10q10k10q10k.net

What changed in Aquestive Therapeutics, Inc.'s 10-K — 2024 vs 2025

vs

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

+441 added−422 removedSource: 10-K (2026-03-04) vs 10-K (2025-03-05)

Top changes in Aquestive Therapeutics, Inc.'s 2025 10-K

441 paragraphs added · 422 removed · 321 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

123 edited+32 added−20 removed196 unchanged
Biggest changeIn January 2021, we announced that we granted an exclusive license to MTPA for the commercialization in the United States of Exservan. MTPA is a multinational pharmaceutical company with a focus on patients with ALS. The product was launched by MTPA in June 2021.
Biggest changeMTPA is a multinational pharmaceutical company with a focus on patients with ALS. The product was launched by MTPA in June 2021. Under the terms of the MTPA license agreement, Aquestive was the exclusive manufacturer and supplier of Exservan for MTPA in the United States. In June 2024, the Company and MTPA mutually agreed to terminate the MTPA Licensing Agreement.
We manufacture licensed products at our facilities and anticipate that our current manufacturing capacity is sufficient for commercial quantities of our proprietary and licensed products and product candidates currently in development. Our facilities have been inspected by the FDA, TGA, and DEA and are subject to inspection by all applicable health agencies, including ANVISA and EMA.
We manufacture licensed products at our facilities and anticipate that our current manufacturing capacity is sufficient for commercial quantities of our licensed products and proprietary product candidates currently in development. Our facilities have been inspected by the FDA, TGA, and DEA, and are subject to inspection by all applicable health agencies, including ANVISA and EMA.
A drenaverse ™ – Our Epinephrine Prodrug Technology Our Adrenaverse™ platform contains a library of over twenty epinephrine prodrug product candidates intended to control absorption and conversion rates across a variety of possible dosage forms and delivery sites.
A drenaVerse ™ – Our Epinephrine Prodrug Platform Technology Our AdrenaVerse™ platform contains a library of over twenty epinephrine prodrug product candidates intended to control absorption and conversion rates across a variety of possible dosage forms and delivery sites.
In his first term, President Trump enacted Executive Orders directing the Secretary of HHS to eliminate protection under an Anti-Kickback Statute safe harbor for certain retrospective price reductions, ensure that payment by the Medicare program for certain Medicare Part B drugs is not higher than the payment by other comparable countries, allow certain low-income individuals purchase insulin and epinephrine, and implement a rulemaking plan to test a payment model, pursuant to which Medicare would receive most-favored-nation prices ( i.e ., the lowest price) for certain pharmaceutical products.
In his first term, President Trump enacted Executive Orders directing the Secretary of HHS to eliminate protection 21 under an Anti-Kickback Statute safe harbor for certain retrospective price reductions, ensure that payment by the Medicare program for certain Medicare Part B drugs is not higher than the payment by other comparable countries, allow certain low-income individuals purchase insulin and epinephrine, and implement a rulemaking plan to test a payment model, pursuant to which Medicare would receive most-favored-nation prices ( i.e ., the lowest price) for certain pharmaceutical products.
In assessing whether a drug candidate sponsor has demonstrated that its drug candidate provides a “major contribution to patient care” over and above the currently approved drugs, which is evaluated by the FDA on a case by case basis, there is no single objective standard and the FDA may, in appropriate circumstances, consider such factors as convenience of treatment location, duration of treatment, patient comfort, reduced treatment burden, advances in ease and comfort of drug administration, longer periods between doses, and potential for self-administration.
In assessing whether a drug candidate sponsor has demonstrated that its drug candidate provides a “major contribution to patient care” over and above the currently 12 approved drugs, which is evaluated by the FDA on a case by case basis, there is no single objective standard and the FDA may, in appropriate circumstances, consider such factors as convenience of treatment location, duration of treatment, patient comfort, reduced treatment burden, advances in ease and comfort of drug administration, longer periods between doses, and potential for self-administration.
While we believe we are in compliance with applicable environmental and other regulations, in each of these areas, as above, the FDA and other government agencies have broad regulatory and enforcement powers, including, among other things, the ability to levy fines and civil penalties, suspend or delay issuance of approvals, seize or recall products, and withdraw approvals, any one or more of which could have a material adverse effect on us.
While we believe we are in compliance with applicable environmental and other regulations, in each of these areas, as above, the FDA and other government agencies have broad regulatory and enforcement powers, including, among other things, the ability to levy fines 22 and civil penalties, suspend or delay issuance of approvals, seize or recall products, and withdraw approvals, any one or more of which could have a material adverse effect on us.
PharmFilm, which is similar in thickness and size to a postage stamp, can be administered via buccal, sublingual or lingual oral delivery. 9 We believe the innovative nature of our drug delivery platform has the potential to offer a number of meaningful advantages to patients, caregivers and physicians compared to current standard of care therapies, including: • faster, or at least equivalent, onset of action; • ease of administration and availability (no device required); • direct absorption into the bloodstream reducing or avoiding “first pass” effects in the liver; • reduced gastrointestinal, or GI, side effects; • positive dosing outcomes, especially for patients with physical ( e.g. , dysphagia) or psychological barriers to other methods of drug administration; • stable, durable, portable and quick dissolving (with or without water); • customizable delivery routes for tailored PK, profiles (buccal, sublingual or lingual); and • customizable taste profiles.
PharmFilm, which is similar in thickness and size to a postage stamp, can be administered via buccal, sublingual or lingual oral delivery. 3 We believe the innovative nature of our drug delivery platform has the potential to offer a number of meaningful advantages to patients, caregivers and physicians compared to current standard of care therapies, including: • faster, or at least equivalent, onset of action; • ease of administration and availability (no device required); • direct absorption into the bloodstream reducing or avoiding “first pass” effects in the liver; • reduced gastrointestinal, or GI, side effects; • positive dosing outcomes, especially for patients with physical ( e.g. , dysphagia) or psychological barriers to other methods of drug administration; • stable, durable, portable and quick dissolving (with or without water); • customizable delivery routes for tailored PK profiles (buccal, sublingual or lingual); and • customizable taste profiles.
AQST‑108, is a topically delivered adrenergic agonist prodrug, which we believe has the potential to support the re-establishment of immune privilege in the hair follicle and we are pursuing its development for the treatment of alopecia areata, which is an autoimmune disease leading to hair loss on the scalp, face and, in more severe cases, other body areas.
AQST‑108 is a topically delivered adrenergic agonist prodrug, which we believe has the potential to support the re-establishment of immune privilege in the hair follicle and we are pursuing its development for the possible treatment of alopecia areata, which is an autoimmune disease leading to hair loss on the scalp, face and, in more severe cases, other body areas.
For medicines that do not fall within these categories, an applicant has the option of submitting an application for a centralized marketing authorization to the EMA, as long as the medicine concerned is a significant therapeutic, scientific or technical innovation, or if its authorization would be in the interest of public health. National authorization procedures .
For medicines that do not fall within these categories, an applicant has the option of submitting an application for a centralized marketing authorization to the EMA, as long as the medicine concerned is a significant therapeutic, scientific or technical innovation, or if its authorization would be in the interest of public health. 20 National authorization procedures .
In addition, Title II of the Federal Drug Quality and Security Act of 2013, known as the DSCSA has imposed new “track and 22 trace” requirements on the distribution of prescription drug products by manufacturers, distributors, and other entities in the drug supply chain. These requirements are being phased in over a ten-year period.
In addition, Title II of the Federal Drug Quality and Security Act of 2013, known as the DSCSA has imposed new “track and trace” requirements on the distribution of prescription drug products by manufacturers, distributors, and other entities in the drug supply chain. These requirements are being phased in over a ten-year period.
However, such a product might be approved under an NDA, with supportive data from clinical trials. 505(b)(2) NDAs As an alternative path to FDA approval for modifications to formulations or uses of products previously approved by the FDA, an applicant may submit an NDA under Section 505(b)(2) of the FDCA.
However, such a product might be approved under an NDA, with supportive data from clinical trials. 17 505(b)(2) NDAs As an alternative path to FDA approval for modifications to formulations or uses of products previously approved by the FDA, an applicant may submit an NDA under Section 505(b)(2) of the FDCA.
Epinephrine is the standard of care in the treatment of anaphylaxis and is typically administered via intramuscular injection (IM), including manual auto-injectors such as EpiPen and Auvi-Q, which require patients or their caregivers to inject epinephrine into the patient’s thigh during an emergency allergic reaction.
Epinephrine is the standard of care in the treatment of anaphylaxis and is typically administered via intramuscular injection, including manual auto-injectors such as EpiPen and Auvi-Q, which require patients or their caregivers to inject epinephrine into the patient’s thigh during an emergency allergic reaction.
We licensed our intellectual property to Cynapsus Therapeutics, Inc., a company that was acquired by Sunovion for the commercialization of KYNMOBI under the Sunovion License 15 Agreement. KYNMOBI was approved by the FDA on May 21, 2020 and commercially launched by Sunovion in September 2020. On November 3, 2020, we entered into the Monetization Agreement.
We licensed our intellectual property to Cynapsus Therapeutics, Inc., a company that was acquired by Sunovion for the commercialization of KYNMOBI under the Sunovion License Agreement. KYNMOBI was approved by the FDA on May 21, 2020 and commercially launched by Sunovion in September 2020. On November 3, 2020, we entered into the Monetization Agreement.
Califf, for which the Company joined as a Defendant Intervenor) challenging the FDA's approval of Libervant for ARS patients aged between two and five years, the U.S. District for the District of Columbia issued a final appealable order entering a judgment in favor of Neurelis's motion for summary judgement and vacating the FDA’s approval of Libervant.
Califf, for which the Company joined as a Defendant Intervenor) challenging the FDA's approval of Libervant for ARS patients aged between two and five years, the U.S. District for the District of Columbia issued a final appealable order entering a judgment in favor of Neurelis's motion for summary judgment and vacating the FDA’s approval of Libervant.
Further, we may be 25 subject to contractual damages and reputational harm as result of such non-compliance. Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity.
Further, we may be subject to contractual damages and reputational harm as result of such non-compliance. Even if we are not determined to have violated these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity.
The data from these clinical studies formed the basis for the EoP2 meeting with the FDA in December of 2022, which provided clarity as to the FDA’s 11 expectations regarding key clinical program areas for design of revised dosing instructions expected for use in our pivotal clinical trial.
The data from these clinical studies formed the basis for the EOP2 meeting with the FDA in December of 2022, which provided clarity as to the FDA’s expectations regarding key clinical program areas for design of revised dosing instructions expected for use in our pivotal clinical trial.
Additionally, discounted pricing or rebates on purchases of pharmaceutical products must be offered under various federal and state healthcare programs, including: the Centers for Medicare & Medicaid Services’ Medicaid Drug Rebate 27 Program, Medicare Part B Program and Medicare Part D Manufacturer Discount Programs, the U.S.
Additionally, discounted pricing or rebates on purchases of pharmaceutical products must be offered under various federal and state healthcare programs, including: the Centers for Medicare & Medicaid Services’ Medicaid Drug Rebate Program, Medicare Part B Program and Medicare Part D Manufacturer Discount Programs, the U.S.
The companies operating in this market include multinational organizations, 17 established biotechnology companies, single product pharmaceutical and biotechnology companies, specialty pharmaceutical companies, and generic drug companies. Many of the larger, established organizations currently have commercialization capabilities in-house, and may have partnership or license agreements in place with smaller companies for commercialization rights.
The companies operating in this market include multinational organizations, established biotechnology companies, single product pharmaceutical and biotechnology companies, specialty pharmaceutical companies, and generic drug companies. Many of the larger, established organizations currently have commercialization capabilities in-house, and may have partnership or license agreements in place with smaller companies for commercialization rights.
For example, the Inflation Reduction Act of 2022 (“IRA”), signed into law by President Biden, included a number of significant drug pricing reforms, which include the establishment of a drug price negotiation program within the HHS (beginning in 2026) that requires manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers under Medicare Parts B and D to penalize price increases that outpace inflation, and a redesign of the Part D benefit, a part of which requires manufacturers to provide discounts on Part D drugs starting in 2025.
For example, the Inflation Reduction Act of 2022 (“IRA”), signed into law by President Biden, included a number of significant drug pricing reforms, which include the establishment of a drug price negotiation program within the HHS (beginning in 2026) that requires manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance, the establishment of rebate payment requirements on manufacturers under Medicare Parts B and D to penalize price increases that outpace inflation, and a redesign of the Part D benefit, a part of which requires manufacturers to provide discounts on Part D drugs.
After the FDA grants orphan product designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation, however, does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
After the FDA grants orphan product designation, the identity of the therapeutic agent and its 18 potential orphan use are disclosed publicly by the FDA. Orphan drug designation, however, does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.
For each state that does not choose to expand its Medicaid program, 26 there may be fewer insured patients overall, which could impact our sales of products for which we receive regulatory approval, business and financial condition.
For each state that does not choose to expand its Medicaid program, there may be fewer insured patients overall, which could impact our sales of products for which we receive regulatory approval, business and financial condition.
Other states prohibit various marketing-related activities, such as the provision of certain kinds of gifts or meals. Still other states require the reporting of certain pricing information, including information pertaining to and justification of price increases, or prohibit prescription drug price gouging.
Other states prohibit various marketing-related activities, such as the provision of certain kinds of gifts or meals. Still other states require the reporting of certain pricing information, including information pertaining to and justification of price increases, or prohibit 19 prescription drug price gouging.
Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy, and the FDA has the authority to prevent or limit further marketing of a product based on the results of these post-marketing programs.
Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy, and the FDA has the authority to prevent or limit further marketing of a product based on the results of these post- 16 marketing programs.
The process required by the FDA before a new drug may be marketed in the United States generally involves: • completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s GLP regulations; • submission to the FDA of an IND, application for human clinical testing which must become effective before human clinical trials may begin in the United States; • approval by an independent IRB at each clinical trial site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with current good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug product for each intended use; • submission to the FDA of an NDA; • satisfactory completion of an FDA pre-approval inspection of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s current cGMP regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; 20 • satisfactory completion of a potential review at a public FDA Advisory Committee meeting; which is a meeting of independent outside experts that provide advice and recommendations to the FDA; and • FDA review and approval of the NDA.
The process required by the FDA before a new drug may be marketed in the United States generally involves: • completion of preclinical laboratory and animal testing and formulation studies in compliance with the FDA’s GLP regulations; • submission to the FDA of an IND, application for human clinical testing which must become effective before human clinical trials may begin in the United States; • approval by an independent IRB at each clinical trial site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with current good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug product for each intended use; • submission to the FDA of an NDA; • satisfactory completion of potential clinical site inspection(s) to assure studies are conducted in accordance with Good Clinical Practice (GCP) regulations; • satisfactory completion of a potential FDA pre-approval inspection(s) of the facility or facilities at which the product is manufactured to assess compliance with the FDA’s current cGMP regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • satisfactory completion of a potential review at a public FDA Advisory Committee meeting; which is a meeting of independent outside experts that provide advice and recommendations to the FDA; and • FDA review and approval of the NDA.
The active programs in our complex molecule pipeline portfolio are: • Anaphylm (epinephrine) Sublingual Film – the first and only non-device based, orally delivered epinephrine product candidate in development that has shown clinical results comparable to auto-injectors (such as EpiPen ® and Auvi-Q ® ) for the emergency treatment of allergic reactions, including anaphylaxis.
The active programs in our complex molecule pipeline portfolio are: • Anaphylm ® (dibutepinephrine) sublingual film – the first and only non-device based, orally delivered epinephrine prodrug product candidate in development that has shown clinical results comparable to auto-injectors (such as EpiPen ® and Auvi-Q ® ) for the emergency treatment of allergic reactions, including anaphylaxis.
The FDA reserved judgement on the sufficiency of the Anaphylm clinical development program until completion of ongoing and planned studies, the results of which were presented at a pre-NDA interaction with the FDA on November 22, 2024. In March 2024, we released topline data from our pivotal clinical study for Anaphylm.
The FDA reserved judgment on the sufficiency of the Anaphylm clinical development program until completion of ongoing and planned studies, the results of which were presented at a pre-NDA interaction with the FDA on November 22, 2024. In March 2024, we released topline data from our pivotal clinical study for Anaphylm.
The single-dose, three-period, randomized crossover study was designed to compare the PK and PD of Anaphylm self-administered, Anaphylm healthcare provider (HCP)-administered, and Adrenalin IM injection HCP- administered. The primary PK parameters were the Cmax and the AUC exposures, at predefined time points after dosing in 36 healthy adult subjects.
The single-dose, three-period, randomized crossover study was designed to compare the PK and PD of Anaphylm self-administered, Anaphylm HCP-administered, and Adrenalin IM injection HCP-administered. The primary PK parameters were the Cmax and the AUC exposures, at predefined time points after dosing in 36 healthy adult subjects.
Pursuant to the terms of the Pharmanovia Amendment, we received a non-refundable payment of $2.0 million from Pharmanovia on execution of the Pharmanovia Amendment. • Sympazan ® – an oral soluble film formulation of clobazam used for the treatment of seizures associated with a rare, intractable form of epilepsy known as Lennox-Gastaut syndrome, or LGS, in patients aged two years of age or older, was approved by the FDA on November 1, 2018.
Pursuant to the terms of the Pharmanovia Amendment, we received a non-refundable payment of $2,000 from Pharmanovia on execution of the Pharmanovia Amendment. • Sympazan ® – an oral soluble film formulation of clobazam used for the treatment of seizures associated with a rare, intractable form of epilepsy known as Lennox-Gastaut syndrome, or LGS, in patients aged two years of age or older, was approved by the FDA on November 1, 2018.
The Company’s pipeline includes Anaphylm™ (epinephrine) Sublingual Film and AQST-108 (epinephrine) Topical Gel, which are both product candidates emerging from the Company’s Adrenaverse epinephrine prodrug platform. 10 Our Product Portfolio and Pipeline The following table outlines our proprietary growth drivers and licensed products.
The Company’s pipeline includes Anaphylm™ (dibutepinephrine) sublingual film and AQST-108 (epinephrine) topical gel, which are both product candidates emerging from the Company’s AdrenaVerse epinephrine prodrug platform. Our Product Portfolio and Pipeline The following table outlines our proprietary growth drivers and licensed products.
We believe that our Adrenaverse platform has demonstrated the ability to harness the therapeutic potential of epinephrine through highly differentiated prodrug formulations, which can achieve absorption, provide sustained local exposure and avoid systemic exposure.
We believe that our AdrenaVerse platform has demonstrated the ability to harness the therapeutic potential of epinephrine through highly differentiated prodrug formulations, which can achieve absorption, provide sustained local exposure and reduce systemic exposure.
We commercially launched Sympazan in December 2018. On October 26, 2022, we entered into a License Agreement with Otter Pharmaceuticals, LLC, a subsidiary of Assertio Holdings, Inc., pursuant to which we granted an exclusive, worldwide license of its intellectual property for Sympazan to Assertio during the term of that agreement for an upfront payment of $9.0 million.
We commercially launched Sympazan in December 2018. On October 26, 2022, we entered into a License Agreement with Otter Pharmaceuticals, LLC, a subsidiary of Assertio Holdings, Inc., pursuant to which we granted an exclusive, worldwide license of its intellectual property for Sympazan to Assertio during the term of that agreement for an upfront payment of $9,000.
We expect to file for FDA approval of these epilepsy patients aged between 6 and 12 years prior to the expiration of the orphan drug marketing exclusivity block of the nasal spray product. 18 In September 2023, the FDA accepted Aquestive's NDA for Libervant (diazepam) Buccal Film for ARS patients between two and five years of age.
We expect to file for FDA approval of these epilepsy patients aged between 6 and 11 years prior to the expiration of the orphan drug marketing exclusivity block of the nasal spray product. In September 2023, the FDA accepted Aquestive's NDA for Libervant (diazepam) Buccal Film for ARS patients between two and five years of age.
Our platform technology patents and/or patent applications further cover the products Libervant, Suboxone and Ondif, as well as our formulations of the molecules apomorphine, which is part of our licensed programs.
Our platform technology patents and/or patent applications further cover the product candidate Libervant™ and Suboxone® and Ondif® licensed products, as well as our formulations of the molecules apomorphine, which is part of our licensed programs.
Item 1. Business Overview Aquestive is a pharmaceutical company advancing medicines to bring meaningful improvement to patients’ lives through innovative science and delivery technologies. We are developing pharmaceutical products to deliver complex molecules through alternative administrations to invasive and inconvenient standard of care therapies.
Item 1. Business Overview Aquestive is a pharmaceutical company advancing medicines to bring meaningful improvement to patients' lives through innovative science and delivery technologies. We are developing pharmaceutical products to deliver complex molecules through administrations that are alternatives to invasive and inconvenient standard of care therapies.
The expiration dates for patents covering PharmFilm products and product candidates, and for pending applications if issued as patents, extend from 2024 to 2044, excluding any patent term adjustment or patent term extension. 19 We note that several of our issued patents are or have been involved in administrative proceedings, such as reexamination and inter partes review at the U.S.
The expiration dates for patents covering PharmFilm products and product candidates, and for pending applications if issued as patents, extend from 2025 to 2044, excluding any patent term adjustment or patent term extension. We note that several of our issued patents have been involved in administrative proceedings, such as reexamination and inter partes review at the U.S.
Libervant is the first and only orally administered rescue product for the treatment of seizure cluster in patients between ages two to five. The only other current FDA approved product for these ARS patients between two to five years of age is a diazepam rectal gel.
Libervant is the first and only orally administered rescue product for the treatment of seizure cluster in patients between ages two to five. The only other current FDA approved products for these ARS patients between two to five years of age is a diazepam rectal gel and a diazepam nasal spray.
Where our intellectual property is not protected by patents, we may seek to protect it through other means, including maintenance of trade secrets and careful protection of our proprietary information. Patents Our patent portfolio currently comprises at least 110 issued patents worldwide, of which at least 28 are U.S. patents, and more than 150 pending patent applications worldwide.
Where our intellectual property is not protected by patents, we may seek to protect it through other means, including maintenance of trade secrets and careful protection of our proprietary information. Patents Our patent portfolio currently comprises at least 140 issued patents worldwide, of which at least 30 are U.S. patents, and more than 110 pending patent applications worldwide.
Additionally, we subsequently received from Assertio a $6.0 million milestone payment upon its receipt of a notice of allowance from the United States Patent and Trademark Office of its patent application U.S. Serial No. 16/561,573, and payment of the related allowance fee.
Additionally, we subsequently received from Assertio a $6,000 milestone payment upon its receipt of a notice of allowance from the United States Patent and Trademark Office of its patent application U.S. Serial No. 16/561,573, and payment of the related allowance fee.
However, as a result of the orphan drug marketing exclusivity previously granted by the FDA to a nasal spray product, the FDA cannot give final approval for U.S. market access for Libervant for any age group of 6 years and above until the expiration or inapplicability of the orphan drug market exclusivity scheduled to occur in January, 2027.
However, as a result of the orphan drug marketing exclusivity previously granted by the FDA to Valtoco, the FDA cannot give final approval for U.S. market access for Libervant for any age group of 6 years and above until the expiration or inapplicability of the orphan drug market exclusivity scheduled to occur in January, 2027.
Proprietary and patent-protected compositions, formulations and manufacturing techniques and technology are employed to ensure that the API is distributed uniformly throughout the film and that target absorption levels are achieved.
Proprietary and patent-protected compositions, formulations and manufacturing techniques and technology, and methods of treatment are employed to ensure that the API is distributed uniformly throughout the film and that target absorption levels are achieved.
President Biden enacted Executive Orders to, among other things, reduce barriers to the PPACA marketplace, increase the affordability of the marketplace and increase eligibility for and coverage from the marketplace and Medicaid. On the first day of President Trump’s second term, he revoked many of President Biden’s Executive Orders, including such Orders impacting Medicaid and the PPACA.
President Biden enacted Executive Orders to, among other things, reduce barriers to the PPACA marketplace, increase the affordability of the marketplace and increase eligibility for and coverage from the marketplace and Medicaid. During President Trump’s second term, he revoked many of President Biden’s Executive Orders, including such Orders impacting Medicaid and the PPACA.
Anaphylm is the first and only orally delivered epinephrine product candidate in development to demonstrate clinical results comparable to autoinjectors such as EpiPen and Auvi-Q for the emergency treatment of allergic reactions, including anaphylaxis.
We believe that Anaphylm is the first and only orally delivered epinephrine prodrug product candidate in development to demonstrate clinical results comparable to autoinjectors such as EpiPen and Auvi-Q for the emergency treatment of allergic reactions, including anaphylaxis.
Among these are needle device-based treatments that have been accepted as standard of care treatment for many years, including autoinjectors such as EpiPen® marketed by Teva, and generics of EpiPen marketed by Viatris, Inc., Adrenaclick® marketed by Amneal Pharmaceuticals, LLC, and Auvi-Q® marketed by Kaleo Inc. and syringe device Symjepi® marketed by US Worldmeds.
Among these are needle device-based treatments that have been accepted as standard of care treatment for many years, including autoinjectors such as EpiPen ® marketed by Teva, and generics of EpiPen marketed by Viatris, Inc., Adrenaclick ® marketed by Amneal Pharmaceuticals, LLC, and Auvi-Q ® marketed by Kaleo Inc. and syringe device Symjep ® marketed by U.S. Worldmeds.
As of December 31, 2024, Suboxone branded products retain approximately 27% film market share as generic film-based products have penetrated this market. • Emylif ® – an oral film formulation of riluzole, has been developed by Aquestive for the treatment of ALS.
As of December 31, 2025, Suboxone branded products retain approximately 24% film market share as generic film-based products have penetrated this market. • Emylif ® – an oral film formulation of riluzole, has been developed by Aquestive for the treatment of ALS.
On April 26, 2024, the FDA approved Libervant for U.S. market access for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity ( i.e. , seizure clusters, acute repetitive seizures) (or ARS) that are distinct from a patient’s usual seizure pattern in patients with epilepsy between two to five years of age.
On April 26, 2024, the FDA approved Libervant ® (diazepam) Buccal Film for U.S. market access for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity ( i.e. , seizure clusters, ARS) that are distinct from a patient’s usual seizure pattern in patients with epilepsy between two to five years of age.
In the years ended December 31, 2024 and 2023, our licensed product portfolio generated $57,561 and $50,583 in revenue to Aquestive, respectively. Those products include: • Suboxone ® – a sublingual film formulation of buprenorphine and naloxone, respectively an opioid agonist and antagonist, that is marketed in the United States and internationally for the treatment of opioid dependence.
In the years ended December 31, 2025 and 2024, our licensed product portfolio generated $44,545 and $57,561 in revenue to Aquestive, respectively. Those products include: • Suboxone ® – a sublingual film formulation of buprenorphine and naloxone, respectively an opioid agonist and antagonist, that is marketed in the United States and internationally for the treatment of opioid dependence.
Under the Pharmanovia Agreement, Pharmanovia will lead the regulatory and commercialization activities for Libervant in the Territory and Aquestive will serve as the exclusive sole manufacturer and supplier of Libervant in the Territory. We received $3.5 million upon agreement execution.
Under the Pharmanovia Agreement, Pharmanovia will lead the regulatory and commercialization activities for Libervant in the Territory and Aquestive will serve as the exclusive sole manufacturer and supplier of Libervant in the Territory. We 9 received $3,500 upon agreement execution.
Suboxone was launched by our licensee, Indivior Inc., or Indivior, in 2010. Suboxone is the most prescribed branded product in its category and was the first sublingual film product for the treatment of opioid dependence. We are the sole and exclusive supplier and manufacturer of Suboxone and have produced over 2.7 billion doses of Suboxone since its launch in 2010.
Suboxone was launched by our licensee, Indivior, in 2010. Suboxone is the most prescribed branded product in its category and was the first sublingual film product for the treatment of opioid dependence. We are the sole and exclusive supplier and manufacturer of Suboxone and have produced over 3.0 billion doses of Suboxone since its launch in 2010.
The District Court's ruling was not based on grounds of safety or efficacy of Libervant, but rather on the grounds that the law granting ODE to the FDA approved nasal spray Valtoco for patients aged six and older should be interpreted to extend to children aged two to five, despite that Valtoco was not approved by the FDA to treat these younger patients.
The District Court's ruling was not based on grounds of safety or efficacy of Libervant, but rather on the grounds that the law granting ODE to the FDA approved nasal spray Valtoco for patients aged six years and older should be interpreted to extend to children aged two to five years, despite that Valtoco was not approved by the FDA to treat these younger patients at the time the FDA approved Libervant for this pediatric age group.
On February 24, 2025, Aquestive filed a request with the FDA that the FDA also confirms approval of Libervant for ARS patients aged between two and five years on the FDA regulatory grounds of clinical superiority over the other currently existing FDA approved ARS drugs, including confirming the FDA grant of ODE for Libervant for ARS patients aged between two and five years.
On February 24, 2025, Aquestive filed a request with the FDA that the FDA also confirm approval of Libervant for ARS patients aged between two and five years on the FDA regulatory grounds of clinical superiority over the other currently existing FDA approved ARS drugs.
The analysis showed that 87.5% of subjects maintained consistent film placement during disintegration. In the 12.5% of subjects where movement was noted, there were no significant differences in Cmax and Tmax. These findings further demonstrate that initial placement or subsequent movement of the sublingual film had no impact on epinephrine PK or PD comparability to epinephrine autoinjectors.
In the 12.5% of subjects where movement was noted, there were no significant differences in Cmax and Tmax. These findings further demonstrate that initial placement or subsequent movement of the sublingual film had no impact on epinephrine PK or PD comparability to epinephrine autoinjectors.
Under the terms of the license agreement with Haisco, as amended, Aquestive received a $7.0 million upfront payment in September 2022, and was to receive regulatory milestone payments, double-digit royalties on net sales of Exservan in China, and earn manufacturing revenue upon the sale of Exservan in China.
Under the terms of the license agreement with Haisco, as amended, Aquestive received a $7,000 upfront payment in September 2022, and was to receive regulatory milestone payments, double-digit royalties on net sales of Exservan in China, and earn manufacturing revenue upon the sale of Exservan in China. In June 2024, Aquestive and Haisco mutually agreed to terminate the Haisco Agreement.
However, overcoming the orphan drug marketing exclusivity determination is difficult to establish, with limited precedent, and there can be no assurance that the FDA will agree with our position seeking to overcome such market exclusivity and approve Libervant for U.S. market access for this age group of 6 years and older earlier than January 2027, the scheduled date for expiration of orphan drug market exclusivity for the FDA nasal spray product.
However, overcoming the orphan drug marketing exclusivity determination is difficult to establish, with limited precedent, and there can be no assurance that the FDA will agree with our position seeking to overcome such market exclusivity and approve Libervant for U.S. market access for any age group earlier than January 2027, the scheduled date for expiration of ODE for Valtoco.
Epilepsy treatment regimens typically consist of chronic and acute management therapies. Chronic medicines are used on a daily basis to suppress seizure activity. Approximately 1.1 million of those suffering from epilepsy will continue to suffer 16 with breakthrough seizures and may require an acute (rescue) management strategy.
Epilepsy treatment regimens typically consist of chronic and acute management therapies. Chronic medicines are used on a daily basis to suppress seizure activity. Approximately 1.1 million of those suffering from epilepsy will continue to suffer with breakthrough seizures and may require an acute (rescue) management strategy. Patients are routinely prescribed AEDs, as “maintenance” therapy to control chronic seizure activity.
In June 2024, Aquestive and Haisco mutually agreed to terminate the Haisco Agreement. See Part II Item 8. Financial Statements and Supplementary Data, Note 7, Material Agreements for details. • Ondif ® – an oral soluble film formulation of ondansetron, a 5-HT antagonist, was developed for the treatment of nausea and vomiting associated with chemotherapy and post-operative recovery.
See Part II Item 8. Financial Statements and Supplementary Data, Note 7, Material Agreements for details. • Ondif ® – an oral soluble film formulation of ondansetron, a 5-HT antagonist, was developed for the treatment of nausea and vomiting associated with chemotherapy and post-operative recovery.
For purposes of an NDA submission and approval, human clinical trials are typically conducted in the following sequential phases, which may overlap or be combined: Phase 1 In Phase 1, through the initial introduction of the drug into healthy human subjects or patients, the drug is tested to assess metabolism, pharmacokinetics, pharmacological actions, side effects associated with increasing doses, and, if possible, early evidence on effectiveness.
Sponsors of clinical trials generally must register and report, at the NIH-maintained website ClinicalTrials.gov, key parameters of certain clinical trials. 15 For purposes of an NDA submission and approval, human clinical trials are typically conducted in the following sequential phases, which may overlap or be combined: Phase 1 In Phase 1, through the initial introduction of the drug into healthy human subjects or patients, the drug is tested to assess metabolism, pharmacokinetics, pharmacological actions, side effects associated with increasing doses, and, if possible, early evidence on effectiveness.
One of the most effective benzodiazepines currently available for the treatment of acute seizures is diazepam. Diazepam has historically been marketed as a product administered rectally and more recently, a nasal spray product was introduced to the market for patients ages 6 years and up. Rectal administration of this drug presents a particular challenge for patients.
Diazepam has historically been marketed as a product administered rectally and more recently, a nasal spray product was introduced to the market for patients ages 6 years and up. Rectal administration of this drug presents a particular challenge for patients.
PharmFilm – Our Oral Film Technology We are presently the worldwide leader in oral film drug delivery and manufacturing, having historically supplied the substantial majority of the world’s oral films for prescription pharmaceutical use, and we have the capability to produce more than one billion commercial doses a year.
PharmFilm® – Our Oral Film Technology We are presently the worldwide leader in oral film drug delivery and manufacturing, having historically supplied the substantial majority of the world’s oral films for prescription pharmaceutical use and having shipped more than two billion doses to patients worldwide.
Human Capital As of December 31, 2024, we employed approximately 142 colleagues. All of our colleagues were employed in the U.S. Of these colleagues, 22 are directly involved in research and development, 93 are involved in manufacturing operations, and 27 are involved in business development and general and administrative activities. Our colleagues are not represented by a labor union.
Human Capital As of December 31, 2025, we employed approximately 147 colleagues. All of our colleagues were employed in the U.S. Of these colleagues, 22 are directly involved in R&D, 90 are involved in manufacturing operations, and 35 are involved in business development and general and administrative activities. Our colleagues are not represented by a labor union.
We also collaborate with pharmaceutical companies to bring new molecules to market using proprietary, best-in-class technologies, like PharmFilm®, and have proven drug development and commercialization capabilities. Our production facilities are located in Portage, Indiana, and our corporate headquarters and primary research laboratory facilities are based in Warren, New Jersey.
We are the exclusive manufacturer of these licensed products. Aquestive also collaborates with pharmaceutical companies to bring new molecules to market using proprietary, best-in-class technologies, like PharmFilm ® , and has proven drug development and commercialization capabilities. Our production facilities are located in Portage, Indiana, and our corporate headquarters and primary research laboratory facilities are based in Warren, New Jersey.
Environmental Safety We have few environmental risks but are committed to be part of the global solution. We run environmentally responsible laboratory waste collection, recycling and disposal programs. We educate and encourage our colleagues to be environmentally responsible.
Environmental Safety We have few environmental risks but are committed to be part of the global solution. We run environmentally responsible laboratory waste collection, recycling and disposal programs. We educate and encourage our colleagues to be environmentally responsible. As of December 31, 2025, we were in compliance with government and environmental regulations.
We are also advancing a product pipeline for the treatment of severe allergic reactions, including anaphylaxis, under the trade name "Anaphylm™", and our Adrenaverse epinephrine prodrug pipeline platform. We have five licensed commercialized products which are marketed by our licensees in the U.S. and around the world. We are the exclusive manufacturer of these licensed products.
We are advancing our late stage non-device based epinephrine prodrug product candidate for the treatment of severe allergic reactions, including anaphylaxis, under the "Anaphylm™" trade name, and our AdrenaVerse™ epinephrine prodrug pipeline platform. We have four licensed commercialized products which are marketed by our licensees in the U.S. and around the world.
Patients are routinely prescribed antiepileptic drugs, or AEDs, as “maintenance” therapy to control chronic seizure activity. Most AEDs specifically target neuronal excitation or neuronal inhibitory pathways. Patients are routinely prescribed benzodiazepines as “rescue” therapy for the management of acute seizure emergencies. Rescue therapies are administered as needed in the event of an acute seizure to rapidly terminate seizure activity.
Most AEDs specifically target neuronal excitation or neuronal inhibitory pathways. Patients are routinely prescribed benzodiazepines as “rescue” therapy for the management of acute seizure emergencies. Rescue therapies are administered as needed in the event of an acute seizure to rapidly terminate seizure activity. One of the most effective benzodiazepines currently available for the treatment of acute seizures is diazepam.
These issued patents and pending patent applications provide both process of making and composition of matter protection for our PharmFilm technology and products and product candidates, including Suboxone, Libervant and Anaphylm and our PharmFilm formulations of diazepam, clobazam, riluzole and epinephrine. These patents and, if issued as patents, pending patent applications will likely expire between 2024 and 2044.
These issued patents and pending patent applications provide process of making, composition of matter and method of treatment protection for our PharmFilm technology and products and product candidates, including Suboxone®, Libervant® and Anaphylm™ and our PharmFilm formulations of clobazam and riluzole. These granted patents will likely expire between 2036 and 2037.
In this event, the NDA must be resubmitted with the additional information and is subject to payment of additional user fees. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review.
The FDA may request additional information rather than accept an NDA for filing. In this event, the NDA must be resubmitted with the additional information and is subject to payment of additional user fees. The resubmitted application is also subject to review before the FDA accepts it for filing.
With the cGMP facilities in Indiana, we will continue to explore possible additional manufacturing efficiencies in 2025. We will also continue to consider our anticipated facilities and infrastructure needs as our product development grows. We have produced over 1.0 billion doses in the last five years.
With the cGMP facilities in Indiana, we will continue to explore possible additional manufacturing efficiencies in 2026. We will also continue to consider our anticipated facilities and infrastructure needs as our product development grows. We have produced over 2.5 billion doses since the Company's inception.
Failure to comply with applicable FDA or other requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending applications, clinical holds, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, withdrawal of product from the market, injunctions, fines, civil penalties and criminal prosecution.
Failure to comply with applicable FDA or other requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending applications, clinical holds, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, withdrawal of product from the market, injunctions, fines, civil penalties and criminal prosecution. 14 FDA approval is required before any new drug or dosage form, including a new use of a previously approved drug, can be marketed in the United States.
As of December 31, 2024, we were in compliance with government and environmental regulations. 28 Available Information We file with or submit to the SEC our annual, quarterly, periodic and current reports, proxy statements and other information meeting the informational requirements of the Exchange Act.
Available Information We file with or submit to the SEC our annual, quarterly, periodic and current reports, proxy statements and other information meeting the informational requirements of the Exchange Act.
Proprietary Growth Drivers Complex Molecule Portfolio We have developed a proprietary pipeline of complex molecule-based product candidates as alternatives to invasively administered standard of care therapeutics addressing large market opportunities.
Final approval of the Anaphylm proprietary name is conditioned on FDA approval of Anaphylm, if any. 4 Proprietary Growth Drivers Complex Molecule Portfolio We have developed a proprietary pipeline of complex molecule-based product candidates as alternatives to invasively administered standard of care therapeutics addressing large market opportunities.
We believe there is a significant market opportunity for a non-injectable, device-free, easier to administer product with a fast onset of action. A product with this profile could enable patients to conveniently and rapidly self-administer a reliable and accurate dose of epinephrine during an anaphylactic reaction, which we believe will improve patient compliance.
A product with this profile could enable patients to conveniently and rapidly self-administer a reliable and accurate dose of epinephrine during an anaphylactic reaction, which we believe will improve patient compliance.
Some of these state prohibitions apply to the referral of patients for healthcare services reimbursed by any insurer, not just federal healthcare programs such as Medicare and Medicaid. 24 The Federal False Claims Act prohibits anyone from knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services, including drugs, that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services.
The Federal False Claims Act prohibits anyone from knowingly presenting, or causing to be presented, for payment to federal programs (including Medicare and Medicaid) claims for items or services, including drugs, that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services.
The ANDA or 505(b)(2) application also will not be approved until any applicable non-patent exclusivity listed in the Orange Book for the branded reference drug has expired as described in further detail below. 23 Non-Patent Exclusivity In addition to patent exclusivity, the holder of the NDA for the listed drug may be entitled to a period of non-patent related exclusivity, during which the FDA cannot review, or in some cases, approve an ANDA or 505(b)(2) application that relies on the listed drug.
Non-Patent Exclusivity In addition to patent exclusivity, the holder of the NDA for the listed drug may be entitled to a period of non-patent related exclusivity, during which the FDA cannot review, or in some cases, approve an ANDA or 505(b)(2) application that relies on the listed drug.
However, due to an existing FDA regulatory grant of orphan drug market exclusivity for a diazepam nasal spray product sold by another 13 company for use in ARS patients 6 years of age and older, the FDA determined that Libervant was not yet eligible for marketing in the United States for this patient population of 12 years of age and older.
However, due to the existing FDA regulatory grant of ODE for Valtoco® for use in ARS patients 6 years of age and older, the FDA determined that Libervant was not yet eligible for marketing in the United States for this patient population of 12 years of age and older.
The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing.
The PDUFA defines the metrics FDA must meet as a result of the fee payment. The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the Agency’s threshold determination that it is sufficiently complete to permit substantive review.
The results of this study demonstrated that the primary endpoint of epinephrine PK biocomparability of the single administration of Anaphylm to the single administration of Adrenalin (epinephrine IM injection) and epinephrine autoinjectors in healthy adult subjects was met, as well as the secondary endpoints, which included evaluating the PK sustainability of Anaphylm following repeat administration and the safety and tolerability of Anaphylm following single and repeat administrations versus epinephrine IM injection and epinephrine autoinjectors.
The results of this study demonstrated that the primary endpoint, epinephrine PK biocomparability of the single administration of Anaphylm to the single administration of Adrenalin (epinephrine IM injection) and epinephrine autoinjectors in healthy adult subjects was met.
The pending patent applications will provide composition of matter and process of making protection for our PharmFilm dosage formulations of diazepam and epinephrine and, if issued as patents, will likely expire by 2040 and 2044, respectively. The projected expiration dates exclude any patent term adjustment or patent term extension.
The pending patent applications will provide composition of matter, process of making protection and method of treatment for our PharmFilm dosage formulations of diazepam and epinephrine and, if issued as patents, will likely expire by 2037 and 2045, respectively.
Also, there was no statistical difference between the Anaphylm self-administered and HCP- administered arms of the study based on a comparison of epinephrine exposures across the first 60 minutes post-administration. Topline PD data from the study showed no difference in the median increase in systolic blood pressure, diastolic blood pressure, and heart rate whether Anaphylm was self-administered or HCP-administered.
Also, there was no statistical difference between the Anaphylm self-administered and HCP- administered arms of the study based on a comparison of epinephrine exposures across the first 60 minutes post-administration.
We expect to file for FDA approval for use of Libervant for these ARS patients aged between 6 and 12 years prior to the expiration of the orphan drug marketing exclusivity block of the nasal spray product.
We expect to file for FDA approval for use of Libervant for these ARS patients aged between 6 and 11 years prior to the expiration of the ODE for Valtoco.
As a condition of NDA approval, the FDA may require a REMS to help ensure that the benefits of the drug outweigh the potential risks. If the FDA determines a REMS is necessary during review of the application, the drug sponsor must agree to the REMS plan at the time of approval.
If the FDA determines a REMS is necessary during review of the application, the drug sponsor must agree to the REMS plan at the time of approval.
On April 26, 2024, the FDA approved Libervant for U.S. market access for ARS patients between two and five years of age. Libervant is the first and only orally administered rescue product for the treatment of ARS patients between ages two and five years.
On April 26, 2024, the FDA approved Libervant for U.S. market access for ARS patients between two and five years of age. On December 18, 2024, the FDA granted seven years of ODE to Libervant for the treatment of ARS patients between two and five years of age.

… 95 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

110 edited+49 added−43 removed455 unchanged
Biggest changeWe expect our expenses will continue to be substantial in 2025 and future periods as we continue to: • clinically develop Anaphylm and provide supporting data needed for market approval from the FDA, anticipated NDA submission, pre-commercialization preparations including manufacturing and regulatory inspections and commercialization activities; • seek licensing and other transactions of our product candidates; • engage with the FDA to overcome the present stay on Libervant entering the U.S. market due to a competitor’s orphan drug market exclusivity status: • commercialize Libervant for ARS patients between two and five years of age; and • clinical development of our product candidate AQST-108. 30 We expect to continue to manage the timing and level of expenses in light of the declining Suboxone revenues, while focusing on the development and commercialization of Anaphylm.
Biggest changeWe expect our expenses will continue to be substantial in 2026 and future periods as we continue to: • clinically develop Anaphylm and provide supporting data needed for market approval from the FDA, anticipated amended NDA submission, pre-commercialization preparations including manufacturing and regulatory inspections and commercialization activities; • seek licensing and other transactions of our product candidates; • R&D of the Adrenaverse technology to support the future pipeline of product candidates; and • clinical development of our product candidate AQST-108.
The market price for our Common Stock may be influenced by many factors, including: • results of clinical trials of our current and any future product candidates or those of our competitors; • the success or regulatory approval of competitive drugs or therapies; • regulatory or legal developments in the United States and other countries, as to both our products and product candidates and those of our competitors; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to our current and any future product candidates or clinical development programs; 62 • the results of our efforts to discover, develop, acquire or in-license additional product candidates; • actual or anticipated changes in estimates as to financial results, development, clinical trials or regulatory approval timelines or recommendations by securities analysts; • our inability to obtain or delays in obtaining adequate drug supply for any approved drug or inability to do so at acceptable prices; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • variations in our financial results or those of companies that are perceived to be similar to us, or our failure to achieve anticipated financial results or funding; • market conditions in the pharmaceutical and biotechnology sectors; • inflation and rising interest rates; • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section.
The market price for our Common Stock may be influenced by many factors, including: • results of clinical trials of our current and any future product candidates or those of our competitors; • the success or regulatory approval of competitive drugs or therapies; • regulatory or legal developments in the United States and other countries, as to both our products and product candidates and those of our competitors; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to our current and any future product candidates or clinical development programs; • the results of our efforts to discover, develop, acquire or in-license additional product candidates; • actual or anticipated changes in estimates as to financial results, development, clinical trials or regulatory approval timelines or recommendations by securities analysts; • our inability to obtain or delays in obtaining adequate drug supply for any approved drug or inability to do so at acceptable prices; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • variations in our financial results or those of companies that are perceived to be similar to us, or our failure to achieve anticipated financial results or funding; • market conditions in the pharmaceutical and biotechnology sectors; • inflation and rising interest rates; • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section.
Our net loss and other operating results will be affected by numerous factors, including: • whether the FDA requires us to complete additional, unanticipated studies, trials or other activities prior to approving any of our current and future product candidates, which would likely delay any such approval; • our execution of other collaborative, licensing or similar arrangements and the timing of payments we may make or receive under these arrangements; • our limited cash resources and substantial indebtedness; • variations in the level of expenses related to our future development programs; • any product liability or intellectual property infringement lawsuit in which we may become involved; • delays in obtaining, failure to obtain, or adverse developments in obtaining FDA and other regulatory approval of our product candidates; • other regulatory developments affecting any of our other current and future product candidates, or the product candidates of our competitors; • the costs of pre-commercialization and commercialization of any of our approved products that we market ourselves; and • if any of our current or future product candidates receive regulatory approval, the level of underlying demand for such product candidate and wholesaler buying patterns.
Our net loss and other operating results will be affected by numerous factors, including: • whether the FDA requires us to complete additional, unanticipated studies, trials or other activities prior to approving any of our current and future product candidates, which would likely delay any such approval; • our execution of other collaborative, licensing or similar arrangements and the timing of payments we may make or receive under these arrangements; • our limited cash resources and substantial indebtedness; • variations in the level of expenses related to our future development programs; • any product liability or intellectual property infringement lawsuit in which we may become involved; • delays in obtaining, failure to obtain, or adverse developments in obtaining FDA and other regulatory approval of our product candidates; • other regulatory developments affecting any of our other current and future product candidates, or the product candidates of our competitors; • the costs of pre-commercialization and commercialization of any of our approved products that we market ourselves; and 53 • if any of our current or future product candidates receive regulatory approval, the level of underlying demand for such product candidate and wholesaler buying patterns.
Some of the expenses we expect to incur going forward include: • conducting clinical trials of our product candidates; • seeking regulatory approval for any of our product candidates that successfully complete clinical development; • maintaining, expanding and protecting our intellectual property portfolio; • acquiring or in-licensing new technologies or development-stage or approved products; • activities related to pre-commercialization and commercialization of products; • adding clinical, scientific, operational, financial, and management information systems personnel, including personnel to support our product development and to support our operations as a public company; and • experiencing incremental costs due to delays or encountering any issues with any of the above, including, but not limited to, failed or not fully successful trials, complex results, safety issues or other regulatory challenges.
Some of the expenses we expect to incur going forward include: 34 • conducting clinical trials of our product candidates; • seeking regulatory approval for any of our product candidates that successfully complete clinical development; • maintaining, expanding and protecting our intellectual property portfolio; • acquiring or in-licensing new technologies or development-stage or approved products; • activities related to pre-commercialization and commercialization of products; • adding clinical, scientific, operational, financial, and management information systems personnel, including personnel to support our product development and to support our operations as a public company; and • experiencing incremental costs due to delays or encountering any issues with any of the above, including, but not limited to, failed or not fully successful trials, complex results, safety issues or other regulatory challenges.
Market acceptance of our products and any product candidate for which we receive approval depends on a number of factors, including: 37 • the timing of market introduction of the product candidate as well as competitive products; • the clinical indications for which the product candidate is approved; • the potential and perceived advantages of such product candidate over alternative treatments; • favorable pricing and the availability of coverage and adequate reimbursement by third-party payors and government authorities; • relative convenience and ease of administration; • any negative publicity related to our or our competitors’ products that include the same active ingredient; • the prevalence and severity of adverse side effects, including limitations or warnings contained in a product’s FDA-approved labeling; and • the effectiveness of sales and marketing efforts.
Market acceptance of our products and any product candidate for which we receive approval depends on a number of factors, including: • the timing of market introduction of the product candidate as well as competitive products; • the clinical indications for which the product candidate is approved; • the potential and perceived advantages of such product candidate over alternative treatments; • favorable pricing and the availability of coverage and adequate reimbursement by third-party payors and government authorities; • relative convenience and ease of administration; • any negative publicity related to our or our competitors’ products that include the same active ingredient; • the prevalence and severity of adverse side effects, including limitations or warnings contained in a product’s FDA-approved labeling; and • the effectiveness of sales and marketing efforts.
If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, if the third parties need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our preclinical development activities or clinical trials may be extended, delayed, suspended or terminated and we may not be able to obtain regulatory approval for any of our product candidates; 29 • our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel; • our ability to protect our intellectual property and proprietary technology is uncertain; • we may be subject to damages resulting from claims that we, or our colleagues, have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition or non-solicitation agreements with our competitors; • our products and operations are subject to extensive governmental regulation, and failure to comply with applicable requirements could cause our business to suffer; • if we issue more shares of our Common Stock to raise capital, our current stockholders will incur substantial dilution; • we may be subject to damages resulting from litigation matters currently pending against Aquestive; • cybersecurity continues to affect businesses and could cause business interruption; and • adverse developments affecting the financial services industry which could adversely affect our current and projected business operations and our financial condition and results of operations.
If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected deadlines, if the third parties need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our preclinical development activities or clinical trials may be extended, delayed, suspended or terminated and we may not be able to obtain regulatory approval for any of our product candidates; • our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel; • our ability to protect our intellectual property and proprietary technology is uncertain; • we may be subject to damages resulting from claims that we, or our colleagues, have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition or non-solicitation agreements with our competitors; • our products and operations are subject to extensive governmental regulation, and failure to comply with applicable requirements could cause our business to suffer; • if we issue more shares of our Common Stock to raise capital, our current stockholders will incur substantial dilution; • we may be subject to damages resulting from litigation matters currently pending or that may arise in the future against Aquestive; • cybersecurity continues to affect businesses and could cause business interruption; and • adverse developments affecting the financial services industry which could adversely affect our current and projected business operations and our financial condition and results of operations.
Further, if any of our products cause serious or unexpected side effects after receiving market approval, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw their approval of the product or impose restrictions on its distribution; • the FDA may require implementation of a REMS; • regulatory authorities may require the addition of labeling statements, such as warnings or contraindications; • we may be required to change the way the product is administered or conduct additional clinical studies; • we could be sued and held liable for substantial damages for harm caused to patients; and • our reputation may suffer.
Further, if any of our products cause serious or unexpected side effects after receiving market approval, a number of potentially significant negative consequences could result, including: • regulatory authorities may withdraw their approval of the product or impose restrictions on its distribution; • the FDA may require implementation of a REMS; • regulatory authorities may require the addition of labeling statements, such as warnings or contraindications; • we may be required to change the way the product is administered or conduct additional clinical studies; • we could be sued and held liable for substantial damages for harm caused to patients; and 45 • our reputation may suffer.
The commencement and completion of clinical trials for our clinical product candidates may be delayed suspended or terminated as a result of many factors, including: • the FDA disagreeing as to the design, protocol or implementation of our clinical studies; • the delay or refusal of regulators or IRBs, to authorize us to commence a clinical trial at a prospective trial site; • changes in regulatory requirements, policies and guidelines; 36 • delays or failure to reach an agreement on acceptable terms with prospective CROs, and clinical trial sites; • the inability to enroll or delays in enrolling a sufficient number of patients in trials, particularly in orphan indications, to observe statistically significant treatment effects in the trial; • having clinical sites deviate from the trial protocol; • negative or inconclusive results from ongoing preclinical studies or clinical trials, which may require us to conduct additional preclinical studies or clinical trials or to abandon projects that we had expected to be promising; • reports from preclinical testing of other similar therapies that raise safety or efficacy concerns; • regulators or IRBs requiring that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or safety concerns, among others; • lower than anticipated retention rates of patients and volunteers in clinical trials; • our CROs or clinical trial sites failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, deviating from the protocol or dropping out of a trial; • delays in establishing the appropriate dosage levels; and • exceeding budgeted costs due to difficulty in accurately predicting costs associated with clinical trials.
The commencement and completion of clinical trials for our clinical product candidates may be delayed suspended or terminated as a result of many factors, including: • the FDA disagreeing as to the design, protocol or implementation of our clinical studies; • the delay or refusal of regulators or IRBs, to authorize us to commence a clinical trial at a prospective trial site; • changes in regulatory requirements, policies and guidelines; 25 • delays or failure to reach an agreement on acceptable terms with prospective CROs, and clinical trial sites; • the inability to enroll or delays in enrolling a sufficient number of patients in trials, particularly in orphan indications, to observe statistically significant treatment effects in the trial; • having clinical sites deviate from the trial protocol; • negative or inconclusive results from ongoing preclinical studies or clinical trials, which may require us to conduct additional preclinical studies or clinical trials or to abandon projects that we had expected to be promising; • reports from preclinical testing of other similar therapies that raise safety or efficacy concerns; • regulators or IRBs requiring that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or safety concerns, among others; • lower than anticipated retention rates of patients and volunteers in clinical trials; • our CROs or clinical trial sites failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, deviating from the protocol or dropping out of a trial; • delays in establishing the appropriate dosage levels; and • exceeding budgeted costs due to difficulty in accurately predicting costs associated with clinical trials.
In addition, regardless of merit or eventual outcome, product liability claims or false marketing claims may result in: • impairment of our business reputation; • withdrawal of clinical study participants; 48 • substantial costs due to litigation; • distraction of management’s attention from our primary business; • substantial monetary awards to patients or other claimants; • the inability to commercialize our licensed products and product candidates; and • decreased demand for our licensed products or product candidates, if approved for commercial sale.
In addition, regardless of merit or eventual outcome, product liability claims or false marketing claims may result in: • impairment of our business reputation; • withdrawal of clinical study participants; • substantial costs due to litigation; • distraction of management’s attention from our primary business; • substantial monetary awards to patients or other claimants; • the inability to commercialize our licensed products and product candidates; and • decreased demand for our licensed products or product candidates, if approved for commercial sale.
To the extent that we raise additional funds through collaborative or licensing arrangements, it may be necessary to relinquish some rights to our intellectual property or grant licenses on terms that are not favorable to us. In addition, payments made by potential collaborators or licensees generally will depend upon our achievement of negotiated 31 development, regulatory and sales milestones.
To the extent that we raise additional funds through collaborative or licensing arrangements, it may be necessary to relinquish some rights to our intellectual property or grant licenses on terms that are not favorable to us. In addition, payments made by potential collaborators or licensees generally will depend upon our achievement of negotiated development, regulatory and sales milestones.
If we are unable to enter into any development and commercial collaborations and/or sales and marketing arrangements on acceptable terms, if at all, we may be unable to successfully develop and seek regulatory approval for our product or product candidates and/or effectively market and sell approved products, if any, in all of the territories outside of the United States where it may otherwise be valuable to do so.
If we are unable to enter into any development and commercial collaborations and/or sales and marketing arrangements on acceptable terms, if at all, we may be 40 unable to successfully develop and seek regulatory approval for our product or product candidates and/or effectively market and sell approved products, if any, in all of the territories outside of the United States where it may otherwise be valuable to do so.
In addition, widespread investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all.
In addition, widespread investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on 58 acceptable terms or at all.
Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for 42 physicians under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The introduction of the Medicare quality payment program has shifted the focus of physician reimbursement from volume to value, encouraging higher quality and more cost-effective care.
Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The introduction of the Medicare quality payment program has shifted the focus of physician reimbursement from volume to value, encouraging higher quality and more cost-effective care.
In addition, our competitors may file citizen petitions with the FDA in an attempt to persuade the FDA that our product candidates, or the clinical studies that support their approval, contain deficiencies. Such actions by our competitors could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2) or other filing pathways.
In addition, our competitors may submit citizen petitions with the FDA in an attempt to persuade the FDA that our product candidates, or the clinical studies that support their approval, contain deficiencies. Such actions by our competitors could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2) or other filing pathways.
We and our CROs are required to comply with FDA laws and regulations regarding current good clinical practice, or GCP, which are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Conference on Harmonization, or 43 ICH, guidelines for all of our products in clinical development.
We and our CROs are required to comply with FDA laws and regulations regarding current good clinical practice, or GCP, which are also required by the Competent Authorities of the Member States of the European Economic Area and comparable foreign regulatory authorities in the form of International Conference on Harmonization, or ICH, guidelines for all of our products in clinical development.
Because of our indebtedness: • we may have difficulty satisfying our obligations with respect to our existing indebtedness including the repayment of such indebtedness; • we may have difficulty obtaining financing in the future (and we have substantial restrictions on incurring any additional indebtedness under our current debt instruments) for working capital, capital expenditures, acquisitions or other purposes; • we will need to use a substantial portion of our available cash flow to pay interest and principal on our debt, which will reduce the amount of money available to finance our operations and other business activities; • we may be more vulnerable to general economic downturns and adverse industry conditions; • if cash flow from revenues from licensed product or collaborative arrangements are insufficient to satisfy our obligations with respect to our existing indebtedness, we may be forced to seek to sell assets (subject to obtaining consent under the Indenture) or seek additional capital, which we may not be able to accomplish on favorable terms, if at all; • we could be limited in our flexibility in planning for, or reacting to, changes in our business and in our industry in general; • we could be placed at a competitive disadvantage compared to our competitors that have less debt, less debt restriction or less restrictive debt covenants; • our failure to comply with the financial and other restrictive covenants in our debt instruments which, among other things, limits our ability to incur additional debt and sell or dispose of assets, could result in an event of default that, if not cured or waived, would have a material adverse effect on our business or prospects; and 33 • our tangible and intangible assets, including our intellectual property, are subject to first priority liens and may be used to satisfy our outstanding debt.
Because of our indebtedness: • we may have difficulty satisfying our obligations with respect to our existing indebtedness including the repayment of such indebtedness; • we may have difficulty obtaining financing in the future (and we have substantial restrictions on incurring any additional indebtedness under our current debt instruments) for working capital, capital expenditures, acquisitions or other purposes; • we will need to use a substantial portion of our available cash flow to pay interest and principal on our debt, which will reduce the amount of money available to finance our operations and other business activities; • we may be more vulnerable to general economic downturns and adverse industry conditions; 36 • if cash flow from revenues from licensed product or collaborative arrangements are insufficient to satisfy our obligations with respect to our existing indebtedness, we may be forced to seek to sell assets (subject to obtaining consent under the Indenture Agreement) or seek additional capital, which we may not be able to accomplish on favorable terms, if at all; • we could be limited in our flexibility in planning for, or reacting to, changes in our business and in our industry in general; • we could be placed at a competitive disadvantage compared to our competitors that have less debt, less debt restriction or less restrictive debt covenants; • our failure to comply with the financial and other restrictive covenants in our debt instruments which, among other things, limits our ability to incur additional debt and sell or dispose of assets, could result in an event of default that, if not cured or waived, would have a material adverse effect on our business or prospects; and • our tangible and intangible assets, including our intellectual property, are subject to first priority liens and may be used to satisfy our outstanding debt.
These products may compete with our products or product candidates, and our and our licensors’ patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. 53 In addition, we may decide to abandon national and regional patent applications before grant. The examination of each national or regional patent application is an independent proceeding.
These products may compete with our products or product candidates, and our and our licensors’ patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. In addition, we may decide to abandon national and regional patent applications before grant. The examination of each national or regional patent application is an independent proceeding.
In addition, we are subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with an interested stockholder for a period of three years following the date on which the stockholder became an interested stockholder, unless such transactions are approved by our board of directors.
In addition, we are subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with an interested stockholder for a period of three years following the date on which the stockholder became an interested stockholder, 54 unless such transactions are approved by our board of directors.
In addition, the FDA and other regulatory authorities outside the United States conduct independent reviews of proposed product names for pharmaceuticals, including an evaluation of the potential for confusion with other pharmaceutical product names for medications. These regulatory authorities may also object to a proposed product name if they believe the name inappropriately makes or implies a therapeutic claim.
In addition, the FDA and other regulatory 52 authorities outside the United States conduct independent reviews of proposed product names for pharmaceuticals, including an evaluation of the potential for confusion with other pharmaceutical product names for medications. These regulatory authorities may also object to a proposed product name if they believe the name inappropriately makes or implies a therapeutic claim.
Financial Statements and Supplementary Data, Note 23, Contingencies to our financial statement s. Any product liability claims, or false marketing claims, could have a material adverse effect on our business, financial position, results of operations and future growth prospects. If we cannot successfully defend against product liability claims or false marketing claims, we could incur substantial liability and costs.
Financial Statements and Supplementary Data, Note 23, Contingencies to our financial statement s. Any product liability claims, or false marketing claims, could have a material adverse effect on our 42 business, financial position, results of operations and future growth prospects. If we cannot successfully defend against product liability claims or false marketing claims, we could incur substantial liability and costs.
In many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. There are situations, however, 56 in which non-compliance can result in abandonment or lapse of the patents or patent applications, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
In many cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. There are situations, however, in which non-compliance can result in abandonment or lapse of the patents or patent applications, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected. Our colleagues, principal investigators, consultants and agents may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected. 56 Our colleagues, principal investigators, consultants and agents may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
We may lose any of the challenged patents entirely, or we may have to amend the scope of claims to an extent which may be considered insufficient to cover our products or product candidates. If any of those scenarios were to occur, we might lose our competitive advantage in our market, and our business could be materially affected.
We may lose any of the challenged patents entirely, or we may have to amend the scope of claims to an extent which 49 may be considered insufficient to cover our products or product candidates. If any of those scenarios were to occur, we might lose our competitive advantage in our market, and our business could be materially affected.
Such characteristics could cause us, our IRBs, clinical trial sites, the FDA or other regulatory authorities to interrupt, delay or halt clinical trials and could result in a more 50 restrictive label or the delay, denial or withdrawal of regulatory approval, which may harm our business, financial condition and prospects significantly.
Such characteristics could cause us, our IRBs, clinical trial sites, the FDA or other regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay, denial or withdrawal of regulatory approval, which may harm our business, financial condition and prospects significantly.
While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its 61 standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.
While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.
We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that 57 event, we would be unable to further develop and commercialize one or more of our products or product candidates, which could harm our business significantly.
We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize one or more of our products or product candidates, which could harm our business significantly.
Those factors may include the likelihood of approval by the FDA or foreign regulatory authorities, the potential market for the product or product candidate, the costs and complexities of delivering such product or 46 product candidate to patients, competing products, and industry and market conditions generally. Collaborations are complex and time-consuming to negotiate and document.
Those factors may include the likelihood of approval by the FDA or foreign regulatory authorities, the potential market for the product or product candidate, the costs and complexities of delivering such product or product candidate to patients, competing products, and industry and market conditions generally. Collaborations are complex and time-consuming to negotiate and document.
For each drug product, we must demonstrate its efficacy and monitor its safety throughout the process. If development within these parameters is unsuccessful, our business could be harmed, and our stock price could be adversely affected. We currently have product candidates in preclinical and clinical development.
For each drug product, we must demonstrate its 24 efficacy and monitor its safety throughout the process. If development within these parameters is unsuccessful, our business could be harmed, and our stock price could be adversely affected. We currently have product candidates in preclinical and clinical development.
Even if we do complete development and obtain regulatory approval for our product candidates, our product candidates may not gain market acceptance among patients, physicians, nurses, pharmacists, the medical community or third-party payors, which is critical to commercial success.
Even if we do complete development and obtain regulatory approval for our product candidates, our product candidates may not gain market acceptance among patients, physicians, nurses, pharmacists, the medical community or 26 third-party payors, which is critical to commercial success.
Changes in either patent laws or in interpretations of patent laws in the United States and other countries may materially diminish the value of our intellectual property or narrow the scope of our patent protection. 54 We have in the past and are likely in the future to be, involved in lawsuits to protect or enforce our patents.
Changes in either patent laws or in interpretations of patent laws in the United States and other countries may materially diminish the value of our intellectual property or narrow the scope of our patent protection. We have in the past and are likely in the future to be, involved in lawsuits to protect or enforce our patents.
Should any of these events occur, they could significantly harm our business, results of operations and prospects. 58 Risks Related to Ownership of Our Common Stock Our quarterly operating results may fluctuate significantly, and these fluctuations could cause our stock price to decline. We expect our operating results to continue to be subject to significant quarterly and annual fluctuations.
Should any of these events occur, they could significantly harm our business, results of operations and prospects. Risks Related to Ownership of Our Common Stock Our quarterly operating results may fluctuate significantly, and these fluctuations could cause our stock price to decline. We expect our operating results to continue to be subject to significant quarterly and annual fluctuations.
In addition, any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely.
In addition, any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence 39 new clinical trials at additional expense or terminate clinical trials completely.
If we or our licensors encounter difficulties in protecting, or are otherwise precluded from effectively protecting, the intellectual property rights important for our business in such jurisdictions, the value of these rights may be diminished, and we may face additional competition from others in those jurisdictions.
If we or our licensors encounter difficulties in protecting, or are otherwise precluded from effectively protecting, the 48 intellectual property rights important for our business in such jurisdictions, the value of these rights may be diminished, and we may face additional competition from others in those jurisdictions.
If we are unable to obtain regulatory approval, or any approval contains significant limitations, we may not be 35 able to obtain sufficient funding or generate sufficient revenue to continue the development of that product candidate or any other product candidate that we may in-license, develop or acquire in the future.
If we are unable to obtain regulatory approval, or any approval contains significant limitations, we may not be able to obtain sufficient funding or generate sufficient revenue to continue the development of that product candidate or any other product candidate that we may in-license, develop or acquire in the future.
Approval processes vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking foreign regulatory approval could result in difficulties and costs and require additional non-clinical studies or clinical trials which could be costly and time consuming.
Approval processes vary among countries and can involve additional product testing and validation and additional administrative review periods. Seeking foreign regulatory 46 approval could result in difficulties and costs and require additional non-clinical studies or clinical trials which could be costly and time consuming.
Registration of these shares under the Securities Act has resulted in a substantial amount of these shares becoming freely 63 tradable without restriction under the Securities Act. Any sales of securities by these stockholders could have a material adverse effect on the trading price of our Common Stock.
Registration of these shares under the Securities Act has resulted in a substantial amount of these shares becoming freely tradable without restriction under the Securities Act. Any sales of securities by these stockholders could have a material adverse effect on the trading price of our Common Stock.
It is also possible that we or our licensors may fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them.
It is also possible that we or our licensors may fail to identify patentable aspects of inventions made in the course 47 of development and commercialization activities before it is too late to obtain patent protection on them.
Because we utilize the 505(b)(2) regulatory pathway for the approval of our products and product candidates, we rely in whole or in part on studies conducted by third parties related to those approved drug products.
Because we utilize the 505(b)(2) regulatory pathway for the approval of our 51 products and product candidates, we rely in whole or in part on studies conducted by third parties related to those approved drug products.
Sequestration may result in additional reductions in Medicare and other healthcare funding and, if we obtain regulatory approvals, may otherwise affect the prices we may obtain for our product candidates or the frequency with which our product candidates may be prescribed or used if approved.
Sequestration may result in additional reductions in Medicare and other healthcare funding and, if we obtain regulatory approvals, may otherwise affect the prices we may obtain for our product 31 candidates or the frequency with which our product candidates may be prescribed or used if approved.
If payors are not adequately reimbursed for our licensed products or product candidates, they may reduce or discontinue purchases of them, which would result in a significant shortfall in achieving revenue expectations and negatively impact our business, prospects and financial condition. 40 Our relationships with customers, physicians, and third-party payors will be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations.
If payors are not adequately reimbursed for our licensed products or product candidates, they may reduce or discontinue purchases of them, which would result in a significant shortfall in achieving revenue expectations and negatively impact our business, prospects and financial condition. 29 Our relationships with customers, physicians, and third-party payors will be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and security laws, and other healthcare laws and regulations.
If we are not able to achieve and maintain regulatory compliance, we may not be permitted to market or 51 license our products and/or product candidates, which would materially adversely affect our ability to generate revenue and achieve or maintain profitability.
If we are not able to achieve and maintain regulatory compliance, we may not be permitted to market or license our products and/or product candidates, which would materially adversely affect our ability to generate revenue and achieve or maintain profitability.
In such event, we may be unable to 55 further practice our technologies or develop and commercialize any of our product candidates at issue, which could significantly harm our business.
In such event, we may be unable to further practice our technologies or develop and commercialize any of our product candidates at issue, which could significantly harm our business.
Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. 41 It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.
Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. 30 It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.
The following examples are illustrative: • others may be able to make products that are similar to our products or product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed; • we or any potential future licensors might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or have exclusively licensed may be held invalid or unenforceable as a result of legal challenges by our competitors; • issued patents that we own or have exclusively licensed may not provide coverage for all aspects of our products or product candidates in all countries; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; and • the patents of others may have an adverse effect on our business.
The following examples are illustrative: • others may be able to make products that are similar to our products or product candidates but that are not covered by the claims of the patents that we own or have exclusively licensed; • we or any potential future licensors might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not lead to issued patents; • issued patents that we own or have exclusively licensed may be held invalid or unenforceable as a result of legal challenges by our competitors; • issued patents that we own or have exclusively licensed may not provide coverage for all aspects of our products or product candidates in all countries; • our competitors might conduct R&D activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we may not develop additional proprietary technologies that are patentable; and • the patents of others may have an adverse effect on our business.
Variations may result from, among other factors: • the timing of FDA or any other regulatory approval, delay in any FDA or other regulatory approvals, or failure to obtain any such FDA or other regulatory approvals; • competitor’s product candidates obtaining FDA or other regulatory approval, which may include orphan drug market exclusivity for seven years in the U.S., before our product has received any such regulatory approval and/ 32 or orphan drug exclusivity, or obtaining other FDA marketing exclusivity that blocks U.S. market access for our product candidates; • the timing of process validation for particular product candidates; • the timing of addressing any additional data required to obtain FDA approval of Anaphylm and delays as a result thereof; • changes in the timing of and the amount we spend to research, develop, acquire, license or promote new product candidates; • the timing, amount we spend on, and outcome of our research, development, preclinical studies and clinical trial programs; • serious or unexpected health or safety concerns related to our products or product candidates; • the introduction of new branded and generic products by others that render our product candidates obsolete, subject to greater competition or noncompetitive; • our ability to maintain selling prices and gross margins on our products; • changes in coverage and reimbursement policies of health plans and other health insurers, including changes to Medicare, Medicaid and similar government healthcare programs; • our ability to comply with complex governmental regulations applicable to many aspects of our business; • increases in the cost of raw materials used to manufacture our products and product candidates; • manufacturing and supply interruptions, including product rejections or recalls due to failure to comply with manufacturing specifications or current Good Manufacturing Practices; • timing of revenue recognition related to our collaboration agreements; • our ability to fund the commercialization of, commence a commercial operation, and actually commercialize our proprietary products and product candidates, if approved by the FDA; • our ability and the significant cost to protect our intellectual property and avoid infringing the intellectual property of others and any adverse developments in any related legal proceeding or in other legal proceedings of any nature; and • the outcome and cost of existing or possible future litigation with third parties.
Variations may result from, among other factors: • the timing of FDA or any other regulatory approval, delay in any FDA or other regulatory approvals, or failure to obtain any such FDA or other regulatory approvals; • competitor’s product candidates obtaining FDA or other regulatory approval, which may include orphan drug market exclusivity for seven years in the U.S., before our product has received any such regulatory approval and/or orphan drug exclusivity, or obtaining other FDA marketing exclusivity that blocks U.S. market access for our product candidates; • the timing of process validation for particular product candidates; • the timing of addressing issues raised in the CRL and collecting the human factors and clinical data required to obtain FDA approval of Anaphylm and delays as a result thereof; • changes in the timing of and the amount we spend to research, develop, acquire, license or promote new product candidates; • the timing, amount we spend on, and outcome of our research, development, preclinical studies and clinical trial programs; • serious or unexpected health or safety concerns related to our products or product candidates; • the introduction of new branded and generic products by others that render our product candidates obsolete, subject to greater competition or noncompetitive; • our ability to maintain selling prices and gross margins on our products; • changes in coverage and reimbursement policies of health plans and other health insurers, including changes to Medicare, Medicaid and similar government healthcare programs; • our ability to comply with complex governmental regulations applicable to many aspects of our business; • increases in the cost of raw materials used to manufacture our products and product candidates; • manufacturing and supply interruptions, including product rejections or recalls due to failure to comply with manufacturing specifications or current Good Manufacturing Practices; • timing of revenue recognition related to our collaboration agreements; • our ability to fund the commercialization of, commence a commercial operation, and actually commercialize our proprietary products and product candidates, if approved by the FDA; • our ability and the significant cost to protect our intellectual property and avoid infringing the intellectual property of others and any adverse developments in any related legal proceeding or in other legal proceedings of any nature; and • the outcome and cost of existing or possible future litigation with third parties.
In 2022, the Biden administration signed into law the Inflation Reduction Act, which included a number of significant drug pricing reforms, including the establishment of a drug price negotiation program within the HHS that, starting in 2026, will require manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance; the establishment, beginning in 2023, of rebate payment requirements on manufacturers under Medicare Parts B and D to penalize price increases that outpace inflation; and a redesign of the Part D benefit, as part of which manufacturers are required to provide discounts on Part D drugs, beginning in 2025.
In 2022, the Biden administration signed into law the Inflation Reduction Act, which included a number of significant drug pricing reforms, including the establishment of a drug price negotiation program within the HHS that, starting in 2026, will require manufacturers to charge a negotiated “maximum fair price” for certain selected drugs or pay an excise tax for noncompliance; the establishment of rebate payment requirements on manufacturers under Medicare Parts B and D to penalize price increases that outpace inflation; and a redesign of the Part D benefit, as part of which manufacturers are required to provide discounts on Part D drugs.
If adequate funds are not available for our liquidity needs and cash requirements, as and when needed, from the sources referred to above or otherwise, or at all, we would be required to engage in expense management activities such as reducing staff, delaying, significantly scaling back, or even discontinuing some or all of our current or planned research and development programs and clinical and other product development activities, or reducing our future commercialization efforts and otherwise significantly reducing our other spending and adjusting our operating plan, and we would need to seek to take other steps intended to improve our liquidity.
If adequate funds are not available for our liquidity needs and cash requirements, as and when needed, from the sources referred to above or otherwise, or at all, we would be required to engage in expense management activities such as reducing staff, delaying, significantly scaling back, or even discontinuing some or all of our current or planned R&D programs and clinical and other product development activities, or reducing our future commercialization efforts and otherwise significantly reducing our other spending and adjusting our operating plan, and we would need to seek to take other steps intended to improve our liquidity.
HIPAA imposes privacy, security and breach notification obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services that involve creating, receiving, maintaining or transmitting individually identifiable health information (“protected health information,” or “PHP”) for or on behalf of such covered entities, and their covered subcontractors.
HIPAA imposes privacy, security and breach notification obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services that involve creating, receiving, maintaining or transmitting individually identifiable health information (“protected health information,” or “PHI”) for or on behalf of such covered entities, and their covered subcontractors.
Included as part of the 2024 Registration Statement are: (i) a base prospectus registering the offer, issuance and sale of up to $250,000 worth of Common Stock, preferred stock, debt securities, warrants, rights and units and (ii) the $100,000 ATM facility prospectus. The remaining authorized balance of the ATM facility was $100,000 as of December 31, 2024.
Included as part of the 2024 Registration Statement are: (i) a base prospectus registering the offer, issuance and sale of up to $250,000 worth of Common Stock, preferred stock, debt securities, warrants, rights and units and (ii) the $100,000 ATM facility prospectus. The remaining authorized balance of the ATM facility was $78,000 as of December 31, 2025.
To date we have been subject to a number of claims of this nature. In defending such lawsuits, whether or not they are with or without merit or are ultimately determined in our favor, we would continue to face costly litigation and diversion of 38 technical and management personnel.
To date we have been 27 subject to a number of claims of this nature. In defending such lawsuits, whether or not they are with or without merit or are ultimately determined in our favor, we would continue to face costly litigation and diversion of technical and management personnel.
Any business partner or supplier bankruptcy or insolvency, or any breach or default by a business partner or supplier, or the loss of any significant business partner or supplier relationships, could result in material adverse impacts on our current and/or projected business operations and financial condition. 64 Item 1B. Unresolved Staff Comments None.
Any business partner or supplier bankruptcy or insolvency, or any breach or default by a business partner or supplier, or the loss of any significant business partner or supplier relationships, could result in material adverse impacts on our current and/or projected business operations and financial condition. 59 Item 1B. Unresolved Staff Comments None.
We are subject to a number of additional risks associated with our dependence on collaborations with third parties, the occurrence of which could cause our collaborative arrangements to fail, including that: • we may be required to undertake the expenditure of substantial operational, financial and management resources; • we may be required to issue equity securities that would dilute our stockholders’ percentage of ownership; • we may be required to assume substantial actual or contingent liabilities; • strategic collaborators could terminate the arrangement or allow it to expire, which would delay the development and commercialization and may substantially increase the cost of developing and commercializing our products and product candidates; • business combinations of a strategic collaborator or significant changes in a strategic collaborator’s business strategy may affect a strategic collaborator’s willingness or ability to complete its obligations under any arrangement; • strategic collaborators could decide to move forward with a competing product or product candidate developed either independently or in collaboration with others, including our competitors; • collaborators may not perform their obligations as expected; • clinical trials conducted as part of any of these collaborations may not be successful; • collaborators may not actively or aggressively pursue development and commercialization of any product candidates that seek to achieve, or that achieves, regulatory approval; • we may not have access to or may be restricted from disclosing certain information regarding product candidates being developed or commercialized under a collaboration; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product candidate; and • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability.
We are subject to a number of additional risks associated with our dependence on collaborations with third parties, the occurrence of which could cause our collaborative arrangements to fail, including that: • we may be required to undertake the expenditure of substantial operational, financial and management resources; • we may be required to issue equity securities that would dilute our stockholders’ percentage of ownership; • we may be required to assume substantial actual or contingent liabilities; • strategic collaborators could terminate the arrangement or allow it to expire, which would delay the development and commercialization and may substantially increase the cost of developing and commercializing our products and product candidates; • business combinations of a strategic collaborator or significant changes in a strategic collaborator’s business strategy may affect a strategic collaborator’s willingness or ability to complete its obligations under any arrangement; • strategic collaborators could decide to move forward with a competing product or product candidate developed either independently or in collaboration with others, including our competitors; • collaborators may not perform their obligations as expected; • clinical trials conducted as part of any of these collaborations may not be successful; • collaborators may not actively or aggressively pursue development and commercialization of any product candidates that seek to achieve, or that achieves, regulatory approval; • we may not have access to or may be restricted from disclosing certain information regarding product candidates being developed or commercialized under a collaboration; • a collaborator with marketing and distribution rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product candidate; and • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability. 41 If any such collaborations do not result in the successful development and commercialization of product candidates, or if one of our collaborators terminates its agreement with us, the development or commercialization of our products or product candidates could be delayed and our business and prospects harmed.
We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of any product; • if our competitors are better able to develop products for the diagnosis and treatment of diseases of the central nervous system and the treatment for anaphylaxis that are safer, more effective, less costly, easier to use or otherwise more attractive than our PharmFilm technology, our business will be adversely impacted; • even if our product candidates are approved for commercial sale, if we are unable to develop a sales and marketing infrastructure, we may not be successful in commercializing our products in the United States; • our ability to commercialize our product candidates will depend in part on the extent to which reimbursement will be available from government and health administration authorities, private health maintenance organizations and health insurers, and other healthcare payors; • any delays or changes to the timing, cost and success of clinical trials for Anaphylm and our other product candidates; • failure to generate sufficient data in our PK and PD comparability submission for FDA approval of Anaphylm; • we have entered into, and may enter into collaborations, licensing arrangements, joint ventures, strategic alliances or partnerships with third-parties that may not result in the development of commercially viable products or the generation of significant future revenues; • we are and will be dependent on third-party CROs to conduct all of our clinical trials.
We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of any product; • if our competitors are better able to develop products for the diagnosis and treatment of diseases of the central nervous system and the treatment for anaphylaxis that are safer, more effective, less costly, easier to use or otherwise more attractive than our PharmFilm technology, our business will be adversely impacted; • even if our product candidates are approved for commercial sale, if we are unable to develop a sales and marketing infrastructure, we may not be successful in commercializing our products in the United States; • our ability to commercialize our product candidates will depend in part on the extent to which reimbursement will be available from government and health administration authorities, private health maintenance organizations and health insurers, and other healthcare payors; • any delays or changes to the timing, cost and success of clinical trials for Anaphylm and our other product candidates; • we have entered into, and may enter into collaborations, licensing arrangements, joint ventures, strategic alliances or partnerships with third-parties that may not result in the development of commercially viable products or the generation of significant future revenues; • we are and will be dependent on third-party CROs to conduct all of our clinical trials.
We cannot predict whether our competitors or potential competitors, some of whom we collaborate with, may bring legal action against us based on our research, development and commercialization activities, as well as any product candidates or products resulting from these activities, claiming, among other things, infringement of their intellectual property rights, breach of contract, false or disparaging statements about another company’s products or product candidates, or other legal theories.
We cannot predict whether our competitors or potential competitors may bring legal action against us based on our research, development and commercialization activities, as well as any product candidates or products resulting from these activities, claiming, among other things, infringement of their intellectual property rights, breach of contract, false or disparaging statements about another company’s products or product candidates, or other legal theories.
On November 1, 2023, we reduced our debt payment obligations when we issued (the “Offering”) $45,000 aggregate principal amount of our 13.5% Notes.
On November 1, 2023, we reduced our debt payment obligations when we issued (the “Offering”) $45 million aggregate principal amount of our 13.5% Notes.
If revenues from such key customer were to decline significantly, it would materially adversely affect our business, financial condition and results of operations. Indivior accounted for approximately 62% and 80% of our revenues for 2024 and 2023, respectively, and we believe in the future will continue to account for a substantial part of our revenues.
If revenues from such key customer were to decline significantly, it would materially adversely affect our business, financial condition and results of operations. Indivior accounted for approximately 73% and 62% of our revenues for 2025 and 2024, respectively, and we believe in the future will continue to account for a substantial part of our revenues.
Our research and development activities could be affected or delayed as a result of possible restrictions on animal testing. Certain laws and regulations require us to test our product candidates on animals before initiating clinical trials involving humans. Animal testing activities have been the subject of controversy and adverse publicity.
Our R&D activities could be affected or delayed as a result of possible restrictions on animal testing. Certain laws and regulations require us to test our product candidates on animals before initiating clinical trials involving humans. Animal testing activities have been the subject of controversy and adverse publicity.
We cannot eliminate the risk of accidental contamination or injury from these materials, which could cause an interruption of our commercialization efforts, research and development efforts and business operations, environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products.
We cannot eliminate the risk of accidental contamination or injury from these materials, which could cause an interruption of our commercialization efforts, R&D efforts and business operations, environmental damage resulting in costly clean-up and liabilities under applicable 44 laws and regulations governing the use, storage, handling and disposal of these materials and specified waste products.
Our level of indebtedness and significant debt service obligations could constrain our ability to invest in our business and make it more difficult for us to fund our operations. We have substantial debt and substantial debt service obligations. At December 31, 2024, we had an aggregate principal amount of $45.0 million of outstanding indebtedness, represented by the 13.5% Notes.
Our level of indebtedness and significant debt service obligations could constrain our ability to invest in our business and make it more difficult for us to fund our operations. We have substantial debt and substantial debt service obligations. At December 31, 2025, we had an aggregate principal amount of $45,000 of outstanding indebtedness, represented by the 13.5% Notes.
Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors.
Many of our competitors have substantially greater financial, technical and other resources, such as larger R&D staff and experienced marketing and manufacturing organizations. Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors.
For example, our existing revenue streams are largely dependent on Indivior, which holds the global commercialization rights to our approved product, Suboxone. During the years ended December 31, 2024 and 2023, Indivior represented 62% and 80% of our total revenue, respectively.
For example, our existing revenue streams are largely dependent on Indivior, which holds the global commercialization rights to our approved product, Suboxone. During the years ended December 31, 2025 and 2024, Indivior represented 73% and 62% of our total revenue, respectively.
Until we become profitable, if ever, we expect to need to raise significant additional capital in the future through equity or debt issuances, or both, to continue to manage our expenses to extend our capital runway, in order to further the development, and regulatory approval of our products and product candidates, and to conduct our business.
Until we become profitable, if ever, we expect to need to raise significant additional capital in the future through equity or debt issuances, or both, to continue to manage our expenses to extend our capital runway, in order to further the 33 development, and regulatory approval of our products and product candidates, to fund the commercialization of Anaphylm if approved, and to conduct our business.
Although we have internal research and development capacity that we believe will enable us to make improvements to existing compounds, we do not have internal drug discovery capabilities to identify and develop entirely new chemical entities or compounds.
Although we have internal R&D capacity that we believe will enable us to make improvements to existing compounds, we do not have internal drug discovery capabilities to identify and develop entirely new chemical entities or compounds.
We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate our business effectively.
We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents (including those facilitated by AI) , could harm our ability to operate our business effectively.
We may sell additional equity, incur debt or raise funds through licensing arrangements to fund our operations, which may result in dilution to our stockholders, impose restrictions on our business or require us to relinquish proprietary rights. Aquestive has experienced a history of net losses and our accumulated deficits totaled $363.2 million as of December 31, 2024.
We may sell additional equity, incur debt or raise funds through licensing arrangements to fund our operations, which may result in dilution to our stockholders, impose restrictions on our business or require us to relinquish proprietary rights. Aquestive has experienced a history of net losses and our accumulated deficits totaled $446,998 as of December 31, 2025.
Included in the 2024 Registration Statement are: (i) a base prospectus registering the offer, issuance and sale of up to $250,000 worth of Common Stock, preferred stock, debt securities, warrants, rights and units and (ii) the $100,000 ATM facility prospectus. The remaining authorized balance of the ATM facility was $100,000 as of December 31, 2024.
Included in the 2024 Registration Statement are: (i) a base prospectus registering the offer, issuance and sale of up to $25 million worth of Common Stock, preferred stock, debt securities, warrants, rights and units and (ii) the $100 million ATM facility prospectus. The remaining authorized balance of the ATM facility was $78 million as of December 31, 2025.
Our largest stockholder and management own a significant percentage of our stock and may have the ability to effectively influence matters subject to stockholder approval. As of December 31, 2024, our executive officers and directors beneficially owned approximately 6.6% of our outstanding common stock.
Our largest stockholder and management own a significant percentage of our stock and may have the ability to effectively influence matters subject to stockholder approval. As of December 31, 2025, our executive officers and directors beneficially owned approximately 5.8% of our outstanding common stock.
Although we are in the process of testing and developing proprietary product candidates and may seek to acquire rights in other approved drugs, we anticipate that our ability to generate revenue and to become profitable in the near future will depend upon the continued commercial success of Sympazan, Suboxone and Azstarys in the U.S., the continued commercial success of Ondif in Brazil and Emylif in the EU, and our ability to commercialize our product Libervant for pediatric patients between two and five years of age.
Although we are in the process of testing and developing proprietary product candidates and may seek to acquire rights in other approved drugs, we anticipate that our ability to generate revenue and to become profitable in the near future will depend upon the continued commercial success of Sympazan, Suboxone and Azstarys in the U.S., the continued commercial success of Ondif in Brazil and Emylif in the EU.
Compliance with ever evolving federal, state, and foreign laws relating to handling of information about individuals involves significant expenditure and resources, and any failure by us or our vendors to comply may result in significant liability, negative publicity, and/or an erosion of trust, and could materially adversely affect our business, results of operations, and financial condition.
Compliance with ever evolving federal, state, and foreign laws relating to handling of information about individuals involves significant expenditure and resources, and any failure by us or our vendors to comply may result in significant liability, negative publicity, and/or an erosion of trust, and could materially adversely affect our business, results of operations, and financial condition. 55 We receive, store, handle, transmit, use and otherwise process information related to individuals.
Any return to stockholders will therefore be limited to the appreciation of their stock. 59 Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law, could make it more difficult for a third-party to acquire us, or may increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law, could make it more difficult for a third-party to acquire us, or may increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management.
Furthermore, if our suppliers fail to deliver the required commercial quantities of components and active pharmaceutical ingredient on a timely basis and at commercially reasonable prices, and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, we would likely be in default in our supply obligations, which could result in the termination of our supply agreements, our incurring potential default damages and our loss of significant revenues. 44 We rely on third parties to manufacture API for our licensed products and product candidates, and we intend to rely on third parties to manufacture the API for other approved products.
Furthermore, if our suppliers fail to deliver the required commercial quantities of components and active pharmaceutical ingredient on a timely basis and at commercially reasonable prices, and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, we would likely be in default in our supply obligations, which could result in the termination of our supply agreements, our incurring potential default damages and our loss of significant revenues.
In addition, Bratton Capital Management L.P. and its affiliates beneficially owned, directly, approximately 10.8% of our outstanding common stock as of December 31, 2024.
In addition, Bratton Capital Management L.P. and its affiliates beneficially owned, directly, approximately 7.9% of our outstanding common stock as of December 31, 2025.
Risks Related to Our Financial Condition and Need for Additional Capital We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability.
We have incurred significant losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability.
As of December 31, 2024, we had $71.5 million of cash and cash equivalents. Capital may be available under our ATM facility, which we initially established in 2019, and under which, from time to time, we may offer and sell shares of our Common Stock pursuant to the Amended Equity Distribution Agreement with Piper Sandler & Co..
Capital may be available under our ATM facility, which we initially established in 2019, and under which, from time to time, we may offer and sell shares of our Common Stock pursuant to the Amended Equity Distribution Agreement with Piper Sandler & Co..
If our competitors’ market products that are more effective, safer or less expensive than our product candidates, or that reach the market sooner than our product candidates, our products may enter the market too late in the cycle and may not achieve commercial success. In addition, the biopharmaceutical industry is characterized by rapid technological change.
If our competitors’ market products that are more effective, safer or less expensive than our product candidates, or that reach the market sooner than our product candidates, our products may enter the market too late in the cycle and may not achieve commercial success.
As the second Trump presidency has commenced, we will continue to evaluate the impact of the PPACA on our business, and the potential for its further repeal or replacement.
We will continue to evaluate the impact of the PPACA on our business, and the potential for its further repeal or replacement.
These risks and their impacts are difficult to predict and could continue to otherwise disrupt and adversely affect our operations and our financial performance. 60 In addition, to the extent a global health crisis, epidemic or pandemic, such as theCOVID-19 pandemic, adversely affects our business, financial condition and results of operations, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.
In addition, to the extent a global health crisis, epidemic or pandemic, such as theCOVID-19 pandemic, adversely affects our business, financial condition and results of operations, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.
Despite the implementation of security measures, our internal computer systems and those of third parties with which we contract are vulnerable to damage from cyber-attacks, computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. We have previously been the target of a phishing attack that resulted in unauthorized access to our email system.
Despite the implementation of security measures, our internal computer systems and those of third parties with which we contract are vulnerable to damage from cyber-attacks, computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures.
We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future.
We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the appreciation of their stock.
A failure to obtain this necessary capital when needed could force us to delay, limit, scale back or cease some or all operations. • we have incurred significant operating losses since inception and cannot assure you that we will ever achieve or sustain profitability; • we may fail to obtain regulatory approvals to market our products in the United States or in other countries; • Libervant for ARS patients aged between two and five years being blocked from remaining in the U.S. market due to a competitor’s orphan drug market exclusivity status; • the development of pharmaceutical products involves a lengthy and expensive process, with an uncertain outcome.
A failure to obtain this necessary capital when and how needed could force us to delay, limit, scale back or cease some or all operations. • we have incurred significant operating losses since inception and cannot assure you that we will ever achieve or sustain profitability; • we may fail to obtain regulatory approvals to market our products in the United States or in other countries; • the development of pharmaceutical products involves a lengthy and expensive process, with an uncertain outcome.

… 122 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+11 added−5 removed0 unchanged
Biggest changeThe IT Officer briefs the Audit Committee on the effectiveness of Aquestive's cybersecurity program quarterly with a more in depth review done annually. The potential impact of risks from cybersecurity threats on the Company are assessed on an ongoing basis, and how such risks could materially affect the Company’s business strategy, operational results, and financial condition are regularly evaluated.
Biggest changeCybersecurity risks are also reviewed as part of the Company’s enterprise risk management program. The Company assesses on an ongoing basis the potential impacts of cybersecurity risks and how such risks could materially affect the Company’s business strategy, results of operations, or financial condition.
The IT Officer reports to the Chief Executive Officer and leads our cybersecurity program. Our IT Officer has been responsible for this function at Aquestive for 10 years and has over eleven years of experience in information security strategy and the management of cybersecurity risk.
The Chief People Officer reports to the Company’s Chief Executive Officer and leads the Company’s cybersecurity program. The Chief People Officer has served in this function at the Company for 10 years and has over eleven years of experience in information security strategy and cybersecurity risk management.
Governance Role of Management/Board The Senior Vice President of Information Technology (the “IT Officer”), along with the broader Information Technology function, is responsible for assessing and managing Aquestive’s cybersecurity risk and informing senior management and the Audit Committee of the Board regarding cybersecurity risks and the prevention, detection, mitigation, and remediation of cybersecurity incidents.
Governance Role of Management/Board The Chief People Officer, together with the broader information technology function, is responsible for assessing and managing the Company’s cybersecurity risks and for informing senior management and the Audit Committee regarding cybersecurity risks and the prevention, detection, mitigation, and remediation of cybersecurity incidents.
During the reporting period, we have not identified any risks from cybersecurity threats or incidents, including as a result of previous cybersecurity incidents, that we believe have materially impacted, or are reasonably likely to materially affect, the Company, including our business strategy, operational results, and financial condition.
During the reporting period, the Company did not identify any cybersecurity threats or incidents, including as a result of previous cybersecurity incidents, that it believes have materially impacted, or are reasonably likely to materially impact, the Company’s business strategy, results of operations, or financial condition.
The internal Aquestive IT team has over fifteen years of technical experience, program management and architecture experience in managing cyber risk and information security. The Audit Committee of the Board provides strategic oversight of Aquestive’s cybersecurity matters, including risks associated with cybersecurity threats.
The Company’s internal information technology team has over fifteen years of combined technical, program management, and architecture experience in managing cyber risk and information security. The Company’s Cybersecurity Policy and Incident Response Plan assign responsibilities for incident governance, including to the CSIRT, Incident Response Commander, Incident Response Manager, and Incident Handling Team.
Removed
Item 1C. Cybersecurity Risk Management and Strategy Aquestive’s cybersecurity program is built on four key pillars: Governance, Process, Compliance and Audit.
Added
Item 1C. Cybersecurity Risk Management and Strategy Aquestive maintains a cybersecurity risk management program designed to identify, assess, and mitigate risks from cybersecurity threats that could materially affect the Company’s business operations, financial performance, or the confidentiality, integrity, and availability of Company data and information systems.
Removed
While we face risks from cybersecurity threats that could have a material adverse effect on our business, financial condition, and results of operations, Aquestive’s cybersecurity program is built upon a set of policies, procedures, and standards supported by training and awareness. In addition, cybersecurity risks are also reviewed as part of our overall Enterprise Risk Management program.
Added
The Company’s cybersecurity program is organized around four pillars—Governance, Process, Compliance, and Audit—and is supported by formal written policies, procedures, and standards, including the Company’s Information Technology Policy and Cybersecurity Policy (collectively, the “Cybersecurity Policies”) that are assessed and evolving to address advancements in technology including artificial intelligence.
Removed
The cybersecurity team has significant experience in managing cybersecurity programs and has engaged with a MSSP to deploy state of the art cybersecurity technologies and gather threat intelligence and cyber risk trends.
Added
The Cybersecurity Policies establish required security controls and requirements relating to, among other things, system access, acceptable use, software acquisition, password management, and network security. The Company also provides cybersecurity training and awareness programs, including training applicable to GxP and non‑GxP systems, as required under the Company’s Computer Policy.
Removed
The cybersecurity program is executed with the MSSP, which provides active threat monitoring, risk assessment and incident response capabilities to timely assess and address any material cyber risk that could impact our business operations. On occasion, we engage other external experts, including cybersecurity assessors, consultants, and auditors to evaluate cybersecurity measures and risk management processes, including those applicable to Aquestive.
Added
The Company evaluates cybersecurity risk using processes aligned with recognized frameworks and standards, including the NIST CSF, applicable NIST Special Publications (including the 800 and 600 series), and ISO 42001.
Removed
We depend on and engage various third parties, including suppliers, vendors, and service providers, to operate. We rely on the expertise of our risk management, legal, information technology, and compliance personnel, as well as our MSSP, when identifying and overseeing risks from cybersecurity threats associated with our use of such entities.
Added
The Company maintains an Incident Response Plan that is aligned to the NIST incident response lifecycle and is designed to support a consistent approach to cybersecurity events, including preparation, identification, containment, eradication, recovery, and lessons learned. The Company’s cybersecurity monitoring activities include, among other things, review of system logs, authentication activity, endpoint security events, and network behavior.
Added
These activities are supported by internal resources and a third‑party MSSP. The MSSP supports the Company with active threat monitoring, threat intelligence, risk assessment processes, and incident response capabilities intended to enable the Company to assess and address cybersecurity risks that could impact business operations.
Added
The Company may also engage other external experts, including cybersecurity assessors, consultants, and auditors, from time to time to evaluate cybersecurity measures and the effectiveness of relevant risk management processes. The Company relies on third parties, including suppliers, vendors, cloud platforms, and other service providers, in connection with its operations.
Added
The Company reviews cybersecurity risks associated with third‑party relationships and maintains controls designed to restrict unauthorized access and to align with internal policy requirements. While the Company’s processes are intended to reduce exposure to cybersecurity threats, no controls can eliminate all risk, and cybersecurity threats and threat actors continue to evolve.
Added
These documents also establish escalation pathways and decision‑making authority during cybersecurity events.
Added
The Company’s leadership, including the Director of IT and senior executives identified in the incident response governance matrix, are responsible for reviewing cybersecurity risks, approving responses to significant incidents, and ensuring the Company maintains appropriate resources for cybersecurity operations and continuous improvement consistent with the Company’s framework‑aligned processes. 60 Board Oversight of Cybersecurity Risk The Audit Committee provides oversight of the Company’s cybersecurity matters, including risks associated with cybersecurity threats.
Added
The IT Officer briefs the Audit Committee quarterly regarding the effectiveness of the Company’s cybersecurity program, with a more in‑depth review conducted annually.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed2 unchanged
Biggest changeAs amended, this lease has a term that extends our lease through August 2026 and contains a renewal option that could extend the lease through August 2029. We do not own any real property.
Biggest changeAs amended, this lease has a term that extends our lease through August 2026 and contains a renewal option that could extend the lease through August 2029. We do not own any real property. Item 3. Legal Proceedings For more information on Legal Proceedings, see Part II Item 8. Financial Statements and Supplementary Data, Note 23, Contingencies . Item 4.
Item 2. Properties We lease our 8,400-square-foot current production facility (Melton) in Portage, Indiana, which houses certain research and development offices and cGMP manufacturing operations. The lease contains an option to purchase the facility at any time during the lease term along with a right of first refusal to purchase the facility.
Item 2. Properties We lease our 8,400-square-foot current production facility (Melton) in Portage, Indiana, which houses certain R&D offices and cGMP manufacturing operations. The lease contains an option to purchase the facility at any time during the lease term along with a right of first refusal to purchase the facility.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed3 unchanged
Biggest changeHolders of Record As of March 3, 2025, we had approximately 84 holders of record of our Common Stock. Certain shares are held in “street” name and, accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.
Biggest changeHolders of Record As of March 2, 2026, we had approximately 72 holders of record of our Common Stock. Certain shares are held in “street” name and, accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.
Recent Sale of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. Reserved 66
Recent Sale of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. Reserved 61

Item 7. Management's Discussion & Analysis

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

79 edited+28 added−33 removed56 unchanged
Biggest changeThe tables below provide a breakdown of the major costs included in total Research and development expenses and project costs by type of expense for each of the main clinical development projects in which we are engaged for each period presented: Year Ended December 31, Change (In thousands) 2024 2023 $ % Clinical Trials $ 8,837 $ 3,597 $ 5,240 146 % Development and Manufacturing 303 664 (361) (54 %) Product Research Expenses 1,119 678 441 65 % Total Project Costs 10,259 4,939 5,320 108 % Preclinical 987 659 328 50 % R&D personnel costs 6,509 5,775 734 13 % Consulting and Outside Services 331 323 8 2 % Share Based Compensation 1,215 456 759 166 % Depreciation/Amortization 70 91 (21) (23 %) All Other R&D 909 861 48 6 % Total $ 20,280 $ 13,104 $ 7,176 55 % Year Ended December 31, 2024 2023 2024 2023 2024 2023 2024 2023 Total % inc / dec Anaphylm % inc / dec AQST-108 % inc / dec Libervant % inc / dec Clinical Trials $ 8,837 $ 3,597 146% $ 8,231 $ 4,687 76% $ 588 $ — N/M $ 18 $ (1,090) N/M Development and Manufacturing 303 664 (54%) 310 676 (54%) 10 — N/M (17) (12) 42% Product Research Expenses 1,119 678 65% 930 463 101% 188 — N/M 1 215 N/M Total Project Costs $ 10,259 $ 4,939 108% $ 9,471 $ 5,826 63% $ 786 $ — N/M $ 2 $ (887) N/M Total project expenses for Anaphylm increased 63%, or $3,645, for the year ended December 31, 2024 compared to the same period in 2023.
Biggest changeThe tables below provide a breakdown of the major costs included in total R&D expenses and project costs by type of expense for each of the main clinical development projects in which we are engaged for each period presented: Year Ended December 31, Change (In thousands) 2025 2024 $ % Clinical Trials $ 3,476 $ 8,837 $ (5,361) (61 %) Development and Manufacturing 834 303 531 175 % Product Research Expenses 2,002 1,119 883 79 % Total Project Costs 6,312 10,259 (3,947) (38 %) Preclinical 665 987 (322) (33 %) R&D personnel costs 6,775 6,509 266 4 % Consulting and Outside Services 416 331 85 26 % Share Based Compensation 1,875 1,215 660 54 % Depreciation/Amortization 61 70 (9) (13 %) All Other R&D 1,088 909 179 20 % Total $ 17,192 $ 20,280 $ (3,088) (15 %) Year Ended December 31, 2025 2024 2025 2024 2025 2024 2025 2024 Total % inc / dec Anaphylm % inc / dec AQST-108 % inc / dec Libervant % inc / dec Clinical Trials $ 3,476 $ 8,837 (61%) $ 3,040 $ 8,231 (63)% $ 436 $ 588 (26)% $ — $ 18 N/M Development and Manufacturing 834 303 175% 773 310 149% 61 10 510% — (17) N/M Product Research Expenses 2,002 1,119 79% 2,002 930 115% — 188 N/M — 1 N/M Total Project Costs $ 6,312 $ 10,259 (38%) $ 5,815 $ 9,471 (39%) $ 497 $ 786 (37)% $ — $ 2 N/M Total project expenses for Anaphylm decreased 39%, or $3,656, for the year ended December 31, 2025 compared to the same period in 2024.
On March 22, 2024, we completed the underwritten public offering of 16,666,667 shares of our common stock at the public offering price of $4.50 per share. In addition, pursuant to the partial exercise of the underwriters' option, on April 22, 2024, we sold an additional 559,801 shares of Common Stock.
On March 22, 2024, we completed an underwritten public offering of 16,666,667 shares of our common stock at the public offering price of $4.50 per share. In addition, pursuant to the partial exercise of the underwriters' option, on April 22, 2024, we sold an additional 559,801 shares of Common Stock.
In addition, in the event of any such asset sales or outlicensing transactions, the future growth of the Company would be dependent on continued successful development or our early stage product candidates and/or asset acquisitions or other strategic transactions for the Company.
In addition, in the event of any such asset sales or outlicensing transactions, the future growth of the Company would be dependent on continued successful development of our early stage product candidates and/or asset acquisitions or other strategic transactions for the Company.
In June 2023, Sunovion announced that it has voluntarily withdrawn KYNMOBI from the U.S. and Canadian markets, therefore, we likely will not receive any of the additional contingent payments under the Monetization agreement. As a result, we discontinued recording interest expense related to the sale of future revenue in the fourth quarter of 2022. See Part II Item 8.
In June 2023, Sunovion announced that it has voluntarily withdrawn KYNMOBI from the U.S. and Canadian markets. Therefore, the Company likely will not receive any of the additional contingent payments under the Monetization agreement. As a result, we discontinued recording interest expense related to the sale of future revenue in the fourth quarter of 2022. See Part II Item 8.
We may hire or engage additional skilled colleagues or third parties to perform these activities, conduct clinical trials and ultimately seek regulatory approvals for any product candidate that successfully completes those clinical trials. 68 Selling, General and Administrative Expenses Selling, General and Administrative expenses consist primarily of salaries, benefits, share-based compensation, other related costs for executive, finance, and operational personnel.
We may hire or engage additional skilled colleagues or third parties to perform these activities, conduct clinical trials and ultimately seek regulatory approvals for any product candidate that successfully completes those clinical trials. Selling, General and Administrative Expenses Selling, General and Administrative expenses consist primarily of salaries, benefits, share-based compensation, other related costs for executive, finance, and operational personnel.
The 13.5% Notes are interest-only until June 30, 2026, whereupon on such date and each payment date thereafter we will also pay an installment of principal of the 13.5% Notes pursuant to a fixed amortization schedule, along with a portion of an Exit Fee determined as of the applicable date of prepayment, payment, acceleration, repurchase or redemption, as the case may be.
The 13.5% Notes are interest-only until June 30, 2026, whereupon on such date and each payment date thereafter we will also pay an installment of principal of the 13.5% Notes 67 pursuant to a fixed amortization schedule, along with a portion of an Exit Fee determined as of the applicable date of prepayment, payment, acceleration, repurchase or redemption, as the case may be.
While an outlicensing of our proprietary products and product candidates, if approved by the FDA, could limit our exposure to the costs of commercialization of the product and provide a potential source of royalty and milestone revenues, the benefit from the potential of additional future value that could result from our independent commercialization of these products and product candidates, assuming a successful launch of our proprietary products and product candidates, if approved by the FDA, would likely be limited.
While an outlicensing of our proprietary products and product candidates, if approved by the FDA, could limit our exposure to the costs of commercialization of the product and provide a potential source of royalty and milestone revenues, the benefit from the potential future value that could result from our independent commercialization of these products and product candidates, assuming a successful launch of our proprietary products and product candidates, if approved by the FDA, would likely be limited.
We can provide no assurance that any of these sources of funding, either individually or in combination, will be available on reasonable terms, if at all, or sufficient to fund our business objectives. In addition, we may be required to utilize available financial resources sooner than expected.
We can provide no assurance that any sources of funding, either individually or in combination, will be available on reasonable terms, if at all, or sufficient to fund our business objectives. In addition, we may be required to utilize available financial resources sooner than expected.
To the extent that we raise additional funds by issuance of equity securities, our stockholders would experience further dilution and the terms of these securities could include liquidation or other preferences (if and to the extent permitted under the Indenture) that would adversely affect our stockholders’ rights.
To the extent that we raise additional funds by issuance of equity securities, our stockholders would experience further dilution, and the terms of these securities could include liquidation or other preferences (if and to the extent permitted under the Indenture Agreement) that would adversely affect our stockholders’ rights.
Financial Statements and Supplementary Data, Note 3, Summary of Significant Accounting Policies in the accompanying Notes to our Financial Statements for a discussion of recent accounting pronouncements. 77 Item 7A. Quantitative and Qualitative Disclosures about Market Risk Item 7A is not applicable to us as a smaller reporting company and has been omitted. Item 8.
Financial Statements and Supplementary Data, Note 3, Summary of Significant Accounting Policies in the accompanying Notes to our Financial Statements for a discussion of recent accounting pronouncements. 72 Item 7A. Quantitative and Qualitative Disclosures about Market Risk Item 7A is not applicable to us as a smaller reporting company and has been omitted. Item 8.
For functional licenses that do not require further development or other ongoing activities by Aquestive, the customer is viewed as acquiring the right to use the license as, and when, transferred and revenues are generally recorded at a point in time, subject to contingencies or constraints.
For functional licenses that do not require further development or other ongoing activities by the Company, the customer is viewed as acquiring the right to use the license as, and when, transferred and revenues are generally recorded at a point in time, subject to contingencies or constraints.
For symbolic licenses providing substantial value only in conjunction with other performance obligations to be provided by Aquestive, revenues are generally recorded over the term of the license agreement. Such other obligations provided by Aquestive generally include manufactured products, additional development services or other deliverables that are contracted to be provided during the license term.
For symbolic licenses providing substantial value only in conjunction with other performance obligations to be provided by the Company, revenues are generally recorded over the term of the license agreement. Such other obligations provided by the Company generally include manufactured products, additional development services or other deliverables that are contracted to be provided during the license term.
While significant accounting policies are more fully described in Part II Item 8. Financial Statements and Supplementary Data, Note 3, Summary of Significant Accounting Policies , included in this filing, we believe that the following accounting policies are those that are most critical to the significant judgements and estimates used in the preparation of our Financial Statements.
While significant accounting policies are more fully described in Part II Item 8. Financial Statements and Supplementary Data, Note 3, Summary of Significant Accounting Policies , included in this filing, we believe that the following accounting policies are those that are most critical to the significant judgments and estimates used in the preparation of our Financial Statements.
Overview Aquestive Therapeutics, Inc. is a pharmaceutical company advancing medicines to bring meaningful improvement to patients' lives through innovative science and delivery technologies. We are developing pharmaceutical products to deliver complex molecules through administrations that are alternatives to invasive and inconvenient standard of care therapies.
Overview Aquestive is a pharmaceutical company advancing medicines to bring meaningful improvement to patients' lives through innovative science and delivery technologies. We are developing pharmaceutical products to deliver complex molecules through administrations that are alternatives to invasive and inconvenient standard of care therapies.
In exchange for the sale of these rights, we received an upfront payment from Marathon of $40,000 and an additional payment of $10,000 through the achievement of the first milestone. We have received an aggregate amount of $50,000 through December 31, 2024 under the Monetization Agreement.
In exchange for the sale of these rights, we received an upfront payment from Marathon of $40,000 and an additional payment of $10,000 through the achievement of the first milestone. We have received an aggregate amount of $50,000 through December 31, 2025 under the Monetization Agreement.
Milestone payments based on a non-sales metric such as a development-based milestone ( e.g. , an NDA filing or obtaining regulatory approval) represent variable consideration and are included in the transaction price subject to any constraints.
Milestone payments based on a non-sales metric such as a development-based milestone (i .e ., an NDA filing or obtaining regulatory approval) represent variable consideration and are included in the transaction price subject to any constraints.
The excess of future estimated royalty payments of $56,926 over the $13,856 of the allocated fair value is recognized as a discount related to the Royalty Right Agreements and is amortized as interest expense using the effective interest method. The 13.5% Notes are discussed in Part II Item 8. Financial Statements and Supplementary Data, Note 15, Long-Term Debt.
The excess of future estimated royalty payments over the allocated fair value is recognized as a discount related to the Royalty Right Agreements and is amortized as interest expense using the effective interest method. The 13.5% Notes are discussed in Part II Item 8. Financial Statements and Supplementary Data, Note 15, Long-Term Debt.
These amounts are due to the accounting associated with the sale of future revenue related to KYNMOBI royalties sold to Marathon on November 3, 2020 and do not represent or imply a monetary obligation or cash output at any time during the life of the transaction. These amounts represent amortization of issuance costs.
These amounts are due to the accounting associated with the sale of future revenue related to KYNMOBI royalties sold to Marathon on November 3, 2020 and do not represent or imply a monetary obligation or cash output at any time during the life of the transaction.
Net proceeds from the Underwritten Public Offering, including the exercise of underwriters' option were $72,868 after deducting underwriting discounts of $4,651. In addition to the underwriting discounts related to this offering, we incurred professional fees and other costs totaling $894 as of December 31, 2024.
Net proceeds from the 2024 Underwritten Public Offering, including the exercise of underwriters' option were $72,868, after deducting underwriting discounts of $4,651. In addition to the underwriting discounts related to this offering, we incurred professional fees and other costs totaling $894.
If the customer is able to benefit from the license without provision of any other performance obligations by Aquestive and the license is 76 thereby viewed as a distinct or functional license, Aquestive then determines whether the customer has acquired a right to use the license or a right to access the license.
If the customer is able to benefit from the license without provision of any other performance obligations by the Company and the license is thereby viewed as a distinct or functional license, the Company then determines whether the customer has acquired a right to use the license or a right to access the license.
Research and development expenses primarily consist of: • employee-related expenses, including compensation, benefits, share-based compensation and travel expense; • external research and development expenses incurred under arrangements with third parties, such as CROs, investigational sites and consultants; • the cost of acquiring, developing and manufacturing clinical study materials; and • costs associated with preclinical and clinical activities and regulatory operations.
R&D expenses primarily consist of: • employee-related expenses, including compensation, benefits, share-based compensation and travel expense; • external R&D expenses incurred under arrangements with third parties, such as CROs, investigational sites and consultants; • the cost of acquiring, developing and manufacturing clinical study materials; and • costs associated with preclinical and clinical activities and regulatory operations.
For milestone payments to be received upon the achievement of a sales threshold, the revenue from the milestone payments is recognized at the later of when the actual sales are incurred or the performance obligation to which the sales relate to has been satisfied.
For milestone payments to be received upon the achievement of a sales threshold, the revenue from the milestone payments is recognized at the later of when the actual sales occur or the performance obligation to which the sales relate to has been satisfied.
The note holders are also entitled to a tiered royalty between 1.0% to 2.0% of annual worldwide net sales of Libervant (diazepam) Buccal Film until the earlier of (1) the first sale of Anaphylm and (2) eight years from the first sale of Libervant.
The Note Holders are also entitled to a tiered royalty between 1.0% to 2.0% of annual worldwide net sales of Libervant until the earlier of (1) the first sale of Anaphylm and (2) eight years from the first sale of Libervant.
Other costs include facility and related costs not otherwise included in research and development expenses such as: professional fees for patent-related and other legal expenses, regulatory fees, consulting, tax and accounting services; insurance; market research; advisory board and key opinion leaders; depreciation; and general corporate expenses, inclusive of IT systems-related costs.
Other costs include facility and related costs not otherwise included in R&D expenses such as: professional fees for patent-related expenses and for other legal expenses, legal expenditures, regulatory fees, consulting, tax and accounting services, insurance, market research, advisory board and key opinion leaders, depreciation, and general corporate expenses, inclusive of IT systems related costs.
We also may seek outlicensing opportunities for our proprietary products and product candidate programs that we currently plan to self-commercialize, including for Libervant and Anaphylm, or explore other potential liquidity options or strategic opportunities.
We also may seek outlicensing opportunities for our proprietary products and product candidate programs that we may self-commercialize, including for Libervant and Anaphylm, or explore other potential liquidity options or strategic opportunities.
The excess of future estimated royalty payments of $56,926 over the $13,856 of allocated fair value is recognized as a discount related to the Royalty Right Agreements and is amortized over the life of the Royalty Rights Agreements. Such amortization is reflected as interest expense related to royalty obligations in the Statements of Operations and Comprehensive Loss.
The excess of future estimated royalty payments over the allocated fair value is recognized as a discount related to the Royalty Right Agreements and is amortized over the life of the Royalty Rights Agreements. Such amortization is reflected as interest expense related to royalty obligations in the Statements of Operations and Comprehensive Loss.
Provisions for these estimated amounts are reviewed and adjusted on no less than a quarterly basis.
Provisions for these estimated amounts are reviewed and adjusted as needed on no less than a quarterly basis.
The sufficiency of our short-term and longer-term liquidity is directly impacted by our level of operating revenues and our ability to achieve our operating plan for revenues, regulatory approval in the time period planned for our product candidates and our ability to monetize other royalty streams or other licensed rights within planned timeframes, and there can be no assurance that we will be successful in any monetization transaction.
The sufficiency of our short-term and longer-term liquidity is directly impacted by our level of operating revenues and our ability to achieve our operating plan for revenues, regulatory approval in the time period planned for our product candidates and licensed rights within planned timeframes, and there can be no assurance that we will be successful in any transaction.
On November 1, 2023, we issued $45,000 in aggregate principal amount of the 13.5% Notes due November 1, 2028. A portion of the net proceeds from the Offering were used to redeem all of the outstanding 12.5% Notes and to pay expenses relating to the Offering, with the balance of the proceeds to be used for general corporate purposes.
On November 1, 2023, we issued $45,000 aggregate principal amount of its 13.5% Notes due November 1, 2028. A portion of the net proceeds from that Offering was used to redeem all of the remaining outstanding 12.5% Notes and to pay expenses relating to that Offering, with the balance of the proceeds to be used for general corporate purposes.
We expect our research and development expenses to continue to be significant over the next several years as we continue to develop existing product candidates such as Anaphylm, AQST-108 and others, and as we identify and develop or acquire additional product candidates and technologies.
We expect our R&D expenses to continue to be significant over the next several years as we continue to develop existing product candidates such as Anaphylm, AQST-108, and others, and as we identify and develop or acquire additional 63 product candidates and technologies.
Aquestive also collaborates with pharmaceutical companies to bring new molecules to market using proprietary, best-in-class technologies, like PharmFilm, and has proven drug development and commercialization capabilities. Our production facilities are located in Portage, Indiana, and our corporate headquarters and primary research laboratory facilities are based in Warren, New Jersey.
We are the exclusive manufacturer of these licensed products. Aquestive also collaborates with pharmaceutical companies to bring new molecules to market using proprietary, best-in-class technologies, like PharmFilm ® , and has proven drug development and commercialization capabilities. Our production facilities are located in Portage, Indiana, and our corporate headquarters and primary research laboratory facilities are based in Warren, New Jersey.
Key factors and assumptions inherent in our planned continued operations and anticipated growth include, without limitation, those related to the following: 74 • continued ability of our customers to pay, in a timely manner, for presently contracted and future anticipated orders for our manufactured products, including effects of generics and other competitive pressures as currently envisioned; • continued ability of our customers to pay, in a timely manner, for presently contracted and future anticipated orders for provided co-development and feasibility services, as well as regulatory support services for recently licensed products; • access to debt or equity markets if, and at the time, needed for any necessary future funding, including our ability to access funding through our ATM facility, should we choose to access this facility; • continuing review and appropriate adjustment of our cost structure consistent with our anticipated revenues and funding; • continued growth and market penetration of Sympazan, including anticipated patient and physician acceptance and our licensee’s ability to obtain adequate reimbursement and payment support from government agencies and other private medical insurers; • effective commercialization within anticipated cost levels and expected ramp-up timeframes of our product Libervant for pediatric patients between two and five years of age; • infrastructure and administrative costs at expected levels to support operations as an FDA and highly regulated public company; • a manageable level of costs for ongoing efforts to protect our intellectual property rights and litigation matters in which we are involved; • continued compliance with all covenants under our 13.5% Notes, including our ability to comply with our debt service obligations as required thereunder; and • absence of significant unforeseen cash requirements.
Key factors and assumptions inherent in our planned continued operations and anticipated growth include, without limitation, those related to the following: • continued ability of our customers to pay, in a timely manner, for presently contracted and future anticipated orders for our manufactured products, including effects of generics and other competitive pressures as currently envisioned; • approval of Anaphylm by the FDA; • continued ability of our customers to pay, in a timely manner, for presently contracted and future anticipated orders for provided co-development and feasibility services, as well as regulatory support services for recently licensed products; • our obligation to commence the 13.5% Notes principal payments in June 2026, unless they are refinanced or amended; • access to debt or equity markets if, and at the time, needed for any necessary future funding, including our ability to access funding through our ATM facility, should we choose to access this facility; • continuing review and appropriate adjustment of our cost structure consistent with our anticipated revenues and funding; • continued growth and market penetration of Sympazan, including anticipated patient and physician acceptance and our licensee’s ability to obtain adequate reimbursement and payment support from government agencies and other private medical insurers; • infrastructure and administrative costs at expected levels to support operations as an FDA and highly regulated public company; • a manageable level of costs for ongoing efforts to protect our intellectual property rights and litigation matters in which we are involved; • continued compliance with all covenants under our 13.5% Notes, including our ability to comply with our debt service obligations as required thereunder; and • absence of significant unforeseen cash requirements.
Similarly determined estimates are recorded relating to wholesaler service fees, co-pay support redemptions, and other rebates, and these estimates are reflected as a component of accrued liabilities. Once all related variable considerations are resolved and uncertainties as to collectable amounts are eliminated, estimates are adjusted to actual allowance amounts.
Once receivables are collected, allowances are reclassified and treated as accrued liabilities. Similarly determined estimates are recorded relating to wholesaler service fees, co-pay support redemptions, and other rebates, and these estimates are reflected as a component of accrued liabilities. Once related variable considerations are resolved and uncertainties as to incurred amounts are eliminated, estimates are adjusted to actual allowance amounts.
Critical Accounting Policies and Use of Estimates We have based our Management’s Discussion and Analysis of our financial condition and results of operations on our Financial Statements, which have been prepared in accordance with generally accepted accounting principles, or GAAP, in the U.S.
Financial Statements and Supplementary Data, Note 15, Long-Term Debt . 70 Critical Accounting Policies and Use of Estimates We have based our Management’s Discussion and Analysis of our financial condition and results of operations on our Financial Statements, which have been prepared in accordance with generally accepted accounting principles, or GAAP, in the U.S.
For sales of Libervant for patients between two to five years of age, returns allowances and prompt pay discounts are estimated based on contract terms and historical return rates, if available, and these estimates are recorded as a reduction of receivables.
For sales of Libervant for patients between two to five years of age while Libervant had U.S. market access through April 2025, returns allowances and prompt pay discounts are estimated based on contract terms and historical return rates, if available, and these estimates are recorded as a reduction of receivables.
We expect to incur significant operating losses and negative operating cash flows for the foreseeable future, and we have a significant level of debt on which we have substantial ongoing interest payments have principal repayments related to our 13.5% Notes starting in June 2026 through the debt maturity date and royalty obligation payments projected to be made from the fourth quarter of 2024 to 2034, which are further discussed in Part II Item 8.
We expect to incur significant operating losses and negative operating cash flows for the foreseeable future, and we have a significant level of debt with principal payments starting in June 2026 through the debt maturity date, substantial ongoing interest payments, and royalty obligation payments projected to be made through 2035, which are further discussed in Part II Item 8.
Included as part of the 2024 Registration Statement was a $100,000 ATM facility pursuant to the Amended Equity Distribution Agreement with Piper Sandler & Co. For the year ended December 31, 2024, we sold 4,557,220 shares which provided net proceeds of approximately $11,821 after deducting commissions and other transaction costs of $564.
Included as part of the 2024 Registration Statement was a $100,000 ATM facility pursuant to the Amended Equity Distribution Agreement with Piper Sandler & Co. For the year ended December 31, 2025, we sold 7,457,627 shares under the ATM facility which provided net proceeds of approximately $21,229 after deducting commissions and other transaction costs of $771.
We are advancing a product pipeline for the treatment of severe allergic reactions, including anaphylaxis, under the trade name "Anaphylm™", and our Adrenaverse™ epinephrine prodrug pipeline platform. We have five licensed commercialized products which are marketed by our licensees in the U.S. and around the world. We are the exclusive manufacturer of these licensed products.
We are advancing our late stage non-device based epinephrine prodrug product candidate for the treatment of severe allergic reactions, including anaphylaxis, under the Anaphylm™ trade name, and our Adrenaverse™ epinephrine prodrug pipeline platform. We have four licensed commercialized products which are marketed by our licensees in the U.S. and around the world.
If such growth should occur for higher volume product opportunities such as Suboxone and Ondif, we would incur increased costs associated with hiring additional personnel to support the increased manufacturing and supply costs arising from higher manufactured volumes from proprietary and licensed products.
If such growth should occur for higher volume product opportunities such as Suboxone and Ondif, we would incur increased costs associated with hiring additional personnel to support the increased manufacturing and supply costs arising from higher manufactured volumes from proprietary and licensed products. Research and Development Expenses Since our inception, we have focused significant resources on our R&D activities.
The redemption of 12.5% Notes and the issuance of 13.5% Notes are discussed in Note 15, Long-Term Debt , to our financial statements. In addition, see Liquidity and Capital Resources below for further detail on our 12.5% Notes and 13.5% Notes.
The issuance of our 13.5% Notes is discussed Part II Item 8. Financial Statements and Supplementary Data, Note 15, Long-Term Debt . In addition, see Liquidity and Capital Resources below for further detail on our 13.5% Notes.
During the year ended December 31, 2024, we recognized a gain of $1,500 on the termination of a license and supply agreement, which was partially offset by the adjustment of $1,200 to the remaining balance of the intangible asset due to the termination of the agreement.
In June 2024, the Company recorded a gain of $1,500 on the termination of a license and supply agreement, which was partially offset by the adjustment of $1,200 to the remaining balance of the intangible asset due to the termination of the agreement.
We established our first ATM facility in September 2019, and since inception to December 31, 2024, we have sold 19,857,518 shares of Common Stock which has generated net cash proceeds of approximately $60,524, net of commissions and other transactions costs of $3,119.
We established our first ATM facility in September 2019, and since inception to December 31, 2025, we have sold 27,315,145 shares of Common Stock which has generated net cash proceeds of approximately $81,753, net of commissions and other transactions costs of $3,890.
Liquidity and Capital Resources Sources of Liquidity We had $71,546 in cash and cash equivalents as of December 31, 2024.
Liquidity and Capital Resources Sources of Liquidity We had $121,169 in cash and cash equivalents as of December 31, 2025.
Although each contractual arrangement is unique, common milestones contained in these arrangements include those for the performance of efficacy and other tests, reports of findings, formulation of initial prototypes, production of stability clinical 67 and/or scale-up batches, and stability testing of those batches.
Accordingly, the duration of our R&D projects may range from several months to approximately three years. Although each contractual arrangement is unique, common milestones contained in these arrangements include those for the performance of efficacy and other tests, reports of findings, formulation of initial prototypes, production of stability clinical and/or scale-up batches, and stability testing of those batches.
Provisions for these estimated amounts are reviewed and adjusted on no less than a quarterly basis. License and Royalty Revenue – license revenues are determined based on an assessment of whether the license is distinct from any other performance obligations that may be included in the underlying licensing arrangement.
Revenue Recognition License and Royalty Revenue – license revenues are determined based on an assessment of whether the license is distinct from any other performance obligations that may be included in the underlying licensing arrangement.
Interest expense related to amortization of the discount on the royalty obligations was $5,459 and $905 for the years ended December 31, 2024 and 2023, respectively. These amounts are due to the accounting associated with the royalty obligations as part of the 13.5% Notes issuance in November 2023.
These amounts are due to the accounting associated with the royalty obligations as part of the 13.5% Notes issuance. Interest expense related to the sale of future revenue was $243 and $236 for the years ended December 31, 2025 and 2024, respectively, and represents amortization of the issuance costs.
At the time of sale, estimates for various revenue allowances are recorded based on historical trends and judgmental estimates. For sales of Libervant for patients between two to five years of age, returns allowances and prompt pay discounts are estimated based on contract terms and historical return rates, if available, and these estimates are recorded as a reduction of receivables.
For sales of Libervant for ARS patients between two to five years of age while Libervant had U.S. market access through April 2025, returns allowances and prompt pay discounts are estimated based on contract terms and historical return rates, if available, and these estimates are recorded as a reduction of receivables.
Net Cash Provided by Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 increased by $79,618 compared to the same period in 2023.
Net Cash Used for Investing Activities Net cash used for investing activities for the year ended December 31, 2025 increased by $403 compared to the same period in 2024.
Net Cash Used for Investing Activities Net cash used for investing activities for the year ended December 31, 2024 decreased by $836 compared to the same period in 2023. The use of cash was related to capital expenditures.
The use of cash was related to capital expenditures. 68 Net Cash Provided by Financing Activities Net cash provided by financing activities for the year ended December 31, 2025 increased by $19,025 compared to the same period in 2024.
Financial Statements and Supplementary Data, Note 17, Sale of Future Revenue for details. Interest income and other income, net was $3,437 and $16,321 for the years ended December 31, 2024 and 2023, respectively.
Financial Statements and Supplementary Data, Note 17, Sale of Future Revenue for details. Interest income and other income, net was $4,367 and $3,437 for the years ended December 31, 2025 and 2024, respectively. The increase primarily represents a ERTC credit received in April 2025.
We continue to incur significant costs in seeking to protect our intellectual property rights, including significant litigation costs in connection with seeking to enforce our rights concerning third parties’ at-risk launch of generic products.
We continue to incur significant costs in seeking to protect our intellectual property rights, including significant litigation costs in connection with seeking to enforce our rights concerning third parties’ at-risk launch of generic products. We will continue to manage business costs to prepare for a potential future decline in Suboxone revenue and other external factors affecting our business.
In connection with the Monetization Agreement, we performed an assessment under ASC 860, Transfer and Servicing to determine whether the existing receivable was transferred to Marathon and concluded that the receivable was 69 not transferred. See Part II Item 8. Financial Statements and Supplementary Data, Note 17, Sale of Future Revenue , and Note 13, Other-Non-Current Assets for further detail.
In connection with the Monetization Agreement, we performed an assessment under ASC 860, Transfer and Servicing to determine whether the existing receivable was transferred to Marathon and concluded that the receivable was not transferred. See Part II Item 8.
The increase was primarily related to the underwritten public offering which provided net proceeds of $71,974, and higher ATM proceeds by $2,871 due to higher volumes and Common Stock prices as compared to the prior year.
The increase was primarily related to net proceeds of $79,460 from the 2025 Underwritten Public Offering as compared to net proceeds of $71,974 from the 2024 Underwritten Public Offering, higher ATM proceeds by $9,411 due to higher volumes and Common Stock prices as compared to the prior year, higher net proceeds from exercise of warrants by $1,265, and higher net proceeds from exercise of options by $538.
Similarly determined estimates are recorded relating to wholesaler service fees, co-pay support redemptions, and other rebates, and these estimates are reflected as a component of accrued liabilities. Once all related variable considerations are resolved and uncertainties as to collectable amounts are eliminated, estimates are adjusted to actual allowance amounts.
Once receivables are collected, allowances are reclassified and treated as accrued liabilities. Similarly determined estimates are recorded relating to wholesaler service fees, co-pay support redemptions, and other rebates, and these estimates are reflected as a component of accrued liabilities.
The increase in research and development expenses is primarily due to clinical trial costs and product research expenses associated with the continued advancement of the Anaphylm and AQST-108 programs, increases in personnel costs, and an increase in share-based compensation.
The decrease in R&D expenses is primarily due to decreases in clinical trial costs associated with the continued advancement of the Anaphylm program, partially offset by increases in product research expenses as well as R&D personnel costs and share-based compensation.
Interest Expense Interest expense consists of interest costs on the outstanding balances of our 12.5% Notes and 13.5% Notes at a fixed rate of 12.5% and 13.5%, respectively, payable quarterly, as well as amortization of loan costs and debt discounts.
We continue to focus on our core business as well as regulatory and pre-commercial launch activities for Anaphylm. Interest Expense Interest expense consists of interest costs on the outstanding balances of our 13.5% Notes at a fixed rate of 13.5%, payable quarterly, and amortization of issuance costs and debt discounts.
Co-development and research fees increased 37% or $523 for the year ended December 31, 2024 compared to the same period in 2023. The increase was driven by the timing of the achievement of research and development performance obligations which are expected to fluctuate from one reporting period to the next.
The decrease was driven by the timing of the achievement of research and co-development performance obligations which are expected to fluctuate among reporting periods. Proprietary product revenue, net decreased by $793 for the year ended December 31, 2025 compared to the same period in 2024.
Our ability to secure additional equity financing could be significantly impacted by numerous factors including our operating performance and prospects, positive or negative developments in the regulatory approval process for our product candidates, our existing level of debt which is secured by substantially all of our assets under the Indenture, and general financial market conditions, and there can be no assurance that we will continue to be successful in raising capital or that any such needed financing will be available, available on favorable or acceptable terms, if at all. 75 If adequate funds are not available for our short-term or longer-term liquidity needs and cash requirements as and when needed, we would be required to engage in expense management activities such as reducing staff, delaying, significantly scaling back, or even discontinuing some or all of our current or planned launch activities and research and development programs and clinical and other product development activities, and otherwise significantly reducing our other spending and adjusting our operating plan, and we would need to seek to take other steps intended to improve our liquidity.
Our ability to secure additional equity financing could be significantly impacted by numerous factors including our operating performance and prospects, positive or negative developments in the regulatory approval process for our product candidates, our existing level of debt which is secured by substantially all of our assets under the Indenture Agreement, and general financial market conditions, and there can be no assurance that we will continue to be successful in raising capital or that any such needed financing will be available on favorable or acceptable terms, if at all.
For more information regarding our future lease payments, see Part II, Item 8. Financial Statements and Supplementary Data, Note 11, Right-of-Use Assets and Lease Obligations for our minimum lease payments schedule. The expected timing of our leases may be different in future years, depending on our decision to extend lease terms and/or enter into leases in preceding years.
For more information regarding our future lease payments, see Part II, Item 8. Financial Statements and Supplementary Data, Note 11, Right-of-Use Assets and Lease Obligations for our minimum lease payments schedule.
Until profitability is achieved, if at all, additional capital and/or other financing or funding will be required, which could be material, to further advance the commercialization of Libervant for pediatric patients between two and five years of age and development and commercialization of Anaphylm and AQST-108, if approved by the FDA, and to meet our other cash requirements, including debt service, specifically our 13.5% Notes.
Until profitability is achieved, if at all, additional capital and/or other financing or funding will be required, which could be material, to develop and commercialize our product pipeline, including AQST-108, and to fund additional development and commercial activities that are required by the FDA for Anaphylm under the CRL issued to the Company on January 30, 2026, and to meet our other cash requirements, including debt 69 service, specifically our 13.5% Notes.
The increase was primarily due to certain one-time increases in license and royalty revenue and increases in co-development and research fees, partially offset by decreases in manufacture and supply revenue. Manufacture and supply revenue decreased 9% or $3,829 for the year ended December 31, 2024 compared to the same period in 2023.
The decrease was primarily due to decreases in license and royalty revenue, proprietary product revenue, net, and co-development and research fees. Manufacture and supply revenue increased 1% or $249 for the year ended December 31, 2025 compared to the same period in 2024.
The increase primarily represents higher commercial spending of approximately $3,750, higher personnel costs of approximately $3,000, severance costs of approximately $2,900, higher share-based compensation expenses of $2,300, higher regulatory and licensing fees of approximately $1,400 related to the regulatory fee for Libervant, higher legal fees of $520, and higher expenses of $4,600 due to a change in the allocation of manufacture and supply costs compared to the prior period, partially offset by lower insurance expenses of $1,150.
The increase primarily represents higher legal-related expenses of approximately $14,300, higher commercial spending of approximately $9,600 in preparation for the launch of Anaphylm, Anaphylm PDUFA fee of $4,310, higher personnel expenses of approximately $1,900, higher regulatory expenses related to Anaphylm of approximately $1,000, and higher share-based compensation expenses of approximately $900, partially offset by lower severance expenses of approximately $2,800 including the acceleration of share-based compensation, and lower insurance expenses of approximately $600.
Revenue Recognition Proprietary product revenue, net - this net revenue is recognized when product is shipped and title passes to the customer, typically at time of delivery. At the time of sale, estimates for various revenue allowances are recorded based on historical trends and judgmental estimates .
At the time of sale, estimates for various revenue allowances are recorded based on historical trends and judgmental estimates.
Year Ended December 31, Change 2024 2023 $ % (In thousands, except %) Manufacture and supply revenue $ 39,976 $ 43,805 $ (3,829) (9 %) License and royalty revenue 15,345 5,376 9,969 185 % Co-development and research fees 1,925 1,402 523 37 % Proprietary product revenue, net 315 — 315 N/M Total revenues $ 57,561 $ 50,583 $ 6,978 14 % Revenues increased 14% or $6,978 in 2024 compared to the same period in 2023.
Year Ended December 31, Change 2025 2024 $ % (In thousands, except %) Manufacture and supply revenue $ 40,225 $ 39,976 $ 249 1 % License and royalty revenue 3,519 15,345 (11,826) (77 %) Co-development and research fees 1,279 1,925 (646) (34 %) Proprietary product revenue, net (478) 315 (793) N/M Total revenues $ 44,545 $ 57,561 $ (13,016) (23 %) Revenues decreased 23% or $13,016 for the year ended December 31, 2025, compared to the same period in 2024.
Interest Income and other income, net Interest income and other income, net consists of earnings derived from an interest-bearing account, investments in money market Treasury mutual funds and other miscellaneous income and expense items.
Financial Statements and Supplementary Data, Note 17, Sale of Future Revenue , and Note 13, Other-Non-Current Assets for further detail. 64 Interest Income and other income, net Interest income and other income, net consists of earnings derived from an interest-bearing accounts, investments in money market Treasury mutual funds, Treasury bills and other miscellaneous income and expense items.
The increase in cash used for operating activities was primarily related to the change in net loss of $36,267 and deferred revenue of $13,809, which was mostly attributed to the recognition of deferred revenues due to the termination of license and supply agreements during the year ended December 31, 2024, and increases in trade and other receivables of $4,167.
The increase in cash used for operating activities was primarily related to the increases in net loss by $39,647, in trade and other receivables by $11,466, and in inventories by $851, partially offset by increases in liabilities by $21,265 largely due to obligations under a confidential legal settlement, changes in deferred revenue of $12,272, which were mostly attributed to the recognition of deferred revenues due to the termination of license and supply agreements during the year ended December 31, 2024, and decreases in prepaid expenses and other assets by $921.
Financial Operations Overview Revenues We generate revenues in four primary categories: manufacture and supply revenue, license and royalty revenue, co-development and research fees, and proprietary product revenue, net.
R evenues are also earned from our product development services provided under contracts with customers, and from the licensing of our intellectual property. We generate revenues in four primary categories: manufacture and supply revenue, license and royalty revenue, co-development and research fees, and proprietary product revenue, net.
The decrease in manufacture and supply costs was due to lower volume of strips sold, changes in product mix, and lower production costs. Research and development expenses increased 55%, or $7,176, for the year ended December 31, 2024 compared to the same period in 2023.
The increase in manufacture and supply costs was due to changes in product mix and inventory write downs. R&D expenses decreased 15%, or $3,088, for the year ended December 31, 2025 compared to the same period in 2024.
The New Warrants have an exercise price of $2.60 per share. On November 1, 2023, we issued $45,000 aggregate principal amount of its 13.5% Notes due November 1, 2028.
On November 1, 2023, we issued $45,000 in aggregate principal amount of the 13.5% Notes due November 1, 2028. Principal payments of the 13.5% Notes will commence in June 2026, unless the 13.5% Notes are refinanced or amended.
For the year ended December 31, 2023, we sold 4,958,341 shares under the ATM facility which provided net proceeds of approximately $8,962 after deducting commissions and other transaction costs of $502.
For the year ended December 31, 2024, we sold 4,557,220 shares under the ATM facility which provided net proceeds of approximately $11,821 after deducting commissions and other transaction costs of $564. The remaining authorized balance of the ATM facility was $78,000 as of December 31, 2025. On June 6, 2022, we entered into the Securities Purchase Agreements with certain purchasers.
This increase was partially offset by an additional accrual for returns allowances related to the period prior to the outlicensing to Assertio of our proprietary product, Sympazan, which is recorded as an addition to accrued distribution expenses and sales return provision. 70 Expenses, Interest Income and Other Income: The following table sets forth our expense data for the periods indicated: Year Ended December 31, Change 2024 2023 $ % (In thousands, except %) Manufacture and supply $ 17,872 $ 20,831 $ (2,959) (14 %) Research and development 20,280 13,104 7,176 55 % Selling, general and administrative 50,180 31,750 18,430 58 % Interest expense 11,122 6,337 4,785 76 % Interest expense related to royalty obligations 5,459 905 4,554 N/M Interest expense related to the sale of future revenue 236 220 16 7 % Interest income and other income, net (3,437) (16,321) 12,884 (79) % Loss on extinguishment of debt — 1,382 (1,382) N/M Manufacture and supply costs and expenses decreased 14%, or $2,959, for the year ended December 31, 2024 compared to the same period in 2023.
Expenses, Interest Income and Other Income: The following table sets forth our expenses and income for the periods indicated: Year Ended December 31, Change 2025 2024 $ % (In thousands, except %) Manufacture and supply $ 18,555 $ 17,872 $ 683 4 % Research and development 17,192 20,280 (3,088) (15 %) Selling, general and administrative 79,849 50,180 29,669 59 % Interest expense 11,120 11,122 (2) — % Interest expense related to royalty obligations 5,737 5,459 278 5 % Interest expense related to the sale of future revenue 243 236 7 3 % Interest income and other income, net (4,367) (3,437) (930) 27 % 65 Manufacture and supply costs and expenses increased 4%, or $683, for the year ended December 31, 2025 compared to the same period in 2024.
We have used and intend to continue to use the net proceeds received from these transactions, together with the Company’s existing cash and cash equivalents, primarily to advance the development and commercialization of our product pipeline, including Anaphylm™ (epinephrine) Sublingual Film for the treatment of severe life-threatening allergic reactions, including anaphylaxis, and the continued commercial expansion of Libervant® (diazepam) Buccal Film for the treatment of ARS patients aged between two and five years, and for working capital, capital expenditures and general corporate purposes.
We have used and intend to continue to use our existing cash and cash equivalents, primarily to advance the development and commercialization of our product pipeline and for working capital, capital expenditures and general corporate purposes.
Results of Operations Comparison of Years Ended December 31, 2024 and 2023 The following discussion of our results of operations explains the material drivers of these results of operations. Revenues The following table sets forth our revenue data for the periods indicated.
These interest-bearing accounts have no minimum amounts to be maintained in the accounts for which interest and dividends are earned. Results of Operations Comparison of Years Ended December 31, 2025 and 2024 The following discussion of our results of operations explains the material drivers of these results of operations.
In addition to the underwriting discounts related to this offering, we incurred professional fees and other costs totaling $894 as of December 31, 2024. 73 Cash Flows The following table provides information regarding our cash flows for the years ended December 31, 2024 and 2023: (In thousands) 2024 2023 Net cash used for operating activities $ (35,759) $ (6,380) Net cash used for investing activities (159) (995) Net cash provided by financing activities 83,592 3,974 Net increase (decrease) in cash and cash equivalents $ 47,674 $ (3,401) Net Cash Used for Operating Activities Net cash used for operating activities for the year ended December 31, 2024 increased by $29,379 compared to the same period in 2023.
Year Ended December 31, (In thousands) 2025 2024 Net cash used for operating activities $ (52,432) $ (35,759) Net cash used for investing activities (562) (159) Net cash provided by financing activities 102,617 83,592 Net increase in cash and cash equivalents $ 49,623 $ 47,674 Net Cash Used for Operating Activities Net cash used for operating activities for the year ended December 31, 2025 increased by $16,673 compared to the same period in 2024.
In 2023, product research expenses for Libervant of $215 were primarily due to data integration and modeling work. R&D personnel costs increased by 13%, or $734, for the year ended December 31, 2024 compared to the same period in 2023, due to additional headcount.
R&D personnel costs and share-based compensation increased by $266, or 4% and $660, or 54%, respectively, primarily due to severance and acceleration of compensation expense, partially offset by forfeitures. Selling, general and administrative expenses increased 59%, or $29,669, for the year ended December 31, 2025 as compared to the same period in 2024.
This increase was primarily due to the one-time recognition of deferred revenues of $11,544 due to the terminations of licensing and supply agreements. These increases were partially offset by a $1,500 decrease in milestone licensing revenue for Azstarys from Zevra Therapeutics recognized in the prior year.
This decrease was primarily due to the one-time recognition of deferred revenues of $11,544 due to the termination of licensing and supply agreements in the prior year. Co-development and research fees decreased 34% or $646 for the year ended December 31, 2025 compared to the same period in 2024.
Total project expenses for AQST-108 increased $786 for the year ended December 31, 2024 compared to the same period in 2023 and were related to feasibility work for AQST-108. In 2023, Clinical trial expenses for Libervant of $1,090 were a credit from third party contractors upon the post completion audit of a study.
Total project expenses for AQST-108 decreased $289 over the comparable period in 2024 due to a credit received from a vendor and due to completion of feasibility work for AQST-108 performed in the prior year period.
Interest expense increased 76%, or $4,785, for the year ended December 31, 2024 compared to the same period in 2023. The increase was mostly driven by the increased amortization of debt issuance costs and discounts and higher interest expense on the 13.5% Notes refinanced in November 2023.
These amounts represent interest incurred on the outstanding 13.5% Notes, and amortization of the debt discount and capitalized debt issuance costs. 66 Interest expense related to amortization of the discount on the royalty obligations was $5,737 and $5,459 for the years ended December 31, 2025 and 2024, respectively.
For more information on our payments related to the 13.5% Notes, see Part II, Item 8. Financial Statements and Supplementary Data, Note 15, Long-Term Debt .
The expected timing of our leases may be different in future years, depending on our decision to extend terms of leases entered in proceeding years and/or enter into new leases. For more information on our obligations related to the 13.5% Notes, see Part II, Item 8.
Removed
We have a proprietary commercial product, Libervant® (diazepam) Buccal Film for the acute treatment of intermittent, stereotypic episodes of frequent seizure activity ( i.e. , seizure clusters, acute repetitive seizures) that are distinct from a patient’s usual seizure pattern in patients with epilepsy between two and five years of age, which was launched in April 2024.

… 60 more changes not shown on this page.

Other AQST 10-K year-over-year comparisons