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What changed in ZEVRA THERAPEUTICS, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ZEVRA THERAPEUTICS, 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.

+634 added−1121 removedSource: 10-K (2026-03-09) vs 10-K (2025-03-12)

Top changes in ZEVRA THERAPEUTICS, INC.'s 2025 10-K

634 paragraphs added · 1121 removed · 423 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

156 edited+77 added−152 removed115 unchanged
Biggest changeThe process required by the FDA before product candidates may be marketed in the United States generally involves the following: ● certain non-clinical laboratory and animal tests that must be conducted in accordance with good laboratory practices ("GLP") requirements and other applicable regulations; ● submission of an IND, which must be received by the FDA and become effective before human clinical trials may begin; ● approval by an independent institutional review board ("IRB") or ethics committee at each clinical site or centrally before each trial may be initiated; ● performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed product candidate for its intended use, performed in accordance with good clinical practice requirements ("GCPs"); ● preparation and submission of an NDA to the FDA; ● satisfactory completion of an FDA advisory committee review, if applicable; ● pre-approval inspection of manufacturing facilities at which the drug is produced to assess their compliance with cGMPs and of selected clinical investigation sites to assess compliance with GCPs; and ● FDA approval of an NDA to permit commercial marketing for particular indications for use.
Biggest changeThe process required by the FDA before a non-biological pharmaceutical product may be marketed in the United States generally involves the following: • Completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices (“GLP”), and other applicable regulations; • Submission of an Investigational New Drug application (“IND”), which must become effective before human clinical studies may begin; 17 Table of Contents • Conduct of adequate and well-controlled human clinical studies according to current Good Clinical Practices (“GCP”), to establish the safety and efficacy of the proposed pharmaceutical product for its intended use; • Submission of a New Drug Application (“NDA”) for a new pharmaceutical product; • Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the pharmaceutical product is produced to assess compliance with s current Good Manufacturing Practice standards (“cGMP”), to assure that the facilities, methods and controls are adequate to preserve the pharmaceutical product’s identity, strength, quality and purity; • Potential FDA inspection of the preclinical and clinical study sites that generated the data in support of the NDA; and • FDA review and approval of the NDA.
Beyond our internally generated IP, we have also acquired extensive IP portfolios through our business development efforts which support the products and product candidates that we are seeking to commercialize and/or develop.
Beyond our internally-generated IP, we have also acquired extensive IP portfolios through our business development efforts which support the products and product candidates that we are seeking to develop and/or commercialize.
We have established promotional programs to drive awareness and patient experience with OLPRUVA and MIPLYFFA including Quick Start, a thirty-day free trial program designed to provide patient experience, and other patient co-pay programs, reflecting our commitment to ensure access to innovative treatments to those in need.
We have established promotional programs to drive awareness and patient experience with MIPLYFFA and OLPRUVA including Quick Start, a thirty-day free trial program designed to provide patient experience, and other patient co-pay programs, reflecting our commitment to ensure access to innovative treatments to those in need.
Non-clinical Studies and Clinical Trials Similarly to the United States, the various phases of non-clinical and clinical research in the EU are subject to significant regulatory controls. Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances.
EU Non-clinical Studies and Clinical Trials Similarly to the United States, the various phases of non-clinical and clinical research in the EU are subject to significant regulatory controls. Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances.
However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical or biological entity, and products may not qualify for data exclusivity. Orphan Medicinal Products The criteria for designating an “orphan medicinal product” in the EU are similar in principle to those in the United States.
However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical or biological entity, and products may not qualify for data exclusivity. EU Orphan Medicinal Products The criteria for designating an “orphan medicinal product” in the EU are similar in principle to those in the United States.
Narcolepsy is a rare, chronic, debilitating neurologic disorder of sleep-wake state instability that impacts up to 200,000 Americans and is primarily characterized by EDS and cataplexy (sudden loss of muscle tone while a person is awake) along with other manifestations of rapid eye movement ("REM"), sleep dysregulation, which intrude into wakefulness.
Narcolepsy is a rare, chronic, debilitating neurologic disorder of sleep-wake state instability that impacts up to 200,000 Americans and is primarily characterized by EDS and cataplexy (sudden loss of muscle tone while a person is awake) along with other manifestations of rapid eye movement and sleep dysregulation, which intrude into wakefulness.
In a May 2021 Type B meeting with the FDA, Acer discussed the conduct of an U.S.-based prospective, randomized, double-blind, placebo-controlled, decentralized clinical trial in patients with COL3A1 positive VEDS, and sought the FDA’s opinion on various proposed design features of the study.
In a May 2021 Type B meeting with the FDA, Acer discussed the conduct of a U.S.-based prospective, randomized, double-blind, placebo-controlled, decentralized clinical trial in patients with COL3A1 positive VEDS and sought the FDA’s opinion on various proposed design features of the study.
In May 2021, we announced that SDX, our proprietary prodrug of d-MPH and the primary active pharmaceutical ingredient ("API") in AZSTARYS, was classified as a Schedule IV controlled substance by the DEA. AZSTARYS is classified as a Schedule II controlled substance as its formulation includes a 70:30 mixture of SDX (Schedule IV) and d-MPH (Schedule II), respectively.
In May 2021, we announced that SDX, our proprietary prodrug of d-MPH and the primary active pharmaceutical ingredient in AZSTARYS, was classified as a Schedule IV controlled substance by the DEA. AZSTARYS is classified as a Schedule II controlled substance, as its formulation includes a 70:30 mixture of SDX (Schedule IV) and d-MPH (Schedule II), respectively.
In addition, Corium agreed to make additional payments upon the achievement of specified U.S. sales milestones of up to $420 million in the aggregate. Further, Commave will pay us quarterly, tiered royalty payments based on a percentage of net sales on a product-by-product basis.
In addition, Corium agreed to make additional payments upon the achievement of specified U.S. sales milestones of up to $420.0 million in the aggregate. Further, Commave will pay us quarterly, tiered royalty payments based on a percentage of net sales on a product-by-product basis.
After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also are continuing, annual human prescription drug program fee requirements for approved products.
Post-Approval Requirements After approval, most changes to the approved product, such as adding new indications or other labeling claims are subject to prior FDA review and approval. There also are continuing, annual human prescription drug program fee requirements for approved products.
These requirements are directly applicable to us and also applicable to our contract manufacturers and to distributors, prescribers and dispensers of our product candidates. The DEA regulates the handling of controlled substances through a closed chain of distribution.
These requirements are directly applicable to us and also applicable to our contract manufacturers and to distributors, prescribers and dispensers of our products and product candidates. The DEA regulates the handling of controlled substances through a closed chain of distribution.
Depending on the circumstances, failure to comply with these laws can result in significant penalties, including criminal, civil and/or administrative penalties, damages, fines, disgorgement, debarment from government contracts, individual imprisonment, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, exclusion from government programs, refusal to allow us to enter into supply contracts, including government contracts, reputational harm, diminished profits and future earnings and the curtailment or restructuring of our operations, any of which could adversely affect our business. 24 Table of Contents Data Privacy and Security Laws We may be subject to data privacy and security laws, regulations, and standards by foreign, federal, state and local governments that govern the collection, use, access to, confidentiality and security of health-related and other personal information.
Depending on the circumstances, failure to comply with these laws can result in significant penalties, including criminal, civil and/or administrative penalties, damages, fines, disgorgement, debarment from government contracts, individual imprisonment, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, exclusion from government programs, refusal to allow us to enter into supply contracts, including government contracts, reputational harm, diminished profits and future earnings and the curtailment or restructuring of our operations, any of which could adversely affect our business. 24 Table of Contents Data Privacy and Security Law We are subject to data privacy and security laws, regulations, and standards by foreign, federal, state and local governments that govern the collection, use, access to, confidentiality and security of health-related and other personal information.
DEA Regulation Our products and certain of our product candidates are, or if approved, will be regulated as “controlled substances” as defined in the Controlled Substances Act of 1970 ("CSA"), and the DEA’s implementing regulations, which establish registration, security, recordkeeping, reporting, storage, distribution, importation, exportation, inventory, quota and other requirements administered by the DEA.
DEA Regulation Our products and certain of our product candidates are, or if approved, will be regulated as “controlled substances” as defined in the Controlled Substances Act of 1970 (“CSA”), and the DEA’s implementing regulations, which establish registration, security, recordkeeping, reporting, storage, distribution, importation, exportation, inventory, quota and other requirements administered by the DEA.
The term of our overall domestic and foreign patent portfolio related to our selected prodrugs and product candidates, including patent term adjustments but excluding possible patent term extensions, extend to various dates ranging, for example, between 2029 and 2042, if pending patent applications in each of our patent families are issued as patents.
The term of our overall domestic and foreign patent portfolio related to our selected prodrugs and product candidates, including patent term adjustments but excluding possible patent term extensions, extend to various dates ranging, for example, between 2029 and 2044, if pending patent applications in each of our patent families are issued as patents.
The plans have considerable discretion in establishing formularies and tiered co-pay structures, negotiating rebates with manufacturers and placing prior authorization and other restrictions on the utilization of specific products, subject to review by the Centers for Medicare & Medicaid Services ("CMS"), for discriminatory practices.
The plans have considerable discretion in establishing formularies and tiered co-pay structures, negotiating rebates with manufacturers and placing prior authorization and other restrictions on the utilization of specific products, subject to review by the Centers for Medicare & Medicaid Services (“CMS”), for discriminatory practices.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in withdrawal of marketing approval, mandatory revisions to the approved labeling to add new safety information or other limitations, imposition of post-market studies or clinical trials to assess new safety risks, or imposition of distribution or other restrictions under a REMS program, among other consequences.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in withdrawal of marketing approval, mandatory revisions to the approved labeling, imposition of post-market studies or clinical trials to assess new safety risks, or imposition of distribution or other restrictions under a REMS program, among other consequences.
In addition, the distribution of prescription pharmaceutical products, including samples, is subject to the Prescription Drug Marketing Act ("PDMA"), which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states.
In addition, the distribution of prescription pharmaceutical products, including samples, is subject to the Prescription Drug Marketing Act (“PDMA”), which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states.
As we get closer to potential approval of our product candidates, we will work to identify and implement the most appropriate commercialization strategies that we conclude are the most desirable with regard to each specific product candidate. 15 Table of Contents Competition Our industry is characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products.
As we get closer to potential approval of our product candidates, we will work to identify and implement the most appropriate commercialization strategies that we conclude are the most desirable with regard to each specific product candidate. Competition Our industry is characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products.
FDA regulations also require investigation and correction of any deviations from cGMPs and specifications and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.
FDA regulations also require investigation and correction of any deviations from cGMPs and specifications and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money and effort on production and quality control to maintain cGMP compliance.
Failure to comply with statutory and regulatory requirements subjects a manufacturer to possible legal or regulatory action, including refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, imposition of a clinical hold or termination of clinical trials, warning letters, untitled letters, cyber letters, modification of promotional materials or labeling, product recalls, product seizures or detentions, refusal to allow imports or exports, total or partial suspension of production or distribution, debarment, injunctions, fines, consent decrees, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreements to resolve allegations of non-compliance with these laws, refusals of government contracts and new orders under existing contracts, exclusion from participation in federal and state healthcare programs, restitution, disgorgement or civil or criminal penalties, including fines and individual imprisonments.
Failure of third-party manufacturers to comply with statutory and regulatory requirements may subject us to possible legal or regulatory action, including refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, imposition of a clinical hold or termination of clinical trials, warning letters, untitled letters, cyber letters, modification of promotional materials or labeling, product recalls, product seizures or detentions, refusal to allow imports or exports, total or partial suspension of production or distribution, debarment, injunctions, fines, consent decrees, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreements to resolve allegations of non-compliance with these laws, refusals of government contracts and new orders under existing contracts, exclusion from participation in federal and state healthcare programs, restitution, disgorgement or civil or criminal penalties, including fines and individual imprisonments.
The cardinal feature of IH is excessive daytime sleepiness ("EDS"), characterized by daytime lapses into sleep, or an irrepressible need to sleep that persists even with adequate or prolonged nighttime sleep.
The cardinal feature of IH is excessive daytime sleepiness (“EDS”), characterized by daytime lapses into sleep, or an irrepressible need to sleep that persists even with adequate or prolonged nighttime sleep.
MIPLYFFA (arimoclomol) Pursuant to our acquisition of the assets of Orphazyme, we have received method of use and method of treatment patents, and have filed related patent applications, related to the arimoclomol families in various jurisdictions, including the U.S., European countries, Israel, Japan, South Korea, Canada, China, Brazil, Russia and Turkey, with anticipated patent expiration dates of 2029, excluding any potential patent term adjustments or extensions.
MIPLYFFA (arimoclomol) Pursuant to our acquisition of the Orphazyme assets, we have received method of use and method of treatment patents, and have filed related patent applications, related to the arimoclomol families in various jurisdictions, including the United States, European countries, Israel, Japan, South Korea, Canada, China, Brazil, Russia and Turkey, with anticipated patent expiration dates of 2029, excluding any potential patent term adjustments or extensions.
Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the product candidate as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
Concurrent with clinical studies, companies usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the pharmaceutical product as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
In April 2021, we entered into the AZSTARYS Amendment ("AZSTARYS Amendment"). Pursuant to the AZSTARYS Amendment, we and Commave agreed to modify the compensation terms of the AZSTARYS License Agreement. Commave paid us $10.0 million in connection with the execution of the AZSTARYS Amendment following the FDA approval of AZSTARYS in the United States.
In April 2021, we entered into the AZSTARYS Amendment (“AZSTARYS Amendment”), pursuant to which we and Commave agreed to modify the compensation terms of the AZSTARYS License Agreement. Commave paid us $10.0 million in connection with the execution of the AZSTARYS Amendment following the FDA approval of AZSTARYS in the United States.
OLPRUVA for oral suspension is a proprietary and novel formulation of sodium phenylbutyrate powder, packaged in pre-measured single-dose envelopes, that has shown bioequivalence to existing sodium phenylbutyrate powder but with a pH-sensitive polymer coating that is designed to minimize dissolution of the coating for up to five (5) minutes after preparation.
OLPRUVA for oral suspension is a proprietary and novel formulation of sodium phenylbutyrate powder, packaged in pre-measured single-dose envelopes, that has shown bioequivalence to existing sodium phenylbutyrate powder but with a pH-sensitive polymer coating that is designed to minimize dissolution of the coating for up to five minutes after preparation to help minimize the unpleasant taste of the sodium phenylbutyrate powder.
Furthermore, celiprolol may qualify for an additional six months of pediatric exclusivity in the U.S., which requires the submission of one or more studies in pediatric subjects that meet requirements to be specified by the FDA in a written request for pediatric studies. Pediatric exclusivity can be obtained either before or after NDA approval.
Furthermore, celiprolol may qualify for an additional six months of pediatric exclusivity in the United States, which requires the submission of one or more studies in pediatric subjects that meet requirements to be specified by the FDA in a written request for pediatric studies. Pediatric exclusivity can be obtained either before or after NDA approval.
Pursuant to the Relief License Agreement, Relief will hold exclusive development and commercialization rights for OLPRUVA in the EU, Liechtenstein, San Marino, Vatican City, Norway, Iceland, Principality of Monaco, Andorra, Gibraltar, Switzerland, United Kingdom, Albania, Bosnia, Kosovo, Montenegro, Serbia and North Macedonia ("Geographical Europe").
Pursuant to the Relief License Agreement, Relief will hold exclusive development and commercialization rights for OLPRUVA in the EU, Liechtenstein, San Marino, Vatican City, Norway, Iceland, Principality of Monaco, Andorra, Gibraltar, Switzerland, United Kingdom, Albania, Bosnia, Kosovo, Montenegro, Serbia and North Macedonia (“Geographical Europe”).
Following FDA review, Acer received a CRL from the FDA stating that it will be necessary to conduct an adequate and well-controlled trial to determine whether celiprolol reduces the risk of clinical events in patients with VEDS. Subsequently, Acer appealed the FDA decision, and while the FDA denied the appeal, it described possible paths forward toward approval.
Following FDA review, Acer received a complete response letter (“CRL”) from the FDA stating that it will be necessary to conduct an adequate and well-controlled trial to determine whether celiprolol reduces the risk of clinical events in patients with VEDS. Subsequently, Acer appealed the FDA decision. While the FDA denied the appeal, it described possible paths forward toward approval.
We believe celiprolol will be eligible for NCE exclusivity which provides upon approval as an NCE five years of marketing exclusivity, during which time the FDA will not approve another drug with the same active ingredient, regardless of the indication for use, in the U.S.
We believe celiprolol will be eligible for NCE exclusivity which provides upon approval as an NCE five years of marketing exclusivity, during which time the FDA will not approve another drug with the same active ingredient, regardless of the indication for use, in the United States.
Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.
Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the pharmaceutical product candidate does not undergo unacceptable deterioration over its shelf life. U.S.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities, including contract manufacturers and subcontracts, are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA will typically inspect one or more clinical trial sites to assure compliance with GCPs.
The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA will typically inspect one or more clinical trial sites to assure compliance with GCPs.
The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product.
The manufacturing process must be capable of consistently producing quality batches of the pharmaceutical product candidate and, among other things, must include methods for testing the identity, strength, quality and purity of the final pharmaceutical product.
The FDA may also revoke any priority review voucher if the rare pediatric disease drug for which the voucher was awarded is not marketed in the U.S. within one year following the date of approval.
The FDA may also revoke any priority review voucher if the rare pediatric disease drug for which the voucher was awarded is not marketed in the United States within one year following the date of approval.
While unapproved drugs may be imported into the U.S. underspecified circumstances, such as for use in clinical studies under a valid and effective investigational new drug ("IND") or for further manufacture into an IND drug or an approved drug, we intend to aggressively assert our rights, via regulatory and legal means, to limit the importation of non-FDA approved versions of celiprolol.
While unapproved drugs may be imported into the United States under specified circumstances, such as for use in clinical studies under a valid and effective investigational new drug (“IND”) or for further manufacture into an IND drug or an approved drug, we intend to aggressively assert our rights, via regulatory and legal means, to limit the importation of non-FDA approved versions of celiprolol.
Mechanism of action in VEDS patients is thought to be through vascular dilatation and smooth muscle relaxation, the effect of which is to reduce the mechanical stress on collagen fibers in the arterial wall, and thereby potentially less incidence of vascular ruptures. ● Evidence of efficacy in the EU and extensive clinical experience from multiple trials.
Mechanism of action in VEDS patients is thought to be through vascular dilatation and smooth muscle relaxation, the effect of which is to reduce the mechanical stress on collagen fibers in the arterial wall, potentially resulting in less incidence of vascular and hollow organ ruptures. • Evidence of efficacy in Europe and extensive clinical experience from multiple trials.
To support the launch of OLPRUVA and MIPLYFFA, we have built in-house capabilities including rare disease sales specialists who are working with prescribing clinicians and healthcare providers, which include metabolic specialists and clinical geneticists, as well as marketing, patient reimbursement services, market access and contracting, patient advocacy, and medical affairs teams.
Commercialization To support the launch of MIPLYFFA and OLPRUVA, we have built in-house capabilities including rare disease sales specialists who are working with prescribing clinicians and healthcare providers, as well as marketing, patient reimbursement services, market access and contracting, patient advocacy, and medical affairs teams.
There are currently no approved treatments of VEDS in the U.S. and we believe that celiprolol, if approved, could be a significant innovation in the treatment of VEDS in the U.S. where current treatment options are focused primarily on surgical intervention. ● Unique pharmacological profile.
There are currently no approved treatments for VEDS in the United States, and we believe that celiprolol, if approved, could be a significant innovation in the treatment of VEDS where current treatment options are focused primarily on surgical intervention. • Unique pharmacological profile.
On March 2, 2021, the FDA approved AZSTARYS as a once-daily treatment for attention deficit hyperactivity disorder (ADHD), in patients age six years and older. AZSTARYS is currently being marketed in the U.S. under our September 2019 collaboration and license agreement, or the AZSTARYS License Agreement, with Commave.
On March 2, 2021, the FDA approved AZSTARYS as a once-daily treatment for attention deficit hyperactivity disorder (ADHD) in patients age six years and older. AZSTARYS is currently being marketed in the United States under our September 2019 collaboration and license agreement (the “AZSTARYS License Agreement”) with Commave.
Once the CTA is approved, clinical study development may proceed. The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions of the CTR. Medicines used in clinical trials must be manufactured in accordance with Good Manufacturing Practice (“GMP”).
Once the CTA is approved, clinical study development may proceed. The CTR transition period ended on January 31, 2025, and all clinical trials (and related applications) are now fully subject to the provisions of the CTR. Medicines used in clinical trials must be manufactured in accordance with Good Manufacturing Practice (“GMP”). Other national and EU-wide regulatory requirements may also apply.
Our name, Zevra, is the Greek word for zebra, which is the internationally recognized symbol for rare disease. This name reflects our intense focus and dedication to developing transformational, patient-focused therapies for rare diseases with limited or no treatment options available, or treatment areas with significant unmet needs.
Zevra, is the Greek word for zebra, which is the internationally recognized symbol for rare disease. This name reflects our intense focus and dedication to developing transformational, patient-focused therapies for rare diseases with limited or no treatment options available, or treatment areas with significant unmet needs. Our strategic plan is focused on transforming Zevra into a leading rare-disease company.
As of December 31, 2024, we have been granted and maintain 89 active patents within the United States, and an additional 375 active foreign patents covering our selected prodrugs and product candidates. The terms of the 89 issued U.S. patents extend to various dates ranging, for example, between 2029 and 2042.
As of December 31, 2025, we have been granted and maintain about 87 active patents within the United States, and about an additional 497 active foreign patents covering our selected prodrugs and product candidates. The terms of the issued U.S. patents extend to various dates ranging, for example, between at least 2029 and 2042.
The federal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, the referral of an individual for, or purchasing, leasing, ordering, or arranging for the purchase, lease or order of, any good, facility, item or service reimbursable under Medicare, Medicaid or other federal healthcare programs.
Compliance with government regulations requires the expenditure of substantial time and financial resources. 23 Table of Contents The federal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward, or in return for, the referral of an individual for, or purchasing, leasing, ordering, or arranging for the purchase, lease or order of, any good, facility, item or service reimbursable under Medicare, Medicaid or other federal healthcare programs.
Although there are several approved medications for narcolepsy, we believe a treatment option based on serdexmethylphenidate (“SDX”), our proprietary prodrug of d-methylphenidate (“d-MPH”) which has previously been classified as a Schedule IV controlled substance, with superior exposure/duration characteristics and low abuse potential may be beneficial.
Although there are several approved medications for narcolepsy, we believe a treatment option based on serdexmethylphenidate (“SDX”), our proprietary prodrug of d-methylphenidate (“d-MPH”), which has previously been classified as a Schedule IV controlled substance, may be beneficial.
Department of Health and Human Services and its various divisions, including the CMS and the Health Resources and Services Administration, the Department of Veterans Affairs, the Department of Defense and state and local governments. Our business activities must comply with numerous healthcare laws, including those described below. Compliance with government regulations requires the expenditure of substantial time and financial resources.
Department of Health and Human Services and its various divisions, including the CMS and the Health Resources and Services Administration, the Department of Veterans Affairs, the Department of Defense and state and local governments. Our business activities must comply with numerous healthcare laws, including those described below.
As of December 31, 2024, we had 25 pending patent applications under active prosecution in the United States, and an additional 109 pending foreign patent applications potentially covering our selected prodrugs and product candidates.
As of December 31, 2025, we had about 51 pending patent applications under active prosecution in the United States, and about an additional 250 pending foreign patent applications potentially covering our selected prodrugs and product candidates.
We currently have no manufacturing facilities and limited personnel in our manufacturing department. We have contracted with third parties for the manufacture, testing, and storage of our approved products and product candidates and intend to continue to do so in the future.
We have contracted with third parties for the manufacture, testing, and storage of our approved products and product candidates and intend to continue to do so in the future.
Once the MA is obtained in all the EU member states and study results are included in the product information, even when negative, the product is eligible for six months’ supplementary protection certificate extension (if any is in effect at the time of approval) or, in the case of orphan pharmaceutical products, a two-year extension of the orphan market exclusivity is granted.
Once the MA is obtained in all the EU member states and study results are included in the product information, even when negative, the product is eligible for six months’ supplementary protection certificate extension (if any is in effect at the time of approval) or, in the case of orphan pharmaceutical products, a two-year extension of the orphan market exclusivity is granted. 28 Table of Contents EU Controlled Substances The EU legislation does not establish different classes of narcotic or psychotropic substances.
Some of these currently marketed products include CONCERTA, marketed by J&J Innovative Medicines (formerly Jannsen), QUELBREE, marketed by Supernus Pharmaceuticals, Inc., QUILLIVANT XR and QUILLICHEW ER, marketed by Tris Pharma, RITALIN, FOCALIN and FOCALIN XR, marketed by Novartis AG, METADATE CD, marketed by UCB SA, DAYTRANA, marketed by Noven Therapeutics, LLC, Neos Therapeutics’ CONTEMPLA XR-ODT, marketed Aytu BioScience, Inc., JORNAY PM, Ironshore Pharmaceuticals, Inc., and ADHANSIA XR, marketed by Adlon Therapeutics, in addition to multiple other branded and generic methylphenidate products.
Some of these currently marketed products include CONCERTA, marketed by J&J Innovative Medicines (formerly Jannsen), QUELBREE, marketed by Supernus Pharmaceuticals, Inc., QUILLIVANT XR and QUILLICHEW ER, marketed by Tris Pharma, RITALIN, FOCALIN and FOCALIN XR, marketed by Novartis AG, METADATE CD, marketed by UCB SA, DAYTRANA, marketed by Noven Therapeutics, LLC, Neos Therapeutics’ CONTEMPLA XR-ODT, marketed Aytu BioScience, Inc., JORNAY PM, marketed by Collegium Pharmaceutical Inc.
Other national and EU-wide regulatory requirements may also apply. 26 Table of Contents Marketing Authorization In order to market our product candidates in the EU and many other foreign jurisdictions, we must obtain separate regulatory approvals. More concretely, in the EU, medicinal product candidates can only be commercialized after obtaining a marketing authorization (“MA”).
EU Marketing Authorization In order to market our product candidates in the EU and many other foreign jurisdictions, we must obtain separate regulatory approvals. More concretely, in the EU, medicinal product candidates can only be commercialized after obtaining a marketing authorization (“MA”).
The FDA may refer drugs which present difficult questions of safety or efficacy to an advisory committee. An advisory committee is a panel that typically includes clinicians and other experts who review, evaluate and make a recommendation as to whether the application should be approved and under what conditions.
The FDA may refer applications for novel pharmaceutical products or pharmaceutical products which present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions.
The individual EU member states are all signatories to these UN Conventions. All signatories have a dual obligation to ensure that these substances are available for medical purposes and to protect populations against abuse and dependence.
All signatories have a dual obligation to ensure that these substances are available for medical purposes and to protect populations against abuse and dependence.
Therefore, patients must adopt a “watch and wait” approach following any confirmed diagnosis. Unfortunately, many of these arterial events have high mortality associated with them, and thus, a pharmacologic intervention that reduces the rate of events would be clinically meaningful. Celiprolol received orphan drug designation from the FDA for the treatment of VEDS in 2015.
Unfortunately, many of these arterial events have high mortality associated with them; thus, a pharmacologic intervention that reduces the rate of events would be clinically meaningful. Celiprolol received orphan drug designation from the FDA for the treatment of VEDS in 2015.
Failure to comply with EU and member state laws that apply to the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of the MA, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties.
After these five years, the authorization may be renewed based on a reevaluation of the risk-benefit balance. 27 Table of Contents Failure to comply with EU and member state laws that apply to the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of the MA, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties.
Our U.S. patents are directed to pharmaceutical compositions, including OLPRUVA's polymer coated, multi-particulate dosage formulation for oral administration and covers certain methods of use claims related to OLPRUVA. Additionally, we have patents in Europe, Israel, and Mexico related to pharmaceutical compositions, including OLPRUVA's polymer coated, multi-particulate dosage formulation for oral administration. These patents expire in 2036.
We have both U.S. and foreign patents with claims related to OLPRUVA. Our U.S. patents are directed to pharmaceutical compositions, including OLPRUVA's polymer coated, multi-particulate dosage formulation for oral administration and covers certain methods of use claims related to OLPRUVA.
In addition to the execution of our IP strategy, we also depend upon the skills, knowledge and experience of our scientific and technical personnel, as well as that of our advisors, consultants and other contractors.
In addition to the execution of our IP strategy, we also depend upon the skills, knowledge and experience of our scientific and technical personnel, as well as that of our advisors, consultants and other contractors. We also rely on trade secret protection, assignments and confidentiality agreements to protect our interests.
These penalties could include delays or refusal to authorize the conduct of clinical trials, or to grant MA, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the MA, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties. 28 Table of Contents Employees As of December 31, 2024, we employed 59 full-time employees .
These penalties could include delays or refusal to authorize the conduct of clinical trials, or to grant MA, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the MA, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.
Celiprolol is generally protected by U.S. patents that will expire, after utilizing all appropriate patent term adjustments but excluding possible term extensions, in 2038. 10 Table of Contents KP1077 KP1077 is being developed and evaluated for the treatment of IH and narcolepsy. IH is a rare neurological sleep disorder affecting approximately 37,000 patients in the United States.
Celiprolol is generally protected by U.S. patents that will expire, after utilizing all appropriate patent term adjustments but excluding possible term extensions, in 2038. KP1077 Idiopathic hypersomnia (“IH”) is a rare neurological sleep disorder affecting approximately 37,000 patients in the United States.
UCDs are a group of rare genetic disorders that can cause harmful ammonia to build up in the blood, potentially resulting in brain damage and neurocognitive impairments, if ammonia levels are not controlled. Any increase in ammonia over time is serious.
MIPLYFFA has been granted orphan medicinal product designation for the treatment of NPC by the European Commission. OLPRUVA UCDs are a group of rare genetic disorders that can cause harmful ammonia to build up in the blood, potentially resulting in brain damage and neurocognitive impairments, if ammonia levels are not controlled. Any increase in ammonia over time is serious.
Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution. The Drug Supply Chain Security Act also imposes obligations on manufacturers of pharmaceutical products related to product tracking and tracing. Failure to comply with any of the FDA’s requirements could result in significant adverse enforcement actions.
The Drug Supply Chain Security Act also imposes obligations on manufacturers of pharmaceutical products related to product tracking and tracing. 22 Table of Contents Failure to comply with any of the FDA’s requirements could result in significant adverse enforcement actions.
Corium is leading the commercialization of AZSTARYS in the U.S. under the AZSTARYS License Agreement. Corium commercially launched AZSTARYS in the U.S. in July 2021. In December 2021, Commave Therapeutics, S.A. sublicensed to Shanghai Ark Biopharmaceutical Co., Ltd. the commercialization rights Greater China, including mainland China, Hong Kong, Macau and Taiwan.
Corium commercially launched AZSTARYS in the United States in July 2021. In December 2021, Commave sublicensed to Shanghai Ark Biopharmaceutical Co., Ltd. the commercialization rights in Greater China, including mainland China, Hong Kong, Macau and Taiwan.
Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. There are also requirements governing the reporting of ongoing clinical studies and clinical study results to public registries.
Similarly, an IRB can suspend or terminate approval of a clinical study at its institution if the clinical study is not being conducted in accordance with the IRB’s requirements or if the pharmaceutical product has been associated with unexpected serious harm to patients.
Other Third-Party Agreements Aquestive Termination Agreement Under our March 2012 termination agreement with Aquestive Therapeutics ("Aquestive"), Aquestive has the right to receive a royalty amount equal to 10% of any value generated by AZSTARYS and any product candidates containing SDX.
We have the right to receive a royalty of up to 10% of the net sales of OLPRUVA in Geographical Europe. Aquestive Termination Agreement (AZSTARYS) Under our March 2012 termination agreement with Aquestive Therapeutics (“Aquestive”), Aquestive has the right to receive a royalty amount equal to 10% of any value generated by AZSTARYS and any product candidates containing SDX.
Currently, there are no approved therapies anywhere in the world for VEDS. However, celiprolol, prescribed off label, has become the standard of care therapy for VEDS in some European countries. Medical intervention for VEDS focuses on surgery, symptomatic treatment, genetic counseling, and prophylactic measures, such as avoiding intense physical activity, scuba diving, and violent sports.
However, celiprolol, prescribed off label, has become the standard of care therapy for VEDS in some European countries. Medical intervention for VEDS focuses on surgery, symptomatic treatment, genetic counseling, and prophylactic measures, such as avoiding intense physical activity, scuba diving, and violent sports. Therefore, patients must adopt a “watch and wait” approach following any confirmed diagnosis.
We believe KP1077 may potentially be eligible for fast-track and breakthrough therapy designation, which may provide various regulatory benefits for the development program. 12 Table of Contents AZSTARYS (Partnered product) AZSTARYS contains d-MPH and our prodrug of d-MPH, SDX.
Because the size of the IH patient population is small, the FDA has granted KP1077 orphan drug designation for the treatment of IH. We believe KP1077 may potentially be eligible for fast-track and breakthrough therapy designation, which may provide various regulatory benefits for the development program. AZSTARYS (partnered product) AZSTARYS contains d-MPH and our prodrug of d-MPH, SDX.
The review process and the PDUFA date may also be extended if the FDA requests or the NDA sponsor otherwise provides additional information or clarification regarding the submission.
The review process and the PDUFA goal date may be extended by three months if the FDA requests or if the NDA sponsor otherwise provides additional information or clarification regarding information already provided in the submission within the last three months before the PDUFA goal date.
Controlled substances The EU legislation does not establish different classes of narcotic or psychotropic substances. However, the United Nations (“UN”) Single Convention on Narcotic Drugs of 1961 and the UN Convention on Psychotropic Substances of 1971 (“UN Conventions”) codify internationally applicable control measures to ensure the availability of narcotic drugs and psychotropic substances for medical and scientific purposes.
However, the United Nations (“UN”) Single Convention on Narcotic Drugs of 1961 and the UN Convention on Psychotropic Substances of 1971 (“UN Conventions”) codify internationally applicable control measures to ensure the availability of narcotic drugs and psychotropic substances for medical and scientific purposes. The individual EU member states are all signatories to these UN Conventions.
In 2022, the USPTO issued a Notice of Allowance for a patent application exclusively licensed from Assistance Publique—Hôpitaux de Paris (AP-HP), for claims related to certain methods of VEDS with celiprolol. This application, titled “Method of Providing Celiprolol Therapy to a Patient,” has now issued as a U.S. patent (US 11,523,997) with an expiration date in November 2038.
We have exclusively licensed from Assistance Publique—Hôpitaux de Paris (AP-HP) a now-issued U.S. patent (US 11,523,997) titled “Method of Providing Celiprolol Therapy to a Patient,” with an expiration date in November 2038, excluding any potential patent term extension, which covers certain methods for treating VEDS with celiprolol.
After these five years, the authorization may be renewed based on a reevaluation of the risk-benefit balance. Data and Marketing Exclusivity In the EU, new products authorized for marketing (i.e., reference products) generally receive eight years of data exclusivity and an additional two years of market exclusivity upon MA.
EU Data and Marketing Exclusivity In the EU, new products authorized for marketing (i.e., reference products) generally receive eight years of data exclusivity and an additional two years of market exclusivity upon MA.
Additionally, MA may be granted to a similar product for the same indication at any time if (i) the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; (ii) the applicant consents to a second orphan medicinal product application; or (iii) the applicant cannot supply enough orphan medicinal product. 27 Table of Contents Pediatric Development In the EU, MAAs for new medicinal products must include the results of studies conducted in the pediatric population, in compliance with a PIP agreed with the EMA’s Pediatric Committee (“PDCO”).
Additionally, MA may be granted to a similar product for the same indication at any time if (i) the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; (ii) the applicant consents to a second orphan medicinal product application; or (iii) the applicant cannot supply enough orphan medicinal product.
Commave has tasked Corium, another affiliate of Gurnet Point Capital, L.P., to lead all commercialization activities for AZSTARYS in the U.S. Corium commercially launched AZSTARYS in the U.S. during the third quarter of 2021. In December 2021, Commave entered into a sublicense of commercialization rights for AZSTARYS in greater China to Shanghai Ark Biopharmaceutical Ltd.
Corium commercially launched AZSTARYS in the United States during the third quarter of 2021. In December 2021, Commave entered into a sublicense of commercialization rights for AZSTARYS in greater China to Shanghai Ark Biopharmaceutical Ltd.
Furthermore, we may qualify to receive an additional six months of pediatric exclusivity in the U.S., which runs consecutively to an existing exclusivity, if we conduct a successful pediatric study of OLPRUVA for the treatment of MSUD, approved by the FDA for this purpose. 14 Table of Contents AZSTARYS and Serdexmethylphenidate (SDX) We have received composition-of-matter patents and also additionally filed composition-of-matter and method of treatment patent applications related to the AZSTARYS and SDX families in the United States and in Argentina, Australia, Brazil, Canada, Chile, China, Egypt, Hong Kong, European Countries, India, Israel, Indonesia, Japan, South Korea, Kazakhstan, Mexico, Malaysia, New Zealand, Philippines, Russia, Singapore, South Africa, Thailand, Ukraine, and Vietnam.
AZSTARYS and Serdexmethylphenidate (SDX) We have received composition-of-matter patents and also additionally filed composition-of-matter and method of treatment patent applications related to the AZSTARYS and SDX families in the United States and in Argentina, Australia, Brazil, Canada, Chile, China, Egypt, Hong Kong, European Countries, India, Israel, Indonesia, Japan, South Korea, Kazakhstan, Mexico, Malaysia, New Zealand, Philippines, Russia, Singapore, South Africa, Thailand, Ukraine, and Vietnam.
If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full NDA, to market the same drug for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated.
To gain exclusivity, if a product that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to the orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same drug or biologic for the same approved use or indication within such rare disease or condition for seven years, except in limited circumstances, such as another drug’s showing of clinical superiority over the drug with orphan exclusivity.
In July 2022, Acer initiated enrollment in a Phase 3 long-term event-driven clinical trial designed based on the discussions from the May 2021 Type B meeting with the FDA, also known as the DiSCOVER trial. The DiSCOVER trial intends to enroll 150 VEDS patients, with 100 patients receiving celiprolol and 50 patients receiving placebo.
In April 2022, the FDA granted celiprolol Breakthrough Therapy designation in the United States for the treatment of patients with COL3A1-positive VEDS. In July 2022, Acer initiated enrollment in a Phase 3 long-term event-driven clinical trial designed based on the discussions from the May 2021 Type B meeting with the FDA, also known as the DiSCOVER trial.
KP1077 could face potential competition from any products for the treatment of IH that are currently in or which may enter into clinical development. AZSTARYS AZSTARYS competes against currently marketed, branded and generic methylphenidate products for the treatment of ADHD.
(formerly Ironshore), and ADHANSIA XR, marketed by Adlon Therapeutics, in addition to multiple other branded and generic methylphenidate products. In addition, AZSTARYS will face potential competition from any other methylphenidate products for the treatment of ADHD that are currently in, or which may enter into clinical development.
Based on FDA's feedback during the Type B meeting, we adopted a decentralized (virtual) event-based clinical trial design and use of an independent centralized adjudication committee with a primary endpoint based on clinical events associated with disease outcome. In April 2022, the FDA granted celiprolol Breakthrough Therapy designation (“BTD”) in the U.S. for the treatment of patients with COL3A1-positive VEDS.
Based on the FDA's feedback during the Type B meeting, Acer adopted a decentralized (virtual) event-based clinical trial design and use of an independent centralized adjudication committee with a primary endpoint based on clinical events associated with disease outcome.
Under the AZSTARYS License Agreement, we granted Commave an exclusive, worldwide license, to develop, manufacture, and commercialize AZSTARYS and any of our product candidates containing SDX and used to treat ADHD or any other CNS disease. In July 2020, we entered into the consulting agreement with Corium, Inc.
Under the AZSTARYS License Agreement, we granted Commave an exclusive, worldwide license, to develop, manufacture, and commercialize AZSTARYS and any of our product candidates containing SDX and used to treat ADHD or any other CNS disease. 11 Table of Contents Commave has tasked its affiliate, Corium, Inc. (“Corium”), to lead all commercialization activities for AZSTARYS in the United States.
OLPRUVA offers benefits over other UCD treatments by eliminating issues with palatability, offering improved portability with its single-dose envelopes, and it comes in a dosage personalized to the patient based on weight. During the quarter ended December 31, 2023, we began generating revenue from the sale of OLPRUVA in the U.S.
We believe that OLPRUVA offers benefits over other UCD treatments by eliminating issues with palatability, offering improved portability with its single-dose envelopes, and being provided in a dosage personalized to the patient based on weight.
In addition, we acquired Acer's pipeline of investigational product candidates, including celiprolol for the treatment of Vascular Ehlers-Danlos syndrome ("VEDS") in, patients with a confirmed type III collagen (COL3A1) mutation.
This included the acquisition of OLPRUVA (sodium phenylbutyrate) for oral suspension, which is commercially available in the U.S., for the treatment of certain urea cycle disorders (“UCDs”). In addition, we acquired Acer's pipeline of investigational product candidates, including celiprolol for the treatment of Vascular Ehlers-Danlos syndrome (VEDS) in patients with a confirmed type III collagen (COL3A1) mutation.
The incidence of NPC is estimated to be one in 100,000 to 130,000 live births. We estimate that there are approximately 1,800 individuals with NPC in the U.S. and Europe combined, of which approximately 900 are in the U.S. and 1,100 are in the EU where there is a mature market with an approved treatment available for NPC.
We estimate that there are approximately 2,000 individuals with NPC in the United States and Europe combined, of which approximately 900 are in the United States and 1,100 are in Europe, where there is a mature market with an approved treatment available for NPC. Of this estimated population, approximately 300 to 350 people have been diagnosed in the United States.
The IND becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises safety concerns or questions about the conduct of the clinical trial by imposing a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin.
The IND becomes effective 30 days after receipt by the FDA, unless the FDA has concerns and notifies the sponsor. In such a case, the IND sponsor must resolve any outstanding concerns to the satisfaction of FDA before a clinical study can begin.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe degree of market acceptance of our approved products, or any of our product candidates if approved for commercial sale, will depend on a number of factors, including: ● the efficacy and potential advantages compared to alternative treatments, including less expensive generic treatments; ● the ability to obtain differentiating claims in the labels for most of our product candidates; ● our ability to offer our prodrug products for sale at competitive prices; ● the clinical indications for which our product candidates are approved; ● the convenience and ease of administration compared to alternative treatments; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● the cost of treatment in relation to alternative treatments; ● the steps that prescribers and dispensers must take for approved products are or any of our product candidates that may be considered controlled substances in the future, as well as the perceived risks based upon their controlled substance status; ● the ability to manufacture our product in sufficient quantities and yields; ● the strength of marketing and distribution support; ● the availability of third-party coverage and adequate reimbursement or willingness of patients to pay out of pocket in the absence of third-party coverage; ● the prevalence and severity of any side effects; ● any potential unfavorable publicity; ● any restrictions on the use, sale or distribution of our approved products or any of our product candidates, including through REMS; and ● any restrictions on the use of our prodrug products together with other medications.
Biggest changeThe degree of market acceptance of our approved products will depend on a number of factors, including: • the efficacy and potential advantages compared to alternative treatments, including less expensive generic treatments; • the ability to obtain differentiating claims in the labels for approved products; • the clinical indications for which our products are approved; • the convenience and ease of administration compared to alternative treatments; 29 Table of Contents • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the cost of treatment in relation to alternative treatments; • the strength of marketing and distribution support; • the availability of third-party coverage and adequate reimbursement or willingness of patients to pay out of pocket in the absence of third-party coverage; and • the prevalence and severity of any side effects.
For example, we are required to conduct pediatric studies related to AZSTARYS to evaluate its safety and effectiveness for the claimed indication in pediatric patients. Under the AZSTARYS License Agreement, Corium will be responsible for these regulatory activities going forward, and we cannot guarantee they will be complied with.
For example, we are required to conduct pediatric studies related to AZSTARYS to evaluate its safety and effectiveness for the claimed indication in pediatric patients. Under the AZSTARYS License Agreement, Corium is responsible for these regulatory activities going forward, and we cannot guarantee they will be complied with.
Adverse events or other undesirable side effects caused by our products or product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approvals by the FDA or other comparable foreign regulatory authorities.
Adverse events or other undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approvals by the FDA or other comparable foreign regulatory authorities.
Additionally, trade policies and geopolitical disputes and other international conflicts can result in tariffs, sanctions and other measures that restrict international trade, and can materially adversely affect our business, particularly if these measures affect regions where manufacturing and product development activities take place or raw materials are sourced.
Trade policies, geopolitical disputes and other international conflicts can result in tariffs, sanctions and other measures that restrict international trade, and can materially adversely affect our business, particularly if these measures affect regions where manufacturing and product development activities take place or raw materials are sourced.
If we are unable to do so, we may have to curtail the development of product candidates, reduce or delay one or more of our development programs, delay potential commercialization of our product candidates or reduce the scope of any sales or marketing activities of our product candidates, or increase our expenditures and undertake development or commercialization activities at our own expense of our product candidate.
If we are unable to do so, we may have to curtail the development of product candidates, reduce or delay one or more of our development programs, delay potential commercialization of our product candidates or reduce the scope of any sales or marketing activities of our product candidates, or increase our expenditures and undertake development or commercialization activities of our product candidates at our own expense.
Our commercial success depends upon our ability, and the ability of any collaborators, to develop, manufacture, market and sell our product candidates and use our proprietary technologies without infringing the proprietary rights of third parties. There is considerable intellectual property litigation in the biotechnology and pharmaceutical industries.
Our commercial success depends upon our ability, and the ability of any collaborators, to develop, manufacture, market and sell our products, product candidates and use our proprietary technologies without infringing the proprietary rights of third parties. There is considerable intellectual property litigation in the biotechnology and pharmaceutical industries.
In 2012, the European Patent Package, or EU Patent Package, regulations were passed with the goal of providing a single pan-European Unitary Patent and a new European Unified Patent Court, or UPC, for litigation involving European patents. The EU Patent Package went into effect June 1, 2023.
In addition, in 2012, the European Patent Package, or EU Patent Package, regulations were passed with the goal of providing a single pan-European Unitary Patent and a new European Unified Patent Court, or UPC, for litigation involving European patents. The EU Patent Package went into effect June 1, 2023.
Our failure to comply 340B program requirements could negatively impact our financial results. Any additional future changes to the definition of average manufacturer price and the Medicaid rebate amount under legislation or regulation could affect our 340B ceiling price calculations and also negatively impact our financial results.
Our failure to comply with 340B program requirements could negatively impact our financial results. Any additional future changes to the definition of average manufacturer or the Medicaid rebate amount under legislation or regulation could affect our 340B ceiling price calculations and also negatively impact our financial results.
Our approved products are, and any of our product candidates for which we obtain marketing approval could be, subject to significant post-marketing regulatory requirements and oversight, including the submission of reports to regulatory authorities and surveillance to monitor the safety and efficacy of the product, significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and burdensome post-approval study or risk management requirements.
Our approved products are, and any of our product candidates for which we obtain marketing approval will be, subject to significant post-marketing regulatory requirements and oversight, including the submission of reports to regulatory authorities and surveillance to monitor the safety and efficacy of the product, significant limitations related to use restrictions for specified age groups, warnings, precautions or contraindications, and burdensome post-approval study or risk management requirements.
These net operating loss carryforwards could expire unused and be unavailable to offset future income tax liabilities, which could adversely affect our profitability. These federal net operating loss carryforwards are fully reserved under a valuation allowance in the consolidated balance sheet as of December 31, 2024.
These net operating loss carryforwards could expire unused and be unavailable to offset future income tax liabilities, which could adversely affect our profitability. These federal net operating loss carryforwards are fully reserved under a valuation allowance in the consolidated balance sheet as of December 31, 2025.
Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our prodrug product candidates.
Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain or maintain profitability, or commercialize our product candidates.
In addition, the provisions of our termination agreement with Aquestive Therapeutics ("Aquestive") may delay or prevent a change in control of our company.
In addition, the provisions of our termination agreement with Aquestive Therapeutics (“Aquestive”) may delay or prevent a change in control of our company.
Our corporate governance documents include provisions: ● establishing a classified board of directors with staggered three-year terms so that not all members of our board of directors are elected at one time; ● providing that directors may be removed by stockholders only for cause; ● preventing the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting; ● requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors; ● permitting the board of directors to issue up to 10,000,000 shares of preferred stock with a ny rights, preferences and privileges they may designate; ● limiting the liability of, and providing indemnification to, our directors and officers; ● providing that vacancies may be filled by remaining directors; ● preventing cumulative voting; and ● providing for a supermajority requirement to amend our amended and restated bylaws.
Our corporate governance documents include provisions: • establishing a classified board of directors with staggered three-year terms so that not all members of our board of directors are elected at one time; • providing that directors may be removed by stockholders only for cause; • preventing the ability of our stockholders to call and bring business before special meetings and to take action by written consent in lieu of a meeting; • requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors; • permitting the board of directors to issue up to 10,000,000 shares of preferred stock with any rights, preferences and privileges they may designate; • limiting the liability of, and providing indemnification to, our directors and officers; • providing that vacancies may be filled by remaining directors; 50 Table of Contents • preventing cumulative voting; and • providing for a supermajority requirement to amend our amended and restated bylaws.
Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including warning letters, clinical holds or termination of clinical trials, fines, injunctions, restitution, disgorgement, civil penalties, delays, suspension or withdrawal of approvals or other permits, FDA refusal to approve pending applications, product detentions, FDA or DEA consent decrees placing significant restrictions on or suspending manufacturing and distribution operations, debarment, refusal to allow import or export, product detentions, adverse publicity, dear-health-care-provider letters or other warnings, license revocation, seizures or recalls of product candidates, operating restrictions, refusal of government contracts or future orders under existing contracts and civil and criminal liability, including False Claims Act liability, exclusion from participation in federal health care programs, and corporate integrity agreements among other consequences, any of which could significantly and adversely affect supplies of our prodrugs.
The failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including warning letters, clinical holds or termination of clinical trials, fines, injunctions, restitution, disgorgement, civil penalties, delays, suspension or withdrawal of approvals or other permits, FDA or foreign regulatory authorities refusal to approve pending applications, product detentions, FDA or DEA consent decrees placing significant restrictions on or suspending manufacturing and distribution operations, debarment, refusal to allow import or export, product detentions, adverse publicity, dear-health-care-provider letters or other warnings, license revocation, seizures or recalls of product candidates, operating restrictions, refusal of government contracts or future orders under existing contracts and civil and criminal liability, including False Claims Act liability, exclusion from participation in federal healthcare programs, and corporate integrity agreements, among other consequences, any of which could significantly and adversely affect supplies of our products.
Our success depends in large part on our ability to obtain and maintain trade secret protection of our proprietary LAT platform technology as well as patent protection in the United States and other countries with respect to our approved products, and any of our product candidates.
Our success depends in large part on our ability to obtain and maintain trade secret protection of our proprietary technology as well as patent protection in the United States and other countries with respect to our approved products and any of our product candidates.
We expect that the healthcare reform measures that have been adopted and may be adopted in the future, may, among other things, result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product.
We expect that the healthcare reform measures that have been adopted and may be adopted in the future may, among other things, result in more rigorous coverage criteria as well as additional downward pressure on the price that we receive for any approved product.
The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be approved for sale in that country.
The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can be marketed in that country.
Any future proxy contest with respect to election of our directors, or other activist stockholder activities, could adversely affect our business because: (1) responding to a proxy contest and other actions by activist stockholders can be costly and time-consuming, disruptive to our operations and divert the attention of management and our employees; (2) actual or perceived uncertainties as to our future direction caused by activist activities may cause or appear to cause instability or lack of continuity, resulting in the loss of potential business opportunities, and potentially making it more difficult to attract and retain qualified personnel and business partners; and (3) if individuals are elected to our board of directors with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plans.
Any future proxy contest with respect to election of our directors, or other activist stockholder activities, could adversely affect our business because: (1) responding to a proxy contest and other actions by activist stockholders is costly and time-consuming, disruptive to our operations and diverts the attention of management and our employees; (2) actual or perceived uncertainties as to our future direction caused by activist activities may cause or appear to cause instability or lack of continuity, resulting in the loss of potential business opportunities, and potentially making it more difficult to attract and retain qualified personnel and business partners; and (3) if individuals are elected to our board of directors with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plans.
Despite the implementation of security measures, our information technology systems and data, and those of our CROs and other third parties on which we rely, are vulnerable to system failure, interruption, compromise, attack or damage from several sources, such as data corruption; breakdown; malicious human acts; malware (such as ransomware); misconfigurations, “bugs” or other vulnerabilities,; malicious code (such as computer viruses or worms); fraudulent activity; employee misconduct, theft or error; denial-of-service attacks; public health epidemics; cyber-attacks by sophisticated nation-state and nation-state supported actors; natural disasters; terrorism; war (such as the current situation with Ukraine and Russia); and telecommunication and electrical failures.
Despite the implementation of security measures, our information technology systems and data, and those of our CROs and other third parties on which we rely, are vulnerable to system failure, interruption, compromise, attack or damage from several sources, such as data corruption; breakdown; malicious human acts; malware (such as ransomware); misconfigurations, “bugs” or other vulnerabilities; malicious code (such as computer viruses or worms); fraudulent activity; employee misconduct, theft or error; denial-of-service attacks; public health epidemics; cyber-attacks by sophisticated nation-state and nation-state supported actors; natural disasters; terrorism; war; and telecommunication and electrical failures.
Additionally, if one or more of our product candidates receives marketing approval and we or others later identify undesirable side effects or adverse events caused by such products, a number of potentially significant negative consequences could result, including but not limited to: ● regulatory authorities may suspend, limit or withdraw approvals of such product, or seek an injunction against its manufacture or distribution; ● regulatory authorities may require additional warnings on the label, including “boxed” warnings, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; ● we may be required to change the way the product is administered or conduct additional clinical trials or post-approval studies; ● we may be required to create a risk evaluation and mitigation strategy, or REMS, which could include a medication guide outlining the risks of such side effects for distribution to patients; ● we may be subject to fines, injunctions or the imposition of criminal penalties; ● we could be sued and held liable for harm caused to patients; and ● our reputation may suffer.
For approved products, if we or others later identify undesirable side effects or adverse events caused by such products, a number of potentially significant negative consequences could result, including but not limited to: • regulatory authorities may suspend, limit or withdraw approvals of such product, or seek an injunction against its manufacture or distribution; • regulatory authorities may require additional warnings on the label, including “boxed” warnings, or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; • we may be required to change the way the product is administered or conduct additional clinical trials or post-approval studies; • we may be required to create a risk evaluation and mitigation strategy, or REMS, which could include a medication guide outlining the risks of such side effects for distribution to patients; • we may be subject to fines, injunctions or the imposition of criminal penalties; • we could be sued and held liable for harm caused to patients; and • our reputation may suffer.
For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act, collectively the CCPA, requires businesses that process the personal information of the California residents to, among other things, (i) provide certain disclosures to California residents regarding the business's collection, use, and disclosure of their personal information (ii) receive and respond to requests from California residents to access, delete, and correct their personal information or opt out of certain disclosures of their personal information; and (iii) enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, the “CCPA”), requires covered businesses that process the personal information of California residents to, among other things: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; (ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information; and (iii) enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
Among policy makers and payors in the United States and elsewhere, there is sign ificant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.
Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.
Medicaid is a joint federal and state program administered by the states for low income and disabled beneficiaries. We participate in and have certain price reporting obligations under the Medicaid Drug Rebate Program, or the MDRP, as a condition of having covered outpatient drugs payable under Medicaid and, if applicable, under Medicare Part B.
Medicaid is a joint federal and state program administered by the states for low income and disabled beneficiaries. We participate in and have certain price reporting obligations under the Medicaid Drug Rebate Program (the “MDRP”) as a condition of having covered outpatient drugs payable under Medicaid and, if applicable, under Medicare Part B.
Any of these events could lead to the unauthorized access, disclosure and use of proprietary, confidential, or otherwise non-public information (such as personal information). The techniques used by criminal actors to attack computer systems are sophisticated, change frequently and may originate from less regulated and remote areas of the world.
Any of these events could lead to the unauthorized access, disclosure and use of proprietary, confidential, or otherwise non-public information. The techniques used by criminal actors to attack computer systems are sophisticated, change frequently and may originate from less regulated and remote areas of the world.
Our inability to enroll a sufficient number of subjects for clinical trials would result in significant delays and could require us to abandon one or more clinical trials altogether.
Our inability to enroll a sufficient number of subjects for clinical trials would result in significant delays, increased costs and could require us to abandon one or more clinical trials altogether.
In addition, under Section 382 and Section 383 of the Code, if a corporation undergoes an ‘‘ownership change,’’ which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited.
In addition, under Section 382 and Section 383 of the Code, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited.
These laws may affect our and our commercial partners' sales, marketing, and other promotional activities by imposing administrative and compliance burdens on us and our commercial partners. Efforts to ensure that our current and future business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs.
These laws may affect our and our commercial partners' sales, marketing, and other promotional activities by imposing administrative and compliance burdens. Efforts to ensure that our current and future business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs.
Anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law and the terms of some or our contracts, might discourage, del ay or prevent a change in control of our company or changes in our board of directors or management and, therefore, depress the price of our common stock.
Anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law and the terms of some or our contracts, might discourage, delay or prevent a change in control of our company or changes in our board of directors or management and, therefore, depress the price of our common stock.
I n addition, we have solicited and applied for trademarks for the Zevra logo and several potential trade names and logos for future product candidates. Third parties may oppose or attempt to cancel our trademark applications or trademarks, or otherwise challenge our use of the trademarks.
In addition, we have solicited and applied for trademarks for the Zevra logo and several potential trade names and logos for future product candidates. Third parties may oppose or attempt to cancel our trademark applications or trademarks, or otherwise challenge our use of the trademarks.
The ACA expanded the list of covered entities to include certain free‑standing cancer hospitals, critical access hospitals, rural referral centers and sole community hospitals, but exempts “orphan drugs,” such as OLPRUVA, from the ceiling price requirements for these covered entities.
The ACA expanded the list of covered entities to include certain free‑standing cancer hospitals, critical access hospitals, rural referral centers and sole community hospitals, but exempts “orphan drugs,” from the ceiling price requirements for these covered entities.
Our approved products, or any of our product candidates that may receive marketing approval, may fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community.
Our approved products, as well as any of our product candidates that may receive marketing approval, may fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community.
There can be no assurance that we will be successful in achieving a sufficient degree of market penetration and/or obtaining or maintaining high per-patient prices for OLPRUVA and MIPLYFFA for diseases with small patient populations.
There can be no assurance that we will be successful in achieving a sufficient degree of market penetration and/or obtaining or maintaining high per-patient prices for products for diseases with small patient populations.
The rebate is based on pricing data that we must report on a monthly and quarterly basis to the Centers for Medicare & Medicaid Services, or CMS, the federal agency that administers the MDRP and other governmental healthcare programs.
The rebate is based on pricing data that we must report on a monthly and quarterly basis to the Centers for Medicare & Medicaid Services (“CMS”), the federal agency that administers the MDRP and other governmental healthcare programs.
These data include the average manufacturer price (AMP) for each drug and, in the case of innovator products, the best price, which in general represents the lowest price available from the manufacturer to certain entities in the U.S. in any pricing structure, calculated to include all sales and associated rebates, discounts and other price concessions.
These data include the average manufacturer price (AMP) for each drug and, in the case of innovator products, the best price, which in general represents the lowest price available from the manufacturer to certain entities in the United States in any pricing structure, calculated to include all sales and associated rebates, discounts and other price concessions.
Failure, or perceived failure, to comply with the GDPR, the UK GDPR, and other countries' data protection laws and regulations, privacy policies, contracts and other data protection obligations could result in government investigations and enforcement actions (which could include civil or criminal penalties, fines, or sanctions), private litigation, a diversion of management’s attention, adverse publicity and other negative effects on our operating results and business.
Failure, or perceived failure, to comply with foreign data protection laws and regulations, privacy policies, contracts and other data protection obligations could result in government investigations and enforcement actions (which could include civil or criminal penalties, fines, or sanctions), private litigation, a diversion of management’s attention, adverse publicity and other negative effects on our operating results and business.
Because of the numerous risks and uncertainties associated with prodrug development, we are unable to accurately predict the timing or amount of expenses or when, or if, we will be able to achieve profitability.
Because of the numerous risks and uncertainties associated with drug development, we are unable to accurately predict the timing or amount of expenses or when, or if, we will be able to achieve or maintain profitability.
The Medicare Part D rebate will be calculated on the basis of the AMP figures we report pursuant to the MDRP.
The Medicare Part D rebate, if applicable, will be calculated on the basis of the AMP figures we report pursuant to the MDRP.
Many of the factors described above are not within our control and w e cannot guarantee that future instances of these influencing factors will not have effects on the trading price of our common stock.
Many of the factors described above are not within our control and we cannot guarantee that future instances of these influencing factors will not have effects on the trading price of our common stock.
However, if the FDA determines that our promotional materials, statements or training constitutes promotion of an off-label use, it could request that we modify our promotional materials, statements or training methods or subject us to regulatory or enforcement actions, such as the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine, disgorgement of money, operating restrictions or criminal penalties.
However, if the FDA or any other federal, state or foreign enforcement authority determines that our promotional materials, statements or training constitutes promotion of an off-label use, it could request that we modify our promotional materials, statements or training methods or subject us to regulatory or enforcement actions, such as the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine, disgorgement of money, operating restrictions or criminal penalties.
Due to small patient populations for certain of our products, we believe that we would need to have significant market penetration to achieve meaningful revenues and identifying patients and targeting the prescriber base are key to achieving significant market penetration.
Due to small patient populations for our products and product candidates, we believe that we would need to have significant market penetration to achieve meaningful revenues and identifying patients and targeting the prescriber base are key to achieving significant market penetration.
In the ordinary course of our business, we may collect, process, transmit and store proprietary, confidential and sensitive information, including personal information (including key-coded data and health information), intellectual property, trade secrets and proprietary business information (collectively, “Confidential Information”) owned or controlled by ourselves or other parties.
In the ordinary course of our business, we may collect, process, transmit and store proprietary, confidential and sensitive information, including personal information (such as key-coded data and health information), intellectual property, trade secrets and proprietary business information owned or controlled by ourselves or other parties.
It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such Confidential Information. 65 Table of Contents There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.
It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such information. There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be complied with or effective in protecting our systems and information.
Even after an orphan drug is approved, the FDA or comparable foreign regulatory authority can subsequently approve the same drug for the same condition if such regulatory authority concludes that the later drug is clinically superior because it is shown to be safer, more effective or makes a major contribution to patient care.
Even after an orphan drug is approved, the FDA or comparable foreign regulatory authority can subsequently approve the same drug for the same approved use or indication within the relevant rare disease or condition if such regulatory authority concludes that the later drug is clinically superior because it is shown to be safer, more effective or makes a major contribution to patient care.
In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect the ability to profitably sell our approved products and our ability to profitably sell any of our product candidates for which we obtain marketing approval.
In the United States and many foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect the ability to profitably sell approved products.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new manufacturer discounting program (which began in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare, with prices that can be subject to a cap, imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023), and replaces the Part D coverage gap discount program with a new manufacturer discounting program (which began in 2025).
To the extent that we continue to generate taxable losses in the United States or in the Kingdom of Denmark, unused losses will carry forward to offset future taxable income (subject to any applicable limitations), if any.
To the extent that we continue to generate taxable losses in the United States, unused losses will carry forward to offset future taxable income (subject to any applicable limitations), if any.
If we are unable to enter into collaborations with third parties for the commercialization of approved product candidates, if any, on acceptable terms or at all, or if any such collaborator does not devote sufficient resources to the commercialization of our product or otherwise fails in commercialization efforts, we may not be able to successfully commercialize our product candidates that receive marketing approval.
If we are unable to enter into collaborations with third parties for the commercialization of approved products on acceptable terms or at all, or if any such collaborator does not devote sufficient resources to the commercialization of our products or otherwise fails in commercialization efforts, we may not be able to successfully commercialize our approved products.
Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.
Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance under both the EU GDPR and UK GDPR of up to €20 million/GBP 17.5 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.
The costs of maintaining or upgrading our cyber-security systems at the level commercially reasonable to keep up with our expanding operations and prevent against potential attacks are increasing, and despite our best efforts, our network security and data recovery measures and those of our vendors may still not be adequate to protect against such security breaches and disruptions, which could cause harm to our business, financial condition and results of operations.
The costs of maintaining or upgrading our cyber-security systems at the level commercially reasonable to keep up with our expanding operations and prevent against potential attacks are increasing, and despite our best efforts, our network security and data recovery measures and those of our vendors may still not be adequate to protect against such security breaches and disruptions.
For any of our other product candidates that receive marketing approval we may have to augment our commercial capabilities or make arrangements with third parties to perform additional services, and we may not be successful in doing any of the foregoing. Building and maintaining a targeted specialty sales force is expensive and time consuming.
For any of our other product candidates that receive marketing approval, we may have to augment our commercial capabilities or make arrangements with third parties to perform additional services. Building and maintaining a targeted specialty sales force is expensive and time consuming.
Our and our commercial partners' current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws, including, without limitation, the Anti-Kickback Statute and the False Claims Act, that may constrain the business or financial arrangements and relationships through which we and our commercial partners sell, market and distribute any product candidates for which we obtain marketing approval.
Our and our commercial partners' current and future arrangements with healthcare professionals, principal investigators, consultants, customers and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws, including, without limitation, the Anti-Kickback Statute and the False Claims Act, that may constrain the business or financial arrangements and relationships through which we and our commercial partners sell, market and distribute approved products.
In the United States, the FDA generally requires the completion of non-clinical testing and clinical trials of each drug to establish its safety and efficacy and extensive pharmaceutical development to ensure its quality and other factors before an NDA is approved. Regulatory authorities in other jurisdictions impose similar requirements.
In the United States, the FDA generally requires the completion of non-clinical testing and clinical trials of each drug to establish its safety and efficacy and extensive pharmaceutical development to ensure its quality and other factors before an NDA is approved.
As part of this program, we are required to make our products available for procurement on an FSS contract under which we must comply with standard government terms and conditions and charge a price that is no higher than the statutory Federal Ceiling Price, or FCP, to four federal agencies (VA, U.S.
As part of this program, we are required to make our products available for procurement on an FSS contract under which we must comply with standard government terms and conditions and charge a price that is no higher than the statutory Federal Ceiling Price (“FCP”), to four federal agencies (VA, U.S. Department of Defense (“DOD”), Public Health Service, and U.S.
The market price for our common stock may be influenced by many factors, includi ng: ● actual or anticipated variations in our operating results; ● changes in financial estimates by us or by any securities analysts who might cover our stock; ● conditions or trends in our industry, including without limitation changes in the structure of healthcare payment systems; ● stock market price and volume fluctuations of comparable companies and, in particular, those that operate in the pharmaceutical industry; ● announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures; ● announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us; ● adverse regulatory announcements or determinations regarding our product candidates; ● capital commitments; ● investors’ general perception of us and our business; ● global macroeconomic conditions, including inflation, tariffs, labor shortages, supply chain shortages, or other economic, political or legal changes, uncertainties or adverse developments; ● political unrest, terrorism and wars, such as the current situation with Ukraine and Russia or Israel and Hamas, which could delay or disrupt our business, and if such political unrest escalates or spills over to or otherwise impacts additional regions it could heighten many of the other risk factors included in this Item 1A; ● other events or factors, including those resulting from system failures and disruptions, earthquakes, hurricanes, other natural disasters, pandemics, or responses to these events; ● recruitment, retention, or departure of key personnel; and ● sales of our common stock, including sales by our directors and officers or specific stockholders.
The market price for our common stock may be influenced by many factors, includi ng: • actual or anticipated variations in our operating results; 49 Table of Contents • changes in financial estimates by us or by any securities analysts who might cover our stock; • conditions or trends in our industry, including without limitation changes in the structure of healthcare payment systems; • stock market price and volume fluctuations of comparable companies; • announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures; • announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us; • adverse regulatory announcements or determinations regarding our product candidates; • capital commitments; • investors’ general perception of us and our business; • global macroeconomic conditions, including inflation, tariffs, labor shortages, supply chain shortages, or other economic, political or legal changes, uncertainties or adverse developments; • political unrest, terrorism and wars, such as the current situation with Ukraine and Russia or Israel and Hamas; • other events or factors, including those resulting from system failures and disruptions, earthquakes, hurricanes, other natural disasters, pandemics, or responses to these events; • recruitment, retention, or departure of key personnel; and • sales of our common stock, including sales by our directors and officers or specific stockholders.
We participate in the 340B program, which is administered by the Health Resources and Services Administration, or HRSA, and requires us to charge statutorily defined covered entities no more than the 340B “ceiling price” for our covered outpatient drugs [BP(A4] [TS5] [RC6] .
We participate in the 340B program, which is administered by the Health Resources and Services Administration (“HRSA”), and requires us to charge statutorily defined covered entities no more than the 340B “ceiling price” for our covered outpatient drugs.
Unexpected refunds to the government, and responding to a government investigation or enforcement action, would be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Unexpected refunds to the government, and responding to a government investigation or enforcement action, would be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects. Pricing and rebate calculations vary among products and programs.
This reliance on third parties increases the risk that we will not have sufficient quantities of SDX, sodium phenylbutyrate, arimoclomol, or other bulk drug substances or our approved products, partnered product or product candidates, or such quantities at an acceptable cost or quality, which could delay, prevent or impair our ability to timely conduct our clinical trials or our other development or commercialization efforts.
This reliance on third parties increases the risk that we will not have sufficient quantities of our approved products or product candidates, or such quantities at an acceptable cost or quality, which could delay, prevent or impair our ability to generate revenue or timely conduct our clinical trials or our other development or commercialization efforts.
In addition, if a product candidate that has orphan designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including an NDA, to market the same product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or where the manufacturer is unable to assure sufficient product quantity.
In addition, if a product candidate that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including an NDA, to market the same product for the same approved use or indication within such rare disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity within the relevant approved use or indication.
We have not declared or paid cash dividends on our common stock to date. We currently intend to retain our future earnings, if any, to fund the development and growth of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends.
We have not declared or paid cash dividends on our common stock to date. We currently intend to retain our future earnings, if any, to fund the development and growth of our business. In addition, the terms of our current credit agreement precludes us from paying cash dividends.
We face significant competition in seeking appropriate collaborators. Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of several factors.
Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of several factors.
The recently-enacted IRA imposes rebates under Medicare Part B and Medicare Part D that are triggered by price increases that outpace inflation (first due in 2023), as described under the risk factor “ Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of our product candidates and increase the cost to commercialize our approved products, and any of our product candidates that may be approved in the future and affect the prices thereof ,” above.
The IRA imposes rebates under Medicare Part B and Medicare Part D that are triggered by price increases that outpace inflation (first due in 2023), as described under the risk factor “ Current and future healthcare reform legislation or regulation may increase the difficulty and cost for us to obtain marketing approval of our product candidates and increase the cost to commercialize our approved products ,” above.
Similar requirements apply in foreign jurisdictions. Failure to comply with these regulations may require us to repeat preclinical studies and clinical trials, which would delay the regulatory approval process.
Failure to comply with these regulations may require us to repeat preclinical studies and clinical trials, which would delay the regulatory approval process.
Regardless of merit or eventual outcome, liability claims may result in: ● decreased demand for our approved products, and any of our product candidates that we may develop; ● injury to our reputation and significant negative media attention; ● termination of clinical trial sites or entire trial programs; ● withdrawal of clinical trial participants; ● initiation of investigations by regulators; ● significant costs to defend the related litigation; ● a diversion of management’s time and our resources; ● substantial monetary awards paid to trial participants or patients; ● product recalls, withdrawals or labeling revisions and marketing or promotional restrictions; ● loss of revenue; ● reduced resources of our management to pursue our business strategy; and ● the inability to successfully commercialize any of our approved products, or any of our product candidates that might be approved in the future.
Regardless of merit or eventual outcome, liability claims may result in: • decreased demand for our products; • injury to our reputation and significant negative media attention; • termination of clinical trial sites or entire trial programs; • withdrawal of clinical trial participants; • initiation of investigations by regulators; • significant costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards paid to trial participants or patients; • product recalls, withdrawals or labeling revisions and marketing or promotional restrictions; and • loss of revenue.
Although we seek to develop proprietary prodrug formulations that do not infringe the intellectual property rights of others, we may become party to, or threatened with, future adversarial proceedings or litigation, domestic or foreign, regarding intellectual property rights with respect to our prodrugs or other aspects of our technology, including, for example, interference or derivation proceedings before the USPTO.
Although we seek to develop proprietary formulations that do not infringe the intellectual property rights of others, we may become party to, or threatened with, future adversarial proceedings or litigation, domestic or foreign, regarding intellectual property rights with respect to our products or other aspects of our technology.
In order for OLPRUVA or any product candidates, if approved, to be paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by certain federal agencies and grantees, we also participate in the U.S. Department of Veterans Affairs, or VA, Federal Supply Schedule, or FSS, pricing program.
In order for approved products to be paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by certain federal agencies and grantees, we also participate in the U.S. Department of Veterans Affairs (“VA”) Federal Supply Schedule (“FSS”) pricing program.
We may seek regulatory approval for our approved products and any of our product candidates, if approved, outside of the United States and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including: ● differing regulatory requirements in foreign countries; ● the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from a foreign market with low or lower prices rather than buying them locally; ● unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; ● economic weakness, including inflation, labor shortages, supply chain shortages, or other economic or political uncertainties or instability in particular foreign economies and markets; ● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; ● foreign taxes, including withholding of payroll taxes; ● foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; ● difficulties staffing and managing foreign operations; ● workforce uncertainty in countries where labor unrest is more common than in the United States; ● potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations; ● challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; ● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and ● business interruptions resulting from geo-political actions, including war and terrorism, such as the current situation with Ukraine and Russia.
Accordingly, we expect that we will be subject to additional risks related to operating in foreign countries including: • different regulatory requirements for maintaining approval of drugs in foreign countries; • differing payor reimbursement regimes, governmental payors or patient self-pay systems and price controls; • the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from a foreign market with low or lower prices rather than buying them locally; • unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements; • economic weakness, including inflation, labor shortages, supply chain shortages, or other economic or political uncertainties or instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; 33 Table of Contents • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue; • difficulties staffing and managing foreign operations; • workforce uncertainty in countries where labor unrest is more common than in the United States; • potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States; and • business interruptions resulting from geo-political actions, including war and terrorism, such as the current conflict with Ukraine and Russia.
Subject enrollment is affected by other factors including: ● the size and nature of the subject population specified in the trial protocol; ● the eligibility criteria for the study in question; ● the perceived risks and benefits of the product candidate under study; ● the fact that the product candidate is a controlled substance; ● severe or unexpected drug-related adverse events experienced by subjects in a clinical trial; ● the availability of drugs approved to treat the diseases or conditions under study; ● the efforts to facilitate timely enrollment in clinical trials; ● the patient referral practices of physicians; ● the severity of the disease or condition under investigation; ● the ability to obtain and maintain subject informed consent; ● the ability to retain subjects in the clinical trial and their return for follow-up; ● the clinical trial design, including required tests, procedures and follow-up; ● the ability to monitor subjects adequately during and after treatment; ● delays in adding new investigators and clinical sites; ● withdrawal of clinical trial sites from clinical trials; and ● the proximity and availability of clinical trial sites for prospective subjects.
Subject enrollment is affected by other factors including: • the size and nature of the subject population specified in the trial protocol, especially in indications for rare diseases; • the eligibility criteria for the study in question; • the perceived risks and benefits of the product candidate under study; • ongoing trials by competitors for similar indications as our product candidates; • severe or unexpected drug-related adverse events experienced by subjects in a clinical trial; • the availability of drugs approved to treat the diseases or conditions under study; • the patient referral practices of physicians; • the severity of the disease or condition under investigation; 41 Table of Contents • the ability to obtain and maintain subject informed consent; • the clinical trial design, including required tests, procedures and follow-up; • the ability to monitor subjects adequately during and after treatment; • delays in adding new, or withdrawals of existing, investigators and clinical sites; and • the proximity and availability of clinical trial sites for prospective subjects.
Further, even if Commave does not terminate the AZSTARYS License Agreement, we cannot guarantee that we will receive any additional milestone or royalty payments under the AZSTARYS License Agreement. In addition, under the AZSTARYS License Agreement, we have limited control over the amount and timing of resources that Corium will dedicate to the development, manufacturing or commercialization of AZSTARYS.
In addition, under the AZSTARYS License Agreement, we have limited control over the amount and timing of resources dedicated to the development, manufacturing or commercialization of AZSTARYS, so we cannot guarantee that we will receive any additional milestone or royalty payments.
We must report 340B ceiling prices to HRSA on a quarterly basis, and HRSA publishes those prices to 340B covered entities. In addition, HRSA has finalized regulations regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities for 340B‑eligible drugs.
In addition, HRSA has finalized regulations regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities for 340B-eligible drugs.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed. In addition to seeking patent and trademark protection for our product candidates, we also rely on trade secrets, including unpatented show-how, know-how, technology and other proprietary information, to maintain our competitive position.
In addition to seeking patent and trademark protection for our product candidates, we also rely on trade secrets, including unpatented show-how, know-how, technology and other proprietary information, to maintain our competitive position.
Any of these events could lead to clinical trial delays, failure to obtain regulatory approval or impact our ability to successfully commercialize our products, if approved.
Any of these events could impact our ability to successfully commercialize our products, lead to clinical trial delays, or failure to obtain regulatory approval, and have a material impact on our business.
Patents are of national or regional effect, and filing, prosecuting and defending patents on all of our products and technologies throughout the world would be prohibitively expensive.
We may not be able to protect our intellectual property rights throughout the world. Patents are of national or regional effect, and filing, prosecuting and defending patents on all of our products and technologies throughout the world would be prohibitively expensive.
Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents are invalid or unenforceable, or both. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace.
Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents are invalid or unenforceable, or both. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
We may also experience security breaches that may remain undetected for an extended period. Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques – including artificial intelligence (“AI”) – that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
If we do not have sufficient funds, we may not be able to further develop our product candidates or bring our product candidates to market and generate product revenue. 50 Table of Contents Risks Related to Our Intellectual Property If we are unable to obtain and maintain trade secret protection or patent protection for our technology, our approved products or our product candidates, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and drugs similar or identical to ours, and our ability to successfully commercialize our technology, our approved products, or our product candidates, if approved, may be impaired.
Risks Related to Our Intellectual Property If we are unable to obtain and maintain intellectual property protection for our technology, our approved products or our product candidates, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology, our approved products, or our product candidates if approved, may be impaired.
Failure to comply with the FDA’s and comparable foreign regulatory authorities’ promotional, marketing and advertising laws and regulations could lead to the issuance of warning letters, cyber letters, or untitled letters, adverse publicity, the requirement for dear-health-care-provider letters or other corrective information, fines and other monetary penalties, civil or criminal prosecution, including False Claims Act liability, restrictions on our operations and other operating requirements through consent decrees or corporate integrity agreements, debarment, exclusion from participation in federal health care programs and refusal of government contracts or future orders under existing contracts, among other consequences.
Violations of the FFDCA relating to the promotion of prescription drugs may lead to a number of actions and penalties, including warning letters, cyber letters, or untitled letters, adverse publicity, the requirement for dear-health-care-provider letters or other corrective information, fines and other monetary penalties, civil or criminal prosecution, including False Claims Act liability, restrictions on our operations and other operating requirements through consent decrees or corporate integrity agreements, debarment, exclusion from participation in federal health care programs and refusal of government contracts or future orders under existing contracts, among other consequences.
If those collaborations are not successful, we may not be able to capitalize on the market potential of AZSTARYS or any of our other product candidates, if approved. We entered into the AZSTARYS License Agreement with Commave pursuant to which we granted an exclusive, worldwide license to Commave to develop, manufacture and commercialize AZSTARYS.
If this collaboration is not successful, we may not be able to capitalize on the market potential of AZSTARYS. We entered into the AZSTARYS License Agreement with Commave pursuant to which we granted an exclusive, worldwide license to Commave to develop, manufacture and commercialize AZSTARYS.
Any trademarks we may obtain may be infringed or successfully challenged, resulting in harm to our business. We expect to rely on trademarks as one means to distinguish our product candidates that are approved for marketing from the products of our competitors. We have registered trademarks, including those for LAT, Zevra, and OLPRUVA .
We expect to rely on trademarks as one means to distinguish our product candidates that are approved for marketing from the products of our competitors. We have registered trademarks, including those for LAT, Zevra, MIPLYFFA and OLPRUVA.
A key component of the successful commercialization of an approved product for these indications includes identification of patients and a targeted prescriber base for such product.
We are focused on diseases with a small patient population. A key component of the successful commercialization of an approved product for these indications includes identification of patients and a targeted prescriber base for such product.
There can be no assurance that our approved products, or any of our product candidates, if they are approved for sale in the United States or in other countries, will be considered medically reasonable and necessary for a specific indication, that they will be considered cost-effective by third-party payors, that coverage or an adequate level of reimbursement will be available, or that third-party payors’ reimbursement policies will not adversely affect the ability to sell our approved products, or our ability to sell any of any of our product candidates profitably if they are approved for sale.
Furthermore, there is no assurance that a product will be considered medically reasonable and necessary for a specific indication, will be considered cost-effective by third-party payors, that an adequate level of reimbursement will be established even if coverage is available or that the third-party payors’ reimbursement policies will not adversely affect the ability for manufacturers to sell products profitably.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Item 1C. Cybersecurity Item 2. Properties 77 Item 3. Legal Proceedings 77 Item 4. Mine Safety Disclosures 77 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 81 Item 6. [Reserved] 81 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 82 Item 7A.
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ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”).
Removed
Quantitative and Qualitative Disclosures About Market Risk 94 Item 8. Financial Statements and Supplementary Data 94 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures 94 Item 9A. Controls an d Procedures 94
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This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
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Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. 51 Table of Contents Key elements of our cybersecurity risk management program include but are not limited to the following: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems, and information; • a security team principally responsible for managing (i) our cybersecurity risk assessment processes, (ii) our security controls, and (iii) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, including incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers, based on our assessment of their criticality to our operations and respective risk profile.
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For more information, see “ Cybersecurity breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation. ” in the “ Risk Factors ” section above.
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Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (“Committee”) oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management program. The Committee receives periodic reports from management on our cybersecurity risks.
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In addition, management updates the Committee, where it deems appropriate, regarding any cybersecurity incidents it considers to be significant or potentially significant. The Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cyber risk management program.
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Board members receive presentations on cybersecurity topics from our internal security staff or external experts as part of the Board’s continuing education on topics that impact public companies. Our management te am, including our Chief Legal Officer, Secretary and Compliance Officer, is responsible for assessing and managing our material risks from cybersecu rity threats.
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The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
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Our management team includes IT staff such as a Director of IT with more than 22 years of IT-related experience in various roles including managing information security, managing privacy and data protection, evaluating cybersecurity risks, developing cybersecurity strategy, and implementing cybersecurity programs, as well as a dedicated Information Security Manager, responsible for operational IT security initiatives.
Added
Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the information technology environment.
Added
In addition, our management team periodically evaluates and tests the effectiveness of our cybersecurity controls and incident response capabilities through internal reviews and, where appropriate, engagement of external specialists. These efforts may include security assessments, penetration testing, resilience and recovery exercises, and employee awareness initiatives designed to enhance preparedness against evolving threats, including ransomware and social engineering.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES As of December 31, 2024, we have leased approximately 17,000 square feet of headquarters office space in Celebration, Florida, comprised of two contiguous office suites, under non-cancelable lease agreements that expire in August 2025 and February 2026, respectively.
Biggest changeWe continue to lease approximately 6,000 square feet of office space in Celebration, Florida under a non-cancelable lease agreement that expires in August 2026, as well as office space in Copenhagen, Denmark.
Removed
One such office suite, which is approximately 6,300 square feet and has an expiration date of February 2026, is subleased to a third party. We have the right to extend the term of the lease for two successive five-year terms upon expiration. In addition, we occupy leased office space in Newton, Massachusetts and Copenhagen, Denmark.
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ITEM 2. PROPERTIES In 2026, we changed the location of our headquarters from Celebration, Florida to Boston, Massachusetts where we sublease approximately 10,000 square feet of office space under a lease that expires in June 2028.
Removed
We believe that our facilities are adequate for our current needs.
Added
As we continue to grow our headquarters in Boston, we expect that we will require additional space, and we are currently negotiating with the landlord to lease additional office space. 52 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOther than as disclosed in Note K of our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K, we believe there is no litigation pending that would reasonably be expected to, individually or in the aggregate, have a material adverse effect on our results of operations or financial condition.
Biggest changeOther than as disclosed herein, we believe there is no litigation pending that would reasonably be expected to, individually or in the aggregate, have a material adverse effect on our results of operations or financial condition. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 53 Table of Contents PART II
ITEM 3. LEGAL PROCEEDINGS From time to time, we may be involved in routine legal proceedings, as well as demands, claims and threatened litigation, which arise in the normal course of our business.
ITEM 3. LEGAL PROCEEDINGS From time to time, we may be involved in routine legal proceedings, as well as demands, claims and threatened litigation, which arise in the normal course of our business. In connection with the AZSTARYS License Agreement with Commave, a dispute has arisen with Commave concerning the interpretation of certain provisions under the AZSTARYS License Agreement.
Added
On September 4, 2024, Commave filed a complaint against us in the Court of Chancery of the State of Delaware (Case No. 2024-0920-LWW) alleging breach of contract and seeking injunctive relief, specific performance, declaratory relief, and damages regarding the parties' respective rights and obligations under the Agreement.
Added
On February 12, 2025, our motion to dismiss was denied and the case is now in the discovery phase. On July 17, 2025, Zevra and Commave filed cross motions for partial summary judgment as to certain of Commave’s claims, and the court held oral argument on the parties' cross motions on September 22, 2025.
Added
On December 31, 2025, the court granted Commave’s motion for partial summary judgment and denied our motion for partial summary judgment. Trial is currently scheduled to commence on June 8, 2026. We strongly disagree with Commave's allegations and believe this lawsuit is without merit. The litigation is in its early stages.
Added
While we intend to vigorously defend against Commave's claims, the outcome of this matter is inherently uncertain. We cannot predict with certainty the timing or ultimate outcome of this litigation or its potential impact on our business, financial condition, or results of operations. At this time, we have not recorded any accrual for contingent liability associated with this matter.
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We will continue to monitor developments in this matter and will assess the potential impact on our financial statements in future periods. We expect to incur significant legal expenses in connection with this litigation, which may materially affect our results of operations in future periods.
Added
The AZSTARYS License Agreement remains in effect during this litigation, and both parties continue to perform their respective obligations thereunder. However, there can be no assurance that this dispute will not have an adverse impact on our relationship with Commave or on our business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance under Equity Compensation Plans The information regarding securi ties authorized for issuance under equity compensation plans is included in Part III of this report. Recent Sales of Unregistered Securities None. Purchases of Eq uity Securities By the Issuer and Affiliated Purchasers None.
Biggest changeSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K for information regarding securities authorized for issuance under equity compensation plans. Recent Sales of Unregistered Securities None. Purchases of Equity Securities By the Issuer and Affiliated Purchasers None. ITEM 6. [Reserved] 54 Table of Contents
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Listing Our common stock trades on The Nasdaq Global Select Market under the ticker symbol "ZVRA". Holders of our Common Stock As of December 31, 2024, there were approximat ely 80 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Listing Our common stock trades on The Nasdaq Global Select Market under the ticker symbol “ZVRA.” Holders of our Common Stock As of December 31, 2025, there were approximately 91 holders of record of our common stock.
Dividend Policy We have never declared or paid any cash dividends on our common stock. We anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying cash dividends in the foreseeable future.
We anticipate that we will retain all our future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. Securities Authorized for Issuance under Equity Compensation Plans Refer to the section titled “Part III, Item 12.
Added
Dividend Policy We have never declared or paid any cash dividends on our common stock. In addition, the terms of our current credit agreement preclude us from paying cash dividends.

Item 7. Management's Discussion & Analysis

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

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Biggest changeComparison of the Years Ended December 31, 2024, and 2023 (in thousands): Year Ended December 31, Period-to 2024 2023 Period Change Revenue, net $ 23,612 $ 27,461 $ (3,849 ) Cost of product revenue (excluding $6,235 and $772 in intangible asset amortization for the years ended December 31, 2024, and 2023, respectively, shown separately below) 7,417 2,173 5,244 Intangible asset amortization 6,235 772 5,463 Operating expenses: Research and development 42,095 39,806 2,289 Selling, general and administrative 54,868 34,314 20,554 Total operating expenses 96,963 74,120 22,843 Loss from operations (87,003 ) (49,604 ) (37,399 ) Other (expense) income: Interest expense (7,351 ) (1,501 ) (5,850 ) Fair value adjustment related to warrant and CVR liability 2,057 (98 ) 2,155 Fair value adjustment related to investments (18 ) 613 (631 ) Interest and other income, net 2,175 4,541 (2,366 ) Total other (expense) income (3,137 ) 3,555 (6,692 ) Loss before income taxes (90,140 ) (46,049 ) (44,091 ) Income tax expense (15,371 ) - (15,371 ) Net loss $ (105,511 ) $ (46,049 ) $ (59,462 ) Net Loss Net loss for the year ended December 31, 2024, wa s $105.5 m illion compared to net loss of $46.0 million for the year ended December 31, 2023.
Biggest changeThese items are unrelated to our core business and thus are recognized as other income (expense) in our consolidated statements of operations. 58 Table of Contents Results of Operations Comparison of the years ended December 31, 2025, and 2024 (in thousands): Year Ended December 31, Period-to-Period Change 2025 2024 Revenue, net $ 106,470 $ 23,612 $ 82,858 Cost of product revenue (excluding $3,862 and $6,235 in intangible asset amortization for the years ended December 31, 2025, and 2024, respectively, shown separately below) 16,482 7,417 9,065 Intangible asset amortization 3,862 6,235 (2,373) Impairment of intangible assets 58,710 — 58,710 Operating expenses: Research and development 12,743 42,095 (29,352) Selling, general and administrative 77,616 54,868 22,748 Total operating expenses 90,359 96,963 (6,604) Loss from operations (62,943) (87,003) 24,060 Other income (expense): Gain on sale of PRV 148,325 — 148,325 Interest expense (7,977) (7,351) (626) Fair value adjustment related to warrant and CVR liability 2,178 2,057 121 Fair value adjustment related to investments 149 (18) 167 Interest and other income, net 6,946 2,175 4,771 Total other income (expense) 149,621 (3,137) 152,758 Income (loss) before income taxes 86,678 (90,140) 176,818 Income tax expense (3,449) (15,371) 11,922 Net income (loss) $ 83,229 $ (105,511) $ 188,740 Net income (loss) Net income for the year ended December 31, 2025, wa s $83.2 million, compared to a net loss of $105.5 million for the year ended December 31, 2024, an increase to net income of $188.7 million.
We will pay Citizens JMP a commission equal to 3.0% in the aggregate of the gross sales proceeds of any common stock sold through Citizens JMP under the 2024 ATM Agreement. As of December 31, 2024, no shares have been issued or sold under the 2024 ATM Agreement.
We will pay Citizens JMP a commission equal to 3.0% in the aggregate of the gross sales proceeds of any common stock sold through Citizens JMP under the 2024 ATM Agreement. As of December 31, 2025, no shares have been issued or sold under the 2024 ATM Agreement.
Net loss was primarily attributable to our spending on research and development programs and operating costs, partially offset by revenue received from MIPLYFFA and OLPRUVA product sales, royalties under the AZSTARYS License Agreement, and reimbursements from the EAP.
Net loss was primarily attributable to our spending on research and development programs and operating costs, partially offset by revenue received from MIPLYFFA and OLPRUVA product sales, royalties under the AZSTARYS License Agreement, and reimbursements from the global EAP.
Potential near-term sources of additional funding include: ● any royalties or net sales milestone payments generated under the AZSTARYS License Agreement; ● any reimbursements received for arimoclomol under the EAP; ● any product sales of OLPRUVA, and ● any product sales of MIPLYFFA.
Potential near-term sources of additional funding include: • any product sales of MIPLYFFA; • any product sales of OLPRUVA; • any reimbursements received for arimoclomol under the global EAP; and • any royalties or net sales milestone payments generated under the AZSTARYS License Agreement.
If we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of these costs, our actual expenses could differ from our estimates. 91 Table of Contents Stock-Based Compensation We record the fair value of stock options issued as of the grant date as compensation expense.
If we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of these costs, our actual expenses could differ from our estimates. 65 Table of Contents Stock-Based Compensation We record the fair value of stock options issued as of the grant date as compensation expense.
At this time, we cannot be certain regarding the nature, timing or costs required to commercialize MIPLYFFA, OLPRUVA, or any of our product candidates that may be approved in the future, due to the numerous risks and uncertainties associated with commercialization activities.
At this time, we cannot be certain regarding the nature, timing or costs required to commercialize any of our product candidates that may be approved in the future, due to the numerous risks and uncertainties associated with commercialization activities.
Adjustments for variable consideration are determined based on the contractual terms with customers, historical trends, communications with customers and the levels of inventory remining in the distribution channel, as well as expectations about the market for the product and anticipated introduction of competitive products.
Adjustments for variable consideration are determined based on the contractual terms with customers, historical trends, communications with customers and the levels of inventory remaining in the distribution channel, as well as expectations about the market for the product and anticipated introduction of competitive products.
Accrued Expenses We enter into contractual agreements with third-party vendors who provide research and development, manufacturing, and other services in the ordinary course of business. Some of these contracts are subject to milestone-based invoicing and services are com pleted over an extended period of time. We record liabilities under these contractual commitments when an obligation has been incurred.
Accrued Research and Development Expenses We enter into contractual agreements with third-party vendors who provide research and development, manufacturing, and other services in the ordinary course of business. Some of these contracts are subject to milestone-based invoicing and services are completed over an extended period of time. We record liabilities under these contractual commitments when an obligation has been incurred.
Inherent in the determination of fair value of the reporting units are certain estimates and judgments, including the interpretation of current economic indicators and market valuations, as well as management’s strategic plans with regard to its operations.
Inherent in the determination of fair value of the reporting units are certain estimates and judgments, including the interpretation of current economic indicators and market valuations, as well as management’s strategic plans with regard to our operations.
We base our expenses related to clinical trials on our estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and manage clinical trials on our behal f. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.
We base our expenses related to clinical trials on our estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and manage clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.
Treasury securities with a remaining term equal to the expected life assumed at the date of grant; and ● we e stimate forfeitures based on our historical analysis of actual stock option forfeitures. We account for stock-based compensation arrangements with directors and consultants that contain only service conditions for vesting using a fair value approach.
Treasury securities with a remaining term equal to the expected life assumed at the date of grant; and • we estimate forfeitures based on our historical analysis of actual stock option forfeitures. We account for stock-based compensation arrangements with directors and consultants that contain only service conditions for vesting using a fair value approach.
The adjustments for non-cash items primarily consisted of income tax expense of $15.4 million, stock-based compensation expense of $14.9 m illion, consulting fees paid in stock of $0.5 mill ion, interest expense of $2.1 million, inventory obsolescence of $5.7 million and $5.7 mill ion related to depreciation, amortization and other items, and a loss on disposal of $0.2 million, partially offset by a change in fair value adjustment of warrants and CVR of $2.1 million.
The adjustments for non-cash items primarily consisted of income tax expense of $15.4 million, stock-based compensation expense of $14.9 million, consulting fees paid in stock of $0.5 million, interest expense of $2.1 million, inventory obsolescence of $5.7 million and $5.7 million related to depreciation, amortization and other items, and a loss on disposal of $0.2 million, partially offset by a change in fair value adjustment of warrants and CVR of $2.1 million.
Some of the information cont ained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties.
Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties.
We expect that our other sources of revenues will be through payments arising from our license agreements with Corium, and through any other future arrangements related to one of our product candidates.
We expect that our other sources of revenues will be through payments arising from our license agreements, and through any other future arrangements related to one of our product candidates.
The Black-Scholes option-pricing model requires the use of subjective assumptions, including the expected volatility of our common stock, the assumed dividend yield, the expected term of our stock options, the risk-free interest rate for a period that approximates the expected term of our stock options and the fair value of the underlying common stock on the date of grant.
The BSM option pricing model requires the use of subjective assumptions, including the expected volatility of our common stock, the assumed dividend yield, the expected term of our stock options, the risk-free interest rate for a period that approximates the expected term of our stock options and the fair value of the underlying common stock on the date of grant.
The Company's net revenues represent total revenues adjusted for discounts and allowances, including estimated cash discounts, chargebacks, rebates, returns, copay assistance, data fees and wholesaler fees for services. These adjustments represent variable consideration under ASC 606 and are recorded as a reduction of revenue.
Our net revenues represent total revenues adjusted for discounts and allowances, including estimated cash discounts, chargebacks, rebates, returns, copay assistance, data fees and wholesaler fees for services. These adjustments represent variable consideration under ASC 606 and are recorded as a reduction of revenue.
ITEM 7. MANAGEMENT ’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K.
At this time, we cannot be certain regarding the nature, timing or costs required to complete the remaining development of any product candidates. This is due to the numerous risks and uncertainties associated with the development of our products and product candidates.
The successful development of our product candidates is highly uncertain. At this time, we cannot be certain regarding the nature, timing or costs required to complete the remaining development of any product candidates. This is due to the numerous risks and uncertainties associated with the development of our products and product candidates.
For warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and on each balance sheet date thereafter.
For warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and on each balance sheet date thereafter.
Entry into 2024 ATM Agreement On July 12, 2024, we entered into an equity distribution agreement (the "2024 ATM Agreement") with Citizens JMP Securities LLC ("Citizens JMP") under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $75.0 million through Citizens JMP as its sales agent.
Entry into 2024 ATM Agreement On July 12, 2024, we entered into an equity distribution agreement (the “2024 ATM Agreement”) with Citizens JMP Securities LLC (“Citizens JMP”) under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $75.0 million through Citizens JMP as our sales agent.
While our significant accounting policies are more fully described in Note B to our audited financial statements appearing elsewhere in this Annual Report on Form 10-K, we belie ve that the following accounting policies are critical to the process of making significant estimates in the preparation of our financial statements and understanding and evaluating our reported financial results.
While our significant accounting policies are more fully described in Note B to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe that the following accounting policies are critical to the process of making significant estimates in the preparation of our financial statements and understanding and evaluating our reported financial results.
These refundable tax credits are a result of increased q ualified research and development spending in certain jurisdictions which allow for a refundable credit even when the Company has no current period income tax expense.
These refundable tax credits are a result of increased qualified research and development spending in certain jurisdictions which allow for a refundable credit even when a company has no current period income tax expense.
August 2024 Offering On August 8, 2024, we entered into an underwriting agreement (the “Underwriting Agreement”) with Cantor Fitzgerald & Co. and William Blair & Company, L.L.C., as representatives of the several underwriters named therein (collectively, the “Underwriters”), in connection with the offering, issuance and sale by us of 9,230,770 shares of our common stock at a public offering price of $6.50 per share, pursuant to the June 2024 Registration Statement and a related prospectus supplement dated August 8, 2024 filed with the SEC (the "August 2024 Offering").
The registration statement was declared effective on June 13, 2024. 60 Table of Contents August 2024 Offering On August 8, 2024, we entered into an underwriting agreement (the “Underwriting Agreement”) with Cantor Fitzgerald & Co. and William Blair & Company, L.L.C., as representatives of the several underwriters named therein (collectively, the “Underwriters”), in connection with the offering, issuance and sale by us of 9,230,770 shares of our common stock at a public offering price of $6.50 per share, pursuant to the June 2024 Registration Statement and a related prospectus supplement dated August 8, 2024 filed with the SEC (the “August 2024 Offering”).
We also do not know when, if ever, any other product candidate will be commercially available. Cost of Product Revenue The components of our cost of product revenue are royalties and expenses directly attributable to revenue.
We also do not know when, if ever, any other product candidate will be commercially available. 56 Table of Contents Cost of Product Revenue The components of cost of product revenue are royalties and expenses directly attributable to revenue.
For warrants that meet all criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital, on the consolidated statement of stockholders’ deficit at the time of issuance.
For warrants that meet all criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital on the consolidated statements of changes in stockholders’ equity at the time of issuance.
T he grant date fair value of these options is measured using the Black-Scholes option pricing model reflecting the same assumptions as applied to employee options in each of the reported periods, other than the expected life, which is assumed to be the remaining contractual life of the option.
The grant date fair value of these options is measured using the BSM option pricing model reflecting the same assumptions as applied to employee options in each of the reported periods, other than the expected life, which is assumed to be the remaining contractual life of the option.
On February 5, 2024, we filed a registration statement on Form S-3 (File No. 333-276856) registering an aggregate of 2,269,721 shares of our common stock. On April 5, 2024, we filed an amendment to such registration statement, which was declared effective on April 8, 2024.
Registration Statements on Form S-3 On February 5, 2024, we filed a registration statement on Form S-3 (File No. 333-276856) registering an aggregate of 2,269,721 shares of our common stock for resale by certain stockholders. On April 5, 2024, we filed an amendment to such registration statement, which was declared effective on April 8, 2024.
Net revenues from product sales are recognized at the transaction price when the customer obtains control of the Company's product, which occurs at a point in time, typically upon receipt of the product by the customer. The Company's current single customer is a specialty pharmacy provider.
Net revenues from product sales are recognized at the transaction price when the customer obtains control of our product, which occurs at a point in time, typically upon receipt of the product by the customer. Our current single customer for product sales of MIPLYFFA and OLPRUVA is a specialty pharmacy provider.
Our name, Zevra, is the Greek word for zebra, which is the internationally recognized symbol for rare disease. This name reflects our intense focus and dedication to developing transformational, patient-focused therapies for rare diseases with limited or no treatment options available, or treatment areas with significant unmet needs.
Zevra, is the Greek word for zebra, which is the internationally recognized symbol for rare disease. This name reflects our intense focus and dedication to developing transformational, patient-focused therapies for rare diseases with limited or no treatment options available, or treatment areas with significant unmet needs. Our strategic plan is focused on transforming Zevra into a leading rare-disease company.
Under the XOMA License Agreement, XOMA is also entitled to a mid-single digit royalty on net sales of MIPLYFFA, as well as certain net sales and regulatory milestone payments. We also owe an additional royalty in the low-single digit to KU/UCLB on net sales of MIPLYFFA and a 10% royalty on net sales of OLPRUVA under the Relief Termination Agreement.
XOMA is also entitled to a mid-single digit royalty on net sales of MIPLYFFA, as well as certain net sales and regulatory milestone payments. We also owe a 10% royalty on net sales of OLPRUVA under the Relief License Agreement.
We anticipate that our expenses will fluctuate substantially as we: ● continue building and maintaining our ongoing commercial capabilities to support the launch of our approved product OLPRUVA® and MIPLYFFA in the U.S. ● continue our ongoing preclinical studies, clinical trials and our product development activities for our pipeline of product candidates; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● continue research and preclinical development and initiate clinical trials of our product candidates; ● seek to discover and develop additional product candidates either internally or in partnership with other pharmaceutical companies; ● adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products; ● maintain, expand and protect our intellectual property portfolio; ● incur additional legal, accounting and other expenses in operating as a public company; and ● add operational systems and personnel, if needed, to support any future commercialization efforts.
We anticipate that our expenses will fluctuate substantially as we: • continue building and maintaining our ongoing commercial capabilities to support the commercialization of our approved products, MIPLYFFA and OLPRUVA, in the United States; • continue or initiate preclinical studies, clinical trials and product development activities for our pipeline of product candidates; • seek regulatory approvals for any product candidates that may successfully complete clinical trials; 55 Table of Contents • seek to discover, license or acquire, and develop additional product candidates; • adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products; • maintain, expand and protect our intellectual property portfolio; • incur additional legal, accounting and other expenses in operating as a public company; and • add operational systems and personnel, if needed, to support any future commercialization efforts.
Pursuant to the Exclusive License Agreement, Relief holds exclusive development and commercialization rights for OLPRUVA in the European Union, Liechtenstein, San Marino, Vatican City, Norway, Iceland, Principality of Monaco, Andorra, Gibraltar, Switzerland, United Kingdom, Albania, Bosnia, Kosovo, Montenegro, Serbia and North Macedonia (Geographical Europe).
Pursuant to the Relief License Agreement, Relief will hold exclusive development and commercialization rights for OLPRUVA in the EU, Liechtenstein, San Marino, Vatican City, Norway, Iceland, Principality of Monaco, Andorra, Gibraltar, Switzerland, United Kingdom, Albania, Bosnia, Kosovo, Montenegro, Serbia and North Macedonia (“Geographical Europe”).
Financing Activities For the year ended December 31, 2024, net cash provided by financing activities wa s $82.1 m illion, which was primarily attributable to proceeds from the issuance of debt o f $58.9 million , proceeds from insurance financing arrangements o f $1.0 millio n and proceeds from sales of common stock under the Employee Stock Purchase Plan, or the ESPP, of $1.1 million, pr oceeds from issuance of common stock of $66.2 mill ion, partially offset by repayments of debt of $4 2.7 mill ion, payments of principal on insurance financing arrangemen ts of $0.4 mill ion, and payments of deferred offering costs of $2.0 million.
For the year ended December 31, 2024, net cash provided by financing activities was $82.1 million, which was primarily attributable to proceeds from the issuance of debt of $58.9 million, proceeds from insurance financing arrangements of $1.0 million and proceeds from sales of common stock under the Employee Stock Purchase Plan, or the ESPP, of $1.1 million, proceeds from issuance of common stock of $66.2 million, partially offset by repayments of debt of $42.7 million, payments of principal on insurance financing arrangements of $0.4 million, and payments of deferred offering costs of $2.0 million.
On June 4, 2024, we filed a registration statement on Form S-3 (File No. 333-279941) (the "June 2024 Registration Statement") under which we sell securities, including as may be issuable upon conversion, redemption, repurchase, exchange or exercise of securities, in one or more offerings up to a total aggregate offering price of $350.0 million, $75.0 million of which was allocated to the sale of the shares of common stock issuable under the 2024 ATM Agreement.
On June 4, 2024, the Company filed a registration statement on Form S-3 (File No. 333-279941) (the “June 2024 Registration Statement”) under which we may sell securities in one or more offerings up to a total aggregate offering price of $350.0 million, $75.0 million of which was allocated to the sale of the shares of common stock issuable under the 2024 ATM Agreement (as described further below).
This includes conducting preclinical studies and clinical trials, manufacturing development efforts and activities related to regulatory filings for product candidates. We recognize research and development expenses as they are incurred.
Research and Development Expense Research and development expense consists of expenses incurred while performing research and development activities to discover and develop potential product candidates. This includes conducting preclinical studies and clinical trials, manufacturing development efforts and activities related to regulatory filings for product candidates. We recognize research and development expenses as they are incurred.
The changes in working capital consisted of $3.6 mill ion related to a change in accounts payable and accrued expense s, $8.9 million related to a change in inventories, $2.2 million related to a change in prepaids and other assets, and $0.6 mi llion related to operating lease liabilities, partially offset by $0.4 million re lated to a change in discount and r ebate liabilities, $0.6 million related to a change in operating lease right of use assets, $0.8 million related to a change in other liabilities, and $6.9 million increase in accounts and other receivables .
The changes in working capital consisted of $3.6 million related to a change in accounts payable and accrued expenses, $8.9 million related to a change in inventories, $2.2 million related to a change in prepaids and other assets, and $0.6 million related to operating lease liabilities, partially offset by $0.4 million related to a change in discount and rebate liabilities, $0.6 million related to a change in operating lease right of use assets, $0.8 million related to a change in other liabilities, and $6.9 million increase in accounts and other receivables.
Stock-based compensation expense has been reported in our statements of operations as follows (in thousands): Year Ended December 31, 2024 2023 Research and development $ 5,819 $ 2,664 General and administrative 9,087 3,290 Total stock-based compensation $ 14,906 $ 5,954 Determination of the Fair Value of Stock-Based Compensation Grants We calculate the fair value of stock-based compensation arrangements using the Black-Scholes option-pricing model.
Stock-based compensation expense has been reported in our statements of operations as follows (in thousands): Year ended December 31, 2025 2024 Research and development $ 841 $ 5,819 Selling, general and administrative 11,793 9,087 Total stock-based compensation expense $ 12,634 $ 14,906 Determination of the Fair Value of Stock-Based Compensation Grants We calculate the fair value of stock-based compensation arrangements using the Black-Scholes-Merton (“BSM”) option pricing model.
In connection with the AZSTARYS License Agreement, we paid Aquestive a royalty equal to 10% of the upfront license payment and all regulatory milestone and royalty payments. In addition, we paid a $6 million regulatory milestone payment earned by XOMA upon the approval of MIPLYFFA on September 20, 2024.
Under the Aquestive Termination Agreement, we pay Aquestive a royalty equal to 10% of the upfront license payment and all regulatory milestone and royalty payments we received from Commave under the AZSTARYS License Agreement. Under the XOMA License Agreement, we paid a $6.0 million regulatory milestone payment earned by XOMA upon the approval of MIPLYFFA on September 20, 2024.
For the year ended December 31, 2023, net cash used in operating activities of $33.5 million consisted of a net loss of $46.0 million, partially offset by $6.0 million in changes in working capital and $6.5 m illion in adjustments for non-cash items.
For the year ended December 31, 2024, net cash used in operating activities of $69.7 million consisted of a net loss of $105.5 million and $6.6 million in changes in working capital, partially offset by $42.5 million in adjustments for non-cash items.
For grants after the second anniversary of the initial public offering we utilized our historical volatility to determine the expected volatility; ● the assumed dividend yield is based on our expectation of not paying dividends for the foreseeable future; ● we determine the average expected life of “ plain vanilla” stock options based on the simplified method in accordance with SEC Staff Accounting Bulletin Nos. 107 and 110, as our common stock to date has been publicly traded for a limited amount of time.
For grants after the second anniversary of the initial public offering we utilized our historical volatility to determine the expected volatility; • the assumed dividend yield is based on our expectation of not paying dividends for the foreseeable future; • we determine the average expected life of “plain vanilla” stock options based on the simplified method in accordance with SEC Staff Accounting Bulletin Nos. 107 and 110 due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected term of the stock options.
We expect that, for the foreseeable future, our only sources of revenues will be through product sales of OLPRUVA and MIPLYFFA, payments arising from the AZSTARYS License Agreement, and any other future arrangements related to one of our product candidates and product sales under the EAP.
We expect that our sources of revenue will be from product sales of MIPLYFFA and OLPRUVA, product reimbursements received under the global EAP, royalties or net sales milestone payments generated under the AZSTARYS License Agreement, and any other future arrangements related to one or more of our products or product candidates.
Components of our Results of Operations Revenue Our commercial revenue is, and will be, primarily derived from sales of our approved products or any of our product candidates for which we obtain regulatory approval, and sales of arimoclomol under the EAP.
Components of our Results of Operations Revenue Our revenue is, and will be, primarily derived from sales of our approved products or any of our product candidates for which we obtain regulatory approval, and reimbursements under our global expanded access program (“EAP”) in France, and in select territories outside Europe.
Investing Activities For the year ended December 31, 2024, net cash used in investing activities was $22.1 mi llion, which was attributable to purchases of investments of $ 41.1 million and a $6.0 million regulatory milestone payment to XOMA, partially offset by maturities of investme nts of $25.0 million.
For the year ended December 31, 2024, net cash used in investing activities was $22.1 million, which was attributable to purchases of investments of $41.1 million and a $6.0 million regulatory milestone payment to XOMA, partially offset by maturities of investments of $25.0 million. 62 Table of Contents Financing Activities For the year ended December 31, 2025, net cash provided by financing activities was $12.1 million, which was primarily attributable to proceeds from common stock warrants exercised of $8.6 million and options exercised of $3.2 million.
Salaries and personnel-related costs, including benefits, bonuses and stock-based compensation expense, comprise a significant component of each of these expense categories.
Operating Expenses We classify our operating expenses into two categories: research and development expenses and selling, general and administrative expenses. Salaries and personnel-related costs, including benefits, bonuses and stock-based compensation expense, comprise a significant component of each of these expense categories.
We performed a Section 382 ownership change analysis in 2017 and determined that we experienced an ownership change in 2010, which resulted in a portion of our net operating loss carryforwards being subject to an annual limitation under Section 382 through 2012.
We performed a Section 382 ownership change analysis through the period ending November 26, 2025 and determined that we experienced ownership changes in 2016, 2020, and 2021 which resulted in a portion of our net operating loss carryforwards being subject to an annual limitation under Section 382 for those respective tax years.
Liquidity and Capital Resources Sources of Liquidity Through December 31, 2024, we have funded our research and development and operating activities primarily through the issuance of debt and equity and from revenue received from the EAP, AZSTARYS License Agreement, OLPRUVA product sales, MIPLYFFA product sales and consulting arrangements.
Liquidity and Capital Resources Sources of Liquidity Through December 31, 2025, we have funded our research and development and operating activities primarily through the issuance of debt and equity and from product sales of MIPLYFFA and OLPRUVA, reimbursements received under the global EAP, royalties or net sales milestone payments generated under the AZSTARYS License Agreement, our PRV sale consummated on April 1, 2025, and consulting agreements.
Selling, General and Administrative Expense We anticipate that selling expenses will vary from quarter to quarter in accordance with our strategic plan as we continue our efforts to commercialize MIPLYFFA and OLPRUVA. The successful commercialization of AZSTARYS, MIPLYFFA, OLPRUVA, or any of our other product candidates that may be approved is highly uncertain.
Selling, General and Administrative Expense We anticipate that selling expenses will vary from quarter-to-quarter in accordance with our strategic plan as we continue our efforts to commercialize MIPLYFFA and OLPRUVA.
Intangible asset amortization Intangible asset amortization for the year ended December 31, 2024, was $6.2 million an increase of approximately $5.5 million compared to intangible asset amortization of $0.8 million for the year ended December 31, 2023.
Intangible asset amortization Intangible asset amortization for the year ended December 31, 2025, was $3.9 million, a decrease of approximately $2.4 million compared to intangible asset amortization of $6.2 million for the year ended December 31, 2024.
Other (expense) income also includes interest expense incurred on our outstanding borrowings as well as interest and other income consisting primarily of interest earned on investments. These items are unrelated to our core business and thus are recognized as other (expense) income in our consolidated statements of operations.
Other income (expense) also includes interest expense incurred on our outstanding borrowings as well as interest and other income consisting primarily of interest earned on investments.
Total shares issued were 10,615,385. Net proceeds from the offering were approximately $64.5 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.
Total shares issued were 10,615,385. Net proceeds from the offering were approximately $64.5 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We are using the net proceeds of the offering to support the commercialization of its approved products and the continued development of its product candidates, and for other general corporate purposes.
Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss in other expense, net, on the consolidated statement of operations. The fair value of the warrants was estimated using the Black-Scholes option pricing model. 93 Table of Contents
Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss in other expense, net, on the consolidated statements of operations. The fair value of the warrants was estimated using the BSM option pricing model. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. ITEM 8.
On February 26, 2025, we entered into the PRV Transfer Agreement, pursuant to which we agreed to sell the PRV to the buyer, subject to customary closing conditions. Pursuant to the PRV Transfer Agreement, the buyer agreed to pay the Company $150.0 million, payable in cash, upon the closing of the sale.
As of December 31, 2025, we had cash, cash equivalents and investments o f $238.9 million. On February 26, 2025, we entered into the PRV Transfer Agreement, pursuant to which we agreed to sell the PRV to the buyer, subject to customary closing conditions.
Other components of cost of product revenue include $6.2 million of non-cash intangible asset amortization related to the MIPLYFFA and OLPRUVA capitalized assets and $5.7 million in inventory obsolescence reserve expense related to OLPRUVA inventory during the year. Operating Expenses We classify our operating expenses into two categories: research and development expenses and selling general and administrative expenses.
Other components of cost of product revenue include $3.9 million of non-cash intangible asset amortization related to the MIPLYFFA and OLPRUVA capitalized assets and $11.7 million in inventory obsolescence reserve expense related to OLPRUVA inventory during the year ended December 31, 2025.
We have based our estimates of our cash needs and cash runway on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect and we cannot guarantee that we will be able to generate sufficient proceeds from product sales of OLPRUVA and MIPLYFFA, the AZSTARYS License Agreement, product reimbursements under the EAP, or other funding transactions to fund our operating expenses.
In addition, we cannot guarantee that we will be able to generate sufficient proceeds from product sales of MIPLYFFA and OLPRUVA, reimbursements received under the global EAP, royalties or net sales milestone payments generated under the AZSTARYS License Agreement, or other funding transactions to fund our operating expenses.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or altogether cease our research and development programs and/or commercialization efforts.
Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) and, as a result, follows the five-step model when recognizing revenue: 1) identifying a contract; 2) identifying the performance obligations; 3) determining the transaction price; 4) allocating the price to the performance obligations; and 5) recognizing revenue when the performance obligations have been fulfilled.
If the sum of the expected future cash flows (undiscounted and without interest charges) were less than the carrying amount of the asset group, we would recognize an impairment charge to reduce such assets to their fair value. 64 Table of Contents Revenue Recognition We recognize revenue in accordance with the provisions of ASC 606, Revenue from Contracts with Customers (“ASC 606”) and, as a result, follows the five-step model when recognizing revenue: 1) identifying a contract; 2) identifying the performance obligations; 3) determining the transaction price; 4) allocating the price to the performance obligations; and 5) recognizing revenue when the performance obligations have been fulfilled.
To date, we have generated revenue from product sales of MIPLYFFA and OLPRUVA to our specialty pharmacy, sales of arimoclomol under the EAP, royalties, milestones and other reimbursements under the AZSTARYS License Agreement, reimbursement of out-of-pocket third-party costs, and the performance of consulting services.
To date, we have generated revenue from product sales of MIPLYFFA and limited sales of OLPRUVA, reimbursements received under our global EAP, royalties or net sales milestone payments generated under the AZSTARYS License Agreement, and consulting agreements.
For the year ended December 31, 2023, net cash used in investing activities was $17.4 million, which was attributable to $30.4 million attributable to the acquisition of Acer, purchases of investments of $45.8 million, and $0.3 million in purchases of property and equipment, partially offset by maturities of investments of $59.1 million.
Investing Activities For the year ended December 31, 2025, net cash provided by investing activities was $18.1 million, which was primarily attributable to proceeds from the sale of the PRV of $150.0 million and maturities of investments of $178.5 million, partially offset by $310.0 million in purchases of investments.
If we determine that an ownership change has occurred and our ability to use our historical net operating loss carryforwards is materially limited, it would harm our future operating results by increasing our future tax obligations. 92 Table of Contents Warrants We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC Topic 480, Distinguishing Liabilities from Equity (ASC 480) and FASB ASC Topic 815, Derivatives and Hedging (ASC 815).
Warrants We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and FASB ASC Topic 815, Derivatives and Hedging (“ASC 815”).
We anticipate that our expenses will fluctuate substantially as we: ● continue our ongoing clinical trials and our product development activities for our pipeline of product candidates; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● continue research and development and clinical trials of our product candidates; ● seek to discover and develop additional product candidates either internally or in partnership with other pharmaceutical companies; ● adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products; ● adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products; ● maintain, expand and protect our intellectual property portfolio; and ● incur additional legal, accounting and other expenses in operating as a public company.
We anticipate that our expenses will fluctuate substantially as we: • continue building and maintaining our ongoing commercial capabilities to support the commercialization of our approved products, MIPLYFFA and OLPRUVA, in the United States; • continue or initiate preclinical studies, clinical trials and product development activities for our pipeline of product candidates; • seek regulatory approvals for any product candidates that may successfully complete clinical trials; • seek to discover, license or acquire, and develop additional product candidates; • adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products; • maintain, expand and protect our intellectual property portfolio; • incur additional legal, accounting and other expenses in operating as a public company; and • add operational systems and personnel, if needed, to support any future commercialization efforts. 63 Table of Contents We have based our estimates of our cash needs and cash runway on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect.
To the extent that we raise additional capital through the sale of equity or debt, the terms of these securities may restrict our ability to operate. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights.
If needed, adequate additional financing may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or debt, the terms of these securities may restrict our ability to operate.
We also expect to continue to incur costs to comply with corporate governance, internal control, investor relations, disclosure and similar requirements applicable to public reporting companies. 84 Table of Contents Other (Expense) Income Other (expense) income consists primarily of non-cash costs associated with fair value adjustments to our derivative and warrant liability and amortization of debt issuance costs and debt discount to interest expense.
We also expect to continue to incur costs to comply with corporate governance, internal control, investor relations, disclosure and similar requirements applicable to public reporting companies.
Income Tax Expense Income tax expense for the year ended December 31, 2024, was $15.4 million as a result of a periodic evaluation of our tax positions. There was no income tax expense for the year ended December 31, 2023.
Income tax expense Income tax expense decreased by approximately $11.9 million, from $15.4 million for the year ended December 31, 2024, to $3.4 million for the year ended December 31, 2025, due to the periodic evaluation of our tax positions in the prior year.
On February 26, 2025, we and Zevra Denmark A/S entered into an asset purchase agreement (the “PRV Transfer Agreement”), pursuant to which we agreed to sell the PRV to the buyer. Pursuant to the PRV Transfer Agreement, the buyer agreed to pay us $150.0 million, payable in cash, upon the closing of the sale.
Pursuant to the PRV Transfer Agreement, the buyer agreed to pay us $150.0 million, payable in cash, upon the closing of the sale. On April 1, 2025, the asset sale was consummated, resulting in net proceeds of $148.3 million.
We cannot guarantee that our current commercialization strategies, or any strategy we adopt in the future, will be successful. For instance, we received milestone payments under the AZSTARYS License Agreement, but we cannot guarantee that we will earn any additional milestone or royalty payments under this agreement in the future.
We cannot guarantee that we will continue to receive reimbursements under the global EAP or the extent of our success in commercializing MIPLYFFA or OLPRUVA. While we have received milestone payments under the AZSTARYS License Agreement, we cannot guarantee that we will earn any additional milestone or royalty payments under this agreement in the future.
If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or altogether cease our research and development programs and/or commercialization efforts. 90 Table of Contents Critical Accounting Estimates This management ’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States.
Critical Accounting Estimates This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The following table summarizes our research and development costs for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Outsourced development costs directly identified to programs: MIPLYFFA $ 5,784 $ 5,579 OLPRUVA 1,776 - KP1077 10,486 14,458 APADAZ (1) - 2,446 Celiprolol 2,133 159 Other costs 496 - Total outsourced development costs directly identified to programs 20,675 22,642 Research and development costs not directly identified to programs: Personnel costs including cash compensation, benefits and stock-based compensation 19,781 11,970 Facilities costs 51 775 Other costs 1,588 4,419 Total research and development costs not directly allocated to programs 21,420 17,164 Total research and development expenses $ 42,095 $ 39,806 (1) On May 31, 2023, Zevra and KVK-Tech, Inc.
We track outsourced development costs by product candidate or development program, but we do not allocate personnel costs, other internal costs or external consultant costs to specific product candidates or development programs. 57 Table of Contents The following table summarizes our research and development costs for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Outsourced development costs directly identified to programs: MIPLYFFA $ 1,993 $ 5,784 OLPRUVA 218 1,776 KP1077 2 10,486 Celiprolol 4,498 2,133 Other costs 846 496 Total outsourced development costs directly identified to programs 7,557 20,675 Research and development costs not directly identified to programs: Personnel costs including cash compensation, benefits and stock-based compensation 3,463 19,781 Facilities costs 96 51 Other costs 1,627 1,588 Total research and development costs not directly allocated to programs 5,186 21,420 Total research and development expenses $ 12,743 $ 42,095 We anticipate that our research and development expenses will fluctuate in accordance with our strategic plan as we continue our efforts to advance the development of our product candidates.
Acer also had a pipeline of investigational product candidates, including celiprolol for the treatment of Vascular Ehlers-Danlos syndrome ("VEDS") in patients with a confirmed type III collagen (COL3A1) mutation.
This included the acquisition of OLPRUVA (sodium phenylbutyrate) for oral suspension, which was approved by the FDA on December 27, 2022, for the treatment of certain urea cycle disorders (“UCDs”). In addition, we acquired Acer's pipeline of investigational product candidates, including celiprolol for the treatment of Vascular Ehlers-Danlos syndrome (VEDS) in patients with a confirmed type III collagen (COL3A1) mutation.
To accomplish our mission, we are seeking to further expand our pipeline through both internal development and through our business development activities to collaborate, partner, and potentially acquire additional assets. We intend to target assets that will allow us to leverage the expertise and infrastructure that we have built to help mitigate risk and enhance our probability of success.
We intend to become the preferred partner for assets that we believe will allow us to leverage the expertise and infrastructure that we have built to help mitigate risk and enhance our probability of success. On September 20, 2024, the U.S.
The following summarizes the assumptions used for estimating the fair value of stock options granted to employees for the periods indicated: Year Ended December 31, 2024 2023 Risk-free interest rate 3.82% - 4.50% 3.34% - 4.79% Expected term (in years) 5.50 - 6.25 5.50 - 10.00 Expected volatility 89.85% - 91.32% 89.48% - 93.67% Expected dividend yield 0 0 Utilization of Net Operating Loss Carryforwards and Research and Development Credits As of December 31, 2024, we had federal net operating loss, or NOL, carryforwards of approximatel y $381.3 million, $118.5 million of which, if not utilized, will begin to expire in 2027 and $262.8 million of which have no expiration date.
The following summarizes the assumptions used for estimating the fair value of stock options granted to employees for the periods indicated: Year Ended December 31, 2025 2024 Risk-free interest rate 3.70% - 4.39% 3.82% - 4.50% Expected term (in years) 5.50 - 6.25 5.50 - 6.25 Expected volatility 81.54% - 87.31% 89.85% - 91.32% Expected dividend yield 0 0 66 Table of Contents Income Taxes We are subject to taxation in the United States and the Kingdom of Denmark.
The Company recorded refundable research and development tax credit as other income and not income tax under ASC 740 in the consolidated statement of operations for the year ended December 31, 2024.
We also have certain state net operating loss carryforwards totaling $312.2 million, which, if not utilized, will begin to expire in 2029. We recorded refundable research and development tax credits as interest and other income, net and not income tax under ASC 740 in the consolidated statements of operations for the year ended December 31, 2025.
In April 2024, the Company repaid the outstanding balance under the margin account with Wells Fargo, and upon such repayment, the margin capabilities were removed from the account. 88 Table of Contents Cash Flows The following table summarizes our cash flows for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, Period-to 2024 2023 Period Change Net cash used in operating activities $ (69,665 ) $ (33,535 ) $ (36,130 ) Net cash used in investing activities (22,161 ) (17,390 ) (4,771 ) Net cash provided by financing activities 82,108 28,464 53,644 Effect of exchange rate changes on cash and cash equivalents 454 44 410 Net decrease in cash and cash equivalents $ (9,264 ) $ (22,417 ) $ 13,153 Operating Activities For the year ended December 31, 2024, net cash used in operating activities of $69.7 million consisted of a net loss of $105.5 million and $6.6 mill ion in changes in working capital, partially offset by $42.5 m illion in adjustments for non-cash items.
Cash Flows The following table summarizes our cash flows for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, Period-to-Period Change 2025 2024 Net cash used in operating activities $ (1,598) $ (69,665) $ 68,067 Net cash provided by (used in) investing activities 18,127 (22,161) 40,288 Net cash provided by financing activities 12,064 82,108 (70,044) Effect of exchange rate changes on cash and cash equivalents 28 454 (426) Net increase (decrease) in cash and cash equivalents $ 28,621 $ (9,264) $ 37,885 Operating Activities For the year ended December 31, 2025, net cash used in operating activities of $1.6 million consisted of net income of $83.2 million, offset by $58.3 million in adjustments for non-cash items and changes in working capital of $26.5 million.
Revenue Revenue for the year ended December 31, 2024, wa s $23.6 m illion, a decrease of approximately $3.8 mi llion compared to revenue o f $27.5 mill ion for the year ended December 31, 2023.
Revenue, net Revenue for the year ended December 31, 2025, wa s $106.5 million, compared to revenue of $23.6 million for the year ended December 31, 2024, an increase of approximately $82.9 million.
Net loss was primarily attributable to our spending on research and development programs and operating costs, partially offset by revenue received under the AZSTARYS License Agreement, EAP and the Corium Consulting Agreement.
Net income was primarily attributable to the sale of the PRV, as well as revenue received from product sales of MIPLYFFA and OLPRUVA, royalties generated under the AZSTARYS License Agreement, and reimbursements received under the global EAP, partially offset by impairment and obsolescence charges and spend on R&D programs and operating costs.
General and Administrative General and administrative expenses increased by $20.6 million, from $34.3 million for the year-ended December 31, 2023, to $54.9 million for the year ended December 31, 2024.
This decrease was primarily driven by a decrease in spending for the Phase 2 clinical study for KP1077 and a decrease in personnel-related costs. Selling, general and administrative Selling, general and administrative expenses increased by approximately $22.7 million, from $54.9 million for the year ended December 31, 2024, to $77.6 million for the year ended December 31, 2025.
Cost of Product revenue Cost of product revenue for the year ended December 31, 2024, was $7.4 million, an increase of $5.2 mil lion compared to cost of product revenue of $2.2 m illion for the year ended December 31, 2023, primarily due to recognition of $5.7 million of inventory obsolescence related to OLPRUVA, an increase of $0.8 million in cost of MIPLYFFA product sales and royalties, and an increase of $0.2 million related to OLPRUVA product sales and royalties, partially offset by a decrease in royalty payments related to the AZSTARYS License Agreement of approximat ely $1.5 mi llion.
The increase was primarily due to $11.7 million in inventory obsolescence for the year ended December 31, 2025, compared to $5.7 million in inventory obsolescence for the year ended December 31, 2024, as well as royalty costs related to product sales of MIPLYFFA.
The decrease was primarily attributable to a decrease in sales under the AZSTARYS License Agreement of $14.2 million and a decrease in consulting revenue of $0.2 million, partially offset by an increase of $10.1 million in MIPLYFFA product sales, an increase in sales under the EAP of approximately $0.4 million, and an increase of $0.1 million in OLPRUVA product sales.
The increase was primarily attributable to an increase in product sales of MIPLYFFA of $77.3 million and an increase in revenues under the global EAP of $3.9 million.
MIPLYFFA, the first FDA-approved treatment for NPC, is indicated for use in combination with miglustat for the treatment of neurological manifestations of NPC in adult and pediatric patients two years of age and older. In addition, we received a transferable rare pediatric disease PRV in conjunction with the approval.
Food and Drug Administration (“FDA”) approved the New Drug Application (“NDA”) for MIPLYFFA, for use in combination with miglustat for the treatment of neurological manifestations of NPC in adult and pediatric patients 2 years of age and older, and MIPLYFFA became commercially available for dispense in the United States in November 2024.
Acer transaction costs were $2.2 million and are included in general and administrative expenses for the year-ended December 31, 2023. Other (Expense) Income Other (expense) income changed from $3.6 m illion of income for the year ended December 31, 2023, t o $3.1 milli on of expense for the year ended December 31, 2024.
This increase was primarily related to an increase in personnel-related costs, professional fees, and other expenses as we continue to build our commercial organization. Other income (expense) Other income (expense) increased from $3.1 million of expense for the year ended December 31, 2024, t o $149.6 million of income for the year ended December 31, 2025.
We typically use our employee, consultant and infrastructure resources across our development programs. We track outsourced development costs by product candidate or development program, but we do not allocate personnel costs, other internal costs or external consultant costs to specific product candidates or development programs.
We typically use our employee, consultant and infrastructure resources across our development programs.

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