, including delays in: • demonstrating sufficient safety and efficacy to obtain regulatory approval to commence a clinical trial; • reaching agreement on acceptable terms with prospective contract research organizations (CROs) and clinical trial sites; • manufacturing sufficient quantities of a product candidate; • obtaining clearance from the FDA to commence clinical trials pursuant to an Investigational New Drug application; • obtaining approval to conduct clinical trials in countries or jurisdictions outside the United States pursuant to evolving regional and local regulations (e.g., EU Clinical Trials Regulation (EU No. 536/2014)); • obtaining institutional review board approval to conduct a clinical trial at a prospective clinical trial site; and • patient recruitment, which is a function of many factors, most of which is outside our control, including the size of the patient population, the nature of the protocol, the proximity of patients to clinical trial sites, the availability of effective treatments for the relevant disease and the eligibility criteria for the clinical trial.
The commencement of clinical trials can be delayed for a variety of reasons, including delays in: • demonstrating sufficient safety and efficacy to obtain regulatory approval to commence a clinical trial; • reaching agreement on acceptable terms with prospective contract research organizations (CROs) and clinical trial sites; • manufacturing sufficient quantities of a product candidate; • obtaining clearance from the FDA to commence clinical trials pursuant to an Investigational New Drug application; • obtaining approval to conduct clinical trials in countries or jurisdictions outside the United States pursuant to evolving regional and local regulations (e.g., EU Clinical Trials Regulation (EU No. 536/2014)); • obtaining institutional review board approval or a positive Ethics Committee opinion to conduct a clinical trial at a prospective clinical trial site; and • patient recruitment, which is a function of many factors, most of which is outside our control, including the size of the patient population, the nature of the protocol (including limitations in the protocol that further limit the size of the potential trial population), the proximity of patients to clinical trial sites, the availability of effective treatments for the relevant disease and the eligibility criteria for the clinical trial.
We believe that comparisons from period to period of our financial results are not necessarily meaningful and should not be relied upon as indications of our future performance. From time to time, we provide guidance relating to our expectations for net sales of our products and certain expense line items based on estimates and the judgment of management.
We believe that comparisons from period to period of our financial results are not necessarily meaningful and should not be relied upon as indications of our future performance. 37 From time to time, we provide guidance relating to our expectations for total revenue, net sales of our products and certain expense line items based on estimates and the judgment of management at the time.
Further, changes in federal policy could affect the geopolitical landscape and could give rise to circumstances that negatively affect our business. The third parties that manufacture our products and product candidates have manufacturing activities located in Canada, Europe and Switzerland.
Further, changes in federal policy could affect the geopolitical landscape and could give rise to circumstances that negatively affect our business. The third parties that manufacture our products and product candidates have manufacturing activities located in Canada, the European Union and Switzerland.
It is unclear how any such challenges and additional healthcare reform measures of the current administration will impact the ACA and our business. Other legislative changes have been proposed and adopted in the U.S. since the ACA.
It is unclear how any healthcare reform measures of the current administration will impact the ACA and our business. Other legislative changes have been proposed and adopted in the U.S. since the ACA.
Our success depends on our ability to attract, retain, and motivate highly qualified management, scientific, and commercial personnel. In particular, our development programs depend on our ability to attract and retain highly skilled development personnel, especially in the fields of CNS disorders and rare diseases.
Our success depends on our ability to attract, retain, and motivate highly qualified management, scientific, and commercial personnel. In particular, our development programs depend on our ability to attract and retain highly skilled development personnel, especially in the fields of neurological and rare diseases.
We face, and will continue to face, intense competition from pharmaceutical and biotechnology companies, as well as numerous academic and research institutions and governmental agencies, both in the U.S. and abroad. We compete, or will compete, with existing and new products being developed by our competitors.
Competition in the pharmaceutical and biotechnology industries is intense and expected to increase. We face, and will continue to face, intense competition from pharmaceutical and biotechnology companies, as well as numerous academic and research institutions and governmental agencies, both in the U.S. and abroad. We compete, or will compete, with existing and new products being developed by our competitors.
If any of our third-party manufacturers are unable to successfully manufacture material that conforms to our specifications and the FDA’s strict regulatory requirements, or pass regulatory inspection, they will not be able to secure or maintain approval for the manufacturing facilities.
If any of our third-party manufacturers are unable to successfully manufacture material that conforms to our specifications and the FDA’s or comparable foreign regulatory authorities’ strict regulatory requirements, or 44 pass regulatory inspection, they will not be able to secure or maintain approval for the manufacturing facilities.
In addition, the facilities used by our third-party manufacturers to manufacture our products and product candidates must be approved by the FDA pursuant to inspections that will be conducted prior to any grant of regulatory approval by the FDA.
In addition, the facilities used by our third-party manufacturers to manufacture our products and product candidates must be approved by the FDA pursuant to inspections that will be conducted prior to any grant of regulatory approval by the FDA. Similar requirements apply abroad.
Any legal action against us or our collaborators could lead to: • payment of damages, which could potentially be trebled if we are found to have willfully infringed a party’s patent rights; • injunctive or other equitable relief that may effectively block our ability to further develop, commercialize, and sell products; or • we or our collaborators having to enter into license arrangements that may not be available on commercially acceptable terms, or at all.
Any legal action against us or our collaborators could lead to: • payment of damages, which could potentially be trebled if we are found to have willfully infringed a party’s patent rights; • injunctive or other equitable relief that may effectively block our ability to further develop, commercialize, and sell products; or • we or our collaborators having to enter into license arrangements that may not be available on commercially acceptable terms, or at all. 48 As a result, we could be prevented from commercializing current or future products.
Even though we have agreements with third parties for the manufacture of our products, the FDA may not approve the facilities of such manufacturers, the manufacturers may not perform as agreed, or the manufacturers may terminate their agreements with us.
Even though we have agreements with third parties for the manufacture of our products, the FDA or comparable foreign regulatory authorities may not approve the facilities of such manufacturers, the manufacturers may not perform as agreed, or the manufacturers may terminate their agreements with us.
Under the registration rights agreement, we have agreed that, if at any time and from time to time, the Baker Entities demand that we register their shares of our common stock for resale under the Securities Act, we would be obligated to effect such registration.
Under the 2016 Registration Rights Agreement, we agreed that, if at any time and from time to time, the Baker Entities demand that we register their shares of our common stock for resale under the Securities Act of 1933, as amended (the Securities Act), we would be obligated to effect such registration.
We cannot predict or estimate the total amount of the costs we may incur or the timing of such costs to comply with these rules and regulations.
We cannot predict or estimate the total amount of the costs we may incur or the timing of such costs to comply with these laws, regulations and standards.
Under current law, federal net operating losses incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal net operating loss carryforwards in a taxable year is limited to 80% of taxable income in such year.
U.S. federal net operating losses incurred in tax years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal net operating loss carryforwards in a taxable year is limited to 80% of taxable income in such year.
Numerous U.S. and foreign issued patents and pending patent applications owned by others exist in the area of CNS disorders and the other fields in which we are developing products. These could materially affect our freedom to operate.
Numerous U.S. and foreign 46 issued patents and pending patent applications owned by others exist in the area of neurological diseases and the other fields in which we are developing products. These could materially affect our freedom to operate.
At this time, we are not planning to conduct any additional clinical studies for pimavanserin. With the completion of the Pediatric Phase 2 Trial, we believe we now have completed the FDA’s requirements to qualify for a pediatric exclusivity for pimavanserin.
At this time, we are not planning to conduct any additional clinical studies for any new indications for pimavanserin or any additional clinical studies with intranasal carbetocin. With the completion of the Pediatric Phase 2 Trial, we believe we now have completed the FDA’s requirements to qualify for a pediatric exclusivity for pimavanserin.
(CoreRx) to manufacture DAYBUE for commercial use. However, we have not entered into any agreements with any alternate suppliers for 10 mg NUPLAZID drug product or NUPLAZID API. We may face delays or increased costs in our supply chain that could jeopardize the commercialization of our products.
However, we have not entered into any agreements with any alternate suppliers for 10 mg NUPLAZID drug product or NUPLAZID API. We may face delays or increased costs in our supply chain that could jeopardize the commercialization of our products.
If the Baker Entities sell a large number of our shares, or the market perceives that the Baker Entities intend to sell a large number of our shares, this could adversely affect the market price of our common stock.
If the Baker Entities sell a 62 large number of our securities, or the market perceives that the Baker Entities intend to sell a large number of our securities, this could adversely affect the market price of our securities, including our common stock.
Laws and regulations affecting public companies, including provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that was enacted in July 2010, the provisions of the Sarbanes-Oxley Act of 2002 (SOX), and rules adopted or proposed by the SEC and by The Nasdaq Stock Market, have resulted in, and will continue to result in, significant costs to us as we evaluate the implications of these rules and respond to their requirements.
Laws, regulations and standards affecting various aspects of our business, including as a result of provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that was enacted in July 2010, the provisions of the Sarbanes-Oxley Act of 2002 (SOX), rules adopted or proposed by the SEC and by The Nasdaq Stock Market and executive orders, have resulted in, and will continue to result in, significant costs to us as we evaluate the implications of these laws, regulations and standards and respond to their requirements.
We anticipate that the level of cash used in our operations will fluctuate in future periods depending on the levels of spending required for our ongoing and planned commercial activities for our products, our ongoing and planned development activities for pimavanserin for the negative symptoms of schizophrenia, ACP-101 as a treatment for PWS and ACP-204 as a treatment for ADP, studies to be conducted pursuant to our PMRs, our ongoing and planned development activities for other early- and late-stage product candidates and strategic business development to further expand our portfolio.
We anticipate that the level of cash used in our operations will fluctuate in future periods depending on the levels of spending required for our ongoing and planned commercial activities for our products, our ongoing and planned development activities for remlifanserin as a treatment for ADP and LBDP, studies to be conducted pursuant to our PMRs, our ongoing and planned development activities for other early- and late-stage product candidates and strategic business development to further expand our portfolio.
The manufacturers of our products and product candidates, including Patheon, Siegfried, Corden, FIS and CoreRx, are obliged to operate in accordance with FDA-mandated current good manufacturing practices (cGMPs), and we have limited control over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel to ensure compliance with cGMPs.
The manufacturers of our products and product candidates, including Patheon, Calatent, Bend, Halo, Siegfried, Corden, FIS and Flamma, are obliged to operate in accordance with FDA-mandated and comparable foreign regulatory authorities’ current good manufacturing practices (cGMPs), and we have limited control over the ability of third-party manufacturers to maintain adequate quality control, quality assurance and qualified personnel to ensure compliance with cGMPs.
If it is within nine months of the issuance of the challenged patent, a third party can petition the U.S. PTO for post-grant review, which can be based on any invalidity grounds and is not limited to prior art patents or printed publications. 42 In post-issuance proceedings, U.S.
If it is within nine months of the issuance of the challenged patent, a third party can petition the U.S. PTO for post-grant review, which can be based on any invalidity grounds and is not limited to prior art patents or printed publications. In post-issuance proceedings, U.S. PTO rules and regulations generally tend to favor patent challengers over patent owners.
U.S. and global market and economic conditions have been, and continue to be, disrupted and volatile due to many factors, including material shortages and related manufacturing and supply chain challenges, geopolitical developments (as well as any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy and manufacturing and supply chain), and the responses by central banking authorities to control inflation, among others.
U.S. and global market and economic conditions have been, and continue to be, disrupted and volatile due to many factors, including international tariffs, material shortages and related manufacturing and supply chain challenges, shutdowns of the federal government and the resulting effects on its regulatory agencies, geopolitical developments (as well as any related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global economy and manufacturing and supply chain), and the responses by central banking authorities to control inflation, among others.
For example, the European Union’s General Data Protection Regulation (EU GDPR), United Kingdom’s GDPR (UK GDPR) (collectively, the GDPR), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or LGPD) (Law No. 13,709/2018), and China’s Personal Information Protection Law (PIPL) impose strict requirements for processing personal data.
For example, the European Union’s General Data Protection Regulation (EU GDPR), United Kingdom’s GDPR (UK GDPR) (collectively, the GDPR), Switzerland’s Federal Act on Data Protection (FADP), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or LGPD) (Law No. 13,709/2018), China’s Personal Information Protection Law (PIPL), and Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA) impose strict requirements for processing personal data.
We cannot predict the impact of such changes and cannot be certain of our future compliance. Failure to comply with these environmental, health and safety laws and regulations may result in substantial fines, penalties or other sanctions.
We cannot predict the impact of such changes and cannot be certain of our future compliance. Failure to comply with these environmental, health and safety laws and regulations may result in substantial fines, penalties or other sanctions. We do not currently carry hazardous waste insurance coverage.
Our registration obligations under this registration rights agreement, which cover all shares now held or later acquired by the Baker Entities, will be in effect for up to 10 years, and include our obligation to facilitate 56 certain underwritten public offerings of our common stock by the Baker Entities in the future.
Our registration obligations under the 2026 Registration Rights Agreement, which cover all securities now held or later acquired by the Baker Entities, will be in effect for up to 10 years, and include our obligation to facilitate certain underwritten public offerings and block trades of our securities by the Baker Entities in the future.
New rules could make it more difficult or more costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the coverage that is the same or similar to our current coverage.
Further, new laws, regulations and standards could make it more difficult or more costly for us to operate our business, including obtaining certain types of insurance (such as director and officer liability insurance), and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the coverage that is the same or similar to our current coverage.
We have had several clinical studies evaluating pimavanserin that did not achieve statistical significance on certain endpoints, including the unsuccessful Phase 3 ADVANCE-2 study of pimavanserin for the treatment of the negative symptoms of schizophrenia in March 2024 and the unsuccessful Phase 2 study of pimavanserin for the treatment of irritability associated with autism spectrum disorder in pediatric populations (Pediatric Phase 2 Trial) in October 2024.
We have had several clinical studies that did not achieve statistical significance on certain endpoints, including the unsuccessful Phase 3 ADVANCE-2 study of pimavanserin for the treatment of the negative symptoms of schizophrenia in March 2024, the unsuccessful Phase 2 study of pimavanserin for the treatment of irritability associated with autism spectrum disorder in pediatric populations (Pediatric Phase 2 Trial) in October 2024 and the unsuccessful Phase 3 COMPASS PWS study of intranasal carbetocin for the treatment of hyperphagia in Prader-Willi Syndrome in September 2025.
We participate in the Medicaid Drug Rebate Program, as administered by CMS, and other federal and state government pricing programs in the U.S., and we may participate in additional government pricing programs in the future.
We participate in the Medicaid Drug Rebate Program, as administered by CMS, and other federal and state government pricing programs in the U.S., such as the Medicare Part D Prescription Drug Inflation Rebate Program, and we may participate in additional government pricing programs in the future.
NUPLAZID is available in the U.S. to treat hallucinations and delusions associated with PDP, and DAYBUE is available in the U.S. to treat Rett syndrome, both indications for which no other FDA-approved pharmaceutical treatments currently exist.
NUPLAZID is available in the U.S. to treat hallucinations and delusions associated with PDP, and DAYBUE is available in the U.S. to treat Rett syndrome, both indications for which no other FDA-approved pharmaceutical treatments currently exist. DAYBUE is also the first and only product approved in Canada and Israel for the treatment of Rett syndrome.
As a result, we could be prevented from commercializing current or future products. Furthermore, because of the substantial amount of pre-trial document and witness discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
Furthermore, because of the substantial amount of pre-trial document and witness discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
In certain jurisdictions, we may be required to provide our products for free if we participate in expanded access or compassionate use programs in certain jurisdictions.
In certain jurisdictions, we may provide our product for a charge, and in others, we may be required to provide our products free of charge if we participate in expanded access or compassionate use programs.
Patents, if issued, may be challenged, invalidated or circumvented. U.S. patents and patent applications may also be subject to interference proceedings as mentioned above, and U.S. patents may be subject to reexamination and post-issuance proceedings in the U.S.
U.S. patents and patent applications may also be subject to interference proceedings as mentioned above, and U.S. patents may be subject to reexamination and post-issuance proceedings in the U.S.
There is no guarantee that our common stock will appreciate, and therefore, a holder of our common stock may not realize a return on his or her investment.
There is no guarantee that our common stock will appreciate, and therefore, a holder of our common stock may not realize a return on his or her investment. Item 1B. Unresolved Staff Comments. This item is not applicable.
DAYBUE is also the first and only product approved in Canada for the treatment of Rett syndrome. 24 As there are no approved competitors for our products, it is particularly difficult to estimate the market potential for our products and how physicians, patients, caregivers, long-term care facilities and payors will respond to changes in the price of our products.
As there are no approved competitors for our products, it is particularly difficult to estimate the market potential for our products and how physicians, patients, caregivers, long-term care facilities and payors will respond to changes in the price of our products.
The ACA, among other things, expanded and increased industry rebates for drugs covered by Medicaid, made changes to the coverage requirements under Medicare Part D, Medicare’s prescription drug benefits program and broadened access to health insurance.
The ACA, among other things, expanded and increased industry rebates for drugs covered by Medicaid, made changes to the coverage requirements under Medicare Part D, Medicare’s prescription drug benefits program, and broadened access to health insurance. There have been legal and political challenges and amendments to certain aspects of the ACA.
Although our scientific and clinical advisors generally agree not to engage in competing work, if a conflict of interest arises between their work for us and their work for another entity, we may lose their services, which may impair our reputation in the industry and delay the development or commercialization of our product candidates, if approved.
Although our scientific and clinical advisors generally agree not to engage in competing work, if a conflict of interest arises between their work for us and their work for another entity, we may lose their services, which may impair our reputation in the industry and delay the development or commercialization of our product candidates, if approved. 45 Risks Related to Our Intellectual Property Our ability to compete may decline if we do not adequately protect our proprietary rights.
If we are unable to develop, or obtain marketing approval for, or, if approved, successfully commercialize our product candidates, we may not be able to generate sufficient revenue and our business operations and financial performance may be materially and adversely affected. Expanded access or compassionate use programs could subject us to additional risks.
If we are unable to develop, or obtain marketing approval for, or, if approved, successfully commercialize our product candidates, we may not be able to generate sufficient revenue and our business operations and financial performance may be materially and adversely affected.
PTO rules and regulations generally tend to favor patent challengers over patent owners. For example, unlike in district court litigation, claims challenged in post-issuance proceedings are given their broadest reasonable meaning, which increases the chance a claim might be invalidated by prior art or lack support in the patent specification.
For example, unlike in district court litigation, claims challenged in post-issuance proceedings are given their broadest reasonable meaning, which increases the chance a claim might be invalidated by prior art or lack support in the patent specification.
Our preclinical activities or clinical trials may be delayed, suspended, or terminated if: • these third parties do not successfully carry out their contractual duties or fail to meet regulatory obligations or expected deadlines; • these third parties need to be replaced; or • the quality or accuracy of the data obtained by these third parties is compromised due to their failure to adhere to our clinical protocols or regulatory requirements or for other reasons. 38 Failure to perform by these third parties may increase our development costs, delay our ability to obtain regulatory approval, and delay or prevent the commercialization of our product candidates, if approved.
Our preclinical activities or clinical trials may be delayed, suspended, or terminated if: • these third parties do not successfully carry out their contractual duties or fail to meet regulatory obligations or expected deadlines; 43 • these third parties need to be replaced; or • the quality or accuracy of the data obtained by these third parties is compromised due to their failure to adhere to our clinical protocols or regulatory requirements or for other reasons.
From the period between January 2, 2024 to February 18, 2025, the closing price of our common stock has ranged from a low of $14.29 per share to a high of $30.86 per share.
From the period between January 2, 2025 to February 18, 2026, the closing price of our common stock has ranged from a low of $14.10 per share to a high of $28.06 per share.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeT he Director of Information Security, along with management, including the CIO and CCO, is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
Biggest changeT he CIDO, along with management, is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel. Management is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Our (or the third parties with whom we work) actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse business consequences.”; and “If our information technology systems or data, or those of third parties with whom we work, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions, interruptions to operations or clinical trials, reputational harm, litigation, fines and penalties, disruptions of our business operations, and a loss of customers or sales.” 58 Gove rnance Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight functio n.
Our (or the third parties with whom we work) actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse business consequences.”; and “If our information technology systems or data, or those of third parties with whom we work, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions, interruptions to operations or clinical trials, reputational harm, litigation, fines and penalties, disruptions of our business operations, and a loss of customers or sales.” Gove rnance Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight functio n.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: incident detection and response policies, disaster recovery/business continuity policies, a vulnerability management policy, a vendor risk management program, risk assessments, encryption of certain data, network security controls and data segmentation for certain systems, access controls, physical security, asset management and tracking, systems monitoring, employee training, penetration testing, cybersecurity insurance, and dedicated cybersecurity staff.
Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: incident detection and response policies, disaster recovery/business 64 continuity policies, a vulnerability management policy, artificial intelligence policy, digital policy, a vendor risk management program, risk assessments, implementation of security standards/certifications, encryption of certain data, network security controls and data segregation for certain systems, access controls, physical security, asset management, tracking, and disposal, systems monitoring, employee training, penetration testing, cybersecurity insurance, and dedicated cybersecurity staff.
Our incident response policy is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including our CIO, Senior Vice President of Finance, CCO, Senior Vice President of People and Performance, and Director of Information Security.
Our incident response policy is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including our CIDO, Chief Legal Officer, Senior Vice President of Finance, Chief Compliance Officer, Senior Vice President of People and Performance, and Senior Director of Information Security.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our Director of Information Security , who has managed the Security Operations Center for a Fortune 500 company, and led cybersecurity efforts as the Director of IT at another organization.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our CIDO, who joined the Company in August 2025, and Senior Director of Information Security , who has led cybersecurity functions at the Company for over a decade, managed the Security Operations Center for a Fortune 500 company, and led cybersecurity efforts as the Director of IT at another organization.
This group works to identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and the Company’s risk profile using various methods in certain contexts, including, for example, manual tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threat actors, conducting scans of certain environments, evaluating certain threats reported to us, conducting threat and vulnerability assessments, using external intelligence feeds, and using third parties to conduct tabletop incident response exercises and other tests.
This group works to identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and the Company’s risk profile using various methods in certain contexts, including, for example, manual tools, automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threat actors, conducting scans of certain environments, evaluating our industry’s risk profile, evaluating certain threats reported to us, coordinating with law enforcement concerning threats, internal and/or external audits, conducting threat and vulnerability assessments, using external intelligence feeds, using third parties to conduct tabletop incident response exercises and other tests, and participating in the Health Information Sharing and Analytics Center (H-ISAC).
This team works with the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified. In addition, the Company’s incident response policy includes reporting to the audit committee of the board of directors for certain cybersecurity incidents.
This team works with the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified.
Our information security function, our Chief Information Officer (CIO), and our Chief Compliance Officer (CCO) help identify, assess and manage the Company’s cybersecurity threats and risks.
Our information security function, led by our Chief Information and Data Officer (CIDO), with our legal and compliance teams, help identify, assess and manage the Company’s cybersecurity threats and risks.
The audit committee receives periodic reports from senior management concerning the Company’s significant cybersecurity threats and risks and the processes the Company has implemented to address them.
In addition, the Company’s incident response policy includes reporting to the audit committee of the board of directors for certain cybersecurity incidents. 65 The audit committee receives periodic reports from senior management concerning the Company’s significant cybersecurity threats and risks and the processes the Company has implemented to address them.
For certain vendors, these processes include vendor risk assessments, security questionnaires, review of vendors’ written security program, and imposition of contractual obligations related to information security on certain vendors. For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part 1. Item 1A.
For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part 1. Item 1A.
Removed
Management is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Added
For certain vendors, these processes include vendor risk assessments, security questionnaires, review of vendors’ written security program, vulnerability scans related to the vendor, security assessment calls with the vendor’s security personnel, and imposition of contractual obligations on certain vendors.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that our existing facilities are adequate to meet our current needs, and that suitable additional alternative spaces will be available in the future on commercially reasonable terms.
Biggest changeIn addition, we lease a new facility in Princeton, New Jersey that covers approximately 53,000 square feet of office space, which is expected to commence in the second quarter of 2026. We believe that our existing facilities are adequate to meet our current needs, and that suitable additional alternative spaces will be available in the future on commercially reasonable terms.
Item 2. Pr operties. As of December 31, 2024, our primary facility consists of approximately 67,000 square feet of office space in San Diego, California. We also lease a facility in Princeton, New Jersey that covers approximately 25,000 square feet of office space, which is leased through January 2026.
Item 2. Pr operties. As of December 31, 2025, our primary facility consists of approximately 67,000 square feet of office space in San Diego, California, pursuant to a lease that expires in May 2031.
Added
We also lease a facility in Princeton, New Jersey that covers approximately 25,000 square feet of office space, which is leased on a month-to-month basis after it expired in January 2026.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOpt-Out Litigation On March 7, 2024, a purported stockholder of the Company filed a complaint (captioned Alger Dynamic Opportunities Fund v. Acadia Pharmaceuticals, Inc. , Case No. 24-cv-00451) in the U.S. District Court for the Southern District of California against us and one executive officer.
Biggest changeThe Court has scheduled a pretrial motions hearing for April 10, 2026. Remaining pretrial deadlines will be determined pending the Court’s rulings on the parties’ pretrial motions. Opt-Out Litigation On March 7, 2024, a purported stockholder of us filed a complaint (captioned Alger Dynamic Opportunities Fund v. Acadia Pharmaceuticals, Inc., Case No. 24-cv-00451) in the U.S.
As a result of the above, only MSN remained as an active defendant in the Pimavanserin I Cases. On January 11, 2024, following summary judgment motions, the District Court entered final judgment in our favor that MSN’s submission of ANDA No. 214925 was an act of infringement in the Pimavanserin I Case and the ’740 patent was not invalid.
On January 11, 2024, following summary judgment motions, the District Court entered final judgment in our favor that MSN’s submission of ANDA No. 214925 was an act of infringement in the Pimavanserin I Case and the ’740 patent was not invalid.
Given the unpredictability inherent in litigation, however, we cannot predict the outcome of these matters. We are unable to estimate possible losses or ranges of losses that may result from these matters, and therefore we have not accrued any amounts in connection with these matters other than attorneys’ fees incurred to date. Item 4. Mine Safety Disclosures .
We are unable to estimate possible losses or ranges of losses that may result from these matters, and therefore we have not accrued any amounts in connection with these matters other than attorneys’ fees incurred to date. Item 4. Mine Safety Disclosures . This item is not applicable. 67 PART II
On October 21, 2022, we filed additional complaints against Aurobindo, MSN and Zydus in the United States District Court for the District of Delaware alleging infringement of an additional Orange Book-listed patent covering NUPLAZID (Pimavanserin II Cases). 59 We entered into an agreement, effective March 31, 2023, with Zydus settling all claims and counterclaims in the Pimavanserin I Cases and Pimavanserin II Cases.
On October 21, 2022, we filed additional complaints against Aurobindo, MSN and Zydus in the United States District Court for the District of Delaware alleging infringement of an additional Orange Book-listed patent covering NUPLAZID (Pimavanserin II Cases).
The complaint is based on the same underlying allegations as the Securities Class Action described above, and alleged claims under federal and state securities laws, and for common law fraud and negligent misrepresentations. On May 24, 2024, Defendants moved to dismiss the complaint. On October 31, 2024, the Court granted in part and denied in part Defendants’ motion to dismiss.
District Court for the Southern District of California against us and one executive officer. The complaint is based on the same underlying allegations as the Securities Class Action described above, and alleged claims under federal and state securities laws, and for common law fraud and negligent misrepresentations. On May 24, 2024, Defendants moved to dismiss the complaint.
Securities Class Action On April 19, 2021, a purported stockholder of us filed a putative securities class action complaint (captioned City of Birmingham Relief Retirement Systems v. Acadia Pharmaceuticals Inc. , Case No. 21-cv-0762) in the U.S. District Court for the Southern District of California against us and certain of our current executive officers.
The case is scheduled for trial commencing November 2, 2026. 66 Securities Class Action On April 19, 2021, a purported stockholder of us filed a putative securities class action complaint (captioned City of Birmingham Relief Retirement Systems v. Acadia Pharmaceuticals, Inc., Case No. 21-cv-0762) in the U.S.
District Court for the Southern District of California against certain of our current directors. We are named as a nominal defendant.
Biggar et al. , Case No. 23-cv-2293) in the U.S. District Court for the Southern District of California against certain of our current directors. We are named as a nominal defendant.
The Court dismissed with leave to amend the purported stockholder’s state and common law claims, as well as the claim brought under Section 18(a) of the Securities Exchange Act of 1934, as amended. Defendants filed their answer to the Sections 10(b) and 20(a) claims on December 16, 2024.
On October 31, 2024, the Court granted in part and denied in part Defendants’ motion to dismiss. The Court dismissed with leave to amend the purported stockholder’s state and common law claims, as well as the claim brought under Section 18(a) of the Securities Exchange Act of 1934, as amended.
On September 29, 2021, the Court issued an order designating lead plaintiff and lead counsel. On December 10, 2021, lead plaintiff filed an amended complaint.
District Court for the Southern District of California against us and certain of our then-current executive officers. On September 29, 2021, the Court issued an order designating lead plaintiff and lead counsel. On December 10, 2021, lead plaintiff filed an amended complaint.
The Court granted that request and the action was stayed on February 20, 2024, pending the outcome of our Demand Review Committee’s investigation into the underlying claims. 60 We currently believe that none of the foregoing claims or other actions pending against us as of December 31, 2024 is likely to have, individually or in the aggregate, a material adverse effect on our business, liquidity, financial position, or results of operations.
We currently believe that none of the foregoing claims or other actions pending against us as of December 31, 2025 is likely to have, individually or in the aggregate, a material adverse effect on our business, liquidity, financial position, or results of operations. Given the unpredictability inherent in litigation, however, we cannot predict the outcome of these matters.
On January 13, 2025, the Court stayed this suit pending the outcome of the Securities Class Action. Derivative Suit On December 15, 2023, a purported stockholder of us filed a derivative action (captioned Kanner et al v. Biggar et al. , Case No. 23-cv-2293) in the U.S.
Defendants filed their answer to the Sections 10(b) and 20(a) claims on December 16, 2024. On January 13, 2025, the Court stayed this suit pending the outcome of the Securities Class Action. Derivative Suit On December 15, 2023, a purported stockholder of us filed a derivative action (captioned Kanner et al v.
The agreement allows Zydus to launch its generic pimavanserin 10 mg tablet products on September 23, 2036 and 34 mg capsule products on February 27, 2038, subject to certain triggers for earlier launch. The Zydus case was dismissed by joint agreement on April 5, 2023.
We entered into an agreement, effective March 31, 2023, with Zydus settling all claims and counterclaims in the Pimavanserin I Cases and Pimavanserin II Cases. The agreement allows Zydus to launch its generic pimavanserin 10 mg tablet products on September 23, 2036 and 34 mg capsule products on February 27, 2038, subject to certain triggers for earlier launch.
(collectively “Zydus”) in the United States District Court for the District of Delaware, alleging infringement of certain of our Orange Book-listed patents covering NUPLAZID (Pimavanserin) by Zydus’ proposed 34 mg pimavanserin tablet product. Zydus has not responded to the complaint as of yet and there is no schedule in place for the case.
On February 14, 2025, we filed a complaint against Zydus Lifesciences Limited, Zydus Worldwide DMCC, and Zydus Pharmaceuticals (USA) Inc. (collectively “Zydus”) in the United States District Court for the District of Delaware, alleging infringement of certain of our Orange Book-listed patents covering NUPLAZID (Pimavanserin) by Zydus’ proposed 34 mg pimavanserin tablet product.
The amended complaint seeks unspecified monetary damages and other relief. On March 11, 2024, the Court granted plaintiffs’ motion for class certification and appointment of class representatives and class counsel. The parties are currently engaged in expert discovery, which is scheduled to close on June 13, 2025.
The amended complaint seeks unspecified monetary damages and other relief. On March 11, 2024, the Court granted plaintiffs’ motion for class certification and appointment of class representatives and class counsel. The parties concluded discovery on September 24, 2025. The parties submitted pretrial motions on November 12, 2025 and briefing for these motions will be complete on February 25, 2026.
On January 18, 2024, MSN filed a Notice of Appeal to the United States Court of Appeals for the Federal Circuit from the final judgment entered on January 11, 2024. The appeal is fully briefed and awaiting a date for oral argument. In connection with the Pimavanserin II cases, MSN and Aurobindo are the remaining defendants.
On January 18, 2024, MSN filed a Notice of Appeal to the United States Court of Appeals for the Federal Circuit from the final judgment entered on January 11, 2024. On June 9, 2025, the Federal Circuit issued a decision affirming the final judgement of the District Court in our favor.
A bench trial was conducted from December 3, 2024 to December 6, 2024 in the matter. Post-trial briefing was completed on February 12, 2025 and we are awaiting the final decision of the Court. On February 14, 2025, we filed a complaint against Zydus Lifesciences Limited, Zydus Worldwide DMCC, and Zydus Pharmaceuticals (USA) Inc.
In connection with the Pimavanserin II cases, MSN and Aurobindo are the remaining defendants. A bench trial was conducted from December 3, 2024 to December 6, 2024 in the matter. Post-trial briefing was completed on February 12, 2025.
Removed
On January 30, 2024, the parties jointly requested a stay of the action.
Added
The Zydus case was dismissed by joint agreement on April 5, 2023. As a result of the above, only MSN remained as an active defendant in the Pimavanserin I Cases.
Removed
This item is not applicable. 61 PART II
Added
On June 9, 2025, the District Court issued a final judgement in our favor that Aurobindo’s ANDA infringes the asserted NUPLAZID patent and that the defendants failed to demonstrate such patent is invalid.
Added
On June 16, 2025, MSN and Aurobindo filed a Notice of Appeal to the United States Court of Appeals for the Federal Circuit from the final judgment entered on June 9, 2025. Briefing was completed on December 19, 2025. An oral argument has not been scheduled as yet.
Added
On January 30, 2024, the parties jointly requested a stay of the action. The Court granted that request and the action was stayed on February 20, 2024, pending the outcome of our Demand Review Committee’s investigation into the underlying claims. The stay was briefly lifted on September 5, 2025 but reinstated on October 17, 2025 and remains in place.
Added
On January 15, 2026, the parties informed the Court that they had reached a settlement in principle regarding the derivative claims. Pursuant to the proposed settlement, which is still subject to Court approval, defendants agreed to certain governance reforms and agreed to an award of $1.5 million in attorneys’ fees to be paid by our insurance carrier.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+1 added−1 removed3 unchanged
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “ACAD”. Holders As of February 18, 2025, there were 166,788,517 shares of common stock outstanding held by approximately 32 stockholders of record.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “ACAD”. Holders As of February 18, 2026, there were 170,494,613 shares of common stock outstanding held by approximately 29 stockholders of record.
Performance Graph The following graph shows a comparison of the total cumulative returns of an investment of $100 in cash from December 31, 2019 through December 31, 2024 in (i) our common stock, (ii) the Nasdaq Biotechnology Index, and (iii) the Nasdaq U.S. Benchmark TR Index.
Performance Graph The following graph shows a comparison of the total cumulative returns of an investment of $100 in cash from December 31, 2020 through December 31, 2025 in (i) our common stock, (ii) the Nasdaq Biotechnology Index, and (iii) the Nasdaq U.S. Benchmark TR Index.
Removed
Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Acadia Pharmaceuticals Inc. $ 100.00 $ 124.96 $ 54.56 $ 37.21 $ 73.19 $ 42.89 NASDAQ Biotechnology Index $ 100.00 $ 121.27 $ 152.67 $ 122.55 $ 154.93 $ 152.89 NASDAQ U.S. Benchmark TR Index $ 100.00 $ 125.69 $ 124.89 $ 111.27 $ 115.42 $ 143.60 62 Item 6. [Reserved ]
Added
Dec-20 Dec-21 Dec-22 Dec-23 Dec-24 Dec-25 Acadia Pharmaceuticals Inc. $ 100.00 $ 43.66 $ 29.78 $ 58.57 $ 34.32 $ 49.94 NASDAQ Biotechnology Index $ 100.00 $ 99.37 $ 88.53 $ 91.84 $ 90.58 $ 119.92 NASDAQ U.S. Benchmark TR Index $ 100.00 $ 125.89 $ 101.05 $ 127.76 $ 159.03 $ 186.96 68 Item 6. [Reserved ]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

71 edited+31 added−8 removed60 unchanged
Biggest changeIn addition to operating leases, we enter into certain other long-term commitments for goods and services that are outstanding for periods greater than one year. We also enter into short-term agreements with various vendors and suppliers of goods and services in the normal course of operations through purchase orders or other documentation, or that are undocumented except for an invoice.
Biggest changeWe also enter into short-term agreements with various vendors and suppliers of goods and services in the normal course of operations through purchase orders or other documentation, or that are undocumented except for an invoice. Such short-term agreements are generally outstanding for periods less than a year and are settled by cash payments upon delivery of goods and services.
Allowances for rebates also include amounts due under the Inflation Reduction act of 2022 for Medicare Part D unit sales with applicable period AMP increases that outpace inflation over the benchmark period. The applicable period will be twelve months on October 1 of each year, with the initial applicable period beginning on October 1, 2022.
Allowances for rebates also include amounts due under the Inflation Reduction Act of 2022 (IRA) for Medicare Part D unit sales with applicable period AMP increases that outpace inflation over the benchmark period. The applicable period will be twelve months on October 1 of each year, with the initial applicable period beginning on October 1, 2022.
Thus the cost of sales as a percentage of net sales of DAYBUE for the year ended December 31, 2024 and 2023 were affected by use of the initial pre-launch inventory, which was previously expensed as research and development expense, and is referred to as zero cost inventories.
Thus the cost of sales as a percentage of net sales of DAYBUE for the year ended December 31, 2025, 2024 and 2023 were affected by use of the initial pre-launch inventory, which was previously expensed as research and development expense, and is referred to as zero cost inventories.
Such forward-looking statements include statements about the benefits to be derived from our products and our product candidates, the potential market opportunities for our products and our drug candidates, our strategy for the commercialization of our products, our plans for exploring and developing our products for additional indications, the commercialization of DAYBUE or trofinetide in jurisdictions other than the U.S., our plans and timing with respect to seeking regulatory approvals, the potential commercialization of any of our product candidates that receive regulatory approval, the progress, timing, results or implications of clinical trials and other development milestones and activities involving our products and our product candidates, our strategy for discovering, developing and, if approved, commercializing our product candidates, our existing and potential future collaborations, our estimates of future payments, revenues and profitability, our estimates regarding our capital requirements, future expenses and needs for additional financing, the potential or expected impacts of geopolitical and macroeconomic developments, possible changes in legislation, and other statements that are not historical facts, including statements which may be preceded by the words “aims,” “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “potential” “predicts,” “pro forma,” “projects,” “seeks,” “should,” “will,” “would,” or similar words.
Such forward-looking statements include statements about the benefits to be derived from our products and our product candidates, the potential market opportunities for our products and our product candidates, our strategy for the commercialization of our products, our plans for exploring and developing our products for additional indications, the commercialization of DAYBUE or trofinetide in jurisdictions other than the U.S., our plans and timing with respect to seeking regulatory approvals, the potential commercialization of any of our product candidates that receive regulatory approval, the progress, timing, results or implications of clinical trials and other development milestones and activities involving our products and our product candidates, our strategy for discovering, developing and, if approved, commercializing our product candidates, our existing and potential future collaborations, our estimates of future payments, revenues and profitability, our estimates regarding our capital requirements, future expenses and need for additional financing, the potential or expected impacts of geopolitical and macroeconomic developments, possible changes in legislation, and other statements that are not historical facts, including statements which may be preceded by the words “aims,” “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “plans,” “potential” “predicts,” “pro forma,” “projects,” “seeks,” “should,” “will,” “would,” or similar words.
Rebates are amounts owed after the final dispensing of the product to a benefit plan participant and are based upon contractual agreements with, or statutory requirements pertaining to, Medicaid and Medicare benefit providers. The allowance for rebates is based on statutory discount rates and expected utilization.
Rebates are amounts owed after the final dispensing of the product to a benefit plan participant and are based upon contractual agreements with, or statutory requirements pertaining to, Medicaid and 73 Medicare benefit providers. The allowance for rebates is based on statutory discount rates and expected utilization.
Likewise, we are unable to determine with certainty the anticipated completion dates for our current research and development programs. Clinical development and regulatory approval timelines, probability of success, and development costs vary widely.
Likewise, we are unable to determine with certainty the anticipated completion dates for our current research and development programs. Clinical development and regulatory approval timelines, probability of success, and development costs vary widely across our development programs.
During the year ended December 31, 2024, we sold the PRV to a third party for the aggregate net proceeds of $146.5 million. No other non-financial asset sale happened during the year ended December 31, 2023.
During the year ended December 31, 2024, we sold the PRV to a third party for the aggregate net proceeds of $146.5 million. No non-financial asset sale happened during the year ended December 31, 2023.
Our future capital requirements will depend on, and could increase significantly as a result of, many factors, including: • the costs of acquiring additional product candidates or research and development programs; • the scope, prioritization and number of our research and development programs; • the ability of our collaborators and us to reach the milestones and other events or developments triggering payments under our collaboration or license agreements, or our collaborators’ ability to make payments under these agreements; • our ability to enter into new collaboration and license agreements; • the progress in, and the costs of, our ongoing and planned development activities for pimavanserin, post-marketing studies for DAYBUE to be conducted over the next several years, and ongoing and planned commercial activities for our products; • the costs of our development activities for our product candidates; • the costs of commercializing our products, including the maintenance and development of our sales and marketing capabilities; • the costs of establishing, or contracting for, sales and marketing capabilities for our product candidates; • the amount of U.S. product sales from our products; • the costs of preparing applications for regulatory approvals for DAYBUE in jurisdictions other than the U.S., for NUPLAZID in additional indications other than PDP and for other product candidates, as well as the costs required to support review of such applications; • the costs of manufacturing and distributing our products for commercial use in the U.S.; • our ability to obtain regulatory approval for, and subsequently generate product sales from, NUPLAZID for the negative symptoms of schizophrenia, or from DAYBUE, and our product candidates; • the extent to which we are obligated to reimburse collaborators or collaborators are obligated to reimburse us for costs under collaboration agreements; 71 • the costs involved in filing, prosecuting, enforcing, and defending patent claims and other intellectual property rights; • the costs of maintaining or securing manufacturing arrangements for clinical or commercial production of pimavanserin, trofinetide or other product candidates; and • the costs associated with litigation, including the costs incurred in defending against any product liability claims that may be brought against us related to our products.
Our future capital requirements will depend on, and could increase significantly as a result of, many factors, including: • the costs of acquiring additional product candidates or research and development programs; • the scope, prioritization and number of our research and development programs; • the ability of our collaborators and us to reach the milestones and other events or developments triggering payments under our collaboration or license agreements, or our collaborators’ ability to make payments under these agreements; • our ability to enter into new collaboration and license agreements; • the progress in, and the costs of, our ongoing and planned development activities for pimavanserin, post-marketing studies for DAYBUE to be conducted over the next several years, and ongoing and planned commercial activities for our products; • the costs of our development activities for our product candidates; • the costs of commercializing our products, including the maintenance and development of our sales and marketing capabilities; • the costs of establishing, or contracting for, sales and marketing capabilities for our product candidates; • the amount of U.S. product sales from our products; 78 • the costs of preparing applications for regulatory approvals for DAYBUE in jurisdictions other than the U.S., for NUPLAZID in additional indications other than PDP and for other product candidates, as well as the costs required to support review of such applications; • the costs of manufacturing and distributing our products for commercial use in the U.S.; • our ability to obtain regulatory approval for, and subsequently generate product sales from, our product candidates; • the extent to which we are obligated to reimburse collaborators or collaborators are obligated to reimburse us for costs under collaboration agreements; • the costs involved in filing, prosecuting, enforcing, and defending patent claims and other intellectual property rights; • the costs of maintaining or securing manufacturing arrangements for clinical or commercial production of pimavanserin, trofinetide or other product candidates; and • the costs associated with litigation, including the costs incurred in defending against any product liability claims that may be brought against us related to our products.
Research and Development Expenses Research and development expenses decreased to $303.2 million in 2024, including $14.1 million in stock-based compensation, from $351.6 million in 2023, including $17.4 million in stock-based compensation.
Research and Development Expenses Research and development expenses decreased to $303.2 million in 2024, including $14.1 million in stock-based compensation expense, from $351.6 million in 2023, including $17.4 million in stock-based compensation expense.
The following table provides a summary of milestone payments that Neuren is eligible to receive based on the achievement of certain sales milestones under the terms of the expanded agreement: Territory First Commercial Sales Milestones Total Sales Milestones Europe $35 million (Rett syndrome) $10 million (2 nd indication) Up to $170 million Japan $15 million (Rett syndrome) $4 million (2 nd indication) Up to $110 million Rest of World __ Up to $83 million In addition to these commercial products, we have a portfolio of product candidates and research programs that are designed to address significant unmet medical needs in CNS disorders and rare diseases.
The following table provides a summary of milestone payments that Neuren is eligible to receive based on the achievement of certain sales milestones under the terms of the expanded agreement: Territory First Commercial Sales Milestones Total Sales Milestones Europe $35 million (Rett syndrome) $10 million (2 nd indication) Up to $170 million Japan $15 million (Rett syndrome) $4 million (2 nd indication) Up to $110 million Rest of World __ Up to $83 million In addition to these commercial products, we have a portfolio of product candidates and research programs that are designed to address significant unmet medical needs in neurological and rare diseases.
Further, we expect our sales allowances to vary from quarter to quarter due to fluctuations in our Medicare Part D Coverage Gap liability and the volume of purchases eligible for government mandated discounts and rebates, as well as changes in discount percentages that may be impacted by potential future price increases and other factors.
Further, we expect our sales allowances to vary from quarter to quarter due to fluctuations in our Medicare Part D liability and the volume of purchases eligible for government mandated discounts and rebates, as well as changes in discount percentages that may be impacted by potential future price increases and other factors.
As such, we are not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in these relationships. Recent Accounting Pronouncements See Item 15 of Part IV, “Notes to Consolidated Financial Statements—Note 2—Summary of Significant Accounting Policies.” 73
As such, we are not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in these relationships. Recent Accounting Pronouncements See Item 15 of Part IV, “Notes to Consolidated Financial Statements—Note 2—Summary of Significant Accounting Policies.” 80
At this time, due to the risks inherent in regulatory requirements and clinical development, we are unable to estimate with certainty the costs we will incur to support the commercialization of DAYBUE, as well as the further development of our early-stage product candidates.
At this time, due to the risks inherent in regulatory requirements and clinical development, we are unable to estimate with certainty the costs we will incur to support the commercialization of DAYBUE or DAYBUE STIX, as well as the further development of our early-stage product candidates.
This decrease in net cash provided by financing activities in 2024 relative to 2023 was attributable primarily to a decrease in proceeds resulting from the exercise of employee stock options. The increase in net cash provided by financing activities in 2023 relative to 2022 was primarily due to an increase in proceeds resulting from the exercise of employee stock options.
This increase in net cash provided by financing activities in 2025 relative to 2024 was attributable primarily to an increase in proceeds resulting from the exercise of employee stock options. The decrease in net cash provided by financing activities in 2024 relative to 2023 was primarily due to a decrease in proceeds resulting from the exercise of employee stock options.
The increase in net cash provided by operating activities in 2023 relative to 2022 was primarily due to an increase in our net revenues and decreased research and development costs , partially offset by increased sales and marketing costs .
The increase in net cash provided by operating activities in 2024 relative to 2023 was primarily due to an increase in our net revenues and decreased research and development costs , partially offset by increased sales and marketing costs .
While our current development efforts are primarily focused on advancing the development of ACP-101, ACP-204 and other early-stage product candidates, we anticipate that we will make determinations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to the scientific and clinical success of each product candidate, as well as an ongoing assessment of the commercial potential of each candidate and our financial position.
While our current development efforts are primarily focused on advancing the development of remlifanserin and other early-stage product candidates, we anticipate that we will make determinations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to the scientific and clinical success of each product candidate, as well as an ongoing assessment of the commercial potential of each candidate and our financial position.
We anticipate that our quarterly and annual results of operations will be impacted for the foreseeable future by several factors, including the progress and timing of expenditures related to our commercial activities associated with our products and the extent to which we generate revenue from product sales, our development of pimavanserin for the negative symptoms of schizophrenia, our further development of our early-stage product candidates and the progress and timing of expenditures related to studies of DAYBUE pursuant to our PMRs.
We anticipate that our quarterly and annual results of operations will be impacted for the foreseeable future by several factors, including the progress and timing of expenditures related to our commercial activities associated with our products and the extent to which we generate revenue from product sales, our further development of our early-stage product candidates and the progress and timing of expenditures related to studies of DAYBUE pursuant to our PMRs.
The FDA approval of DAYBUE for the treatment of Rett syndrome was based on the positive results from our pivotal Phase 3 LAVENDER ™ study which demonstrated statistically significant improvement over placebo for both co-primary endpoints as well as the key secondary endpoint. 63 Under the terms of the 2018 agreement, Neuren received an upfront payment of $10.0 million and is eligible to receive milestone payments of up to $400.0 million based on the achievement of certain development and sales milestones for Rett syndrome in North America, of which, $50 million has been paid to date.
The FDA approval of DAYBUE for the treatment of Rett syndrome was based on the positive results from our pivotal Phase 3 LAVENDER ™ study which demonstrated statistically significant improvement over placebo for both co-primary endpoints as well as the key secondary endpoint. 69 Under the terms of the 2018 agreement, Neuren received an upfront payment of $10.0 million and is eligible to receive milestone payments of up to $400.0 million based on the achievement of certain development and sales milestones for Rett syndrome in North America, of which, $50 million has been paid as of December 31, 2025.
Our research and development activities have focused on pimavanserin, trofinetide, ACP-101, ACP-204 and other earlier-stage product candidates. In connection with the FDA approval of DAYBUE, we are required to conduct post-marketing work, including a clinical study of renal impairment in healthy volunteers, nonclinical carcinogenicity studies, and nonclinical in vitro and clinical in vivo drug interaction studies.
Our research and development activities have focused on pimavanserin, trofinetide, remlifanserin and other earlier-stage product candidates. In connection with the FDA approval of DAYBUE, we are required to conduct post-marketing work, including a clinical study of renal impairment in healthy volunteers, nonclinical carcinogenicity studies, and nonclinical in vitro and clinical in vivo drug interaction studies.
Our neuroscience franchise is anchored by the commercial product NUPLAZID (pimavanserin), which is the first and only drug approved by the FDA for the treatment of hallucinations and delusions associated with PDP. Our neuro-rare disease franchise is anchored by the commercial product DAYBUE, which is the first and only drug approved for the treatment of Rett syndrome.
Our neurological disease franchise is anchored by the commercial product NUPLAZID (pimavanserin), which is the first and only drug approved by the FDA for the treatment of hallucinations and delusions associated with PDP. Our rare disease franchise is anchored by the commercial product DAYBUE, which is the first and only drug approved for the treatment of Rett syndrome.
As of December 31, 2024, we had an accumulated deficit of approximately $2.2 billion. Contingent on the level of business development activities we may complete as well as pipeline programs we may advance, we may incur operating losses as we incur significant research and development costs and costs for continued commercialization of our products.
As of December 31, 2025, we had an accumulated deficit of approximately $1.8 billion. Contingent on the level of business development activities we may complete as well as pipeline programs we may advance, we may incur operating losses as we incur significant research and development costs and costs for continued commercialization of our products.
We regularly monitor our estimates and record adjustments when rebate trends, rebate programs and contract terms, legislative changes, or other significant events indicate that a change in the estimates is appropriate. To date, our estimates have not differed materially from actual rebates.
We regularly monitor our estimates and record adjustments when rebate trends, rebate programs and contract terms, legislative changes, or other significant events indicate that a change in the estimates is appropriate. Prior to 2025, our estimates had not differed materially from actual rebates.
Payment is due 30 days after receiving such invoice; the payment will be set off against the allowance for such rebate that we have accrued up to the date of payment. Cash Flows At December 31, 2024, we had $756.0 million in cash, cash equivalents, and investment securities, compared to $438.9 million at December 31, 2023.
Payment is due 30 days after receiving such invoice; the payment will be set off against the allowance for such rebate that we have accrued up to the date of payment. Cash Flows At December 31, 2025, we had $819.7 million in cash, cash equivalents, and investment securities, compared to $756.0 million at December 31, 2024.
The benchmark period AMP price is January 1, 2021 through September 30, 2021. Our estimates are based Medicare Part D sales as a percentage of gross sales and the rate AMP for the current period will be in excess the benchmark period.
The benchmark period AMP price is January 1, 2021 through September 30, 2021 for NUPLAZID and January 1, 2024 through December 31, 2024 for DAYBUE. Our estimates are based Medicare Part D sales as a percentage of gross sales and the rate AMP for the current period will be in excess the benchmark period.
Net product sales of NUPLAZID were $609.4 million and $549.2 million in 2024 and 2023, respectively. The increase in net product sales of NUPLAZID of $60.2 million was due to the growth in NUPLAZID unit sales as well as a higher average net selling price in NUPLAZID in 2024 compared to 2023.
The increase in net product sales of NUPLAZID of $60.2 million was due to the growth in NUPLAZID unit sales as well as a higher average net selling price in NUPLAZID in 2024 compared to 2023. Net product sales of DAYBUE were $348.4 million and $177.2 million in 2024 and 2023, respectively.
Net product sales from these two commercial products totaled $957.8 million for 2024, compared with $726.4 million for 2023. In August 2018, we acquired an exclusive North American license to develop and commercialize DAYBUE for Rett syndrome and other indications from Neuren.
Net product sales from these two commercial products totaled $1,071.5 million for 2025, compared with $957.8 million for 2024. In August 2018, we acquired an exclusive North American license to develop and commercialize DAYBUE for Rett syndrome and other indications from Neuren.
We anticipate that the level of cash used in our operations will fluctuate in future periods depending on the levels of spending required for our ongoing and planned commercial activities for our products, our ongoing and planned development activities for pimavanserin for the negative symptoms of schizophrenia, ACP-101 as a treatment for PWS and ACP-204 as a treatment for ADP, studies to be conducted pursuant to our PMRs, our ongoing and planned development activities for other early- and late-stage product candidates and strategic business development to further expand our portfolio.
We anticipate that the level of cash used in our operations will fluctuate in future periods depending on the levels of spending required for our ongoing and planned commercial activities for our products, our ongoing and planned development activities for remlifanserin as a treatment for ADP and LBDP, studies to be conducted pursuant to our PMRs, our ongoing and planned development activities for other early- and late-stage product candidates and strategic business development to further expand our portfolio.
These statements are inherently uncertain. For forward-looking statements, we claim the protection of the Private Securities Litigation Reform Act of 1995. Readers of this report are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or revise publicly any forward-looking statements.
These statements are inherently uncertain. For forward-looking statements, we claim the protection of the Private Securities Litigation Reform Act of 1995. Readers of this report are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made.
Due to these fluctuations, we believe that the period-to-period comparisons of our operating results are not a good indication of our future performance. 68 Comparison of the Years Ended December 31, 2024 and 2023 Product Sales, Net Net product sales, comprised of our products, were $957.8 million and $726.4 million for the years ended December 31, 2024 and 2023, respectively.
Due to these fluctuations, we believe that the period-to-period comparisons of our operating results are not a good indication of our future performance. 75 Comparison of the Years Ended December 31, 2025 and 2024 Product Sales, Net Net product sales, comprised of our products, were $1,071.5 million and $957.8 million for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2024, we may be required to make milestone payments up to $4.0 billion in the aggregate. $1.1 billion payments are contingent upon achieving future development and regulatory milestones, and $2.9 billion payments are contingent upon achieving future commercial milestones.
As of December 31, 2025, we may be required to make milestone payments up to $3.5 billion in the aggregate. $0.9 billion payments are contingent upon achieving future development and regulatory milestones, and $2.6 billion payments are contingent upon achieving future commercial milestones.
Prior to receiving FDA approval for DAYBUE in March 2023, we manufactured inventory and recorded approximately $29.9 million related to the zero cost inventory as research and development expense.
Certain manufacturing related expenses incurred prior to DAYBUE receiving FDA approval were classified as research and development expenses, resulting in zero cost inventory. Prior to receiving FDA approval for DAYBUE in March 2023, we manufactured inventory and recorded approximately $29.9 million related to the zero cost inventory as research and development expense.
Utilizing the actual direct costs to manufacture DAYBUE prior to receiving FDA approval, had the previously expensed inventory been capitalized and recognized when sold, the total cost of sales with these manufacturing costs included for the year ended December 31, 2023 would have increased by approximately $9.4 million.
If the previously expensed inventory been capitalized and recognized when sold, the total cost of sales with these manufacturing costs included for the year ended December 31, 2025 would have increased by approximately $6.3 million based on the actual direct costs to manufacture DAYBUE prior to receiving FDA approval.
In such event, we would not be liable for the full amount of the agreement. 72 We have entered into various collaboration, licensing and merger agreements which generally include upfront license fees, development and commercial milestone payments upon achievement of certain clinical and commercial development and annual net sales milestones, as well as royalties calculated as a percentage of net product sales, with rates that vary by agreement.
We have entered into various collaboration, licensing and merger agreements which generally include upfront license fees, development and commercial milestone payments upon achievement of certain clinical and commercial development and annual net sales milestones, as well as royalties calculated as a percentage of net product sales, with rates that vary by agreement.
Net product sales of DAYBUE were $348.4 million and $177.2 million in 2024 and 2023, respectively. The increase in net product sales of DAYBUE of $171.2 million was mainly due to the growth in DAYBUE unit sales in 2024 compared to 2023.
The increase in net product sales of DAYBUE of $171.2 million was mainly due to the growth in DAYBUE unit sales in 2024 compared to 2023.
Selling, General and Administrative Expenses Selling, general and administrative expenses increased to $406.6 million in 2023, including $48.0 million in stock-based compensation expense, from $369.1 million in 2022, including $44.4 million in stock-based compensation expense.
Selling, General and Administrative Expenses Selling, general and administrative expenses increased to $488.4 million in 2024, including $51.6 million in stock-based compensation expense, from $406.6 million in 2023, including $48.0 million in stock-based compensation expense.
Forward-looking statements are not guarantees of performance. Actual results or events may differ materially from those anticipated in our forward-looking statements as a result of various factors, including those set forth under the section captioned “Risk Factors” elsewhere in this report.
We undertake no obligation to update or revise publicly any forward-looking statements except as required by law. Forward-looking statements are not guarantees of performance. Actual results or events may differ materially from those anticipated in our forward-looking statements as a result of various factors, including those set forth under the section captioned “Risk Factors” elsewhere in this report.
We do not expect our cost of product sales for DAYBUE to increase significantly as a percentage of net product sales in future periods as we continue to produce inventory for future sales. We expect to finish selling the zero cost inventories of DAYBUE in 2025.
We do not expect our cost of product sales for DAYBUE to increase significantly as a percentage of net product sales in future periods as we continue to produce inventory for future sales. We sold substantially all of the zero cost inventories of DAYBUE through the year ended December 31, 2025.
The decrease in research and development expenses during 2024 was due to decreased business development payments, which in the period ending December 31, 2023 included the $100.0 million payment to Neuren under the expanded license agreement for trofinetide, partially offset by increased costs from clinical stage programs. 69 Selling, General and Administrative Expenses Selling, general and administrative expenses increased to $488.4 million in 2024, including $51.6 million in stock-based compensation expense, from $406.6 million in 2023, including $48.0 million in stock-based compensation expense.
The decrease in research and development expenses during 2024 was due to decreased business development payments, which in the period ending December 31, 2023 included the $100.0 million payment to Neuren under the expanded license agreement for trofinetide, partially offset by increased costs from clinical stage programs.
Comparison of the Years Ended December 31, 2023 and 2022 Product Sales, Net Product sales, net, comprised of NUPLAZID, were $726.4 million and $517.2 million in 2023 and 2022, respectively. Net product sales of NUPLAZID were $549.2 million and $517.2 million in 2023 and 2022, respectively.
Comparison of the Years Ended December 31, 2024 and 2023 Product Sales, Net Product sales, net, comprised of our products, were $957.8 million and $726.4 million in the years ended December 31, 2024 and 2023, respectively. Net product sales of NUPLAZID were $609.4 million and $549.2 million in 2024 and 2023, respectively.
To the extent that external expenses are not attributable to a specific project, they are allocated proportionally to each of the projects. 65 The following table summarizes our research and development expenses for the years ended December 31, 2024, 2023, and 2022 (in thousands): Years Ended December 31, 2024 2023 2022 Costs of external service providers: NUPLAZID (pimavanserin) $ 34,369 $ 55,527 $ 62,746 DAYBUE (trofinetide) 30,677 32,065 62,300 ACP-101 30,401 11,887 2,085 ACP-204 54,389 43,768 16,898 Early-stage product candidates 44,703 26,789 45,803 Upfront and milestone payments* 34,500 102,500 88,741 Subtotal 229,039 272,536 278,573 Internal costs 60,110 61,675 60,422 Stock-based compensation 14,100 17,408 22,580 Total research and development expenses $ 303,249 $ 351,619 $ 361,575 _____________________ * Includes upfront and milestone consideration as well as transaction costs associated with acquired in-process research and development.
To the extent that external expenses are not attributable to a specific project, they are allocated proportionally to each of the projects. 71 The following table summarizes our research and development expenses for the years ended December 31, 2025, 2024, and 2023 (in thousands): Years Ended December 31, 2025 2024 2023 Costs of external service providers: NUPLAZID (pimavanserin) $ 3,706 $ 34,369 $ 55,527 DAYBUE (trofinetide) 34,083 30,677 32,065 ACP-101 44,412 30,401 11,887 Remlifanserin 85,598 54,389 43,768 Early-stage product candidates 52,272 44,703 26,789 Upfront and milestone payments* 12,000 34,500 102,500 Subtotal 232,071 229,039 272,536 Internal costs 80,295 60,110 61,675 Stock-based compensation 16,436 14,100 17,408 Total research and development expenses $ 328,802 $ 303,249 $ 351,619 _____________________ * Includes upfront and milestone consideration as well as transaction costs associated with acquired in-process research and development.
SPs dispense product to a patient based on the fulfillment of a prescription and SDs sell product to government facilities, long-term care pharmacies, or in-patient hospital pharmacies. We sell DAYBUE through a single wholesale distributor. Product shipping and handling costs are included in cost of product sales.
SPs dispense product to a patient based on the fulfillment of a prescription and SDs sell product to government facilities, long-term care pharmacies, or in-patient hospital pharmacies. We sell DAYBUE in the U.S. through a single wholesale distributor. We sell DAYBUE outside of the U.S. through third party distributors.
The increase in net cash provided by operating activities in 2024 relative to 2023 was primarily due to an increase in our net revenues, decreased research and development costs and proceeds from sale of a non-financial asset , partially offset by increased sales and marketing costs .
The decrease in net cash provided by operating activities in 2025 relative to 2024 was primarily due to increased research and development costs and sales and marketing costs, partially offset by an increase in our net revenues.
Stock-Based Compensation The fair value of each employee stock option and each employee stock purchase plan right granted is estimated on the grant date under the fair value method using the Black-Scholes valuation model, which requires us to make a number of assumptions including the estimated expected life of the award and related volatility.
However, subsequent changes in estimates may result in a material change in our accruals, which could also materially affect our balance sheet and results of operations. 74 Stock-Based Compensation The fair value of each employee stock option and each employee stock purchase plan right granted is estimated on the grant date under the fair value method using the Black-Scholes valuation model, which requires us to make a number of assumptions including the estimated expected life of the award and related volatility.
Our primary uses of cash and operating expenses relate to paying employees and consultants, administering clinical trials, marketing our products, and providing technology and facility infrastructure to support our operations. We also make investments in our office and laboratory facilities to enable continued expansion of our business.
Our primary uses of cash and operating expenses relate to paying employees and consultants, administering clinical trials, marketing our products, and providing technology and facility infrastructure to support our operations.
In addition, we expect to incur increased research and development expenses as a result of advancement of our early-stage product candidates. We use external service providers to manufacture our product candidates and for the majority of the services performed in connection with the preclinical and clinical development of our product candidates.
We use external service providers to manufacture our product candidates and for the majority of the services performed in connection with the preclinical and clinical development of our product candidates.
Results of Operations Fluctuations in Operating Results Our results of operations have fluctuated significantly from period to period in the past and are likely to continue to do so in the future.
Any interest and penalties related to uncertain tax positions will be reflected in income tax expense. Results of Operations Fluctuations in Operating Results Our results of operations have fluctuated significantly from period to period in the past and are likely to continue to do so in the future.
The increase in net product sales of NUPLAZID of $32.0 million was due to the growth in NUPLAZID unit sales as well as a higher average net selling price in NUPLAZID in 2023 compared to 2022. Net product sales of DAYBUE were $177.2 million for 2023. There were no net product sales of DAYBUE during 2022.
The increase in net product sales of DAYBUE of $43.0 million was due to the growth in DAYBUE unit sales as well as a higher average net selling price of DAYBUE in 2025 compared to 2024.
In November 2023, we initiated a Phase 2 study evaluating the efficacy and safety of ACP-204 for the treatment of hallucinations and delusions associated with ADP. We plan to initiate an additional Phase 2 study of ACP-204 in LBDP in the third quarter of 2025.
Our most advanced current product candidate is remlifanserin for the treatment of ADP and LBDP. In November 2023, we initiated a Phase 2 study evaluating the efficacy and safety of remlifanserin for the treatment of hallucinations and delusions associated with ADP. We initiated an additional Phase 2 study of remlifanserin in LBDP in September 2025.
Net cash used in investing activities totaled $30.5 million in 2024 compared to net cash provided by investing activities of $32.0 million in 2023 and net cash provided by investing activities of $73.2 million in 2022. The increase in net cash used in investing activities in 2024 compared to 2023 was primarily due to increased net purchases of investment securities.
The increase in net cash used in investing activities in 2024 compared to 2023 was primarily due to increased net purchases of investment securities. Net cash provided by financing activities was $49.9 million in 2025 compared to $6.8 million in 2024 and $25.1 million in 2023.
We do not expect our cost of product sales for DAYBUE to increase significantly as a percentage of net product sales in future periods as we continue to produce inventory for future sales.
We do not expect our cost of product sales for DAYBUE to increase significantly as a percentage of net product sales in future periods as we continue to produce inventory for future sales. 77 Subsequent to using our entire zero cost inventories, we estimate our overall cost of product sales as a percentage of total net product sales will be in the range of a mid-single digit to high single digit percentage.
The SDs charge back to us the difference between the price initially paid by the SDs and the discounted price paid to the SDs by these entities. We also incur group purchasing organization fees for transactions through certain purchasing organizations. We estimate sales with these entities and accrue for anticipated chargebacks and organization fees, based on the applicable contractual terms.
We also incur group purchasing organization fees for transactions through certain purchasing organizations. We estimate sales with these entities and accrue for anticipated chargebacks and organization fees, based on the applicable contractual terms. To date, our estimates have not differed materially from the actual chargebacks and organization fees.
Similarly, we are unable to estimate with certainty the costs we will incur for post-marketing studies that we committed to conduct in connection with FDA approval of DAYBUE.
Similarly, we are unable to estimate with certainty the costs we will incur for post-marketing studies that we committed to conduct in connection with FDA approval of DAYBUE. We expect our research and development expenses will continue to be substantial as we conduct studies pursuant to our PMRs and pursue the further development of remlifanserin and other early-stage product candidates.
This $317.1 million increase in cash, cash equivalents, and investment securities during 2024 was primarily due to net cash provided by operating activities, including the sale of the PRV.
This $63.7 million increase in cash, cash equivalents, and investment securities during 2025 was primarily due to net cash provided by operating activities. Net cash provided by operating activities was $109.8 million in 2025 compared to $157.7 million in 2024 and $16.7 million in 2023.
Information in the following discussion for a yearly period means for the year ended December 31 of the indicated year. Overview Background We are a biopharmaceutical company focused on the development and commercialization of innovative medicines that address unmet medical needs in CNS disorders and rare diseases. We have two core franchises in neuroscience and neuro-rare diseases.
Information in the following discussion for a yearly period means for the year ended December 31 of the indicated year. Overview Background We are a biopharmaceutical company focused on turning scientific promise into meaningful innovation that makes the difference for underserved neurological and rare disease communities around the world. We have two core franchises in neurological and rare diseases.
We have several product candidates in earlier stages of development for the treatment of CNS disorders and rare diseases, including ACP-711 for the treatment of essential tremor, for which we expect to initiate a Phase 2 study in 2026. 64 We have incurred substantial operating losses since our inception due in large part to expenditures for our research and development activities.
These include ACP-711 for the treatment of essential tremor, with a Phase 2 study expected to begin in 2026; and ACP-271, a GPR88 agonist, with a first-in-human study in healthy volunteers planned for the first quarter of 2026. We have incurred substantial operating losses since our inception due in large part to expenditures for our research and development activities.
The increase in selling, general and administrative expenses was primarily due to increased commercial costs associated with the DAYBUE launch, partially offset by reductions in expenses associated with NUPLAZID. Liquidity and Capital Resources We have funded our operations primarily with revenues from sales of our products since their approvals, and through sales of our equity securities and interest income.
Liquidity and Capital Resources We have funded our operations primarily with revenues from sales of our products since their approvals, and through sales of our equity securities and interest income.
Research and Development Accruals We estimate certain costs and expenses and accrue for these liabilities as part of our process of preparing financial statements.
However, subsequent changes in estimates may result in a material change in our accruals, which could also materially affect our balance sheet and results of operations. Research and Development Accruals We estimate certain costs and expenses and accrue for these liabilities as part of our process of preparing financial statements.
As of December 31, 2024 we have long-term contractual obligations related to our operating leases of $59.4 million. In May 2023, we subleased our 2 nd floor of corporate office space in San Diego with a total minimum sublease income of $18.4 million.
In May 2023, we subleased our 2 nd floor of corporate office space in San Diego with a total minimum sublease income of $18.4 million. In addition to operating leases, we enter into certain other long-term commitments for goods and services that are outstanding for periods greater than one year.
As actual costs become known to us, we adjust our accruals. To date, our estimates have not differed materially from the actual costs incurred. However, subsequent changes in estimates may result in a material change in our accruals, which could also materially affect our balance sheet and results of operations.
As actual costs become known to us, we adjust our accruals. To date, our estimates have not differed materially from the actual costs incurred.
We expect our research and development expenses will continue to be substantial as we conduct studies pursuant to our PMRs and pursue the further development of ACP-101, ACP-204 and other early-stage product candidates. The lengthy process of completing clinical trials and supporting development activities and seeking regulatory approval for our product candidates requires the expenditure of substantial resources.
The lengthy process of completing clinical trials and supporting development activities and seeking regulatory approval for our product candidates requires the expenditure of substantial resources.
In November 2023, we initiated the Phase 3 COMPASS PWS study evaluating the efficacy and safety of ACP-101 for the treatment of hyperphagia in PWS. Our next most advanced product candidate is ACP-204 for the treatment of ADP.
In September 2025, we announced top-line results from our COMPASS PWS study, a Phase 3 study evaluating the efficacy and safety of ACP-101 for the treatment of hyperphagia in PWS.
Net cash provided by operating activities was $157.7 million in 2024 compared to net cash provided by operating activities of $16.7 million in 2023 and net cash used in operating activities of $114.0 million in 2022.
Net cash used in investing activities totaled $302.6 million in 2025 compared to net cash used in investing activities of $30.5 million in 2024 and net cash provided by investing activities of $32.0 million in 2023.
The FDA has released us from one of the five PMRs. In addition, we have fulfilled one of the five PMRs. Of the remaining three PMRs, we have also completed one and we are awaiting the FDA’s acknowledgement and acceptance of that completed PMR. We will be responsible for all costs incurred for these PMRs.
The FDA has released us from one of the five PMRs. In addition, we have fulfilled three of the five PMRs. We will be responsible for all costs incurred for these PMRs. In addition, we expect to incur increased research and development expenses as a result of advancement of our early-stage product candidates.
Income tax expense may fluctuate from quarter to quarter due to adjustments related to non-recurring transactions, timing of revenue and expense across different tax jurisdictions and changes in certain tax assessments. Critical Accounting Policies and Estimates A summary of the significant accounting policies is provided in Note 2 to our Consolidated Financial Statements.
Critical Accounting Policies and Estimates A summary of the significant accounting policies is provided in Note 2 to our Consolidated Financial Statements.
The FDA approved DAYBUE in March 2023 for the treatment of Rett syndrome and we launched the product in the United States in April 2023. Cost of Product Sales Cost of product sales consists of third-party manufacturing costs, freight, and indirect overhead costs associated with sales of our products.
The Ministry of Health in Israel recently approved DAYBUE for the treatment of Rett syndrome in adults and pediatric patients 2 years of age and older and weighing at least 9 kg in December 2025. Cost of Product Sales Cost of product sales consists of third-party manufacturing costs, freight, duties, and indirect overhead costs associated with sales of our products.
Such short-term agreements are generally outstanding for periods less than a year and are settled by cash payments upon delivery of goods and services. The nature of the work being conducted under these agreements is such that, in most cases, the services may be stopped on short notice.
The nature of the work being conducted under these agreements is such that, in most cases, the services may be stopped on short notice. In such event, we would not be liable for the full amount of the agreement.
The following table provides a summary of activity with respect to our sales allowances and accruals for the year ended December 31, 2023 (in thousands): Distribution Fees, Discounts & Chargebacks Co-Pay Assistance Rebates, Data Fees & Returns Total Balance at December 31, 2022 $ 10,923 $ (340 ) $ 26,046 $ 36,629 Provision related to current period sales 97,797 3,979 113,011 214,787 Credits/payments for current period sales (85,641 ) (4,499 ) (26,957 ) (117,097 ) Credits/payments for prior period sales (10,923 ) 340 (26,046 ) (36,629 ) Balance at December 31, 2023 $ 12,156 $ (520 ) $ 86,054 $ 97,690 Cost of Product Sales Cost of product sales was $41.6 million and $10.2 million in 2023 and 2022, respectively, or approximately 6% and 2% of net product sales, respectively.
The following table provides a summary of activity with respect to our sales allowances and accruals for the year ended December 31, 2025 (in thousands): Distribution Fees, Discounts & Chargebacks Co-Pay Assistance Rebates, Data Fees & Returns Total Balance at December 31, 2024 $ 11,883 $ (114 ) $ 148,106 $ 159,875 Provision related to current period sales 145,584 6,779 197,113 349,476 Credits/payments for current period sales (129,127 ) (6,816 ) (69,589 ) (205,532 ) Credits/payments for prior period sales (11,883 ) 114 (135,190 ) (146,959 ) Balance at December 31, 2025 $ 16,457 $ (37 ) $ 140,440 $ 156,860 Cost of Product Sales Cost of product sales was $89.0 million and $81.8 million for the years ended December 31, 2025 and 2024, respectively, or approximately 8% and 9% of net product sales, respectively.
During the year ended December 31, 2024, we sold the PRV to a third party for the aggregate net proceeds of $146.5 million. 66 Income Tax Expense Because we maintain a full valuation allowance against our net deferred tax assets, income tax expense is expected to primarily consist of current federal and state tax expense as a result of taxable income anticipated or incurred in certain jurisdictions.
During the year ended December 31, 2024, we sold the PRV to a third party for the aggregate net proceeds of $146.5 million. 72 Income Tax Expense Our provision for income taxes, deferred tax assets and liabilities, and reserves for unrecognized tax benefits reflect our best assessment of estimated future taxes to be paid.
We also paid Neuren $48.8 million for one third of the net proceeds from sale of PRV in February 2025. We expect to receive our first invoice for rebates under the IRA from Medicare Part D unit sales in 2025.
We expect to receive an invoice for rebates under the IRA from Medicare Part D unit sales for applicable period of October 1, 2024 to September 30, 2025 in June 2026.
However, subsequent changes in estimates may result in a material change in our accruals, which could also materially affect our balance sheet and results of operations. 67 Chargebacks : Chargebacks are discounts and fees that relate to contracts with government and other entities purchasing from the SDs at a discounted price.
Chargebacks : Chargebacks are discounts and fees that relate to contracts with government and other entities purchasing from the SDs at a discounted price. The SDs charge back to us the difference between the price initially paid by the SDs and the discounted price paid to the SDs by these entities.
Cost of product sales as a percentage of net product sales for NUPLAZID remained flat in 2023 as compared to 2022.
Cost of product sales as a percentage of net product sales for both NUPLAZID and DAYBUE remained relatively flat in 2025 as compared to 2024. The increase in cost of product sales was primarily due to the increased standard per unit manufacturing cost for DAYBUE as we substantially finished the zero cost inventories.
Removed
Our most advanced product candidate is ACP-101 (intranasal carbetocin) for the treatment of hyperphagia in PWS, a neuro rare disease. Hyperphagia is an intense persistent sensation of hunger accompanied by food preoccupations, an extreme drive to consume food, food-related behavior problems, and a lack of normal satiety.
Added
In the fourth quarter of 2025, we initiated a Phase 2 study of ACP-211 for the treatment of major depressive disorder. Until September 2025 we had been developing the product candidate ACP-101 (intranasal carbetocin) for the treatment of hyperphagia in PWS, a neuro rare disease.
Removed
To date, our estimates have not differed materially from the actual chargebacks and organization fees. However, subsequent changes in estimates may result in a material change in our accruals, which could also materially affect our balance sheet and results of operations.
Added
In the study, ACP-101 did not demonstrate a statistically significant improvement over placebo on the study’s primary endpoint, change from baseline to Week 12 on the Hyperphagia Questionnaire for Clinical Trials (HQ-CT), nor was there separation from placebo on any secondary endpoint.
Removed
The increase in cost of product sales was primarily due to the $21.8 million in license fees and royalties expensed during 2023 for DAYBUE, including royalties due to Neuren based on net sales of DAYBUE and the amortization of the milestone payments capitalized under our 2018 license agreement with Neuren.
Added
As a result, we do not intend to investigate ACP-101 any further. 70 We have several product candidates in earlier stages of development for the treatment of neurological and rare diseases.
Removed
There were no license fees and royalties in the same period of 2022 for either product. Certain manufacturing related expenses incurred prior to DAYBUE receiving FDA approval were classified as research and development expenses, resulting in zero cost inventory.
Added
The FDA approved DAYBUE in March 2023 for the treatment of Rett syndrome and we launched the product in the United States in April 2023. Health Canada granted marketing authorization of DAYBUE for the treatment of Rett syndrome in adult and pediatric patients 2 years of age and older in October 2024.
Removed
Subsequent to using our entire zero cost inventories, we estimate our overall cost of product sales as a percentage of total net product sales will be in the range of a mid-single digit to high single digit percentage. 70 Research and Development Expenses Research and development expenses decreased to $351.6 million in 2023, including $17.4 million in stock-based compensation expense, from $361.6 million in 2022, including $22.6 million in stock-based compensation expense.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeIf a 10 percent change in interest rates were to have occurred on December 31, 2024 and 2023, this change would not have had a material effect on the fair value of our investment portfolio as of that date.
Biggest changeIf a 10 percent change in interest rates were to have occurred on December 31, 2025 and 2024, this change would not have had a material effect on the fair value of our investment portfolio as of that date.

Other ACAD 10-K year-over-year comparisons