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What changed in CATALYST PHARMACEUTICALS, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CATALYST 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.

+616 added−497 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in CATALYST PHARMACEUTICALS, INC.'s 2025 10-K

616 paragraphs added · 497 removed · 406 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

191 edited+73 added−41 removed258 unchanged
Biggest changeUnder the License Agreement, we make the following royalty payments on our net sales of FIRDAPSE®: ● Royalties to the licensor for seven years from the first commercial sale of FIRDAPSE® equal to 7% of net sales (as defined in the License Agreement) in North America for any calendar year for sales up to $100 million, and 10% of net sales in North America in any calendar year in excess of $100 million; and ● Royalties to the third party licensor of the rights sublicensed to us for seven years from the first commercial sale of FIRDAPSE® equal to 7% of net sales (as defined in the License Agreement between BioMarin and the third party licensor) in any calendar year for the duration of any pending or issued patents or regulatory exclusivity within a territory and 3.5% of net sales in any calendar year in territories without pending or issued patents or regulatory exclusivity. 9 Table of Contents On May 29, 2019, we entered into an amendment to the License Agreement.
Biggest changeUnder the License Agreement, we pay royalties to the third-party licensor of the rights sublicensed to us from the approval of FIRDAPSE® equal to 7% of net sales (as defined in the License Agreement between BioMarin and the third-party licensor) in any calendar year for the lesser of 7 years or the duration of any pending or issued patents licensed from the third-party licensor within a territory and 3.5% of net sales in any calendar year in territories without pending or issued patents or regulatory exclusivity.
(Lupin)) advising that they had each submitted an ANDA to the FDA seeking authorization from the FDA to manufacture, use or sell a generic version of FIRDAPSE® in the U.S.
(Lupin)) advising that they each had submitted an ANDA to the FDA seeking authorization from the FDA to manufacture, use or sell a generic version of FIRDAPSE® in the U.S.
If we were to pursue a patent infringement action if any such ANDA challenges any of AGAMREE®’s Orange Book patents, then the automatic statutory 30-month stay would prevent FDA approval of such ANDA until April 26, 2031.
If we were to pursue a patent infringement action of any such ANDA challenges of any of AGAMREE®’s Orange Book patents, then the automatic statutory 30-month stay would prevent FDA approval of such ANDA until April 26, 2031.
Of this number, approximately 3 million are adults and 470,000 are children. There are 150,000 new cases of epilepsy in the U.S. each year. Worldwide, about 65 million people have epilepsy.
Of this number, approximately 3 million are adults and 470,000 are children. There are approximately 150,000 new cases of epilepsy in the U.S. each year. Worldwide, about 65 million people have epilepsy.
As a condition of NDA approval, the FDA may also require a risk evaluation and mitigation strategy (REMS), to help ensure that the benefits of the drug outweigh the potential risks. REMS can include medication guides, communication plans for the healthcare professionals, and other Elements To Assure Safe Use (ETASU).
As a condition of NDA approval, the FDA may also require a risk evaluation and mitigation strategy (REMS), to help ensure that the benefits of the drug outweigh the potential risks. REMS can include medication guides, communication plans for healthcare professionals, and other Elements To Assure Safe Use (ETASU).
Under the Federal Food, Drug, and Cosmetic Act (FDCA), as amended by the Drug Price Competition and Patent Term Restoration Act of 1984, we had 45 days from receipt of the notice letters to determine if there were grounds to bring a lawsuit and, if so, to commence patent infringement lawsuits against these generic drug manufacturers in a federal district court, which would trigger a statutory stay precluding the FDA from final approval of the subject ANDA until May 2026 or entry of judgment holding the patents invalid, unenforceable, or not infringed, whichever occurs first in all cases (but not earlier than the expiration of orphan drug exclusivity on November 28, 2025).
Under the Federal Food, Drug, and Cosmetic Act (FDCA), as amended by the Drug Price Competition and Patent Term Restoration Act of 1984, we had 45 days from receipt of the notice letters to determine if there were grounds to bring a lawsuit and, if so, to commence patent infringement lawsuits against these generic drug manufacturers in a federal district court, which would trigger a statutory stay precluding the FDA from final approval of the subject ANDA until May 26, 2026 or entry of judgment holding the patents invalid, unenforceable, or not infringed, whichever occurs first in all cases (but not earlier than the expiration of orphan drug exclusivity on November 28, 2025).
Additional patents claiming priority from the patents noted above issued in March 2022 as Patent Nos. 11,268,128, 11,274,332, and 11,274,331, and extended our patent coverage to include fast metabolizers of amifampridine. These patents are now listed in the Orange Book for FIRDAPSE®. As part of our transaction with Jacobus Pharmaceuticals, we also acquired two patents.
Additional patents claiming priority from the patents noted above issued in March 2022 as Patent Nos. 11,268,128, 11,274,332, and 11,274,331, and extended our patent coverage to include fast metabolizers of amifampridine. These patents are now listed in the Orange Book for FIRDAPSE®. As part of our transaction with Jacobus, we also acquired two patents.
Further, on January 8, 2025, we reached a settlement with Teva in which Teva agreed not to market a generic version of FIRDAPSE® in the U.S. any earlier than February 25, 2035, if approved by the FDA, unless certain limited circumstances customarily included in these types of agreements occur.
On January 8, 2025, we reached a settlement with Teva in which Teva agreed not to market a generic version of FIRDAPSE® in the U.S. any earlier than February 25, 2035, if approved by the FDA, unless certain limited circumstances customarily included in these types of agreements occur.
Once an NDA is approved, changes to the conditions of approval, including additional indications, are made by the submission of a supplement to the NDA. The supplemental NDA (sNDA) must contain all of the information necessary to support the change. In the case of a new indication, that information usually consists of at least one clinical trial, and often more.
Once an NDA is approved, changes to the conditions of approval, including additional indications, are made by the submission of a supplement to the NDA. The sNDA must contain all of the information necessary to support the change. In the case of a new indication, that information usually consists of at least one clinical trial, and often more.
Future Markets for FIRDAPSE® Under the amendment to our license agreement that added Japan to our territory, our territory in which we have the right to seek to commercialize FIRDAPSE® has automatically expanded to include several countries in Asia-Pacific and South and Central America, and we are working to expand our FIRDAPSE® activities into some of these.
Future Markets for FIRDAPSE® Under the amendment to our license agreement that added Japan to our territory, our territory in which we have the right to seek to commercialize FIRDAPSE® has automatically expanded to include several countries in Asia-Pacific and South and Central America, and we are working to expand our FIRDAPSE® activities into some of these territories.
Finally, on July 23, 2024 we entered into a license, supply and commercialization agreement with KYE, which is already our sublicensee for FIRDAPSE® in Canada, granting KYE the exclusive Canadian commercial rights to market AGAMREE® in Canada for DMD and other indications.
On July 23, 2024 we entered into a license, supply and commercialization agreement with KYE, which is already our sublicensee for FIRDAPSE® in Canada, granting KYE the exclusive Canadian commercial rights to market AGAMREE® in Canada for DMD and other indications.
However, this program has recently been discontinued because the API for RUZURGI® is no longer available and we are therefore unable to manufacture additional product. Sales, Marketing and Distribution Marketing of FIRDAPSE® In January 2019, we launched FIRDAPSE® in the U.S.
However, this program has been discontinued because the API for RUZURGI® is no longer available and we are therefore unable to manufacture additional product. Sales, Marketing and Distribution Marketing of FIRDAPSE® In January 2019, we launched FIRDAPSE® in the U.S.
AGAMREE® The market for DMD treatment is highly competitive, with multiple lines of treatment and medications, both name brand and generic. The first-line treatment has long been and continues to be corticosteroids. On February 9, 2017, the FDA approved Emflaza (deflazacort), a corticosteroid marketed by PTC Therapeutics for the treatment of DMD in patients 5 years old and older.
AGAMREE® The market for DMD treatment is highly competitive, with multiple lines of treatment and medications, both name brand and generic. The first-line treatment has long been and continues to be corticosteroids. On February 9, 2017, the FDA approved Emflaza (deflazacort), a corticosteroid marketed by PTC Therapeutics for the treatment of DMD in patients five years old and older.
Item 1. B usiness Overview We are a commercial-stage, patient-centric biopharmaceutical company focused on in-licensing, developing, and commercializing novel high-quality medicines for patients living with rare and difficult to treat diseases. We currently market three drug products, FIRDAPSE® (amifampridine), FYCOMPA® (perampanel), and AGAMREE® (vamorolone).
Item 1. B usiness Overview We are a commercial-stage, patient-centric biopharmaceutical company focused on in-licensing, developing, and commercializing novel high-quality medicines for patients living with rare and difficult to treat diseases. We currently sell three commercial stage drug products, FIRDAPSE® (amifampridine), AGAMREE® (vamorolone), and FYCOMPA® (perampanel).
Further, on December 18, 2023, the European Commission (EC) granted to Santhera marketing authorization for AGAMREE® for the treatment of DMD in patents ages four years and older and on January 12, 2024 Santhera announced that AGAMREE® had received approval by the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom.
Further, on December 18, 2023, the European Commission (EC) granted to Santhera marketing authorization for AGAMREE® for the treatment of DMD in patients ages four years and older and on January 12, 2024 Santhera announced that AGAMREE® had received approval by the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom.
Patients were titrated over 4 weeks up to a dose of 8 mg per day or the highest tolerated dose and treated for an additional 13 weeks on the last dose level achieved at the end of the titration period. The total treatment period was 17 weeks. Study drug was given once per day.
Patients were titrated over 4 weeks up to a dose of 8 mg per day or the highest tolerated 17 Table of Contents dose and treated for an additional 13 weeks on the last dose level achieved at the end of the titration period. The total treatment period was 17 weeks. Study drug was given once per day.
Among the remedies available to the government for any failure to properly disclose commercial pricing and/or to extend FSS contract price reductions is recoupment of any FSS overcharges that may result from such omissions, and civil penalties under the Federal False Claims Act if such failures are knowing.
Among the remedies available to the government for any failure to properly disclose commercial pricing and/or to extend FSS contract price reductions is recoupment of any FSS overcharges that may result from such omissions, and civil penalties under the Federal False Claims Act if such failures are known.
We are supporting the distribution of FIRDAPSE® through Catalyst Pathways®, our personalized treatment support program for patients who enroll in it. Catalyst Pathways® is a single source for personalized treatment support, education and guidance through the challenging dosing and titration regimen required to reach an effective therapeutic dose.
We are supporting the distribution in the U.S. of FIRDAPSE® through Catalyst Pathways®, our personalized treatment support program for patients who enroll in it. Catalyst Pathways® is a single source for personalized treatment support, education and guidance through the challenging dosing and titration regimen required to reach an effective therapeutic dose.
Because we have Orange Book listed patents for FIRDAPSE®, potential generic filers were permitted to submit ANDA filings to the FDA starting on the “NCE-1” date (November 28, 2022). For a description of currently ongoing Paragraph IV litigation related to FIRDAPSE®, see “Item 1.
Because we had Orange Book listed patents for FIRDAPSE®, potential generic filers were permitted to submit ANDA filings to the FDA starting on the “NCE-1” date (November 28, 2022). For a description of currently ongoing Paragraph IV litigation related to FIRDAPSE®, see “Item 1.
For 2026, the first year in which negotiated prices become effective, CMS selected 10 high-cost Medicare Part D products in 2023, negotiations began in 2024, and the negotiated maximum fair price for each product has been announced. CMS has selected 15 additional Medicare Part D drugs for negotiated maximum fair pricing in 2027.
For 2026, the first year in which negotiated prices become effective, CMS selected 10 high-cost Medicare Part D products in 2023, negotiations began in 2024, and the negotiated maximum fair price for each product has been announced. In addition, CMS has selected and announced the negotiated maximum fair price for 15 additional Medicare Part D drugs in 2027.
Even with the availability of such 24 Table of Contents studies, our products may be considered less safe, less effective or less cost-effective than alternative products, and third party payors may not provide coverage and reimbursement for our drug candidates, in whole or in part.
Even with the availability of such 25 Table of Contents studies, our products may be considered less safe, less effective or less cost-effective than alternative products, and third-party payors may not provide coverage and reimbursement for our drug candidates, in whole or in part.
New chemical entity exclusivity provides a five-year period of marketing exclusivity for all indications and in the absence of an Orange Book listed 12 Table of Contents patent, precludes a generic from submitting an ANDA until that five-year period has expired.
New chemical entity 13 Table of Contents exclusivity provides a five-year period of marketing exclusivity for all indications and in the absence of an Orange Book listed patent, precludes a generic from submitting an ANDA until that five-year period has expired.
Under the Orphan Drug Act of 1983 (ODA), the FDA may grant Orphan Drug Designation to drugs intended to treat a rare disease or condition that affects fewer than 200,000 individuals in the U.S., or more than 200,000 individuals in the U.S. and for which there is no reasonable expectation that the cost of developing and making available in the U.S. a drug for this type of disease or condition will be recovered from sales in the U.S. for that drug.
Under the Orphan Drug Act of 1983 (ODA), the FDA may grant Orphan Drug Designation to drugs intended to treat a rare disease or condition that affects fewer than 200,000 individuals in the U.S., or more than 200,000 individuals in the U.S. and for which there is no reasonable expectation that the cost of developing and making available in the U.S. a drug for this 26 Table of Contents type of disease or condition will be recovered from sales in the U.S. for that drug.
Failure to promptly conduct Phase 4 clinical trials where necessary could result in withdrawal of approval for products approved under accelerated approval regulations. 20 Table of Contents While Phase 1, Phase 2, and Phase 3 tests are generally required for approval of an NDA, certain drugs may not require one or more steps in the process depending on other testing and the situation involved.
Failure to promptly conduct Phase 4 clinical trials where necessary could result in withdrawal of approval for products approved under accelerated approval regulations. While Phase 1, Phase 2, and Phase 3 tests are generally required for approval of an NDA, certain drugs may not require one or more steps in the process depending on other testing and the situation involved.
Eligible patients on a stable dose of 1 to 3 AEDs experiencing at least 3 primary generalized tonic-clonic seizures during the 8-week baseline period were randomized to either FYCOMPA® 14 Table of Contents or placebo. Efficacy was analyzed in 162 patients (FYCOMPA® N=81, placebo N=81) who received medication and at least one post-treatment seizure assessment.
Eligible patients on a stable dose of 1 to 3 AEDs experiencing at least 3 primary generalized tonic-clonic seizures during the 8-week baseline period were randomized to either FYCOMPA® or placebo. Efficacy was analyzed in 162 patients (FYCOMPA® N=81, placebo N=81) who received medication and at least one post-treatment seizure assessment.
Further, one other product, guanidine HCl tablets, was approved many years ago (during a period when drugs were not required to be reviewed by the FDA for both safety and effectiveness) for use in the treatment of LEMS. However, this drug has significant side effects and is not currently viewed as an effective treatment for LEMS.
Further, one other product, guanidine HCl tablets, was approved many years ago (during a period when drugs were not required to be reviewed by the FDA for both safety and effectiveness) for use in the treatment of LEMS. However, this drug has significant side effects and is not currently believed to be an effective treatment for LEMS.
Based on currently available information, we estimate that there are at least 3,600 LEMS patients in the U.S., approximately half of which we believe are presently diagnosed and identified and the remainder of which we believe are undiagnosed or misdiagnosed.
Based on currently available information, we estimate that there are approximately 3,600 LEMS patients in the U.S., approximately half of which we believe are presently diagnosed and identified and the remainder of which we believe are undiagnosed or misdiagnosed.
Intellectual property and regulatory exclusivity protections for FIRDAPSE® The bulk of our patent rights related to FIRDAPSE® are derived from our license agreement with BioMarin, which was transferred to SERB in 2020. In August 2020, the U.S.
Intellectual property and regulatory exclusivity protections for FIRDAPSE® The majority of our patent rights related to FIRDAPSE® are derived from our license agreement with BioMarin, which was transferred to SERB in 2020. In August 2020, the U.S.
DMD causes muscle weakness that worsens over time, and common symptoms include: • Progressive muscle weakness and atrophy that begins in the legs and pelvis, occurring less severely in the arms, neck, and other areas of the body. • Calf muscle hypertrophy (increase in muscle size). • Difficulty climbing up stairs. • Difficulty walking that gets worse over time. • Frequent falls. 16 Table of Contents • Waddling gait (walk). • Toe walking. • Fatigue.
DMD causes muscle weakness that worsens over time, and common symptoms include: • Progressive muscle weakness and atrophy that begins in the legs and pelvis, occurring less severely in the arms, neck, and other areas of the body. • Calf muscle hypertrophy (increase in muscle size). • Difficulty climbing up stairs. • Difficulty walking that gets worse over time. • Frequent falls. • Waddling gait (walk). • Toe walking. • Fatigue.
Finally, on May 30, 2024, the FDA approved our sNDA increasing the indicated maximum daily dosage of FIRDAPSE® tablets for the treatment of patients with LEMS from 80 mg to 100 mg. We believe that this recent sNDA approval offers healthcare providers and patients greater flexibility in treatment regimens for the management of LEMS.
Additionally, on May 30, 2024, the FDA approved our sNDA increasing the indicated maximum daily dosage of FIRDAPSE® tablets for the treatment of patients with LEMS from 80 mg to 100 mg. We believe that this most recent sNDA approval offers healthcare providers and patients greater flexibility in treatment regimens for the management of LEMS.
The IRA also allows HHS to negotiate the selling price of certain drugs and biologics that CMS reimburses under Medicare Part B and Part D. The negotiated price may not exceed a statutory ceiling price.
The IRA also requires HHS to negotiate the selling price of certain drugs and biologics that CMS reimburses under Medicare Part B and Part D. The negotiated price may not exceed a statutory ceiling price.
Acetylcholine is the neurotransmitter responsible for causing muscles to contract and the failure to release enough of this neurotransmitter results in muscle weakness in LEMS patients. Additionally, LEMS is often associated with an underlying malignancy, most commonly small-cell lung cancer (SCLC), and in some individuals, LEMS is the first symptom of such malignancy.
Acetylcholine is the neurotransmitter responsible for causing muscles to contract and the failure to release enough of this neurotransmitter results in muscle weakness in LEMS patients. Additionally, LEMS is often associated with an underlying malignancy, most commonly small-cell lung cancer 9 Table of Contents (SCLC), and in some individuals, LEMS is the first symptom of such malignancy.
At the time of its approval, the FDA included specific significant warnings for FYCOMPA® in the prescribing information that it required to be included prominently in all communications about the product. Such warnings are known as “black box” warnings because they are traditionally surrounded by a black box to emphasize their significance.
At the time of its approval, the FDA included specific significant warnings for FYCOMPA®, in the prescribing information, that it required to be included prominently in all communications about the product. Such warnings are known as boxed warnings because they are traditionally surrounded by a black box to emphasize their significance.
Alternatively, if the NDA applicant or relevant patent holder does not file 23 Table of Contents a patent infringement lawsuit within the specified 45-day period, the FDA may approve the Section 505(b)(2) application at any time. ANDAs Generic drugs may enter the market after the approval of an ANDA.
Alternatively, if the NDA applicant or relevant patent holder does not file a patent infringement lawsuit within the specified 45-day period, the FDA may approve the Section 505(b)(2) application at any time. ANDAs Generic drugs may enter the market after the approval of an ANDA.
Other common symptoms of DMD include: • Cardiomyopathy. • Breathing difficulties and shortness of breath. • Cognitive impairment and learning difficulty. • Delayed speech and language development. • Developmental delay. • Scoliosis. • Short stature. DMD is caused by a mutation in the gene that gives instructions for a protein called dystrophin.
Other common symptoms of DMD include: • Cardiomyopathy. • Breathing difficulties and shortness of breath. • Cognitive impairment and learning difficulty. • Delayed speech and language development. 15 Table of Contents • Developmental delay. • Scoliosis. • Short stature. DMD is caused by a mutation in the gene that gives instructions for a protein called dystrophin.
There are many pharmaceutical companies, biotechnology companies, public and private universities, government agencies and research organizations that compete with us in developing various approaches to the treatment of orphan diseases. Many of these organizations have substantially greater financial, technical, marketing and manufacturing resources than we have.
There are many pharmaceutical companies, biotechnology companies, public and private universities, government agencies and 18 Table of Contents research organizations that compete with us in developing various approaches to the treatment of orphan diseases. Many of these organizations have substantially greater financial, technical, marketing and manufacturing resources than we have.
When a Tricare beneficiary obtains a prescription drug through a retail pharmacy, the DoD reimburses the pharmacy at the retail price for the drug rather than procuring it from the manufacturer at the discounted FCP discussed above.
When a TRICARE beneficiary obtains a prescription drug through a retail pharmacy, the DoD (through its contractor) reimburses the pharmacy at the retail price for the drug rather than procuring it from the manufacturer at the discounted FCP discussed above.
We also work with several rare disease advocacy organizations (including the Myasthenia Gravis Foundation of America, the National Organization for Rare Disorders, and the LEMS Family Association) to help increase awareness and level of support for patients living with LEMS and to provide education for the physicians who treat these rare diseases and the patients they treat.
We also work with several rare disease advocacy organizations (including the Myasthenia Gravis Foundation of America, the National Organization for Rare Disorders, and the LEMS Family Association) to help increase awareness and level of support for patients living with LEMS and to provide education for the physicians who treat this rare disease and the patients they treat.
Our recruitment, hiring, development, training, compensation, and advancement is based on qualifications, performance, skills, and experience without regard to gender, race, or ethnicity. Communication and Engagement We focus on engagement with our employees as we believe an engaged workforce is key to our success and to the success and wellbeing of our employees.
Our recruitment, hiring, development, training, compensation, and advancement is based on qualifications, performance, skills, and experience without regard to gender, race, or ethnicity. 32 Table of Contents Communication and Engagement We focus on engagement with our employees as we believe an engaged workforce is key to our success and to the success and wellbeing of our employees.
Additionally, following approval of the NDA for the drug, on October 26, 2023, we became obligated to make milestone payments of $36 million to Santhera, $26 million 15 Table of Contents of which will be used by Santhera to make milestone payments to third parties. This payment were made in the fourth quarter of 2023.
Additionally, following approval of the NDA for the drug, on October 26, 2023, we became obligated to make milestone payments of $36 million to Santhera, $26 million of which will be used by Santhera to make milestone payments to third parties. This payment were made in the fourth quarter of 2023.
Recently, 27 Table of Contents several pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly inflating drug prices they report to pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product.
Recently, several pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly inflating drug prices they report to pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product.
Each manufacturer of a drug approved under an NDA. in order for the drugs to be reimbursed by Medicare Part D, is required to enter into a manufacturer discount agreement with HHS and provide a discount on those drugs dispensed to Medicare enrollees.
Each 30 Table of Contents manufacturer of a drug approved under an NDA. in order for the drugs to be reimbursed by Medicare Part D, is required to enter into a manufacturer discount agreement with HHS and provide a discount on those drugs dispensed to Medicare enrollees.
The accuracy of a manufacturer’s reported Non-FAMPs, FCPs, or FSS contract prices may be audited by the government. Among the remedies available to the government for inaccuracies is recoupment of any overcharges to the four specified federal 29 Table of Contents agencies based on those inaccuracies.
The accuracy of a manufacturer’s reported Non-FAMPs, FCPs, or FSS contract prices may be audited by the government. Among the remedies available to the government for inaccuracies is recoupment of any overcharges to the four specified federal agencies based on those inaccuracies.
A demonstration of bioequivalence means that the rate and extent of absorption of the ANDA drug is not significantly different from the rate and extent of absorption of the brand name reference listed drug when administered at the same molar dose under similar experimental conditions.
A demonstration of bioequivalence means that the rate and extent of 24 Table of Contents absorption of the ANDA drug is not significantly different from the rate and extent of absorption of the brand name reference listed drug when administered at the same molar dose under similar experimental conditions.
Drug manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA during which the agency inspects manufacturing facilities to assess compliance with cGMPs.
Drug manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state 22 Table of Contents agencies and are subject to periodic unannounced inspections by the FDA during which the agency inspects manufacturing facilities to assess compliance with cGMPs.
In addition to retroactive rebates, if a 28 Table of Contents manufacturer were found to have knowingly submitted false information to the government, federal law provides for civil monetary penalties for failing to provide required information, late submission of required information, and false information.
In addition to retroactive rebates, if a manufacturer were found to have knowingly submitted false information to the government, federal law provides for civil monetary penalties for failing to provide required information, late submission of required information, and false information.
LEMS patients in financial need, who meet those independent organizations' guidelines. In addition, we have a safety net program in place for patients who are uninsured and underinsured. Subject to compliance with regulatory requirements, our goal is that no LEMS patient is ever denied access to their medication for financial reasons.
LEMS patients in financial need who meet those independent organizations' guidelines. In addition, we have a program in place to help patients who are uninsured and underinsured. Subject to compliance with applicable regulatory requirements, our goal is that no LEMS patient is ever denied access to their medication for financial reasons.
Further, when necessary, we provide patients with access to therapy at no charge while those patients are awaiting coverage decisions. Orphan Drug Exclusivity Some jurisdictions, including the U.S. and Europe, may designate drugs for relatively small patient populations as orphan drugs.
Further, when necessary and in compliance with applicable laws, we provide patients with access to therapy at no charge while those patients are awaiting coverage decisions. Orphan Drug Exclusivity Some jurisdictions, including the U.S. and Europe, may designate drugs for relatively small patient populations as orphan drugs.
FIRDAPSE® We have entered into agreements with a supplier of the active pharmaceutical ingredient (API) contained in FIRDAPSE® for future requirements and we have contracted with third party contract manufacturers who are manufacturing FIRDAPSE® tablets for us.
FIRDAPSE® We have entered into agreements with a supplier of the API contained in FIRDAPSE® for future requirements and we have contracted with third-party contract manufacturers who are manufacturing FIRDAPSE® tablets for us.
FDORA enables the FDA to initiate enforcement action for the failure to conduct with due diligence a required post-approval study, including a failure to meet any required conditions specified by the FDA or to submit timely reports.
The FDA may initiate enforcement action for the failure to conduct with due diligence a required post-approval study, including a failure to meet any required conditions specified by the FDA or to submit timely reports.
We strive to create a professional work environment that is free from all forms of harassment, discrimination and bullying 30 Table of Contents in the workplace, including sexual harassment and any form of retaliation.
We strive to create a professional work environment that is free from all forms of harassment, discrimination and bullying in the workplace, including sexual harassment and any form of retaliation.
However, until awareness of the disease is increased, it is unlikely that the total number of LEMS patients in the U.S. can be determined with better certainty (as is typical of rare diseases), and the actual number of patients in the U.S. with LEMS may be higher or lower than our estimate.
However, until awareness of the disease is increased, it is unlikely that the total number of LEMS patients in the U.S. can be determined with absolute certainty (as is typical of rare diseases), and the actual number of patients in the U.S. with LEMS may be higher or lower than our estimates.
If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired. 22 Table of Contents A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification.
If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired. A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification.
The manufacturing process must be capable of consistently producing quality batches of the drug candidate and, among other requirements, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug.
The manufacturing process must be capable of consistently producing quality batches 21 Table of Contents of the drug candidate and, among other requirements, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug.
Finally, On January 16, 2025, the National Institute for Health and Care Excellence (NICE) issued positive Final Guidance that recommends AGAMREE® for use in the National Health Service (NHS) in England, Wales and Northern Ireland for the treatment of DMD in patients four years of age and older and on February 13, 2025, Santhera announced an agreement with the German National Association of Statutory Health Insurance Funds (GKV-SV) on the reimbursement for AGAMREE® (vamorolone) for the treatment of DMD.
Additionally, on January 16, 2025, the National Institute for Health and Care Excellence (NICE) issued positive Final Guidance that recommends AGAMREE® for use in the National Health Service (NHS) in England, Wales and Northern Ireland for the treatment of DMD in patients four years of age and older and on February 13, 2025, Santhera announced an agreement with the German National Association of Statutory Health Insurance Funds (GKV-SV) on the 6 Table of Contents reimbursement for AGAMREE® for the treatment of DMD.
If a product which has been granted Orphan Drug Designation 25 Table of Contents subsequently receives the first FDA approval for the indication for which it has such designation, the product is entitled to an orphan drug exclusivity period, which means the FDA may not approve any other application to market the same drug for the same disease or condition for a period of seven years, except in limited circumstances, such as where an alternative product demonstrates clinical superiority to the product with orphan exclusivity.
If a product which has been granted Orphan Drug Designation subsequently receives the first FDA approval for the indication or use for which it has such designation, the product is entitled to an orphan drug exclusivity period, which means the FDA may not approve any other application to market the same drug for the same indication or use for a period of seven years, except in limited circumstances, such as where an alternative product demonstrates clinical superiority to the product with orphan exclusivity.
Enrollees in Part D plans, after they meet a deductible, pay a co-insurance of 25% until they reach the out-of-pocket limit, after which they have no co-insurance. The out-of-pocket limit is $2,000 in 2025 and is to be adjusted for inflation thereafter.
Enrollees in Part D plans, after they meet a deductible, pay a co-insurance of 25% until they reach the out-of-pocket limit, after which they have no co-insurance. The out-of-pocket limit is $2,100 in 2026 and is to be adjusted for inflation thereafter.
Under the AGAMREE® License Agreement, we contracted to obtain an exclusive North America license, manufacturing and supply agreement for Santhera’s investigational product candidate, AGAMREE® (vamorolone), a novel corticosteroid for the treatment of DMD. Under the Investment Agreement, we agreed to make a strategic investment into Santhera. Both transactions closed on July 18, 2023.
Under the AGAMREE® License Agreement, we contracted to obtain an exclusive North America license, manufacturing and supply agreement for Santhera’s investigational product candidate, AGAMREE®, a novel corticosteroid for the treatment of Duchenne muscular dystrophy, or DMD. Under the Investment Agreement, we agreed to make a strategic investment into Santhera. Both transactions closed on July 18, 2023.
The process required by the FDA before a drug may be marketed in the U.S. generally involves the following: completion of pre-clinical laboratory tests, animal studies and formulation studies according to the FDA’s good laboratory practice (GLP) regulations: ● submission of an investigational new drug application (IND) which must become effective before human clinical trials may begin and which must include approval by an institutional review board, or IRB, at each clinical site before the trials are initiated; ● performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use conducted in compliance with federal regulations and good clinical practice 19 Table of Contents (GCP), an international standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators, and monitors; ● submission to, and acceptance by, the FDA of an NDA; ● satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with cGMP regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; ● potential FDA audit of the non-clinical and clinical trial sites that generated the data in support of the NDA; and ● FDA review and approval of the NDA.
The process required by the FDA before a drug may be marketed in the U.S. generally involves the following: completion of pre-clinical laboratory tests, animal studies and formulation studies according to the FDA’s good laboratory practice (GLP) regulations: • submission of an investigational new drug application (IND) which must become effective before human clinical trials may begin and which must include approval by an institutional review board, or IRB, at each clinical site before the trials are initiated; • performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use conducted in compliance with federal regulations and good clinical practice (GCP), an international standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators, and monitors; • submission to, and filing by, the FDA of an NDA; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with cGMP regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • potential FDA audit of the non-clinical and clinical trial sites that generated the data in support of the NDA; and • FDA review and approval of the NDA. 20 Table of Contents The testing and approval process requires substantial time, effort and financial resources, and the receipt and timing of any approval is uncertain.
FIRDAPSE® is currently marketed for the treatment of LEMS in Canada through our exclusive sublicensee, KYE. We supply product to KYE at agreed upon prices and we are also eligible to earn sales milestones and sales royalties based on net revenues from sales of the product in Canada. In December 2023, DyDo Pharma, Inc.
FIRDAPSE® is currently marketed for the treatment of LEMS in Canada through our exclusive sublicensee, KYE Pharmaceuticals, Inc. (KYE). We supply product to KYE at agreed upon prices and we are also eligible to earn sales milestones and sales royalties based on net revenues from sales of the product in Canada.
There have been, and we expect there will continue to be, legislative and regulatory proposals to change the healthcare system in ways that could significantly affect our business, including the Patient Protection and Affordable Care Act of 2010 (the Affordable Care Act) and the Inflation Reduction Act of 2022 (IRA).
There have been, and we expect there will continue to be, legislative and regulatory proposals to change the healthcare system in ways that could significantly affect our business, including the Patient Protection and Affordable Care Act of 2010 (the Affordable Care Act), the Inflation Reduction Act of 2022 (IRA) and Most Favored Nation (MFN) pricing.
We believe that we remain in compliance with our obligations under the License Agreement. License Agreement with Jacobus In May 2019, the FDA approved an NDA for RUZURGI®, Jacobus Pharmaceuticals’ version of amifampridine (3,4-DAP), for the treatment of pediatric LEMS patients (ages 6 to under 17).
We believe that we remain in compliance with our obligations under the License Agreement. License Agreement with Jacobus Pharmaceutical Company, Inc. (Jacobus) In May 2019, the FDA approved an NDA for RUZURGI®, Jacobus’ version of amifampridine (3,4-DAP), for the treatment of pediatric LEMS patients (ages 6 to under 17).
Further, we continue to make available at no-cost a LEMS voltage gated calcium channel antibody diagnostic testing program for use by physicians who suspect that one of their patients may have LEMS and wish to reach a definitive diagnosis. When we launched AGAMREE®, in March 2024, we utilized the FIRDAPSE® commercial field-based force for AGAMREE® as well.
Finally, we make available for online ordering a no-cost LEMS voltage gated calcium channel (VGCC) antibody diagnostic testing program for use by physicians who suspect that one of their patients may have LEMS and wish to reach a definitive diagnosis. When we launched AGAMREE®, in March 2024, we utilized the FIRDAPSE® commercial field-based force for AGAMREE® as well.
The submission of an NDA is also subject to the payment of a substantial application fee (for FDA fiscal year 2025 this fee is $4,310,002), although a waiver of such fee may be obtained under certain limited circumstances, including when the drug that is subject of the application has received Orphan Drug Designation for the indication sought.
The submission of an NDA is also subject to the payment of a substantial application fee (for FDA fiscal year 2026 this fee is $4,682,003), although a waiver of such fee may be obtained under certain limited circumstances, including when the drug that is subject of the application has received Orphan Drug Designation for the indication sought.
Anti-Kickback, False Claims Laws & the Prescription Drug Marketing Act In addition to FDA restrictions on marketing of drug products, other state and federal laws have been applied to restrict certain marketing practices in the pharmaceutical industry in recent years. These laws include anti-kickback statutes and false claims statutes.
Other Healthcare Laws and Compliance Requirements In addition to FDA restrictions on marketing of drug products, other state and federal laws have been applied to restrict certain marketing practices in the pharmaceutical industry in recent years. These laws include anti-kickback statutes and false claims statutes.
AGAMREE® On June 19, 2023, we entered into a License and Collaboration Agreement (AGAMREE® License Agreement) and an Investment Agreement (Investment Agreement) with Santhera Pharmaceuticals Holding, Inc. (Santhera).
AGAMREE® On June 19, 2023, we entered into a License and Collaboration Agreement (AGAMREE® License Agreement) and an Investment Agreement (Investment Agreement) with Santhera Pharmaceuticals Holding AG (collectively, Santhera).
Prior to beginning human clinical trials, an IND sponsor must submit an IND to the FDA. The IND sponsor must submit the results of the pre-clinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND. Some pre-clinical or non-clinical testing may continue even after the IND is submitted.
The IND sponsor must submit the results of the pre-clinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND. Some pre-clinical or non-clinical testing may continue even after the IND is submitted.
Sponsors are also obligated to disclose the results of their clinical trials after completion. Disclosure of results of these trials can be delayed in certain circumstances for up to two years after the date of completion of the clinical trial. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs.
Disclosure of results of these trials can be delayed in certain circumstances for up to two years after the date of completion of the clinical trial. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs.
Company Culture We are committed to instilling a company culture that is focused on integrity, transparency, quality and respect. We expect our employees to observe the highest levels of business ethics, integrity, mutual respect, tolerance and inclusivity.
Company Culture We are committed to instilling a company culture that is focused on empowerment, empathy, and passion. We expect our employees to observe the highest levels of business ethics, integrity, mutual respect, tolerance and inclusivity.
We subsequently dismissed all of our claims against Lupin related to those five patents but maintain our claims against Lupin for the remaining Paragraph IV certification for U.S. Patent No. 10,626,088, which is the patent expiring in 2037, accordingly the litigation continues.
We subsequently dismissed all of our claims against Lupin related to those five patents but maintained our claim against Lupin for the remaining Paragraph IV certification for U.S. Patent No. 10,626,088, which is the patent expiring in 2037.
If a product is developed solely for use in the pediatric population, then a Pediatric Use Marketing Authorization, or PUMA, may provide eight years of data exclusivity and ten years of marketing exclusivity. Breakthrough Therapy Designation Breakthrough therapy designation is intended to expedite the development and review of drugs for serious or life-threatening conditions.
If a product is developed solely for use in the pediatric population, then a Pediatric Use Marketing Authorization, or PUMA, may provide eight years of data exclusivity and ten years of marketing exclusivity. Breakthrough Therapy Designation Breakthrough therapy designation was introduced in an effort to encourage innovation and expedite the development and review of drugs for serious or life-threatening conditions.
We believe that by 3 Table of Contents using specialty pharmacies in this way, the difficult task of navigating the health care system is far better for the patient needing treatment for their rare disease and the health care community in general.
We believe that by using specialty pharmacies in this way, the task, which can be difficult, of navigating the health care system is far better for the patient needing treatment for their rare disease and the health care community in general.
Additionally, we believe that in the long term, corticosteroids like AGAMREE®, will continue to be the foundational therapy for the treatment of DMD. 18 Table of Contents Factors affecting competition generally In general, our ability to compete depends in large part upon: ● our ability to complete clinical development and obtain regulatory approvals for our drug candidates; ● the demonstrated efficacy, safety and reliability of our drug candidates; ● the timing and scope of regulatory approvals; ● product acceptance by physicians and other health care providers; ● the willingness of payors to reimburse for our product; ● protection of our proprietary rights and the level of generic competition; ● the speed at which we develop drug candidates; ● our ability to supply commercial quantities of a product to the market; ● our ability to obtain reimbursement from private and/or public insurance entities for product use in approved indications; ● our ability to recruit and retain skilled employees; and ● the availability of capital resources to fund our development and commercialization activities.
Factors affecting competition generally In general, our ability to compete depends in large part upon: • our ability to complete clinical development and obtain regulatory approvals for our drug candidates; • the demonstrated efficacy, safety and reliability of our drug candidates; • the timing and scope of regulatory approvals; • product acceptance by physicians and other health care providers; 19 Table of Contents • the willingness of payors to reimburse for our product; • protection of our proprietary rights and the level of generic competition; • the speed at which we develop drug candidates; • our ability to supply commercial quantities of a product to the market; • our ability to obtain reimbursement from private and/or public insurance entities for product use in approved indications; • our ability to recruit and retain skilled employees; and • the availability of capital resources to fund our development and commercialization activities.
Based on our current financial condition, including our profitability, cash flows generated from operations and forecasts of available cash, we believe that we have sufficient funds to support our operations for at least the next 12 months.
Based on our current financial condition, including our profitability, cash flows generated from operations and forecasts of available cash, absent the use of cash to acquire potential business development opportunities, we believe that we have sufficient funds to support our operations for at least the next 12 months.
Further, the sponsor of an approved NDA is subject to an annual program fee, which for FDA fiscal year 2025 is $403,889 per prescription drug product. User fees typically increase annually.
Further, the sponsor of an approved NDA is subject to an annual program fee, which for FDA fiscal year 2026 is $442,213 per prescription drug product. User fees typically increase annually.
On February 24, 2025, the closing price of Santhera’s common shares on the SIX Swiss Exchange was CHF 16.08 per share (approximately $17.90 USD based on then-current exchange rates). On October 26, 2023, the U.S. FDA approved Santhera’s NDA for AGAMREE® for use in treating DMD in patients aged two years and older.
On February 23, 2026, the closing price of Santhera’s common shares on the SIX Swiss Exchange was CHF 16.46 per share (approximately $21.33 USD based on then-current exchange rates). On October 26, 2023, the U.S. FDA approved Santhera’s NDA for AGAMREE® for use in treating DMD in patients aged two years and older.
Business Development We continue to advance our strategic initiatives and portfolio expansion efforts, focusing on broadening and diversifying our rare (orphan) neurology product portfolio with innovative therapies that address critical unmet medical needs and expanding the geographical footprint of our existing products.
Business Development We continue to advance our strategic initiatives and portfolio expansion efforts, focusing on broadening and diversifying our rare (orphan) neurology product portfolio with innovative therapies that address critical unmet medical needs.
If the manufacturing plan and data are insufficient, any sNDA we submit will not be approved. Before an sNDA can be approved, 17 Table of Contents our manufacturers must also demonstrate compliance with FDA’s cGMP regulations and policies.
If the manufacturing plan and data are insufficient, any sNDA we submit will not be approved. Before an sNDA can be approved, our manufacturers must also demonstrate compliance with FDA’s current Good Manufacturing Practices (cGMP) regulations and policies.
A cornerstone of our strategy is our continuing development of Catalyst Pathways®, our personalized treatment support program, and our development of the patient assistance programs that are required to further our goal that no LEMS patient be denied access to FIRDAPSE® for financial reasons within existing legal restrictions. • Continue to commercialize AGAMREE® for the treatment of DMD and seek to develop additional indications for the product.
A cornerstone of our strategy is our continuing development of Catalyst Pathways®, our personalized treatment support program, and our development of the patient assistance programs that are required to further our goal that no LEMS patient be denied access to FIRDAPSE® for financial reasons within existing legal restrictions.
Third Party Reimbursement in the U.S. Sales of pharmaceutical products depend in significant part on the availability of coverage and adequate reimbursement by third party payors, such as state and federal governments, including Medicare and Medicaid, managed care providers, private commercial insurance plans and pharmacy benefit management (PBM) plans.
Sales of pharmaceutical products depend in significant part on the availability of coverage and adequate reimbursement by third-party payors, such as state and federal governments, including Medicare and Medicaid, managed care providers, private commercial insurance plans and pharmacy benefit management (PBM) plans. There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeTo the extent that our drug products are not commercially successful, our business, financial condition and results of operations will be materially harmed. ● Our drug products may fail to receive the degree of market acceptance by physicians, patients, third party payers or others in the medical community necessary for commercial success, which would negatively impact our business. ● Our strategy of seeking to acquire or in-license innovative technical platforms or earlier stage drug development programs outside of the neuromuscular disease space may not be successful. ● Because the target patient populations for FIRDAPSE® and AGAMREE® are small, we must achieve significant market share and obtain relatively high per-patient prices for our products to achieve meaningful gross margins. ● Because of risks associated with taking FYCOMPA®, potential patients may be reluctant to start treatment with FYCOMPA® or may discontinue use. 31 Table of Contents Risks Related to the Development of Additional Drug Products and Indications ● Failure can occur at any stage of our drug development efforts. ● We rely on third parties to conduct our pre-clinical studies and clinical studies and trials, and if they do not perform their obligations to us we may not be able to obtain approval for additional indications. ● We will need to continue to develop and maintain distribution and production capabilities or relationships to be successful. ● We could be impacted by the viability of our suppliers. ● We are dependent on our licensing partners for supplies of FYCOMPA® and AGAMREE®. ● We may encounter difficulties in managing our growth, which would adversely affect our results of operations. ● Pressure on drug product third party payor coverage, reimbursement and pricing may impair our ability to be reimbursed at prices or on terms sufficient to provide a viable financial outcome. ● Our internal computer systems, or those of our contract research organizations and other key vendors or consultants, may fail or suffer security breaches, which could result in a material disruption of our business and/or our product development programs. ● Our employees, sales agents and consultants may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. ● We may face significant delays in our clinical studies and trials due to an inability to recruit patients for our clinical studies and trials or to retain patients in the clinical studies and trials we may perform.
Biggest changeFurther, for example, MFN pricing if applied to our products could adversely affect our net product revenues and the profitability of our products. • Our strategy of seeking to acquire or in-license innovative technical platforms or earlier stage drug development programs outside of the neuromuscular disease space may not be successful. • Because the target patient populations for FIRDAPSE® and AGAMREE® are small, we must achieve significant market share and obtain relatively high per-patient prices for our products to achieve meaningful gross margins. • Because of risks associated with taking FYCOMPA®, potential patients may be reluctant to start treatment with FYCOMPA® or may discontinue use. 33 Table of Contents Risks Related to the Development of Additional Drug Products and Indications • Failure can occur at any stage of our drug development efforts. • We rely on third parties to conduct our pre-clinical studies and clinical studies and trials, and if they do not perform their obligations to us we may not be able to obtain approval for additional indications. • We will need to continue to develop and maintain distribution and production capabilities or relationships to be successful. • We could be impacted by the viability of our suppliers. • We are dependent on our licensing partner for supplies of AGAMREE® and FYCOMPA®. • Our commercialization, collaborative and other arrangements may give rise to disputes over commercial terms, contract interpretation, and ownership or protection of intellectual property and may adversely affect the commercial success of our product candidates. • We may encounter difficulties in managing our growth, which would adversely affect our results of operations. • Pressure on drug product third-party payor coverage, reimbursement and pricing may impair our ability to be reimbursed at prices or on terms sufficient to provide a viable financial outcome. • Our internal computer systems, or those of our contract research organizations and other key vendors or consultants, may fail or suffer security breaches, which could result in a material disruption of our business and/or our product development programs. • Our employees, sales agents and consultants may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
There can be no assurance that the exclusivity granted in the Orphan Drug Act to orphan drugs approved by the FDA will not be modified in the future, and as to how any such change might affect our products, if approved.
There can be no assurance that the exclusivity granted in the Orphan Drug Act to orphan drugs approved by the FDA will not be modified in the future, and as to how any such change might affect our products, if approved.
Moreover, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act; ● HIPAA, which imposes criminal and civil liability, prohibits, among other things, knowingly and willfully executing, or attempting to execute a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● HIPAA, as amended by HITECH, which impose obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services involving the storage, use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information; ● the federal legislation commonly referred to as the Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of covered drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program, with certain exceptions, to report annually to CMS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, certain types of advanced care practice nurses and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members, with the information made publicly available on a searchable website; 43 Table of Contents ● the U.S.
Moreover, the government may assert that a claim including items and services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act; • HIPAA, which imposes criminal and civil liability, prohibits, among other things, knowingly and willfully executing, or attempting to execute a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by HITECH, which impose obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services involving the storage, use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information; • the federal legislation commonly referred to as the Physician Payments Sunshine Act, enacted as part of the ACA, and its implementing regulations, which requires certain manufacturers of covered drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program, with certain exceptions, to report annually to CMS information related to certain payments and other transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, certain types of advanced care practice nurses and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members, with the information made publicly available on a searchable website; • the U.S.
In addition, acquisitions and in-licenses may entail numerous operational, financial and legal risks, including: ● exposure to known and unknown liabilities, including possible intellectual property infringement claims, violations of laws, tax liabilities and commercial disputes; ● incurrence of substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions; ● higher than expected acquisition and integration costs; ● difficulty in combining the operations and personnel of any acquired businesses with our operations and personnel; ● inability to maintain uniform standards, controls, procedures and policies; ● restructuring charges related to eliminating redundancies or disposing of assets as part of any such combination; 34 Table of Contents ● large write-offs and difficulties in assessing the relative percentages of in-process research and development expense that can be immediately written off as compared to the amount that must be amortized over the appropriate life of the asset; ● increased amortization expenses or, in the event that we write down the value of acquired assets, impairment losses; ● potential failure of the due diligence process to identify significant problems, liabilities or other shortcomings or challenges of an acquired or licensed product candidate or technology, including problems, liabilities or other shortcomings or challenges with respect to intellectual property, product quality, revenue recognition or other accounting practices, partner disputes or issues and other legal and financial contingencies and known and unknown liabilities; and ● entry into therapeutic modalities, indications or markets in which we have no or limited direct prior development or commercial experience and where competitors in such markets have stronger market positions.
In addition, acquisitions and in-licenses may entail numerous operational, financial and legal risks, including: • exposure to known and unknown liabilities, including possible intellectual property infringement claims, violations of laws, tax liabilities and commercial disputes; • incurrence of substantial debt, dilutive issuances of securities or depletion of cash to pay for acquisitions; • higher than expected acquisition and integration costs; • difficulty in combining the operations and personnel of any acquired businesses with our operations and personnel; • inability to maintain uniform standards, controls, procedures and policies; • restructuring charges related to eliminating redundancies or disposing of assets as part of any such combination; • large write-offs and difficulties in assessing the relative percentages of in-process research and development expense that can be immediately written off as compared to the amount that must be amortized over the appropriate life of the asset; • increased amortization expenses or, in the event that we write down the value of acquired assets, impairment losses; • potential failure of the due diligence process to identify significant problems, liabilities or other shortcomings or challenges of an acquired or licensed product candidate or technology, including problems, liabilities or other shortcomings or challenges with respect to intellectual property, product quality, revenue recognition or other accounting practices, partner disputes or issues and other legal and financial contingencies and known and unknown liabilities; and • entry into therapeutic modalities, indications or markets in which we have no or limited direct prior development or commercial experience and where competitors in such markets have stronger market positions.
If a prolonged government shutdown occurs, or if geopolitical or global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
If another prolonged government shutdown occurs, or if geopolitical or global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
We may experience numerous unforeseen events during, or as a result of, testing that could delay or prevent us from obtaining regulatory approval for, or commercializing our drug candidates, including but not limited to: ● regulators or Institutional Review Boards (IRBs) may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site; 35 Table of Contents ● conditions may be imposed upon us by the FDA regarding the scope or design of our clinical trials, or we may be required to resubmit our clinical trial protocols to IRBs for review due to changes in the regulatory environment; ● the number of subjects required for our clinical trials may be larger, patient enrollment may take longer, or patients may drop out of our clinical trials at a higher rate than we anticipate; ● we may have to suspend or terminate one or more of our clinical trials if we, regulators, or IRBs determine that the participants are being subjected to unreasonable health risks; ● our third party contractors, clinical investigators or contractual collaborators may fail to comply with regulatory requirements or fail to meet their contractual obligations to us in a timely manner; ● the FDA may not accept clinical data from trials that are conducted at clinical sites in countries where the standard of care is potentially different from the U.S.; ● our tests may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional testing; and ● the costs of our pre-clinical and/or clinical trials may be greater than we anticipate.
We may experience numerous unforeseen events during, or as a result of, testing that could delay or prevent us from obtaining regulatory approval for, or commercializing our drug candidates, including but not limited to: • regulators or Institutional Review Boards (IRBs) may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site; • conditions may be imposed upon us by the FDA regarding the scope or design of our clinical trials, or we may be required to resubmit our clinical trial protocols to IRBs for review due to changes in the regulatory environment; • the number of subjects required for our clinical trials may be larger, patient enrollment may take longer, or patients may drop out of our clinical trials at a higher rate than we anticipate; • we may have to suspend or terminate one or more of our clinical trials if we, regulators, or IRBs determine that the participants are being subjected to unreasonable health risks; • our third-party contractors, clinical investigators or contractual collaborators may fail to comply with regulatory requirements or fail to meet their contractual obligations to us in a timely manner; • the FDA may not accept clinical data from trials that are conducted at clinical sites in countries where the standard of care is potentially different from the U.S.; • our tests may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional testing; and • the costs of our pre-clinical and/or clinical trials may be greater than we anticipate.
The degree of market acceptance of our drug products is dependent on a number of factors, including but not limited to: ● the efficacy and potential advantages compared to alternative treatments, including the convenience and ease, or duration of administration; 33 Table of Contents ● the competition pressure from other products can be particularly pronounced at launch when having to establish market share against older, more established products; ● a separate competitive pressure also occurs at loss of exclusivity when drug products like ours to face significant price erosion and loss of market share upon the launch of generic alternatives – with the effect typically being more severe the greater the number of generic entrants; ● the prevalence and severity of any side effects; ● the acceptability of the price of our drug products relative to other treatments; ● the content of the approved product labels and our ability to make compelling product claims; ● the effectiveness and adequacy of our and our collaboration partner’s sales and marketing efforts; ● the patients’ out-of-pocket costs in relation to alternative treatments; ● the breadth and cost of distribution support; ● the effectiveness of our patient assistance and support programs; ● the availability of third party payer coverage and adequate reimbursement; and ● any restrictions on the use of our drug products together with other medications.
The degree of market acceptance of our drug products is dependent on a number of factors, including but not limited to: • the efficacy and potential advantages compared to alternative treatments, including the convenience and ease, or duration of administration; • the competition pressure from other products can be particularly pronounced at launch when having to establish market share against older, more established products; • a separate competitive pressure also occurs at loss of exclusivity when drug products like ours to face significant price erosion and loss of market share upon the launch of generic alternatives – with the effect typically being more severe the greater the number of generic entrants; • the prevalence and severity of any side effects; • the acceptability of the price of our drug products relative to other treatments; • the content of the approved product labels and our ability to make compelling product claims; • the effectiveness and adequacy of our and our collaboration partner’s sales and marketing efforts; • the patients’ out-of-pocket costs in relation to alternative treatments; • the breadth and cost of distribution support; • the effectiveness of our patient assistance and support programs; • the availability of third-party payer coverage and adequate reimbursement; and • any restrictions on the use of our drug products together with other medications.
Additionally, while we believe that FIRDAPSE® and AGAMREE® are protected both by patent and NCE, manufacturers may seek to launch generic versions of these products following the expiration of the applicable marketing exclusivity period, even if we still have patent protection for such product.
While we believe that FIRDAPSE® and AGAMREE® are protected both by patent and NCE, manufacturers may seek to launch generic versions of these products following the expiration of the applicable marketing exclusivity period, even if we still have patent protection for such product.
The ability for us to generate net product revenues from our drug products will depend on the size of the markets, the numbers of competitors in such markets and numerous other factors, including: ● successfully establishing and maintaining effective sales, marketing, and distribution systems in jurisdictions in which our drug products are approved for sale; ● successfully establishing and maintaining commercial third party manufacturers and having adequate commercial quantities of our drug products manufactured at acceptable cost and quality levels, including maintaining cGMP and quality systems regulation standards required by various regulatory agencies; ● broad acceptance of our drug products by physicians, patients and the healthcare community; ● the acceptance of pricing and placement of our drug products on payers’ formularies and the associated tiers; ● effectively competing with other approved or used medicines and future compounds in development; ● continued demonstration of safety and efficacy of our drug products in comparison to competing products; and ● obtaining, maintaining, enforcing, and defending intellectual property rights and claims.
The ability for us to generate net product revenues from our drug products will depend on the size of the markets, the numbers of competitors in such markets and numerous other factors, including: • successfully establishing and maintaining effective sales, marketing, and distribution systems in jurisdictions in which our drug products are approved for sale; • successfully establishing and maintaining commercial third-party manufacturers and having adequate commercial quantities of our drug products manufactured at acceptable cost and quality levels, including maintaining cGMP and quality systems regulation standards required by various regulatory agencies; • broad acceptance of our drug products by physicians, patients and the healthcare community; • the acceptance of pricing and placement of our drug products on payers’ formularies and the associated tiers; • effectively competing with other approved or used medicines and future compounds in development; 35 Table of Contents • continued demonstration of safety and efficacy of our drug products in comparison to competing products; and • obtaining, maintaining, enforcing, and defending intellectual property rights and claims.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; ● the federal criminal and civil false claims and civil monetary penalties laws, including the federal False Claims Act, which can be imposed through civil whistleblower or qui tam actions against individuals or entities, prohibits, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the federal criminal and civil false claims and civil monetary penalties laws, including the federal False Claims Act, which can be imposed through civil whistleblower or qui tam actions against individuals or entities, prohibits, 47 Table of Contents among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent, knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim, or from knowingly making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
We source FIRDAPSE® from more than one supplier, and we have entered into contracts with our suppliers that contractually obligate them to meet our requirements. However, if our suppliers cannot or will not meet our requirements (for whatever reason), our business could be adversely impacted. We are dependent on our licensing partners for supplies of FYCOMPA® and AGAMREE®.
We source FIRDAPSE® from more than one supplier, and we have entered into contracts with our suppliers that contractually obligate them to meet our requirements. However, if our suppliers cannot or will not meet our requirements (for whatever reason), our business could be adversely impacted. We are dependent on our licensing partner for supplies of AGAMREE® and FYCOMPA®.
Court of Appeals for the 11th Circuit overturning the FDA’s approval of RUZURGI®, and such legislation, if passed and signed into law, could retroactively affect the outcome of the 11th Circuit’s decision. Notwithstanding, since we now hold the U.S. rights to RUZURGI®, these legislative efforts will have no effect on our FIRDAPSE® business.
Court of Appeals for the 11th Circuit overturning the FDA’s approval of RUZURGI®, and such legislation, if passed and signed into law, could retroactively affect the outcome of the 11th Circuit’s decision. Notwithstanding, since we now hold the U.S. rights to RUZURGI®, any such legislative efforts will have no effect on our FIRDAPSE® business.
If we lose the services of any of our existing executive officers or key employees, or if we were unable to recruit qualified replacements on a timely basis for persons who leave our employ, our efforts to develop our drug candidates might be significantly delayed. We do not carry key-man insurance on any of our personnel.
If we lose the services of any of our existing executive officers or key employees, or if we were unable to recruit qualified replacements on a timely basis for people who leave our employ, our efforts to develop our drug candidates might be significantly delayed. We do not carry key-man insurance on any of our personnel.
These provisions include: ● the ability of our Board of Directors to issue preferred stock with voting or other rights or preferences; ● limitations on the ability of stockholders to amend our charter documents, including stockholder supermajority voting requirements; ● the inability of stockholders to act by written consent or to call special meetings; ● requirements that special meetings of our stockholders may only be called by the Board of Directors; and ● advance notice procedures our stockholders must comply with in order to nominate candidates for election to our Board of Directors or to place stockholders’ proposals on the agenda for consideration at meetings of stockholders.
These provisions include: • the ability of our Board of Directors to issue preferred stock with voting or other rights or preferences; 56 Table of Contents • limitations on the ability of stockholders to amend our charter documents, including stockholder supermajority voting requirements; • the inability of stockholders to act by written consent or to call special meetings; • requirements that special meetings of our stockholders may only be called by the Board of Directors; and • advance notice procedures our stockholders must comply with in order to nominate candidates for election to our Board of Directors or to place stockholders’ proposals on the agenda for consideration at meetings of stockholders.
If our operations are found to be in violation of any such requirements, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of our operations, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, integrity oversight and reporting obligations, or reputational harm, any of which could adversely affect our financial results.
If our operations are found to be in violation of any such requirements, we may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, 48 Table of Contents imprisonment, the curtailment or restructuring of our operations, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, integrity oversight and reporting obligations, or reputational harm, any of which could adversely affect our financial results.
Healthcare reform proposals culminated in the enactment of the IRA, which eliminates, beginning in 2025, the coverage gap under Medicare Part D by significantly lowering the enrollee maximum out-of-pocket cost and requiring manufacturers to subsidize, through a newly established manufacturer discount program, 10% of Part D enrollees’ prescription costs for brand drugs below the out-of-pocket limit, and 20% once the out-of-pocket limit has been reached.
For example, healthcare reform proposals culminated in the enactment of the IRA, which eliminated, beginning in 2025, the coverage gap under Medicare Part D by significantly lowering the enrollee maximum out-of-pocket cost and requiring manufacturers to subsidize, through a newly established manufacturer discount program, 10% of Part D enrollees’ prescription costs for brand drugs below the out-of-pocket limit, and 20% once the out-of-pocket limit has been reached.
In the event of the discovery of new or previously unknown contamination either at our facilities, facilities we acquire in the future, or at third party locations, including facilities we formerly owned or operated, the issuance of additional requirements with respect to existing contamination, or the imposition of other cleanup obligations for which we are responsible, we may be required to take additional, unplanned remedial measures for which we have not recorded reserves.
In the event of the discovery of new or previously unknown contamination either at our facilities, facilities we acquire in the future, or at third-party locations, including facilities we formerly owned or operated, the issuance of additional requirements 49 Table of Contents with respect to existing contamination, or the imposition of other cleanup obligations for which we are responsible, we may be required to take additional, unplanned remedial measures for which we have not recorded reserves.
Any reliance on suppliers may involve several risks, including a potential inability to obtain critical materials and reduced control over production costs, delivery schedules, reliability and 36 Table of Contents quality. Any unanticipated disruption to future contract manufacture caused by problems at suppliers could delay shipment of products, increase our cost of goods sold and result in lost sales.
Any reliance on suppliers may involve several risks, including a potential inability to obtain critical materials and reduced control over production costs, delivery schedules, reliability and quality. Any unanticipated disruption to future contract manufacture caused by problems at suppliers could delay shipment of products, increase our cost of goods sold and result in lost sales.
An inability to promptly obtain coverage and adequate 37 Table of Contents payment rates from both government-funded and private payors for any of our product candidates for which we obtain marketing approval could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
An inability to promptly obtain coverage and adequate payment rates from both government-funded and private payors for any of our product candidates for which we obtain marketing approval could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
Moreover, the Department of Justice can bring civil or criminal actions against companies and executives that promote drugs or biologics for unapproved uses, based on the FDCA, the False Claims Act, and other federal laws governing the marketing and reimbursement for such products under federally supported healthcare programs such as Medicare and Medicaid.
Moreover, the Department of Justice can bring civil or criminal actions against companies and executives that promote drugs or biologics for unapproved uses, based on the FDCA, the False Claims Act, and other federal laws governing the marketing and reimbursement for such products under federally supported healthcare programs 45 Table of Contents such as Medicare and Medicaid.
In that regard, in January 2023, the FDA reported that while it is complying with the 11 th Circuit decision in Catalyst’s favor with respect to FIRDAPSE®, going forward the FDA intends to continue to apply its regulations tying the scope of orphan 42 Table of Contents drug exclusivity to the uses or indications for which a drug is approved with respect to other orphan drugs.
In that regard, in January 2023, the FDA reported that while it is complying with the 11 th Circuit decision in Catalyst’s favor with respect to FIRDAPSE®, going forward the FDA intends to continue to apply its regulations tying the scope of orphan drug exclusivity to the uses or indications for which a drug is approved with respect to other orphan drugs.
Risks related to Our Business Our success depends on the successful commercialization of our products. To the extent that our drug products are not commercially successful, our business, financial condition and results of operations will be materially harmed.
Risks Related to our Business and the Marketing of Approved Products Our success depends on the successful commercialization of our products. To the extent that our drug products are not commercially successful, our business, financial condition and results of operations will be materially harmed.
Rather, the applicant generally must show that its product has the same active ingredient(s), dosage form, strength, route of administration and conditions of use or labeling as the reference listed drug and that the generic version is bioequivalent to the reference listed drug, meaning it is absorbed in the body at the same rate and to the same extent.
Rather, the applicant generally must show that its product has the same active ingredient(s), dosage form, strength, route of administration and conditions of use or labeling as the reference listed drug and 46 Table of Contents that the generic version is bioequivalent to the reference listed drug, meaning it is absorbed in the body at the same rate and to the same extent.
We anticipate being subject to increasing focus by our investors, regulators, customers, and stakeholders on environmental, social & governance (ESG) matters. Our investors, regulators, and other stakeholders have in the last few years increasingly focused on ESG matters.
We anticipate being subject to increasing focus by our investors, regulators, customers, and stakeholders on environmental, social & governance (ESG) disclosures. Our investors, regulators, and other stakeholders have in the last few years increasingly focused on ESG disclosures.
Further, even if we identify acquisition or in-licensing targets, we may not be able to close those deals or we may determine after diligence not to pursue identified targets. The success of this strategy depends partly upon our ability to identify, select and acquire or in-license promising product candidates and technologies.
Further, even if we identify acquisition or in-licensing targets, we may not be able to close those 37 Table of Contents deals or we may determine after diligence not to pursue identified targets. The success of this strategy depends partly upon our ability to identify, select and acquire or in-license promising product candidates and technologies.
Compliance with ESG-related rules and efforts to meet investor expectations on ESG matters may place strain on our personnel, systems, and resources, and we may incur significant compliance costs. Additionally, failure to comply with such rules or meet investor expectations may have a material adverse impact on our business, prospects, financial condition, or results of operations.
Compliance with ESG-related rules and efforts to meet investor 55 Table of Contents expectations on ESG matters may place strain on our personnel, systems, and resources, and we may incur significant compliance costs. Additionally, failure to comply with such rules or meet investor expectations may have a material adverse impact on our business, prospects, financial condition, or results of operations.
In clinical trials, dizziness, somnolence, vertigo, aggression, anger, loss of coordination, blurred vision, irritability, and slurred speech were the side effects that most commonly led people to leave the trial. Use of FYCOMPA® is also contraindicated in women who are pregnant or breastfeeding.
In clinical trials, dizziness, somnolence, vertigo, aggression, anger, loss of coordination, blurred vision, irritability, and slurred speech were the side effects 38 Table of Contents that most commonly led people to leave the trial. Use of FYCOMPA® is also contraindicated in women who are pregnant or breastfeeding.
Moreover, if any manufacturer should cease doing business with us or experience delays, shortages of supply or excessive demands on their capacity, we may not be able to obtain adequate quantities of product in a timely manner, or at all.
Moreover, if 39 Table of Contents any manufacturer should cease doing business with us or experience delays, shortages of supply or excessive demands on their capacity, we may not be able to obtain adequate quantities of product in a timely manner, or at all.
In addition, in an infringement proceeding, a court may decide that a patent of ours or our licensors is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.
In addition, in an infringement proceeding, a court may decide that a patent of ours or our licensors is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do 51 Table of Contents not cover the technology in question.
We may need to raise additional capital in the future in order to fund our business (particularly to fund potential company or product acquisitions that are intended to expand our product offerings). If necessary, we would likely raise additional funds in 47 Table of Contents the future through public or private equity offerings, debt financings, corporate collaborations, or other means.
We may need to raise additional capital in the future in order to fund our business, particularly to fund potential company or product acquisitions that are intended to expand our product offerings. If necessary, we would likely raise additional funds in the future through public or private equity offerings, debt financings, corporate collaborations, or other means.
As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or 48 Table of Contents enhance our protective measures or to investigate and remediate any information security vulnerabilities. While we have implemented security measures to protect our data security and information technology systems, such measures may not prevent such events.
As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities. While we have implemented security measures to protect our data security and information technology systems, such measures may not prevent such events.
Risks Related to Government Regulation ● The healthcare industry is highly regulated, subject to stringent regulatory standards and other applicable laws, and we may be the subject of unexpected changes in interpretation or enforcement, any of which may adversely impact our business. ● The regulatory approval process is lengthy, and we may not be able to obtain all of the regulatory approvals required to manufacture and commercialize our drug products in which we are licensed to them. ● If our pre-clinical studies or our clinical studies and trials are unsuccessful or significantly delayed, our ability to commercialize our products will be impaired. ● If our third party suppliers or contract manufacturers do not maintain appropriate standards of manufacturing in accordance with cGMP and other manufacturing regulations, our development and commercialization activities could suffer significant interruptions or delays. ● Our drug products are subject to continuing regulatory review.
Risks Related to Government Regulation • The healthcare industry is highly regulated, subject to stringent regulatory standards and other applicable laws, and we may be the subject of unexpected changes in interpretation or enforcement, any of which may adversely impact our business. • The regulatory approval process is lengthy, and we may not be able to obtain all of the regulatory approvals required to manufacture and commercialize our drug products in which we are licensed to them. • If our pre-clinical studies or our clinical studies and trials are unsuccessful or significantly delayed, our ability to commercialize our products will be impaired. • We may face significant delays in our clinical studies and trials due to an inability to recruit patients for our clinical studies and trials or to retain patients in the clinical studies and trials we may perform. • If our third-party suppliers or contract manufacturers do not maintain appropriate standards of manufacturing in accordance with cGMP and other manufacturing regulations, our development and commercialization activities could suffer significant interruptions or delays. • Our drug products are subject to continuing regulatory review.
If we fail to comply with continuing U.S. and applicable foreign regulations, we could lose those approvals, and our business would be severely harmed. ● Enacted and future legislation or judicial action may increase the difficulty and cost for us to market our approved products or commercialize any other drug candidates we may acquire or license and affect the prices we may obtain. ● If we fail to obtain or subsequently maintain orphan drug exclusivity or regulatory exclusivity for FIRDAPSE®, AGAMREE®, and any other orphan drug candidates we may acquire or license, our competitors may sell products to treat the same conditions at greatly reduced prices, and our revenues would be significantly adversely affected. ● If the FDA or comparable foreign regulatory authorities approve generic versions of any of our products, or such authorities do not grant our products sufficient periods of exclusivity before approving generic versions of our products, the sales of our products could be adversely affected. ● Changes to the Orphan Drug Act or successful legal challenges to the FDA’s interpretation of the Orphan Drug Act may affect our ability to obtain or subsequently maintain orphan drug exclusivity or may affect the scope orphan drug exclusivity for our products. ● Our operations and relationships with healthcare providers, healthcare organizations, customers and third party payors are subject to applicable anti-bribery, anti-kickback, fraud and abuse, transparency and other healthcare laws and regulations, which could expose us to, among other things, enforcement actions, criminal sanctions, 32 Table of Contents civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings. ● We are subject to environmental, health, and safety laws and regulations, which could increase our costs or restrict our operations.
If we fail to comply with continuing U.S. and applicable foreign regulations, we could lose those approvals, and our business would be severely harmed. • Enacted and future legislation or judicial action may increase the difficulty and cost for us to market our approved products or commercialize any other drug candidates we may acquire or license and affect the prices we may obtain. • If we fail to obtain or subsequently maintain orphan drug exclusivity or regulatory exclusivity for FIRDAPSE®, AGAMREE®, and any other orphan drug candidates we may acquire or license, our competitors may sell products to treat the same conditions at greatly reduced prices, and our revenues would be significantly adversely affected. • If the FDA or comparable foreign regulatory authorities approve generic versions of any of our products, or such authorities do not grant our products sufficient periods of exclusivity before approving generic versions of our products, the sales of our products could be adversely affected. • Changes to the Orphan Drug Act or successful legal challenges to the FDA’s interpretation of the Orphan Drug Act may affect our ability to obtain or subsequently maintain orphan drug exclusivity or may affect the scope orphan drug exclusivity for our products. 34 Table of Contents • Our operations and relationships with healthcare providers, healthcare organizations, customers and third-party payors are subject to applicable anti-bribery, anti-kickback, fraud and abuse, transparency and other healthcare laws and regulations, which could expose us to, among other things, enforcement actions, criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings. • Disruptions at the FDA or other comparable foreign regulatory authorities may also slow the time necessary for new products to be reviewed and/or approved, which would adversely affect our business.
Even absent patient injury, we may be subject to product 40 Table of Contents recalls, product seizures or withdrawals, delays or failures in testing or delivery, cost overruns, or other problems that could seriously harm our business or profitability. Our drug products are subject to continuing regulatory review.
Even absent patient injury, we may be subject to product recalls, product seizures or withdrawals, delays or failures in testing or delivery, cost overruns, or other problems that could seriously harm our business or profitability. Our drug products are subject to continuing regulatory review.
In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the U.S. For example, many countries restrict the 45 Table of Contents patentability of methods of treatment of the human body.
In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the U.S. For example, many countries restrict the patentability of methods of treatment of the human body.
In addition, such an issue could subject us to adverse publicity and costly litigation, including claims from our customers for reimbursement for the cost of lost or damaged active pharmaceutical ingredients or other related losses, the cost of which could be significant.
In addition, such an issue could subject us to adverse publicity and costly litigation, including claims from our customers for reimbursement for the cost of lost or damaged API or other related losses, the cost of which could be significant.
Certain investors, particularly institutional investors, may use third party benchmarks or scores to measure our ESG practices, and to decide whether to invest in our shares, engage with us regarding our practices, or engage or continue to use our services. If our ESG scores or practices do not meet desired standards, we may face reputational challenges.
Certain investors, particularly institutional investors, may use third-party benchmarks or scores based on our ESG disclosures to measure our ESG practices, and to decide whether to invest in our shares or engage with us regarding our practices. If our ESG scores or disclosures do not meet desired standards, we may face reputational challenges.
Generally, issued patents are granted a term of 20 years from the earliest claimed non-provisional filing date.
Generally, issued patents are granted a term of 20 years from the 50 Table of Contents earliest claimed non-provisional filing date.
Foreign Corrupt Practices Act, the U.K. Anti-Bribery Act, and other anti-bribery or anti-corruption laws, regulations, or rules. Our business is heavily regulated and therefore involves significant interaction with public officials, including officials of non-U.S. governments.
Anti-Bribery Act, and other anti-bribery or anti-corruption laws, regulations, or rules. Our business is heavily regulated and therefore involves significant interaction with public officials, including officials of non-U.S. governments.
Risks Related to the Development of Drug Products Failure can occur at any stage of our drug development efforts.
Risks Related to the Development of Additional Drug Products and Indications Failure can occur at any stage of our drug development efforts.
Moreover, the reliance on remote working technologies by our employees and third party partners due to COVID-19 and related public health safety measures and the prevalent use of mobile devices that access confidential and personal information increases the risk of data security breaches, which could lead to the loss of confidential information, personal information, trade secrets or other intellectual property.
Moreover, the reliance on remote working technologies by our employees and third-party partners and the prevalent use of mobile devices that access confidential and personal information increases the risk of data security breaches, which could lead to the loss of confidential information, personal information, trade secrets or other intellectual property.
In addition, any such failure relating to the products or services we provide could expose us to contractual or product liability claims as well as claims from our customers, including claims for reimbursement for lost or damaged active pharmaceutical ingredients, which cost could be significant. Our business activities outside the U.S. are subject to the U.S.
In addition, any such failure relating to the products or services we provide could expose us to contractual or product liability claims as well as claims from our customers, including claims for reimbursement for lost or damaged API, which cost could be significant. Our business activities outside the U.S. are subject to the U.S. Foreign Corrupt Practices Act, the U.K.
The loss of the services of one or more of these individuals could significantly impede the achievement of our scientific and business objectives. We have no employment or retention agreements with any of our other officers or key employees.
We are highly dependent on our executive officers and key employees, and on our Board of Directors. The loss of the services of one or more of these individuals could significantly impede the achievement of our scientific and business objectives. We have no employment or retention agreements with any of our other officers or key employees.
In either case, such a license may not be available on 46 Table of Contents commercially reasonable terms or at all.
In either case, such a license may not be available on commercially reasonable terms or at all.
We do not have the ability to independently conduct pre-clinical studies or clinical studies and trials, and we rely on third parties, such as third party contract research and governmental organizations, medical institutions and clinical investigators (including academic clinical investigators), to conduct studies and trials for us.
We do not have the ability to independently conduct pre-clinical studies or clinical studies and trials, and we rely on third parties, such as third-party contract research and governmental organizations, medical institutions and clinical investigators (including academic clinical investigators), to conduct studies and trials for us. Our reliance on third parties for development activities reduces our control over these activities.
Significant disruptions of our information technology systems or breaches of data security could have a material adverse effect on our business, financial condition and results of operations. We are highly dependent on our small number of key personnel and advisors. We are highly dependent on our executive officers and key employees, and on our Board of Directors.
Significant disruptions of our information 54 Table of Contents technology systems or breaches of data security could have a material adverse effect on our business, financial condition and results of operations. We are highly dependent on our small number of key personnel and advisors.
Risks Related to our Intellectual Property ● If we are unable to obtain and maintain patent protection for our technology and products, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets. ● There is a risk that our patents may not protect our products from generic competition. ● Our success will depend significantly on our ability to operate without infringing the patents and other proprietary rights of third parties. ● We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.
Risks Related to our Intellectual Property • If we are unable to obtain and maintain patent protection for our technology and products, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets. • There is a risk that our patents may not protect our products from generic competition. • Our success will depend significantly on our ability to operate without infringing the patents and other proprietary rights of third parties. • We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights. • We have been, and may continue to be, forced to litigate to enforce or defend our intellectual property, which could be expensive, time-consuming, and unsuccessful, and result in the loss of valuable assets.
Our reliance on third parties for development activities reduces our control over these activities. These third parties may not complete activities on schedule or may not conduct our pre-clinical studies and our clinical studies and trials in accordance with regulatory requirements or our study design.
These third parties may not complete activities on schedule or may not conduct our pre-clinical studies and our clinical studies and trials in accordance with regulatory requirements or our study design.
The negotiated prices, which will first become effective in 2026, will be capped at a statutory ceiling price. For 2026, the first year in which negotiated prices become effective, CMS selected 10 high-cost Medicare Part D products in 2023, negotiations began in 2024, and the negotiated maximum fair price for each product has been announced.
For 2026, the first year in which negotiated prices become effective, CMS selected 10 high-cost Medicare Part D products in 2023, negotiations began in 2024, and the negotiated maximum fair price for each product has been announced. CMS has selected and announced the negotiated maximum fair price for 15 additional Medicare Part D drugs, which will become effective in 2027.
For eligible drugs, we plan to rely on the orphan exclusivity period to maintain a competitive position. However, if we do not obtain orphan drug exclusivity for our drug candidates or we cannot maintain orphan exclusivity for our drug candidates, our competitors may then sell the same drug to treat the same condition and our revenues will be reduced.
However, if we do not obtain orphan drug exclusivity for our drug candidates or we cannot maintain orphan exclusivity for our drug candidates, our competitors may then sell the same drug to treat the same condition and our revenues will be reduced.
As a public reporting company, we are required to comply with the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC, including periodic reports, disclosures and more complex accounting rules.
The obligations incident to being a public company place significant demands on our management. As a public reporting company, we are required to comply with the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC, including periodic reports, disclosures and more complex accounting rules.
Risks Related to the Marketing of Approved Products ● Our success depends on the successful commercialization of our products.
R isks Related to our Business and the Marketing of Approved Products • Our success depends on the successful commercialization of our drug products.
There is no certainty that all of our employees, agents, contractors, or collaborators, or those of our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws. Violations of these laws and regulations may have a material adverse impact on our business, prospects, financial condition, or results of operations.
There is no certainty that all of our employees, agents, contractors, or collaborators, or those of our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws.
Our strategy of seeking to acquire or in-license innovative technical platforms or earlier stage drug development programs may not be successful. We continue to seek to broaden and diversify our product portfolio through acquisitions of both early and late-stage products or companies or technology platforms in orphan, rare disease therapeutic categories.
We continue to seek to broaden and diversify our product portfolio through acquisitions of both early and late-stage products or companies or technology platforms in orphan, rare disease therapeutic categories.
We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights. Competitors may infringe or otherwise violate our patents, the patents of our licensors or our other intellectual property rights.
We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights. Competitors may infringe or otherwise violate our patents, the patents of our licensors or our other intellectual property rights. To counter infringement or unauthorized use, we may be required to file legal claims, which can be expensive and time-consuming.
Despite the time, expense and resources invested by us in the approval process, we may not be able to demonstrate that our drug candidate is safe and effective for such indications, in which event we would not receive the regulatory approval required to market it. 39 Table of Contents If our pre-clinical studies or our clinical studies and trials are unsuccessful or significantly delayed, our ability to commercialize our products will be impaired.
Despite the time, expense and resources invested by us in the approval process, we may not be able to demonstrate that our drug candidate is safe and effective for such indications, in which event we would not receive the regulatory approval required to market it.
Because the extent and scope of patent protection for some of our drug products may be particularly limited, orphan drug designation – and ultimately, orphan drug exclusivity – is especially important for our products that are eligible for orphan drug 41 Table of Contents designation.
Because the extent and scope of patent protection for some of our drug products may be particularly limited, orphan drug designation – and ultimately, orphan drug exclusivity – is especially important for our products that are eligible for orphan drug designation. For eligible drugs, we plan to rely on the orphan exclusivity period to maintain a competitive position.
There have also been indications by some, including President Trump’s Secretary of HHS, that the government should seize the patents of “high priced drugs” and transfer them to other manufacturers to lower drug prices.
The IRA also imposes rebates on Medicare Part D and Part B drugs whose prices have increased at a rate greater than the rate of inflation. There have also been indications by some, including President Trump’s Secretary of HHS, that the government should seize the patents of “high priced drugs” and transfer them to other manufacturers to lower drug prices.
Any such litigation that we become involved in could cause us to incur substantial costs and divert our management’s attention and resources, which could have a material adverse effect on our business, financial condition, and results of operations. 50 Table of Contents Delaware law and our certificate of incorporation and by-laws contain provisions that could delay and discourage takeover attempts that stockholders may consider favorable.
Any such litigation that we become involved in could cause us to incur substantial costs and divert our management’s attention and resources, which could have a material adverse effect on our business, financial condition, and results of operations.
We also had outstanding: (i) stock options to purchase an aggregate of 13,077,867 shares at exercise prices ranging from $2.11 to $22.90 (7,582,868 of which are currently exercisable); and (ii) restricted stock units for 575,049 shares of common stock (none of which are currently vested).
We also had outstanding: (i) stock options to purchase an aggregate of 12,048,182 shares at exercise prices ranging from $3.42 to $24.90 (7,594,793 of which are currently exercisable); and (ii) restricted stock units for 714,953 shares of common stock (none of which are currently vested).
Future sales of our common stock may cause our stock price to decline. As of February 24, 2025, we had 121,449,655 shares of our common stock outstanding, of which 7,642,725 shares were held by our executive officers and directors.
Future sales of our common stock may cause our stock price to decline. As of February 23, 2026, we had 122,123,884 shares of our common stock outstanding, of which 6,750,372 shares were held by our executive officers and directors.
Completion of orphan clinical trials may take considerably more time than other trials, sometimes years, depending on factors such as type, complexity, novelty and intended use of a product candidate. As a result of the uncertainties described above, there can be no assurance that we will meet timelines that we establish for any of our clinical trials.
Completion of orphan clinical trials may take considerably more time than other trials, sometimes years, depending on factors such as type, complexity, novelty and intended use of a product candidate.
Additionally, collecting, measuring, and reporting ESG information and metrics can be costly, difficult, and time-consuming, are subject to evolving reporting standards, and can present numerous operational, reputational, financial, legal, and other risks.
Generally, we expect stakeholder demands and the prevailing legal environment to require us to devote additional resources to ESG matters in our review of prospective acquisitions. Additionally, collecting, measuring, and reporting ESG information and metrics can be costly, difficult, and time-consuming, are subject to evolving reporting standards, and can present numerous operational, reputational, financial, legal, and other risks.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions. 38 Table of Contents Risks Related to Government Regulation The healthcare industry is highly regulated, subject to stringent regulatory standards and other applicable laws, and we may be the subject of unexpected changes in interpretation or enforcement, any of which may adversely impact our business.
Risks Related to Government Regulation The healthcare industry is highly regulated, subject to stringent regulatory standards and other applicable laws, and we may be the subject of unexpected changes in interpretation or enforcement, any of which may adversely impact our business. The healthcare industry is highly regulated.
In addition, FDA-regulated industries, such as ours, face substantial uncertainty in regard to the regulatory environment we will face as we proceed with research and development efforts following the inauguration of President Trump in January 2025. 44 Table of Contents Some of these efforts have manifested to date in the form of personnel measures that could impact the FDA’s ability to hire and retain key personnel, which could result in delays or limitations on our ability to obtain guidance from the FDA on our product candidates in development and obtain the requisite regulatory approvals in the future.
Some of these efforts have manifested to date in the form of reductions in the number of federal employees, including at the FDA, and other personnel measures that could impact the FDA’s ability to hire and retain key personnel, which could result in delays or limitations on our ability to obtain guidance from the FDA on our product candidates in development and obtain the requisite regulatory approvals in the future.
CMS has selected 15 additional Medicare Part D drugs for negotiated maximum fair pricing in 2027. For 2028, an additional 15 drugs, which may be covered under either Medicare Part B or Part D, will be selected, and for 2029 and subsequent years, 20 Part B or Part D drugs will be selected.
For 2028, CMS selected an additional 15 drugs, comprised of drugs covered under Part D and, for the first time, drugs payable under Part B. For 2029 and subsequent years, 20 Part B or Part D drugs will be selected.
If our third party suppliers or contract manufacturers do not maintain appropriate standards of manufacturing in accordance with cGMP and other manufacturing regulations, our development and commercialization activities could suffer significant interruptions or delays.
As a result of the uncertainties described above, there can be no assurance that we will meet timelines that we establish for any of our clinical trials. 44 Table of Contents If our third-party suppliers or contract manufacturers do not maintain appropriate standards of manufacturing in accordance with cGMP and other manufacturing regulations, our development and commercialization activities could suffer significant interruptions or delays.
We cannot be sure that coverage will be available for any product candidate that we commercialize and, if available, that the reimbursement rates will be adequate.
In addition, increasingly, third-party payors are requiring higher levels of evidence of the benefits and clinical outcomes of new technologies and are challenging the prices charged. We cannot be sure that coverage will be available for any product candidate that we commercialize and, if available, that the reimbursement rates will be adequate.
If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our common shares. General Risk Factors Our business may require additional capital.
If securities analysts or investors perceive these results to be negative, it could have an adverse effect on the price of our common shares. We have been, and may continue to be, forced to litigate to enforce or defend our intellectual property, which could be expensive, time-consuming, and unsuccessful, and result in the loss of valuable assets.
If we are not able to secure funding when needed, we may have to delay, reduce the scope of or eliminate one or more research and development programs, which could have an adverse effect on our business. The obligations incident to being a public company place significant demands on our management.
If we are not able to secure funding when needed, we may have to delay, reduce the scope of or eliminate one or more research and development programs, which could have an adverse effect on our business. 52 Table of Contents Unfavorable global economic conditions, whether brought about by material global crises, health epidemics, military conflicts or war, geopolitical and tariffs or other trade disputes or other factors, may adversely affect our business and financial results.
The IRA also allows the Department of Health and Human Services (HHS) to negotiate the selling price of certain drugs and biologics that the CMS reimburses under Medicare Part B and Part D (excluding drugs and biologics that are designated and approved for only one rare disease or condition), although only high-expenditure single-source drugs that have been approved for at least 7 years (11 years for biologics) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year.
Only high-expenditure single-source drugs that have been approved for at least 7 years (11 years for single-source biologics) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year. The negotiated prices, which will first become effective in 2026, will be capped at a statutory ceiling price.
The pricing of pharmaceutical products, in general, and of specialty drugs, in particular, has been a topic of concern in the U.S. Congress, where hearings have been held on the topic, and several bills have been introduced proposing a variety of actions to restrain the prices of drugs.
The pricing of pharmaceutical products, in general, and of specialty drugs, in particular, has been a topic of concern in the U.S. Congress. There have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs in general and the cost of pharmaceuticals in particular.
Removed
Through our agreements with Eisai for FYCOMPA® and Santhera for AGAMREE®, we have agreed to purchase our supplies of each product through such companies.
Added
To the extent that our drug products are not commercially successful, our business, financial condition and results of operations will be materially harmed. • Our drug products may fail to receive the degree of market acceptance by physicians, patients, third-party payers or others in the medical community necessary for commercial success, which would negatively impact our business. • Our business is subject to substantial competition. • Tariffs could adversely affect our business. • The successful commercialization of our approved drug products or any drug products we may develop or acquire in the future will depend in part on the extent to which government authorities and health insurers establish adequate reimbursement and pricing policies.
Removed
If either company were unable to supply sufficient supplies of drug product, our business would be adversely impacted, whether we would be required to work with these companies to resume supplies or whether we would be required to search for a sufficient third party supplier.
Added
In addition, there is substantial uncertainty regarding the new Administration’s initiatives and how these might impact the FDA, its implementation of laws, regulations, policies and guidance and its personnel.
Removed
The healthcare industry is acutely focused on cost containment, both in the U.S. and elsewhere. Government authorities and third party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications, which could affect our ability to sell our product candidates profitably.
Added
These initiatives could prevent, limit or delay development and regulatory approval of our product candidates, which would adversely affect our business. • We are subject to environmental, health, and safety laws and regulations, which could increase our costs or restrict our operations.
Removed
These payors may not view our products as cost-effective, and coverage and reimbursement may not be available to our customers, or may not be sufficient to allow our products, if any, to be marketed on a competitive basis.
Added
Tariffs could adversely affect our business. President Donald Trump and Commerce Secretary Howard Lutnick have each signaled plans for the Administration to potentially tax pharmaceutical imports through tariffs. In furtherance of that goal, on April 16, 2025, the U.S.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe conduct thorough security assessments of all third party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes quarterly assessments by our Chief Legal and Compliance Officer (CLCO) and our Chief Operating Officer (COO) and on an ongoing basis by our IT professionals.
Biggest changeWe conduct thorough security assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards. The monitoring includes quarterly assessments by 57 Table of Contents our Chief Legal and Compliance Officer (CLCO) and our Chief Operating Officer (COO) and on an ongoing basis by our IT professionals.
Engage Third Parties on Risk Management Recognizing the complexity and evolving nature of cybersecurity threats, we engage with a range of external experts in evaluating and testing our risk management systems. These partnerships enable us to leverage specialized knowledge and 51 Table of Contents insights, ensuring our cybersecurity strategies and processes remain at the forefront of industry best practices.
Engage Third Parties on Risk Management Recognizing the complexity and evolving nature of cybersecurity threats, we engage with a range of external experts in evaluating and testing our risk management systems. These partnerships enable us to leverage specialized knowledge and insights, ensuring our cybersecurity strategies and processes remain at the forefront of industry best practices.
This review helps in identifying areas for improvement and ensuring the alignment of cybersecurity efforts with the overall risk management framework. 52 Table of Contents Board of Directors Oversight The Board of Directors as a group is responsible for oversight of cybersecurity risks and bears the primary responsibility for oversight of this domain.
This review helps in identifying areas for improvement and ensuring the alignment of cybersecurity efforts with the overall risk management framework. Board of Directors Oversight The Board of Directors as a group is responsible for oversight of cybersecurity risks and bears the primary responsibility for oversight of this domain.
The Board has delegated to the Audit Committee the primary responsibility of overseeing risk management relating to cybersecurity. The Board of Directors is composed of board members with diverse expertise including, risk management, technology, and finance, equipping them to oversee cybersecurity risks effectively.
The Board has delegated to the Audit Committee the primary responsibility of overseeing risk management relating to cybersecurity. The Board of Directors is composed of board members with diverse expertise including, risk management, technology, and finance, equipping them to oversee cybersecurity risks effectively. 58 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeItem 4. Mi ne Safety Disclosure Not applicable. 53 Table of Contents PA RT II
Biggest changeItem 4. Mi ne Safety Disclosure Not applicable. 59 Table of Contents PA RT II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosure 53 PART II 54 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 54 Item 6. Selected Financial Data 55 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 56 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 71
Biggest changeItem 4. Mine Safety Disclosure 59 PART II 60 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 60 Item 6. Selected Financial Data 61 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 62 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 78

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePerformance Graph The following performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
Biggest changeThe following table presents information regarding repurchases by us of our common stock under the Share Repurchase Program during the three months ended December 31, 2025: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Dollar Value of Shares that May Yet Be Purchased (in thousands) October 1 - October 31, 2025 405,092 $ 20.74 405,092 $ 191,599 November 1 - November 30, 2025 189,427 $ 23.34 189,427 $ 187,177 December 1 - December 31, 2025 530,429 $ 23.52 530,429 $ 174,700 Total 1,124,948 1,124,948 Performance Graph The following performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing.
Dividends The Company has never paid dividends on its common stock and does not anticipate that it will do so in the foreseeable future. Recent Sales of Unregistered Securities None. Repurchases of Equity Securities None.
Dividends The Company has never paid dividends on its common stock and does not anticipate that it will do so in the foreseeable future. Recent Sales of Unregistered Securities None.
Item 5. Ma rket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Shares of the Company's common stock are traded on the Nasdaq Capital Market under the symbol "CPRX". There were 17 holders of record of the Company's common stock as of February 24, 2025.
Item 5. Ma rket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Shares of the Company's common stock are traded on the Nasdaq Capital Market under the symbol "CPRX". There were 17 holders of record of the Company's common stock as of February 23, 2026.
Securities Authorized for Issuance under Equity Compensation Plans The following table presents information as of December 31, 2024 with respect to compensation plans under which shares of our common stock may be issued.
Securities Authorized for Issuance under Equity Compensation Plans The following table presents information as of December 31, 2025 with respect to our 2018 Stock Incentive Plan under which shares of our common stock may be issued.
Equity Compensation Plan Information Plan Category Number of securities to be issued upon exercise of outstanding options, warrants, and rights Weighted-average exercise price of outstanding options, warrants, and rights Number of securities remaining available for equity compensation plans Equity compensation plans approved by security holders (1) 13,076,789 $ 10.76 2,254,102 (2) Equity compensation plans not approved by security holders — — — Total 13,076,789 $ 10.76 2,254,102 (1) Includes our 2014 Stock Incentive Plan and our 2018 Stock Incentive Plan (2) Remaining shares are only under our 2018 Stock Incentive Plan
Equity Compensation Plan Information Plan Category Number of securities to be issued upon exercise of outstanding options, warrants, and rights Weighted-average exercise price of outstanding options, warrants, and rights Number of securities remaining available for equity compensation plans Equity compensation plans approved by security holders 12,173,541 $ 13.52 5,278,300 Equity compensation plans not approved by security holders — — — Total 12,173,541 $ 13.52 5,278,300
The comparison of total return on investment, defined as the change in year-end stock price plus reinvested dividends, for each of the periods assumes that $100 was invested on January 1, 2020, in each of the Company’s common stock, the Nasdaq Composite Index and the Nasdaq Biotechnology Index, with investment weighted on the basis of market capitalization. 54 Table of Contents 12/19 12/20 12/21 12/22 12/23 12/24 Catalyst Pharmaceuticals, Inc. 100.00 89.07 180.53 496.00 448.27 556.53 NASDAQ Composite 100.00 144.92 177.06 119.45 172.77 223.87 Russell MicroCap 100.00 120.96 144.35 112.66 123.17 140.05 NASDAQ Biotechnology 100.00 126.42 126.45 113.65 118.87 118.20 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
The comparison of total return on investment, defined as the change in year-end stock price plus reinvested dividends, for each of the periods assumes that $100 was invested on December 31, 2020, in each of the Company’s common stock, the Nasdaq Composite Index and the Nasdaq Biotechnology Index, with investment weighted on the basis of market capitalization. 60 Table of Contents 12/20 12/21 12/22 12/23 12/24 12/25 Catalyst Pharmaceuticals, Inc. 100.00 202.69 556.89 503.29 624.85 698.80 NASDAQ Composite 100.00 122.18 82.43 119.22 154.48 187.14 Russell MicroCap 100.00 119.34 93.13 101.83 115.78 142.39 NASDAQ Biotechnology 100.00 100.02 89.90 94.03 93.49 124.75 The stock price performance included in this graph is not necessarily indicative of future stock price performance.
Added
Repurchases of Equity Securities In October 2025, the Company’s Board of Directors approved a share repurchase program that authorizes the repurchase of up to $200 million of the Company’s common stock, pursuant to a repurchase plan under Rule 10b-18 of the Securities Act. The share repurchase program commenced on October 1, 2025 and currently expires on December 31, 2026.

Item 7. Management's Discussion & Analysis

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

130 edited+48 added−34 removed67 unchanged
Biggest changeFactors that will affect our success include the uncertainty of: • Whether we will be able to continue to successfully market and sell FIRDAPSE®, FYCOMPA®, and AGAMREE® while maintaining full compliance with applicable federal and state laws, rules and regulations; • Whether we will be able to continue to attract and retain the qualified personnel necessary to run our business; • Whether our estimates of the size of the market for FIRDAPSE® for the treatment of LEMS will prove to be accurate; • Whether the daily dose of FIRDAPSE® taken by patients changes over time and affects our results of operations; • Whether we will continue to be able to locate LEMS patients who are undiagnosed or are misdiagnosed with another disease; • Whether patients will discontinue from the use of our products at rates that are higher than historically experienced or are higher than we project; 69 Table of Contents • Whether new FIRDAPSE®, FYCOMPA®, and AGAMREE® patients can be successfully titrated to stable therapy; • Whether we can continue to market our products on a profitable and cash flow positive basis; • Whether we will be able to demonstrate, to the satisfaction of the FDA and third party payors, whether AGAMREE® offers advantages compared to other corticosteroids or competitor’s products; • Whether DMD patients transitioning to current or future gene therapy treatments will delay initiating use of AGAMREE® while waiting for access to such gene therapy, or stop their AGAMREE® therapy during the course of their gene therapy treatment; • Whether we will be able to continue to successfully commercialize FYCOMPA® after its patents expire starting in May 2025 and generic competition for FYCOMPA® enters the market; • Whether any revenue or earnings guidance that we provide to the public market will turn out to be accurate; • Whether payors will continue to provide coverage and reimburse for our products at the price that we charge for our products; • The ability of our third party suppliers and contract manufacturers to continue to supply sufficient product to meet our customers’ needs in a timely manner; • The ability of our third party suppliers and contract manufacturers to maintain compliance with current Good Manufacturing Practices (cGMP); • The ability of those third parties that distribute our products to maintain compliance with applicable law; • Our ability to maintain compliance with applicable rules relating to our patient assistance programs for our products; • Our ability to maintain compliance with the applicable rules that relate to our contributions to 501(c)(3) organizations that support patients in financial need; • The scope of our intellectual property and the outcome of challenges to our intellectual property, and, conversely, whether any third party intellectual property presents unanticipated obstacles for FIRDAPSE®, FYCOMPA®, or AGAMREE®; • Whether there will be a post-closing review by antitrust regulators of our previous acquisition transactions, and the outcome of any such reviews if they occur; • Whether we will be able to acquire additional drug products under development, complete development required to commercialize such products, and thereafter, if such products are approved for commercialization, successfully market such products; • Whether we will be successful in our litigation to enforce our patents against the Paragraph IV challengers who have filed ANDAs seeking to introduce generic versions of FIRDAPSE®; • Whether our patents will be sufficient to prevent generic competition for FIRDAPSE® and AGAMREE® after our orphan drug exclusivity for each product expires; • The impact on our profits and cash flow of adverse changes in reimbursement and coverage policies or regulations from government and private payors such as Medicare, Medicaid, insurance companies, health maintenance organizations and other plan administrators, or the impact of pricing pressures enacted by industry organizations, the federal government or the government of any state, including as a result of increased scrutiny over pharmaceutical pricing or otherwise; • Changes in the healthcare industry and the effect of political pressure from and actions by the President, Congress and/or medical professionals seeking to reduce prescription drug costs, and changes to the healthcare industry occasioned by any future changes in laws relating to the pricing of drug products, including changes made in the Inflation Reduction Act of 2022, changes (if any) to be made by the current President and/or the current Congressional administrations, changes to the review and approval process at the FDA, or changes in the healthcare industry generally; • Whether we and Santhera can successfully develop additional indications for AGAMREE® and obtain the ability to commercialize the product for these additional indications; 70 Table of Contents • The state of the economy generally and its impact on our business; • The scope, rate of progress and expense of future clinical trials and studies, pre-clinical studies, proof-of-concept studies, and our other drug development activities, and whether any trials and studies we undertake will be successful; • Our ability to complete any clinical trials and studies that we may undertake on a timely basis and within the budgets we establish for such trials and studies; • Whether FIRDAPSE® can be successfully commercialized in Canada on a profitable basis through KYE, our collaboration partner in Canada; • Whether AGAMREE® will be approved by Health Canada for commercialization in Canada and whether, if the product is approved, KYE can successfully commercialize it in Canada; • Whether KYE will successfully file an application seeking to commercialize AGAMREE® in Canada during the first quarter of 2025 or at all; • Now that FIRDAPSE® has been approved for commercialization in Japan and launched, whether DyDo will be successful in commercializing the product in Japan; • The impact on sales of FIRDAPSE® in the U.S. if an amifampridine product is purchased in Canada for use in the U.S.; • Whether our plans to expand the reach of FIRDAPSE® and AGAMREE® into other global regions will be successful; • System failures or security or data breaches due to cyber-attacks, or cyber intrusions, including ransomware, phishing attacks and other malicious intrusions whether it occurs directly to us or indirectly through third parties; and • Our ability to enhance our systems, processes and procedures to appropriately support the growing complexity and scale of our business.
Biggest changeFactors that might cause such differences include, but are not limited to, those discussed in the section entitled “Item 1A – Risk Factors.” • Whether we will be able to continue to successfully market and sell FIRDAPSE® and AGAMREE®, and continue to sell FYCOMPA® while maintaining full compliance with applicable federal and state laws, rules and regulations; • Whether we will be able to continue to attract and retain the qualified personnel necessary to run our business; • Whether we can continue to market our drug products on a profitable and cash flow positive basis; • Whether any revenue or earnings guidance that we provide to the investment community will turn out to be accurate; • Whether we will prevail in our currently pending Paragraph IV litigation with Hetero USA, Inc. regarding our FIRDAPSE® patents that expire in 2032, 2034, and 2037, which matter is currently scheduled to go to trial starting on March 23, 2026; • Whether our estimates of the size of the market for FIRDAPSE® for the treatment of LEMS will prove to be accurate, and whether we can continue to increase FIRDAPSE® net product revenues as we have done in past periods; • Whether the daily dose of FIRDAPSE® taken by patients changes over time and how that affects our net product revenues for FIRDAPSE® in future periods; • Whether we will continue to be able to locate LEMS patients who are undiagnosed or are misdiagnosed with another disease, including LEMS patients who also have small cell lung cancer; • Whether the addition of FIRDAPSE® to the NCCN Clinical Practice Guidelines for small cell lung cancer results in an increase in patients being treated with FIRDAPSE®; • Whether patients will discontinue from the use of our products at rates that are higher than historically experienced or higher than we forecast; • Whether new patients for our existing and future drug products can be successfully titrated to stable therapy. • Whether we will be able to demonstrate, to the satisfaction of the FDA and third-party payors, that AGAMREE® offers advantages compared to other corticosteroids or competitor’s products; 76 Table of Contents • Whether DMD patients transitioning to current or future approved gene therapy treatments will delay initiating use of AGAMREE® while waiting for access to such gene therapy, or stop their AGAMREE® therapy during the course of their gene therapy treatment; • Whether steroids will continue to be the foundational standard of care for the treatment of DMD as new DMD drugs are approved for commercialization in the future; • Whether we will be able to continue to successfully sell FYCOMPA® now that generic competition for FYCOMPA® tablets and oral suspension have entered the market; • Whether reduced revenue resulting from generic FYCOMPA® entering the market will require us to impair all or a portion of our intangible asset for FYCOMPA®; • The extent to which payors will continue to provide coverage and reimburse for our products at the price that we charge for our products; • The ability of our third-party suppliers and contract manufacturers to continue to supply sufficient product to meet our customers’ needs in a timely manner; • The impact on our profits and cash flow of adverse changes in reimbursement and coverage policies or regulations from government and private payors such as Medicare, Medicaid, insurance companies, health maintenance organizations and other plan administrators, or the impact of pricing pressures enacted by industry organizations, the federal government or the government of any state, including as a result of increased scrutiny over pharmaceutical pricing or otherwise; • Changes in the healthcare industry and the effect of political pressure from and actions by the current Administration, Congress and/or medical professionals seeking to reduce prescription drug costs, and changes to the healthcare industry occasioned by any future changes in laws relating to the pricing of drug products, including changes made in the Inflation Reduction Act of 2022, changes (if any) to be made by the current Administration (including the possibility of seeking to impose Most Favored Nation pricing on drug companies or to impose a 100% tariff on branded or patented pharmaceutical products unless a company is "building" a manufacturing plant in the United States) and/or the current Congressional administrations, changes to the review and approval process at the FDA, imposing tariffs on imported product, or changes in the healthcare industry generally; • The potential impact of tariffs on our cost of sales for products that are manufactured, in whole or in part, outside of the U.S.; • The potential impact on our business of “most favorite nation”, or Most Favored Nation pricing, such as proposed in the GUARD and GLOBE Medicare demonstration projects, on what we will realize from the sale of our drug products if Most Favored Nation pricing becomes applicable to even a portion of our drug products; • The ability of our third-party suppliers and contract manufacturers to maintain compliance with current Good Manufacturing Practices; • The ability of those third parties that distribute our products to maintain compliance with applicable law; • Our ability to maintain compliance with applicable rules relating to our patient assistance programs for our products; • The scope and strength of our intellectual property and the outcome of challenges to our intellectual property, and, conversely, whether any third-party intellectual property presents unanticipated obstacles for FIRDAPSE® or AGAMREE®; • Whether there will be a post-closing review by antitrust regulators of our previous or future Paragraph IV patent settlements or our previous acquisition transactions, and the outcome of any such reviews if they were to occur; • Whether we will be able to acquire additional drug products under development, complete development required to commercialize such products, and thereafter, if such products are approved for commercialization, successfully market such products; • Whether the FDA will approve generic versions of FIRDAPSE® following the expiration of our orphan drug exclusivity on November 26, 2025, subject to any pending 30-month stays of approval as required under the Drug Price Competition and Patent Term Restoration Act of 1984; • Whether our patents will be sufficient to prevent generic competition for AGAMREE® after our orphan drug exclusivity for this product expires; 77 Table of Contents • Whether our clinical studies of AGAMREE® and our SUMMIT registry study of DMD patients being treated with AGAMREE®, will be successful and the impact, if any, of the results of these studies on our business; • Assuming we prevail in our currently ongoing patent litigation with Hetero, whether we are able to successfully develop additional indications for FIRDAPSE® and obtain the ability to commercialize FIRDAPSE® for these additional indications; • Whether we and Santhera Pharmaceuticals Holding AG can successfully develop additional indications for AGAMREE®, and obtain the ability to commercialize AGAMREE® for these additional indications. • The state of the economy generally; • The impact on our business of a prolonged U.S. government shutdown; • The scope, rate of progress and expense of our clinical trials and studies, pre-clinical studies, proof-of-concept studies, and our other drug development activities, and whether any trials and studies we undertake will be successful; • Our ability to complete any clinical trials and studies that we may undertake on a timely basis and within the budgets we establish for such trials and studies; • Whether FIRDAPSE® and AGAMREE® will be successfully commercialized in Canada on a profitable basis through KYE Pharmaceuticals, Inc., our sublicensee for the products in Canada; • Whether FIRDAPSE® will be successfully commercialized in Japan on a profitable basis by DyDo Pharma, Inc., our sublicensee for the product in Japan; • The impact on sales of FIRDAPSE® in the U.S. if an amifampridine product is purchased in Canada for use in the U.S.; • Whether any efforts we undertake to expand the reach of FIRDAPSE® into other global regions will be successful; • System failures or security or data breaches due to cyber-attacks, or cyber intrusions, including ransomware, phishing attacks and other malicious intrusions whether it occurs directly to us or indirectly through third parties; and • Our ability to enhance our systems, processes, and procedures to appropriately support the growing complexity and scale of our business.
Selling, General and Administrative Expenses During 2019, we began to commit funds to developing our commercialization program for FIRDAPSE® and we have continued to incur substantial commercialization expenses, including sales, marketing, patient services, patient advocacy and other commercialization related expenses as we have continued our sales program for FIRDAPSE®.
Selling, General and Administrative Expenses During 2019, we began to commit funds to developing our commercialization program for FIRDAPSE® and we have continued to incur substantial commercialization expenses, including sales, marketing, patient services, patient advocacy and other commercialization related expenses as we have continued our sales and marketing program for FIRDAPSE®.
In the future, we may require additional working capital to support our operations depending on our future success with FIRDAPSE®, FYCOMPA® and AGAMREE® sales, or the products we may acquire and continue to develop and whether our results continue to be profitable and cash flow positive.
In the future, we may require additional working capital to support our operations depending on our future success with FIRDAPSE®, AGAMREE®, and FYCOMPA® sales, or the products we may acquire and continue to develop and whether our results continue to be profitable and cash flow positive.
This was partially offset by increases of $12.0 million in accounts receivable, net, $3.9 million in inventory and $8.5 million prepaid expenses and other current assets, a decrease of $0.4 million in operating lease liability, $9.4 million in deferred taxes and $5.6 million in non-cash expenses.
This was partially offset by increases of $12.0 million in accounts receivable, net, $3.9 million in inventory, net and $8.5 million in prepaid expenses and other current assets, a decrease of $0.4 million in operating lease liability, $9.4 million in deferred taxes and $5.6 million in non-cash expenses.
Further, on January 8, 2025, we reached a settlement with Teva in which Teva agreed not to market a generic version of FIRDAPSE® in the U.S. any earlier than February 25, 2035, if approved by the FDA, unless certain limited circumstances customarily included in these types of agreements occur.
On January 8, 2025, we reached a settlement with Teva in which Teva agreed not to market a generic version of FIRDAPSE® in the U.S. any earlier than February 25, 2035, if approved by the FDA, unless certain limited circumstances customarily included in these types of agreements occur.
The first, U.S. patent no. 6,949,571 (the ‘571 patent), will expire on May 23, 2025, including patent term extension. The second FYCOMPA® patent in the Orange Book is U.S. Patent No. 8,772,497 (the ‘497 patent), which will expire on July 1, 2026.
The first, U.S. patent no. 6,949,571 (the ‘571 patent), expired on May 23, 2025, including patent term extension. The second FYCOMPA® patent in the Orange Book is U.S. Patent No. 8,772,497 (the ‘497 patent), which will expire on July 1, 2026.
In connection with our recent acquisition from Santhera: • At closing we paid a $75 million initial cash payment. • In the fourth quarter of 2023, following regulatory approval of Santhera’s NDA for AGAMREE® by the FDA, we paid a regulatory milestone payment of $36 million.
In connection with our acquisition from Santhera: • At closing we paid a $75 million initial cash payment. • In the fourth quarter of 2023, following regulatory approval of Santhera’s NDA for AGAMREE® by the FDA, we paid a regulatory milestone payment of $36 million.
On September 24, 2024, we were informed by DyDo that it had received approval of its New Drug Application for the sale of FIRDAPSE® in Japan. Further, DyDo informed us that they had launched FIRDAPSE® in Japan in January 2025.
On September 24, 2024, we were informed by DyDo that it had received approval of its New Drug Application for the sale of FIRDAPSE® in Japan. Further, DyDo advised us that they launched FIRDAPSE® in Japan in January 2025.
Our effective tax rate is affected by many factors, including the number of stock options exercised in any period, and our effective tax rate is likely to fluctuate in future periods (and may be higher than it was in the 2024 fiscal year). We had no material uncertain tax positions as of December 31, 2024 and 2023. Net Income.
Our effective tax rate is affected by many factors, including the number of stock options exercised in any period, and our effective tax rate is likely to fluctuate in future periods (and may be higher than it was in the 2025 fiscal year). We had no material uncertain tax positions as of December 31, 2025 and 2024. Net Income.
Under the Federal Food, Drug, and Cosmetic Act (FDCA), as amended by the Drug Price Competition and Patent Term Restoration Act of 1984, we had 45 days from receipt of the notice letters to determine if there were grounds to bring a lawsuit and, if so, to commence patent infringement lawsuits against these generic drug manufacturers in a federal district court, which would trigger a statutory stay precluding the FDA from final approval of the subject ANDA until May 2026 or entry of judgment holding the patents invalid, unenforceable, or not infringed, whichever occurs first in all cases (but not earlier 57 Table of Contents than the expiration of orphan drug exclusivity on November 28, 2025).
Under the Federal Food, Drug, and Cosmetic Act (FDCA), as amended by the Drug Price Competition and Patent Term Restoration Act of 1984, we had 45 days from receipt of the notice letters to determine if there were grounds to bring a lawsuit and, if so, to commence patent infringement lawsuits against these generic drug manufacturers in a federal district court, which would trigger a statutory stay precluding the FDA from final approval of the subject ANDA until May 26, 2026 or entry of judgment holding the patents invalid, unenforceable, or not infringed, whichever occurs first in all cases (but not earlier than the expiration of orphan drug exclusivity on November 28, 2025).
Further, on December 18, 2023, the European Commission (EC) granted to Santhera marketing authorization for AGAMREE® for the treatment of DMD in patents ages four years and older and on January 12, 2024 Santhera announced that AGAMREE® had received approval by the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom.
Further, on December 18, 2023, the European Commission (EC) granted to Santhera marketing authorization for AGAMREE® for the treatment of DMD in patients ages four years and older and on January 12, 2024 Santhera announced that AGAMREE® had received approval by the Medicines and Healthcare products Regulatory Agency (MHRA) in the United Kingdom.
Our analyses also contemplated application of the constraint in accordance with the guidance, under which it determined a material reversal of revenue would not occur in a future period for the estimates as of December 31, 2024, 2023 and 2022 and, therefore, the transaction price was not reduced further during the years ended December 31, 2024, 2023 and 2022.
Our analyses also contemplated application of the constraint in accordance with the guidance, under which it determined a material reversal of revenue would not occur in a future period for the estimates as of December 31, 2025, 2024 and 2023 and, therefore, the transaction price was not reduced further during the years ended December 31, 2025, 2024 and 2023.
Overview We are a commercial-stage, patient-centric biopharmaceutical company focused on in-licensing, developing, and commercializing novel high-quality medicines for patients living with rare and difficult to treat diseases. We currently market three drug products, FIRDAPSE® (amifampridine), FYCOMPA® (perampanel), and AGAMREE® (vamorolone).
Overview We are a commercial-stage, patient-centric biopharmaceutical company focused on in-licensing, developing, and commercializing novel high-quality medicines for patients living with rare and difficult to treat diseases. We currently sell three commercial stage drug products, FIRDAPSE® (amifampridine), AGAMREE® (vamorolone), and FYCOMPA® (perampanel).
Concurrent with the closing of the AGAMREE® License Agreement, we made a strategic investment into Santhera in which we acquired 1,414,688 of Santhera’s ordinary shares (representing approximately 11.26% of Santhera’s outstanding ordinary shares immediately following the transaction) at an investment price of CHF 9.477 per share, with the approximately $15.7 million USD in equity investment proceeds to be used by Santhera for Phase IV studies of AGAMREE® in DMD and future development of additional indications for AGAMREE®.
Concurrent with the closing of the AGAMREE® License Agreement, we made a strategic investment into Santhera in which we acquired 1,414,688 of Santhera’s ordinary shares (representing approximately 11.26% of Santhera’s outstanding ordinary shares immediately following the transaction) at an investment price of CHF 9.477 per share, with the approximately $15.7 64 Table of Contents million USD in equity investment proceeds to be used by Santhera for Phase IV studies of AGAMREE® in DMD and future development of additional indications for AGAMREE®.
We are supporting the distribution of FIRDAPSE® through Catalyst Pathways®, our personalized treatment support program for patients who enroll in it. Catalyst Pathways® is a single source for personalized treatment support, education and guidance through the challenging dosing and titration regimen required to reach an effective therapeutic dose.
We are supporting the distribution in the U.S. of FIRDAPSE® through Catalyst Pathways®, our personalized treatment support program for patients who enroll in it. Catalyst Pathways® is a single source for personalized treatment support, education and guidance through the challenging dosing and titration regimen required to reach an effective therapeutic dose.
Our effective income tax rate was approximately 24.2% and 24.4% for fiscal years ended December 31, 2024 and 2023, respectively. Differences in our effective tax and the statutory federal income tax of 21% are driven by state income taxes and anticipated annual permanent differences offset by equity compensation deductions.
Our effective income tax rate was approximately 24.4% and 24.2% for fiscal years ended December 31, 2025 and 2024, respectively. Differences in our effective tax and the statutory federal income tax of 21% are driven by state income taxes and anticipated annual permanent differences offset by equity compensation deductions.
We have entered into the following contractual arrangements with respect to AGAMREE® (vamorolone): • Payments due under our license agreement for AGAMREE®.
We have entered into the following contractual arrangements with respect to AGAMREE®: • Payments due under our license agreement for AGAMREE®.
In furtherance of that objective, we are currently conducting a Phase 1 study in healthy adults comparing a single dose of vamorolone, prednisone, and deflazacort, and studying the immunosuppressive effect of multiple ascending doses of AGAMREE®, which study will attempt to define the immunosuppressive dose of vamorolone for future indications and for the use of our product in conjunction with gene and cell therapies that are approved to treat DMD and require a concurrent immunosuppressive regimen of a corticosteroid when administered.
In furtherance of that objective, we are currently conducting a Phase 1 study in healthy adults comparing a single dose of 65 Table of Contents vamorolone, prednisone, and deflazacort, and studying the immunosuppressive effect of multiple ascending doses of AGAMREE®, which study will attempt to define the immunosuppressive dose of vamorolone for future indications and for the use of our product in conjunction with gene and cell therapies that are approved to treat DMD and require a concurrent immunosuppressive regimen of a corticosteroid when administered.
Finally, On January 16, 2025, the National Institute for Health and Care Excellence (NICE) issued positive Final Guidance that recommends AGAMREE® for use in the National Health Service (NHS) in England, Wales and Northern Ireland for the treatment of DMD in patients four years of age and older and on February 13, 2025, Santhera announced an agreement with the German National Association of Statutory Health Insurance Funds (GKV-SV) on the reimbursement for AGAMREE® (vamorolone) for the treatment of DMD.
Additionally, on January 16, 2025, the National Institute for Health and Care Excellence (NICE) issued positive Final Guidance that recommends AGAMREE® for use in the National Health Service (NHS) in England, Wales and Northern Ireland for the treatment of DMD in patients four years of age and older and on February 13, 2025, Santhera announced an agreement with the German National Association of Statutory Health Insurance Funds (GKV-SV) on the reimbursement for AGAMREE® for the treatment of DMD.
Income Taxes Our effective income tax rate is the ratio of income tax expense over our income before income taxes. As of December 31 2024, 2023, and 2022, we had no federal net operating loss carry-forwards. Additionally, we had no state net operating loss carry-forwards in any such year.
Income Taxes Our effective income tax rate is the ratio of income tax expense over our income before income taxes. As of December 31 2025, 2024, and 2023, we had no federal net operating loss carry-forwards. Additionally, we had no state net operating loss carry-forwards in any such year.
Cost of sales for AGAMREE® for the fiscal year ended December 31, 2024 consisted of royalties payable on the terms set forth below in Liquidity and Capital Resources— Contractual Obligations and Arrangements , product costs and excludes the amortization of the AGAMREE® intangible asset.
Cost of sales for AGAMREE® for the fiscal year ended December 31, 2025 consisted of royalties payable on the terms set forth below in Liquidity and Capital Resources— Contractual Obligations and Arrangements , product costs and excludes the amortization of the AGAMREE® intangible asset.
In that regard, our future funding requirements will depend on many factors, including: 66 Table of Contents • the cost of diligence in seeking potential acquisitions and of the completion of such acquisitions, if any future acquisitions occur; • future clinical trial results; • the scope, rate of progress and cost of our clinical trials and other product development activities; • the terms and timing of any collaborative, licensing and other arrangements that we may establish; • the cost and timing of regulatory approvals; • the cost and delays in product development as a result of any changes in regulatory oversight applicable to our products; • the amount of net revenues that we report from sales of FIRDAPSE®, FYCOMPA® and AGAMREE®; • the effect of competition and market developments; • the cost of filing and potentially prosecuting, defending and enforcing any patent claims and other intellectual property rights; and • the extent to which we acquire or invest in other products.
In that regard, our future funding requirements will depend on many factors, including: • the cost of diligence in seeking potential acquisitions and of the completion of such acquisitions, if any future acquisitions occur; • future clinical trial results; • the scope, rate of progress and cost of our clinical trials and other product development activities; • the terms and timing of any collaborative, licensing and other arrangements that we may establish; • the cost and timing of regulatory approvals; • the cost and delays in product development as a result of any changes in regulatory oversight applicable to our products; • the amount of net revenues that we report from sales of FIRDAPSE®, AGAMREE®, and FYCOMPA®; • the effect of competition and market developments; • the cost of filing and potentially prosecuting, defending and enforcing any patent claims and other intellectual property rights; and • the extent to which we acquire or invest in other products and the size of those investments.
Refer to Note 2, “Basis of Presentation and Significant Accounting Policies,” in the consolidated financial statements included in this report for further details on revenue recognition. Valuation of Intangible Assets. We have acquired and continue to acquire significant intangible assets that we record at fair value at the acquisition date.
Refer to Note 2, “Basis of Presentation and Significant Accounting Policies,” in the consolidated financial statements included in this report for further details on revenue recognition. Valuation of Intangible Assets. 69 Table of Contents We have acquired and continue to acquire significant intangible assets that we record at fair value at the acquisition date.
We also work with several rare disease advocacy organizations (including the Myasthenia Gravis Foundation of America, the National Organization for Rare Disorders, and the LEMS Family Association) to help increase awareness and level of support for patients living with LEMS and to provide education for the physicians who treat these rare diseases and the patients they treat.
We also work with several rare disease advocacy organizations (including the Myasthenia Gravis Foundation of America, the National Organization for Rare Disorders, and the LEMS Family Association) to help increase awareness and level of support for patients living with LEMS and to provide education for the physicians who treat this rare disease and the patients they treat.
This section provides information about key accounting estimates and policies that we followed in preparing our consolidated financial statements for the 2024 fiscal year. • Critical Accounting Policies and Estimates .
This section provides information about key accounting estimates and policies that we followed in preparing our consolidated financial statements for the 2025 fiscal year. • Critical Accounting Policies and Estimates .
Each fiscal quarter, we review the value of our intangible assets to determine if they are impaired. If we determine one or more of our intangible assets are impaired during a future period we would record a charge in the amount of that impairment. 64 Table of Contents Research and Development Expenses.
Each fiscal quarter, we review the value of our intangible assets to determine if they are impaired. If we determine one or more of our intangible assets are impaired during a future period we would record a charge in the amount of that impairment. Research and Development Expenses.
Net cash used in investing activities during the year ended December 31, 2024 was $0.6 million and consisted of purchases of property and equipment.
Net cash used in investing activities during the year ended December 31, 2025 was $0.1 million and consisted of purchases of property and equipment. Net cash used in investing activities during the year ended December 31, 2024 was $0.6 million and consisted of purchases of property and equipment.
Our current plans and objectives are based on assumptions relating to the continued commercialization of FIRDAPSE®, FYCOMPA®, and AGAMREE® and on our plans to seek to acquire or in-license additional products. Although we believe that our assumptions are reasonable, any of our assumptions could prove inaccurate.
Our current plans and objectives are based on assumptions relating to the continued sale of FIRDAPSE®, AGAMREE® and FYCOMPA® and on our plans to seek to acquire or in-license additional drug products. Although we believe that our assumptions are reasonable, any of our assumptions could prove inaccurate.
We have entered into the following contractual arrangements with respect to sales of FIRDAPSE®: • Payments due under our license agreement for FIRDAPSE®.
Contractual Obligations and Arrangements. We have entered into the following contractual arrangements with respect to sales of FIRDAPSE®: • Payments due under our license agreement for FIRDAPSE®.
We believe that by using specialty pharmacies in this way, the difficult task of navigating the health care system is far better for the patient needing treatment for their rare disease and the health care community in general.
We believe that by using specialty pharmacies in this way, the task, which can be difficult, of navigating the health care system is far better for the patient needing treatment for their rare disease and the health care community in general.
LEMS patients in financial need, who meet those independent organizations' guidelines. In addition, we have a safety net program in place for patients who are uninsured and underinsured. Subject to compliance with regulatory requirements, our goal is that no LEMS patient is ever denied access to their medication for financial reasons.
LEMS patients in financial need who meet those independent organizations' guidelines. In addition, we have a program in place to help patients who are uninsured and underinsured. Subject to compliance with applicable regulatory requirements, our goal is that no LEMS patient is ever denied access to their medication for financial reasons.
For the years ended December 31, 2024 and 2023, we recognized an aggregate of approximately $4.4 million and $3.7 million, respectively, of royalties payable to Jacobus. We have entered into the following contractual arrangements with respect to sales of FYCOMPA®: • Payments due under our asset purchase agreement for FYCOMPA®.
For the years ended December 31, 2025 and 2024, we recognized an aggregate of approximately $5.3 million and $4.4 million, respectively, of royalties payable to Jacobus. We have entered into the following contractual arrangements with respect to sales of FYCOMPA®: • Payments due under our asset purchase agreement for FYCOMPA®.
Cost of sales for FYCOMPA® for the fiscal year ended December 31, 2024 consisted of product costs and excludes the amortization of the FYCOMPA® intangible assets.
Cost of sales for FYCOMPA® for the fiscal year ended December 31, 2025 consisted of product costs and excludes the amortization of the FYCOMPA® intangible assets.
FIRDAPSE® On November 28, 2018, we received approval from the FDA for our new drug application, (NDA) for FIRDAPSE® Tablets 10 mg for the treatment of adult patients (ages 17 and above) with LEMS, and in January 2019, we launched FIRDAPSE® in the U.S.
FIRDAPSE® On November 28, 2018, we received approval from the FDA for our new drug application (NDA) for FIRDAPSE® Tablets 10 mg for the treatment of adult patients (ages 17 and above) with Lambert-Eaton Myasthenic Syndrome (LEMS), and in January 2019, we launched FIRDAPSE® in the U.S.
Royalties on sales of AGAMREE® in future years may increase as a percentage if net sales exceed certain amounts over $100 million. See Note 9 of the Notes to Consolidated Financial Statements included elsewhere in this report. Amortization of Intangible Assets.
Royalties on sales of AGAMREE® in future years may increase as a percentage of net sales exceed certain amounts of net revenues over $100 million. See Note 13 of the "Notes to Consolidated Financial Statements" included elsewhere in this report. Amortization of Intangible Assets.
(Eisai), we agreed to pay the following consideration to Eisai: • We paid at closing a $160 million upfront cash payment, plus $1.6 million for reimbursement of certain prepayments. • Royalties commencing on loss of exclusivity for each calendar year during the royalty term equal to 12% on net sales greater than $10 million and less than $100 million, 17% on net sales of greater than $100 million and less than $125 million and 22% on net sales greater than $125 million prior to the date of generic entry.
(Eisai), we agreed to pay the following consideration to Eisai: • We paid at closing a $160 million upfront cash payment, plus $1.6 million for reimbursement of certain prepayments. • Royalties commencing on the expiration of the last patent for the product for each calendar year during the royalty term equal to 12% on net sales greater than $10 million and less than $100 million, 17% on net sales of greater than $100 million and less than $125 million and 22% on net sales greater than $125 million prior to the date of generic entry.
Under the AGAMREE® License Agreement, we contracted to obtain an exclusive North America license, manufacturing and supply agreement for Santhera’s investigational product candidate, AGAMREE® (vamorolone), a novel corticosteroid for the treatment of DMD. Under the Investment Agreement, we agreed to make a strategic investment into Santhera. Both transactions closed on July 18, 2023.
Under the AGAMREE® License Agreement, we contracted to obtain an exclusive North America license, manufacturing and supply agreement for Santhera’s investigational product candidate, AGAMREE®, a novel corticosteroid for the treatment of Duchenne muscular dystrophy, or DMD. Under the Investment Agreement, we agreed to make a strategic investment into Santhera. Both transactions closed on July 18, 2023.
Years Ended December 31, 2023 and 2022 The information comparing results of operations for the year ended 2023 compared to 2022 was included in our Annual Report on Form 10-K for 2023 filed with the SEC on February 28, 2024.
Years Ended December 31, 2024 and 2023 The information comparing results of operations for the year ended 2024 compared to 2023 was included in our Annual Report on Form 10-K for 2024 filed with the SEC on February 26, 2025.
FIRDAPSE® is currently marketed for the treatment of LEMS in Canada through our exclusive sublicensee, KYE. We supply product to KYE at agreed upon prices and we are also eligible to earn sales milestones and sales royalties based on net revenues from sales of the product in Canada. In December 2023, DyDo Pharma, Inc.
FIRDAPSE® is currently marketed for the treatment of LEMS in Canada through our exclusive sublicensee, KYE Pharmaceuticals, Inc. (KYE). We supply product to KYE at agreed upon prices and we are also eligible to earn sales milestones and sales royalties based on net revenues from sales of the product in Canada.
Finally, on May 30, 2024, the FDA approved our sNDA increasing the indicated maximum daily dosage of FIRDAPSE® tablets for the treatment of patients with LEMS from 80 mg to 100 mg. We believe that this recent sNDA approval offers healthcare providers and patients greater flexibility in treatment regimens for the management of LEMS.
Additionally, on May 30, 2024, the FDA approved our sNDA increasing the indicated 62 Table of Contents maximum daily dosage of FIRDAPSE® tablets for the treatment of patients with LEMS from 80 mg to 100 mg. We believe that this most recent sNDA approval offers healthcare providers and patients greater flexibility in treatment regimens for the management of LEMS.
AGAMREE® On June 19, 2023, we entered into a License and Collaboration Agreement (AGAMREE® License Agreement) and an Investment Agreement (Investment Agreement) with Santhera Pharmaceuticals Holding, Inc. (Santhera).
AGAMREE® On June 19, 2023, we entered into a License and Collaboration Agreement (AGAMREE® License Agreement) and an Investment Agreement (Investment Agreement) with Santhera Pharmaceuticals Holding AG (collectively, Santhera).
Royalties equal to 6% on net sales greater than $10 million and less than $100 million, 8.5% on net sales of greater than $100 million and less than $125 million and 11% on net sales greater than $125 million after the date of generic entry. • Concurrently with the acquisition, the parties entered into two related agreements: (i) a short-term TSA for commercial and manufacturing services (to which transition services ended on December 31, 2023) and (ii) a long-term Supply Agreement for the manufacturing of FYCOMPA®.
Upon the entry of generic competition, these royalties will be reduced to 6% on net sales greater than $10 million and less than $100 million, 8.5% on net sales of greater than $100 million and less than $125 million and 11% on net sales greater than $125 million. • Concurrently with the acquisition, the parties entered into two related agreements: (i) a short-term TSA for commercial and manufacturing services (to which transition services ended on December 31, 2023) and (ii) a long-term Supply Agreement for the manufacturing of FYCOMPA®.
We subsequently dismissed all of our claims against Lupin related to those five patents but maintain our claims against Lupin for the remaining Paragraph IV certification for U.S. Patent No. 10,626,088, which is the patent expiring in 2037, accordingly the litigation continues.
We subsequently dismissed all of our claims against Lupin related to those five patents but maintained our claim against Lupin for the remaining Paragraph IV certification for U.S. Patent No. 10,626,088, which is the patent expiring in 2037.
Other Income, Net. 65 Table of Contents We reported other income, net in all periods, primarily relating to interest on our investment of our cash and cash equivalents of approximately $21.1 million and $7.7 million for the fiscal years ended December 31, 2024 and 2023, respectively.
We reported other income, net in all periods, primarily relating to interest on our investment of our cash and cash equivalents of approximately $25.7 million and $21.1 million for the fiscal years ended December 31, 2025 and 2024, respectively.
In connection with our July 2022 settlement with Jacobus, we agreed to pay the following consideration to Jacobus: • $30 million of cash, of which $10 million was paid at the closing of the settlement on July 11, 2022, $10 million was paid on the first anniversary of closing and $10 million was paid on the second anniversary of closing; and • An annual royalty on Catalyst’s net sales (as defined in the License and Asset Purchase Agreement between Catalyst and Jacobus) of amifampridine products in the U.S. equal to: (a) for calendar years 2022 through 2025, 1.5% (with a minimum annual royalty of $3.0 million per year), and (b) for calendar years 2026 through the expiration of the last to expire of Catalyst’s FIRDAPSE® patents in the U.S., 2.5% (with a minimum annual royalty of $5 million per year); provided, however , that the royalty rate may be reduced and the minimum annual royalty may be eliminated under certain circumstances.
In connection with our July 2022 settlement with Jacobus, we agreed to pay the following consideration to Jacobus: • $30 million of cash, of which $10 million was paid at the closing of the settlement on July 11, 2022, $10 million was paid on the first anniversary of closing and $10 million was paid on the second anniversary of closing; and • An annual royalty on Catalyst’s net sales (as defined in the License and Asset Purchase Agreement between Catalyst and Jacobus) of amifampridine products in the U.S. equal to: (a) for calendar years 2022 through 2025, 1.5% (with a minimum annual royalty of $3.0 million per year), and (b) for calendar years 2026 through the expiration of the last to expire of Catalyst’s FIRDAPSE® patents in the U.S., 2.5% (with a minimum annual royalty of $5 million per year); provided, however, that the royalty rate may be reduced and the minimum annual royalty may be eliminated under certain circumstances. • Summary of changes to royalty obligations related to FIRDAPSE® subsequent to the balance sheet date: • On January 25, 2026, we completed seven years from the date of first commercial sale of FIRDAPSE® in the U.S.
For the fiscal year ended December 31, 2024, license and other revenue consisted primarily of a milestone payment of $2.1 million earned upon DyDo receiving product approval to commercialize FIRDAPSE® for the treatment of patients with LEMS in Japan.
For the fiscal year ended December 31, 2024, we recognized approximately $2.4 million in license and other revenue, which consisted primarily of a milestone payment of $2.1 million earned upon DyDo receiving product approval to commercialize FIRDAPSE® for the treatment of patients with LEMS in Japan. Cost of Sales.
Based on our current financial condition, including our profitability, cash flows generated from operations and forecasts of available cash, we believe that we have sufficient funds to support our operations for at least the next 12 months from the date of this report.
Based on our current financial condition, including our profitability, cash flows generated from operations and forecasts of available cash, absent the use of cash to acquire potential business development opportunities, we believe that we have sufficient funds to support our operations for at least the next 12 months from the date of this report.
Based on our current financial condition, including our profitability, cash flows generated from operations and forecasts of available cash, we believe that we have sufficient funds to support our operations for at least the next 12 months.
Based on our current financial condition, including our profitability, cash flows generated from operations and forecasts of available cash, absent the use of cash to acquire potential business development opportunities, we believe that we have sufficient funds to support our operations for at least the next 12 months.
It is estimated that between 11,000 and 13,000 patients in the U.S. are affected by DMD, with approximately 70% of patients currently receiving a corticosteroid treatment. Steroids are expected to remain the foundation of therapy for DMD patients and dosed concomitantly with other therapies.
It is estimated that between 11,000 and 13,000 people in the U.S. are affected by DMD, with approximately 70% of patients currently receiving a corticosteroid treatment. We believe that steroids are and will continue to remain the foundational therapy for DMD patients and dosed concomitantly with other therapies.
On February 24, 2025, the closing price of Santhera’s common shares on the SIX Swiss Exchange was CHF 16.08 per share (approximately $17.90 USD based on then-current exchange rates). On October 26, 2023, the U.S. FDA approved Santhera’s NDA for AGAMREE® for use in treating DMD in patients aged two years and older.
On February 23, 2026, the closing price of Santhera’s common shares on the SIX Swiss Exchange was CHF 16.46 per share (approximately $21.33 USD based on then-current exchange rates). On October 26, 2023, the U.S. FDA approved Santhera’s NDA for AGAMREE® for use in treating DMD in patients aged two years and older.
Business Development We continue to advance our strategic initiatives and portfolio expansion efforts, focusing on broadening and diversifying our rare (orphan) neurology product portfolio with innovative therapies that address critical unmet medical needs and expanding the geographical footprint of our existing products.
Business Development We continue to advance our strategic initiatives and portfolio expansion efforts, focusing on broadening and diversifying our rare (orphan) neurology product portfolio with innovative therapies that address critical unmet medical needs.
Liquidity and Capital Resources Since our inception, we have financed our operations primarily through revenues from product sales and multiple offerings of our securities. At December 31, 2024 we had cash and cash equivalents aggregating $517.6 million and working capital of $502.9 million.
Liquidity and Capital Resources Since our inception, we have financed our operations primarily through revenues from product sales and multiple offerings of our securities. At December 31, 2025 we had cash and cash equivalents aggregating $709.2 million and working capital of $746.9 million.
At December 31, 2023, we had cash and cash equivalents aggregating $137.6 million and working capital of $143.3 million. At December 31, 2024, substantially all of our cash and cash equivalents were deposited with two financial institutions, and such balances were in excess of federally insured limits.
At December 31, 2024 we had cash and cash equivalents aggregating $517.6 million and working capital of $502.9 million. At December 31, 2025, substantially all of our cash and cash equivalents were deposited with two financial institutions, and such balances were in excess of federally insured limits.
(Lupin)) advising that they had each submitted an ANDA to the FDA seeking authorization from the FDA to manufacture, use or sell a generic version of FIRDAPSE® in the U.S.
(collectively Teva), Hetero USA, Inc. (Hetero), and Lupin Pharmaceuticals, Inc. (Lupin)) advising that they each had submitted an ANDA to the FDA seeking authorization from the FDA to manufacture, use or sell a generic version of FIRDAPSE® in the U.S.
Research and development expenses for the years ended December 31, 2024 and 2023 were approximately $12.6 million and $93.2 million, respectively, and represented approximately 4% and 30% of total operating costs and expenses, respectively.
Research and development expenses for the years ended December 31, 2025 and 2024 were approximately $12.7 million and $12.6 million, respectively, and represented approximately 4% of total operating costs and expenses.
Amortization of intangible assets was approximately $37.4 million for the fiscal year ended December 31, 2024 compared to $32.6 million for fiscal year ended December 31, 2023.
Amortization of intangible assets was approximately $37.5 million for the fiscal year ended December 31, 2025 compared to $37.4 million for fiscal year ended December 31, 2024.
For the years ended December 31, 2024 and 2023, we recognized an aggregate of approximately $47.3 million and $39.5 million, respectively, of royalties payable under these license agreements, which is included in cost of sales in the accompanying consolidated statements of operations and comprehensive income.
For the years ended December 31, 2025 and 2024, we recognized an aggregate of approximately $56.2 million and $47.3 million, respectively, of royalties payable under these license agreements, which is included in cost of sales in the accompanying consolidated statements of operations and comprehensive income. • Payments due to Jacobus.
On January 9, 2024, we completed a public offering of 10 million shares of our common stock under the 2023 Shelf Registration Statement, raising net proceeds of approximately $140.7 million.
The 2023 Shelf Registration Statement (file no. 333-274427) became effective upon filing. On January 9, 2024, we completed a public offering of 10 million shares of our common stock under the 2023 Shelf Registration Statement, raising net proceeds of approximately $140.7 million.
Selling, general and administrative expenses for the years ended December 31, 2024 and 2023 were approximately $177.7 million and $133.7 million, respectively, and represented approximately 60% and 43% of total operating costs and expenses for the years ended December 31, 2024, and 2023, respectively.
Selling, general and administrative expenses for the years ended December 31, 2025 and 2024 were approximately $193.8 million and $177.7 million, respectively, and represented approximately 58% and 60% of total operating costs and expenses, respectively.
Further, we will pay royalties to our licensor on net sales in Japan equal to a similar percentage to the royalties that we are currently paying for non-U.S. sales under our original FIRDAPSE® License Agreement for North America. • Payments due to Jacobus.
All royalty obligations to the third-party licensor for non-U.S. sales have concluded. Further, we will pay royalties to our licensor on net sales in Japan equal to a similar percentage to the royalties that we are currently paying for non-U.S. sales under our original FIRDAPSE® License Agreement for North America.
FYCOMPA® is a controlled substance and is approved with a box warning label. FYCOMPA® is used to treat certain types of focal onset seizures (seizures that involve only one part of the brain) in adults and children four years of age and older.
FYCOMPA® is used to treat certain types of focal onset seizures (seizures that involve only one part of the brain) in adults and children four years of age and older.
Cost of sales was approximately $68.8 million for the fiscal year ended December 31, 2024, compared to $52.0 million for the fiscal year ended December 31, 2023. Cost of sales in both periods consisted principally of royalty payments, which are based on net revenue as defined in the applicable license agreements.
Cost of sales was approximately $87.3 million for the fiscal year ended December 31, 2025, compared to approximately $68.8 million for the fiscal year ended December 31, 2024. Cost of sales in all periods consisted principally of royalty payments, 70 Table of Contents which are based on net revenue as defined in the applicable license agreements.
We sell FIRDAPSE® in the U.S. through a field-based force experienced in neurologic, central nervous system or rare disease products consisting at this time of approximately 41 field personnel, including sales (Regional Account Managers), thought leader liaisons and patient assistance and insurance navigation support (Patient Access Liaisons).
We sell FIRDAPSE® in the U.S. through a field-based force experienced in neurologic, central nervous system or rare disease products consisting at this time of approximately 23 field personnel, including sales (Regional Account Managers and Area Business Directors), National Account Directors and thought leader liaisons.
Under the AGAMREE® License Agreement, upon closing we made a $75 million payment to Santhera in return for the exclusive North American license for AGAMREE®.
Under the AGAMREE® License Agreement, upon closing we made a $75 million payment to Santhera in return for the exclusive North American license for AGAMREE®. Additionally, we hold the North American rights to any future approved indications for AGAMREE®.
With an unwavering patient focus embedded in everything we do, we are committed to providing innovative, best-in-class medications with the hope of making a meaningful impact on those affected by these conditions.
With an unwavering patient focus embedded in everything we do, we are committed to providing innovative, best-in-class medications with the hope of making a meaningful positive impact on those affected by these conditions. Currently, we have a total of 58 field personnel supporting FIRDAPSE® and AGAMREE®.
In this settlement, Inventia acknowledged both the validity of our FIRDAPSE® patents and also the infringement by the ANDA filer's product of our patents. As part of the settlement, Inventia also agreed not to commercialize its product until the earlier of all FIRDAPSE® patents expiration or the entry into the market of another ANDA product meeting certain conditions.
As part of the settlement, Inventia also agreed not to commercialize its product until the earlier of all FIRDAPSE® patents expiration or the entry into the market of another ANDA product meeting certain conditions.
In order to help patients with LEMS afford their medication, we, like other pharmaceutical companies which market drug products for ultra-orphan conditions, have developed an array of financial assistance programs to reduce out-of-pocket costs that makes FIRDAPSE® accessible and affordable. A co-pay assistance program has been designed to reduce commercial patients’ out of pocket costs to $0 whenever possible.
In order to help patients with LEMS afford their medication, we, like other pharmaceutical companies which market drug products for orphan and ultra-orphan, rare diseases, have developed an array of financial assistance programs to reduce out-of-pocket costs that makes FIRDAPSE® accessible and affordable.
During the year ended December 31, 2024, net cash provided by operating activities was primarily attributable to our net income of $163.9 million, increases of $1.8 million in accounts payable and $53.8 million in accrued expenses and other liabilities, $22.3 million in stock-based compensation and $37.8 million in amortization of intangible assets and depreciation.
During the year ended December 31, 2025, net cash provided by operating activities was primarily attributable to our net income of $214.3 million, an increase of $24.2 million in accrued expenses and other liabilities, $24.8 million in stock-based compensation and $37.9 million in amortization of intangible assets and depreciation.
This was partially offset by increases of $43.1 million in accounts receivable, net, $4.7 million in inventory and $5.8 million prepaid expenses and other current assets, a decrease of $0.3 million in operating lease liability, $17.8 million in deferred taxes and $1.3 million in non-cash expenses.
This was partially offset by increases of $61.0 million in accounts receivable, net, $18.1 million in inventory, net and $0.2 million in prepaid expenses and other current assets, decreases of $5.4 million in accounts payable and $0.4 million in operating lease liability, $6.8 million in deferred taxes and $0.6 million in non-cash expenses.
For the fiscal year ended December 31, 2024, we recognized total revenues of approximately $491.7 million, which included approximately $489.3 million in net revenue from product sales primarily in the U.S., compared to approximately $398.2 million in total revenues, which included approximately $396.5 million in net revenues from product sales primarily in the U.S., for the fiscal year ended December 31, 2023.
For the fiscal year ended December 31, 2025, we recognized total revenues of approximately $589.0 million, which included approximately $588.8 million in net product revenue (primarily in the U.S.), compared to total revenues of approximately $491.7 million, which included approximately $489.3 million in net product revenue (primarily in the U.S.), for the fiscal year ended December 31, 2024.
Net cash provided by financing activities during the year ended December 31, 2024 was $140.7 million, consisting primarily of proceeds from the issuance of common stock.
Net cash used in financing activities during the year ended December 31, 2025 was $17.0 million, consisting primarily of repurchases of common stock, partially offset by proceeds from the exercise of stock options. Net cash provided by financing activities during the year ended December 31, 2024 was $140.7 million, consisting primarily of proceeds from the issuance of common stock.
The ‘497 patent, which covers the API used in both FYCOMPA® tablets and oral solution, has been the subject of previous Paragraph IV certifications from three ANDA filers for the tablet formulation, which were not contested by Eisai prior to our acquisition of the drug.
The ‘497 patent, which covers certain polymorphic forms of the active pharmaceutical ingredient (API) used in both FYCOMPA® tablets and oral suspension. One of the Orange Book listed patents had been the subject of previous Paragraph IV certifications from three ANDA filers for the tablet formulation, which were not contested by Eisai prior to our acquisition of the drug.
Under the Supply Agreement, Eisai agreed to manufacture FYCOMPA® for us for at least seven years at prices listed in the Supply Agreement (to be updated on a yearly basis), and under the TSA, a U.S. subsidiary of Eisai provided us with certain transitional services (which transition services ended on December 31, 2023).
Under the Supply Agreement, Eisai agreed to manufacture FYCOMPA® for us for at least seven years at prices listed in the Supply Agreement (to be updated on a yearly basis), and under the TSA, a U.S. subsidiary of Eisai provided us with certain transitional services (which transition services ended on December 31, 2023). 66 Table of Contents Patent protection for FYCOMPA® tablets and oral solution was primarily derived from two patents listed in the FDA’s Orange Book.
We are also obligated to pay additional regulatory 68 Table of Contents milestone payments upon regulatory approval by the FDA in the U.S. of an NDA for the product for the first, second, and third additional indications in the amounts of $50 million, $45 million, and $45 million, respectively. • We are obligated to pay royalties and/or sales-based milestone payments if the applicable amount of net sales of all products in the territory in a single calendar year fall within the range of one or more of the net sales threshold levels set forth in the AGAMREE® License Agreement. • Until January 1, 2026, we are obligated to purchase all of the requirements for product solely from Santhera, and Santhera is required to manufacture, supply, and sell product to us at an agreed upon supply price. • Simultaneously with entering into the license agreement, we made a strategic equity investment into Santhera by acquiring 1,414,688 of Santhera’s ordinary shares (representing approximately 11.26% of Santhera’s outstanding ordinary shares immediately following the transaction) at an investment price of CHF 9.477 per share (corresponding to a mutually agreed volume-weighted average price prior to signing), with the approximately $15.7 million USD in equity investment proceeds, inclusive of the approximately $13.5 million USD fair value of the investment in Santhera and approximately $2.2 million USD of transaction costs included in acquired in-process research and development, to be used by Santhera for Phase IV studies in DMD and further development of additional indications for AGAMREE®.
We are also obligated to pay additional regulatory milestone payments upon regulatory approval by the FDA in the U.S. of an NDA for the product for the first, second, and third additional indications in the amounts of $50 million, $45 million, and $45 million, respectively. • We may be obligated to pay Santhera sales-based milestones of up to $105 million, which includes a sales-based milestone payment of up to $12.5 million upon achievement of revenues in the calendar year in which revenues exceed $100 million (which was achieved in the fourth quarter of 2025), and pay royalties if the applicable amount of net sales of all products in the territory in a single calendar year fall within the range of one or more of the net sales threshold levels set forth in the AGAMREE® License Agreement. • At signing, we were obligated to purchase all of our finished goods requirements for products solely from Santhera at a set supply price until January 1, 2026, but the parties agreed upon an amendment to the license agreement that allowed us to start the process for creating our own supply chain to manufacture Agamree earlier and we expect to complete that process by the end of 2026. • Simultaneously with entering into the license agreement, we made a strategic equity investment into Santhera by acquiring 1,414,688 of Santhera’s ordinary shares (representing approximately 11.26% of Santhera’s outstanding ordinary shares immediately following the transaction) at an investment price of CHF 9.477 per share (corresponding to a mutually agreed volume-weighted average price prior to signing), with the approximately $15.7 million USD in equity investment proceeds, inclusive of the approximately $13.5 million USD fair value of the investment in Santhera and approximately $2.2 million USD of transaction costs included in acquired in-process research and development, to be used by Santhera for Phase IV studies in DMD and further development of additional indications for AGAMREE®. 75 Table of Contents For the years ended December 31, 2025 and 2024, we recognized an aggregate of approximately $13.8 million and $5.1 million, respectively, of royalties payable under this license agreement, which is included in cost of sales in the accompanying consolidated statements of operations and comprehensive income.
Our FIRDAPSE® co-pay assistance program is not available to patients enrolled in state or federal healthcare programs, including Medicare, Medicaid, Department of Veterans Affairs (VA), Department of Defense (DoD), or TRICARE. However, we are donating, and committing to continue to donate, money to qualified, independent charitable foundations dedicated to providing assistance to any U.S.
Our co-pay assistance programs, including the one for FIRDAPSE®, are not available to patients enrolled in state or federal healthcare programs, including Medicare, Medicaid, Department of Veterans Affairs (VA), Department of Defense (DoD), or TRICARE. However, we have, at times, donated funds to one or more qualified, independent charitable foundations dedicated to providing assistance to any U.S.
In that regard, we are currently exploring clinically differentiated and adequately de-risked opportunities, with a keen focus on orphan, rare disease products across therapeutic areas. These prospects include evaluating companies with existing commercial drug products or drugs in development, for potential partnerships, licensing, geographical expansion opportunities with our existing products, and/or asset acquisitions.
In that regard, we are currently exploring immediate or near-term accretive, clinically differentiated and adequately de-risked opportunities, with a keen focus on rare (orphan) disease products across therapeutic areas and treatment modalities. These prospects include evaluating companies with existing commercial drug products or drugs in development, including clinical stage opportunities with established proof of concept, for potential licensing or acquisitions.
Our net income was approximately $163.9 million in the year ended December 31, 2024 ($1.38 per basic and $1.31 per diluted share) as compared to approximately $71.4 million in the year ended December 31, 2023 ($0.67 per basic and $0.63 per diluted share).
Our net income was approximately $214.3 million in the year ended December 31, 2025 ($1.75 per basic and $1.68 per diluted share) as compared to approximately $163.9 million in the year ended December 31, 2024 ($1.38 per basic and $1.31 per diluted share).
Actual results may differ from these estimates. 62 Table of Contents The amounts of assets and liabilities reported in our consolidated balance sheets and the amounts reported in our consolidated statements of comprehensive income are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition, valuation of intangible assets, stock-based compensation and valuation allowance for deferred tax assets.
The amounts of assets and liabilities reported in our consolidated balance sheets and the amounts reported in our consolidated statements of comprehensive income are affected by estimates and assumptions, which are used for, but not limited to, the accounting for revenue recognition (including adjustments for government rebates), valuation of intangible assets and stock-based compensation.
Amortization of Intangible Assets Amortization of intangible assets consists of the amortization of the FYCOMPA® product rights, which are amortized using the straight-line method over its estimated useful life of 5 years, the RUZURGI® product rights, which are amortized using the straight-line method over its estimated useful life of 14.5 years, and the milestone payment made to Santhera relating to the approval of AGAMREE® in the U.S. in October 2023, which is amortized using the straight-line method over its estimated useful life of 10.5 years.
Amortization of Intangible Assets Amortization of intangible assets consists of the amortization of the FYCOMPA® product rights, which are amortized using the straight-line method over its estimated useful life of 5 years, the RUZURGI® product rights, which are amortized using the straight-line method over its estimated useful life of 14.5 years, and the AGAMREE® product rights, which are amortized using the straight-line method over its estimated useful life of 10.5 years.
The components of other income, net were as follows (in thousands): For the year ended December 31, 2024 2023 Interest income, net $ 16,064 $ 4,675 Net gains recognized during the period on equity securities 5,075 3,024 Total other income, net $ 21,139 $ 7,699 Income Taxes.
The components of other income, net were as follows (in thousands): For the years ended December 31, 2025 2024 Interest income, net $ 24,765 $ 16,064 Net gains recognized during the period on equity securities 972 5,075 Total other income, net $ 25,737 $ 21,139 Income Taxes.

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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 changeFin ancial Statements and Supplementary Data See the list of financial statements filed with this report under Item 15 below. Item 9. Ch anges in and Disagreements with Accountants on Accounting and Financial Disclosure None.
Biggest changeFin ancial Statements and Supplementary Data See the list of financial statements filed with this report under Item 15 below.

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