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What changed in Eton Pharmaceuticals, Inc.'s 10-K — 2024 vs 2025

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

+143 added−143 removedSource: 10-K (2026-03-19) vs 10-K (2025-03-18)

Top changes in Eton Pharmaceuticals, Inc.'s 2025 10-K

143 paragraphs added · 143 removed · 76 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

18 edited+5 added−7 removed121 unchanged
Biggest changeAccordingly, the Company has filed a request with the SEC that the SEC waive the aforementioned financial statement filing requirement. 8 Risk Factors Summary You should carefully consider the risks set forth in the section of this Annual Report of Form 10-K entitled “Risk Factors” beginning on page 11 of this Annual Report, including, but not limited to, the following: ● We may have significant research, regulatory and development expenses as we advance our product candidates. ● We may need to grow the size of our organization, and we may experience difficulties in managing this growth. ● If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates. ● We may acquire businesses or products, or form strategic alliances, in the future, and we may not realize the benefits of such acquisitions. ● 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. ● Use of artificial intelligence-based software by us or third parties with which we contract, may lead to the release of confidential information which may impact our ability to realize the benefits of our intellectual property. ● Sales of counterfeits of any of our product candidates, as well as unauthorized sales of any of our product candidates, may have adverse effects on our revenues, business and results of operations and damage our brand and reputation. ● We have entered into several arrangements with related parties for the development and marketing of certain product candidates and these arrangements present potential conflicts of interest. ● We face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively. ● Our competitors may obtain FDA or other regulatory approval for comparable products more rapidly than we may obtain approval for ours, and the risk of our competitors doing so may lead us to develop drug candidates without disclosing certain information with regard to such candidates. ● If we are not able to obtain regulatory approvals for our product candidates, we will not be able to commercialize our product candidate and our ability to generate revenue will be limited. ● If the FDA concludes that our product candidates do not satisfy the requirements for the 505(b)(2) regulatory approval pathway, or if the requirements for approval of any of our product candidates under Section 505(b)(2) are not as we expect, the approval pathway for our product candidates will likely take significantly longer, cost significantly more and encounter significantly greater complications and risks than anticipated, and in any case may not be successful. ● An NDA submitted under Section 505(b)(2) subjects us to the risk that we may be subject to a patent infringement lawsuit that would delay or prevent the review or approval of our product candidate. ● Even if we receive regulatory approval for any of our product candidates, we may not be able to successfully commercialize the product, and the revenue that we generate from its sales, if any, may be limited. ● We are subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.
Biggest changeSolely for convenience, the trademarks and trade names in this Annual Report are referred to without the symbols ® and ™, but such references should not be construed as any indication that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. 8 Risk Factors Summary You should carefully consider the risks set forth in the section of this Annual Report of Form 10-K entitled “Risk Factors” beginning on page 10 of this Annual Report, including, but not limited to, the following: ● The Inflation Reduction Act and related Medicare reforms may adversely affect the prices we realize and the demand for our products. ● Our participation in U.S. government price reporting and discount programs (including the Medicaid Drug Rebate Program, 340B, VA/FSS and TRICARE) could adversely affect the net prices we realize and expose us to significant liabilities. ● Third-party coverage and reimbursement and health care cost containment initiatives, including PBM practices, formulary controls and utilization management may constrain our future revenues. ● We may operate or support patient services and assistance programs, and government scrutiny of these activities could require us to curtail such programs, reducing patient access and adversely affecting demand for our products. ● If we obtain or seek marketing authorizations and commercialization outside the United States, we may be subject to pricing controls and health technology assessment processes that could delay commercialization and reduce net prices. ● We may need to grow the size of our organization, and we may experience difficulties in managing this growth. ● If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates. ● We may acquire businesses or products, or form strategic alliances, in the future, and we may not realize the benefits of such acquisitions. ● 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. ● Use of artificial intelligence-based software by us or third parties with which we contract, may lead to the release of confidential information which may impact our ability to realize the benefits of our intellectual property. ● Sales of counterfeits of any of our product candidates, as well as unauthorized sales of any of our product candidates, may have adverse effects on our revenues, business and results of operations and damage our brand and reputation. ● We face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively. ● Our competitors may obtain FDA or other regulatory approval for comparable products more rapidly than we may obtain approval for ours, and the risk of our competitors doing so may lead us to develop drug candidates without disclosing certain information with regard to such candidates. ● If we are not able to obtain regulatory approvals for our product candidates, we will not be able to commercialize our product candidate and our ability to generate revenue will be limited. ● If the FDA concludes that our product candidates do not satisfy the requirements for the 505(b)(2) regulatory approval pathway, or if the requirements for approval of any of our product candidates under Section 505(b)(2) are not as we expect, the approval pathway for our product candidates will likely take significantly longer, cost significantly more and encounter significantly greater complications and risks than anticipated, and in any case may not be successful. ● An NDA submitted under Section 505(b)(2) subjects us to the risk that we may be subject to a patent infringement lawsuit that would delay or prevent the review or approval of our product candidate. ● Even if we receive regulatory approval for any of our product candidates, we may not be able to successfully commercialize the product, and the revenue that we generate from its sales, if any, may be limited. ● We are subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.
We typically avoid participating in broker led transactions of auction processes. ● Regulatory expertise – our knowledge and experience in gaining FDA approval, and particularly our knowledge within the 505(b)(2) regulatory pathway, provides drug sponsors with the opportunity to leverage existing data or literature to drastically expedite drug development timelines and reduce investment. ● Established commercial operations – our sales and marketing teams have developed strong relationships with healthcare professionals and patient advocacy groups in multiple therapeutic areas.
We typically avoid participating in broker led transactions or auction processes. ● Regulatory expertise – our knowledge and experience in gaining FDA approval, and particularly our knowledge within the 505(b)(2) regulatory pathway, provides drug sponsors with the opportunity to leverage existing data or literature to drastically expedite drug development timelines and reduce investment. ● Established commercial operations – our sales and marketing teams have developed strong relationships with healthcare professionals and patient advocacy groups in multiple therapeutic areas.
We do not have complete control over these pharmaceutical compounds and any loss of our rights to them could prevent us from selling our products. ● It is difficult and costly to protect our intellectual property rights, and we cannot ensure the protection of these rights. ● Changes in either U.S. or foreign patent law or interpretation of such laws could diminish the value of patents in general, thereby impairing our ability to protect our products. ● Our product candidates may infringe the intellectual property rights of others, which could increase our costs and delay or prevent our development and commercialization efforts. ● Others may claim an ownership interest in our intellectual property, which could expose us to litigation and have an adverse effect on our prospects. ● We may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers. 10
We do not have complete control over these pharmaceutical compounds and any loss of our rights to them could prevent us from selling our products. ● It is difficult and costly to protect our intellectual property rights, and we cannot ensure the protection of these rights. ● Changes in either U.S. or foreign patent law or interpretation of such laws could diminish the value of patents in general, thereby impairing our ability to protect our products. ● Our product candidates may infringe the intellectual property rights of others, which could increase our costs and delay or prevent our development and commercialization efforts. ● Others may claim an ownership interest in our intellectual property, which could expose us to litigation and have an adverse effect on our prospects. ● We may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers. 9
Preclinical development of a drug candidate can take several years to complete, with no guarantee that an IND based on those studies will become effective to even permit clinical testing to begin.
Preclinical development of a drug candidate can take several years to complete, with no guarantee that an IND application based on those studies will become effective to even permit clinical testing to begin.
Section 505(b)(2) New Drug Applications We intend to submit applications for certain product candidates via the 505(b)(2) regulatory pathway. As an alternate path for FDA approval of new indications or new formulations of previously approved products, a company may submit a Section 505(b)(2) NDA, instead of a “stand-alone” or “full” NDA.
Section 505(b)(2) New Drug Applications We submit applications for certain product candidates via the 505(b)(2) regulatory pathway. As an alternate path for FDA approval of new indications or new formulations of previously approved products, a company may submit a Section 505(b)(2) NDA, instead of a “stand-alone” or “full” NDA.
Our choice to rely on external manufacturers significantly reduces the amount of capital invested in our business and allows us the flexibility to pursue a broad range of opportunities beyond the specific capabilities of a single facility.
Our choice to rely on external manufacturers significantly reduces the amount of capital required to be invested in our business and allows us the flexibility to pursue a broad range of opportunities beyond the specific capabilities of a single facility.
These products are distributed to patients via specialty pharmacies, which support customer service and reimbursement activities. Research and Development We currently have eight employees that support our product research and development (“R&D”) priorities and strategy.
These products are distributed to patients via specialty pharmacies, which support customer service and reimbursement activities. Research and Development We currently have twelve employees that support our product research and development (“R&D”) priorities and strategy.
PKU GOLIKE ® - In March 2024, w e acquired the U.S. rights to PKU GOLIKE, which is a next generation medical formula product engineered with the patent protected, pharmaceutical grade Physiomimic™ technology for the dietary management of phenylketonuria (“PKU”) under medical supervision.
PKU GOLIKE ® - In March 2024, we acquired the U.S. rights to PKU GOLIKE, which is a next generation medical formula product engineered with the patent protected, pharmaceutical grade Physiomimic™ technology for the dietary management of phenylketonuria (“PKU”) under medical supervision.
ET-400 is protected by two issued patents that extend to 2043 and there are additional patent applications related to this product under review with the U.S. Patent and Trademark Office (“USPTO”). ET-600 is protected by an issued patent that extends to 2044 and there are additional patent applications related to this product under review with the USPTO.
KHINDIVI TM is protected by two issued patents that extend to 2043, and there are additional patent applications related to this product under review with the U.S. Patent and Trademark Office (“USPTO”). ET-600 is protected by an issued patent that extends to 2044 and there are additional patent applications related to this product under review with the USPTO.
These relationships allow us to commercialize new products quickly and effectively. Sales and Marketing We currently commercialize seven products under our own label with our internal infrastructure and sales force. We market and sell INCRELEX®, ALKINDI SPRINKLE®, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone in the United States consistent with applicable laws.
These relationships allow us to commercialize new products quickly and effectively. Sales and Marketing We currently commercialize eight products under our own label with our internal infrastructure and sales force. We market and sell INCRELEX®, ALKINDI SPRINKLE®, KHINDIVI TM , GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone in the United States consistent with applicable laws.
ZENEO ® Hydrocortisone Autoinjector – Our ZENEO® hydrocortisone autoinjector product candidate is a proprietary needle-free autoinjector under development for the treatment of adrenal crisis. 2 Eton Pharmaceuticals Products Summary Product Eton Category Indication FDA Status INCRELEX® Endocrinology Severe Primary IGF-1 Deficiency Commercial ALKINDI SPRINKLE® Endocrinology Adrenal Insufficiency Commercial GALZIN® Metabolic Wilson Disease Commercial PKU GOLIKE® Metabolic Phenylketonuria Commercial Carglumic Acid Tablets Metabolic NAGS deficiency Commercial Betaine Anhydrous Metabolic Homocystinuria Commercial Nitisinone Metabolic Tyrosinemia Type 1 Commercial ET-400 Endocrinology Adrenal Insufficiency NDA Submitted (PDUFA Goal Date of May 28, 2025) ET-600 Endocrinology Diabetes Insipidus Under Development Amglidia® Endocrinology Neonatal diabetes mellitus Under Development ET-700 Metabolic Wilson Disease Under Development ET-800 Endocrinology Adrenal Insufficiency Under Development ZENEO® Hydrocortisone Endocrinology Adrenal Crisis Under Development Goals and Strengths Our goal is to become a leading pharmaceutical company focused on developing and commercializing treatments for rare diseases.
ZENEO ® Hydrocortisone Autoinjector – Our ZENEO® hydrocortisone autoinjector product candidate is a proprietary needle-free autoinjector under development for the treatment of adrenal crisis. 2 Eton Pharmaceuticals Products Summary Product Eton Category Indication FDA Status INCRELEX® Endocrinology Severe Primary IGF-1 Deficiency Commercial ALKINDI SPRINKLE® Endocrinology Adrenal Insufficiency Commercial KHINDIVI TM Endocrinology Adrenal Insufficiency Commercial GALZIN® Metabolic Wilson Disease Commercial PKU GOLIKE® Metabolic Phenylketonuria Commercial Carglumic Acid Tablets Metabolic NAGS deficiency Commercial Betaine Anhydrous Metabolic Homocystinuria Commercial Nitisinone Metabolic Tyrosinemia Type 1 Commercial ET-600 Endocrinology Diabetes Insipidus PDUFA goal date of February 25, 2026 Amglidia® Endocrinology Neonatal diabetes mellitus Under Development ET-700 Metabolic Wilson Disease Under Development ET-800 Endocrinology Adrenal Insufficiency Under Development ZENEO® Hydrocortisone Endocrinology Adrenal Crisis Under Development Goals and Strengths Our goal is to become a leading pharmaceutical company focused on developing and commercializing treatments for rare diseases.
Item 1. Business About Eton Eton is an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases. We currently have seven commercial rare disease products: INCRELEX®, ALKINDI SPRINKLE®, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone. We have six additional product candidates in late-stage development: ET-400, ET-600, Amglidia®, ET-700, ET-800 and ZENEO® hydrocortisone autoinjector.
Item 1. Business About Eton Eton is an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases. We currently have eight commercial rare disease products: INCRELEX®, ALKINDI SPRINKLE®, KHINDIVI TM , GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone. We have five additional product candidates in late-stage development: ET-600, Amglidia®, ET-700, ET-800 and ZENEO® hydrocortisone autoinjector.
In the event we have to perform under these indemnification provisions, it could have an adverse effect on our business, financial condition and results of operations. 9 ● Any termination or suspension of, or delays in the commencement or completion of, any necessary studies of any of our product candidates for any indications could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects. ● Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results. ● Third-party coverage and reimbursement and health care cost containment initiatives and treatment guidelines may constrain our future revenues. ● We are subject to extensive laws and regulations related to data privacy, and our failure to comply with these laws and regulations could harm our business. ● We will depend on rights to certain pharmaceutical compounds that have been acquired by us.
In the event we have to perform under these indemnification provisions, it could have an adverse effect on our business, financial condition and results of operations. ● Any termination or suspension of, or delays in the commencement or completion of, any necessary studies of any of our product candidates for any indications could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects. ● Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results. ● We are subject to extensive laws and regulations related to data privacy, and our failure to comply with these laws and regulations could harm our business. ● We will depend on rights to certain pharmaceutical compounds that have been acquired by us.
Employees At December 31, 2024, we had 31 full-time employees, eight of whom are engaged in research and development activities, 18 are engaged in sales and marketing operations and five of whom are engaged in general corporate and strategy roles. We periodically utilize outside consultants on an as-needed basis, including medical consultants.
Employees At December 31, 2025, we had 44 full-time employees, twelve of whom are engaged in research and development activities, twenty-four are engaged in sales and marketing operations and eight of whom are engaged in general corporate and strategy roles. We periodically utilize outside consultants on an as-needed basis, including medical consultants.
Additionally, our product candidates could be subject to labeling and other restrictions and withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates. ● Significant additional labeling or warning requirements or limitations on the availability of our products may inhibit sales of affected products. ● Current and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain. ● Changes in U.S. trade policy, threats of international tariffs, and changes to the U.S. political landscape may adversely affect our business, results of operations, financial condition, and prospects. ● If we market any of our products or product candidates in a manner that violates health care fraud and abuse laws, or if we violate government price reporting laws, we may be subject to civil or criminal penalties. ● We may not be able to establish agreements with third parties with whom we wish to collaborate and, if we are able to establish them, we may not be able to establish them on commercially reasonable terms, which could result in alterations or delays of our development and commercialization plans. ● We expect to rely on third parties to conduct clinical trials for our product candidates.
Additionally, our product candidates could be subject to labeling and other restrictions and withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our product candidates. ● Significant additional labeling or warning requirements or limitations on the availability of our products may inhibit sales of affected products. ● We are subject to Drug Supply Chain Security Act requirements, and failure to comply could disrupt our distribution and result in enforcement action. ● Changes in U.S. trade policy, threats of international tariffs, and changes to the U.S. political landscape may adversely affect our business, results of operations, financial condition, and prospects. ● If we market any of our products or product candidates in a manner that violates health care fraud and abuse laws, we may be subject to civil or criminal penalties. ● We may not be able to establish agreements with third parties with whom we wish to collaborate and, if we are able to establish them, we may not be able to establish them on commercially reasonable terms, which could result in alterations or delays of our development and commercialization plans. ● We expect to rely on third parties to conduct clinical trials for our product candidates.
GALZIN® is FDA-approved as a maintenance treatment for patients with Wilson Disease who have been initially treated with a chelating agent. It is estimated that less than 5,000 patients in the U.S. are currently being treated for Wilson Disease. We acquired the product in December 2024 and assumed the commercialization of the product in the U.S. in March 2025.
It is estimated that less than 5,000 patients in the U.S. are currently being treated for Wilson disease. We acquired the product in December 2024 and assumed the commercialization of the product in the U.S. in March 2025.
AMMTeK has conducted a post-approval study tracking five years of real-world safety and efficacy in European patients, which will be used to support Eton’s NDA submission. ET-700 – We are developing this zinc extended release product for the treatment of Wilson disease. We plan to hold a meeting with the FDA in 2025 to discuss the product’s clinical pathway.
AMMTeK has conducted a post-approval study tracking five years of real-world safety and efficacy in European patients, which will be used to support Eton’s NDA submission. ET-700 – We are scheduled to begin its proof-of-concept positron emission tomography ("PET") study during 2026.
We expect to submit an NDA for the product in 2025, which could allow for an approval and launch of the product in 2026. Amglidia ® - In November 2024, we entered into a licensing agreement with AMMTeK., pursuant to which we have agreed to acquire the U.S. rights to Amglidia® (glyburide oral suspension).
The Company recently held an ET-600 advisory meeting with leading healthcare practitioners within the pediatric endocrinology community. Amglidia ® - In November 2024, we entered into a licensing agreement with AMMTeK., pursuant to which we have agreed to acquire the U.S. rights to Amglidia® (glyburide oral suspension), which we also have a license to the issued patent on Amglidia®.
Removed
ET-400 - We submitted to the FDA a New Drug Application (“NDA”) for the product in 2024, which was originally scheduled with a Prescription Drug User Fee Amendments (“PDUFA”) goal date of February 28, 2025.
Added
KHINDIVI TM – This product was approved by the FDA in May 2025 as a replacement therapy in pediatric patients five years of age and older for adrenocortical insufficiency. KHINDIVI is the only FDA-approved oral solution formulation of hydrocortisone.
Removed
On February 6, 2025, we were notified by the FDA that it had applied a three-month extension to the original PDUFA goal date of February 28, 2025. The new PDUFA goal date is now May 28, 2025. ET-600 – ET-600 is under development for the treatment of central diabetes insipidus.
Added
It comes in a 1mg/ml strength designed to eliminate the need to split or crush tablets, and to offer simple and accurate dosing specifically tailored to each patient’s needs. It does not require refrigeration, mixing, or shaking – it is a ready-to-use oral liquid solution.
Removed
Solely for convenience, the trademarks and trade names in this Annual Report are referred to without the symbols ® and ™, but such references should not be construed as any indication that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.
Added
KHINDIVI is designed to offer administration simplicity and dosing accuracy, and to provide a therapy option for patients who have difficulty swallowing tablets or with special administration needs, such as patients with a gastric tube. GALZIN® is FDA-approved as a maintenance treatment for patients with Wilson disease who have been initially treated with a chelating agent.
Removed
Recent Development As previously reported in our Form 8-K/A filed on March 7, 2025, following the closing of our acquisition of the INCRELEX® product on December 19, 2024, the Company’s advisors determined that, under relevant accounting rules and interpretations, the acquisition must be accounted for by the Company as a business combination rather than an asset purchase.
Added
ET-600 – In July 2025, ET-600’s NDA was accepted for review by the FDA and assigned a PDUFA target action date of February 25, 2026. The Company has scheduled the production of launch inventory for the first quarter of 2026 in preparation for a commercial launch shortly after the anticipated approval.
Removed
As a result of this determination, the Company is required to file an amendment to the Original Report to provide separate audited financial statements and unaudited pro forma financial information for INCRELEX®, specified by Item 9.01 of Form 8-K, no later than 71 calendar days after the date that the Original Report on Form 8-K was required to be filed with the SEC, which was March 7, 2025.
Added
The study is expected to validate the efficacy of the Company’s propriety, patent-pending extended-release formulation, and if positive, would support the initiation of a dose ranging and pivotal clinical trial in late 2026 or early 2027. We have also submitted a patent for ET-700, which is currently pending.
Removed
While the Company is required to file audited financial statements of INCRELEX® for the years ended December 31, 2023 and 2022 and the nine months ended September 30, 2024 and 2023, as well as unaudited proforma financial information for the years ended December 31, 2024 and 2023, INCRELEX® was accounted for as a single product within Ipsen's consolidated financial statements and not as a separate business.
Removed
Historical financial statements for the Increlex product do not exist, and as a result, the Company believes that it will be unable to create the required financial statements.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

30 edited+36 added−46 removed363 unchanged
Biggest changeUse of artificial intelligence-based software by us or third parties with which we contract, may lead to the release of confidential information which may impact our ability to realize the benefits of our intellectual property. Artificial intelligence-based software is increasingly being used in the biopharmaceutical and healthcare industries. As with many developing technologies, artificial intelligence-based software presents risks and challenges.
Biggest changeFor additional information regarding our cybersecurity risk management, third‑party oversight, incident response processes, and board and committee oversight, see Item 1C, “Cybersecurity—Risk Management and Strategy.” Use of artificial intelligence-based software by us or third parties with which we contract, may lead to the release of confidential information which may impact our ability to realize the benefits of our intellectual property.
The market price of our shares on the Nasdaq Global Market may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not limited to: ● actual or anticipated variations in our and our competitors’ results of operations and financial condition; 27 ● market acceptance of our products; ● the mix of products that we sell and related services that we provide; ● changes in earnings estimates or recommendations by securities analysts, if our shares are covered by analysts; ● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”); ● changes in earnings estimates or recommendations by securities analysts, if our shares are covered by analysts; ● development of technological innovations or new competitive products by others; ● announcements of technological innovations or new products by us; ● publication of the results of preclinical or clinical trials for our other product candidates; ● failure by us to achieve a publicly announced milestone; ● delays between our expenditures to develop and market new or enhanced products and the generation of sales from those products; ● developments concerning intellectual property rights, including our involvement in litigation brought by or against us; ● regulatory developments and the decisions of regulatory authorities as to the approval or rejection of new or modified products; ● changes in the structure of healthcare payment systems; ● changes in the amounts that we spend to develop, acquire or license new products, technologies or businesses; ● changes in our expenditures to promote our products; ● our sale or proposed sale, or the sale by our significant stockholders, of our shares or other securities in the future; ● changes in key personnel; ● success or failure of our research and development projects or those of our competitors; ● the trading volume of our shares; and ● general economic and market conditions and other factors, including factors unrelated to our operating performance.
The market price of our shares on the Nasdaq Global Market may fluctuate as a result of a number of factors, some of which are beyond our control, including, but not limited to: ● actual or anticipated variations in our and our competitors’ results of operations and financial condition; ● market acceptance of our products; ● the mix of products that we sell and related services that we provide; ● changes in earnings estimates or recommendations by securities analysts, if our shares are covered by analysts; ● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”); ● changes in earnings estimates or recommendations by securities analysts, if our shares are covered by analysts; ● development of technological innovations or new competitive products by others; ● announcements of technological innovations or new products by us; ● publication of the results of preclinical or clinical trials for our other product candidates; ● failure by us to achieve a publicly announced milestone; ● delays between our expenditures to develop and market new or enhanced products and the generation of sales from those products; ● developments concerning intellectual property rights, including our involvement in litigation brought by or against us; ● regulatory developments and the decisions of regulatory authorities as to the approval or rejection of new or modified products; ● changes in the structure of healthcare payment systems; ● changes in the amounts that we spend to develop, acquire or license new products, technologies or businesses; ● changes in our expenditures to promote our products; ● our sale or proposed sale, or the sale by our significant stockholders, of our shares or other securities in the future; ● changes in key personnel; ● success or failure of our research and development projects or those of our competitors; ● the trading volume of our shares; and ● general economic and market conditions and other factors, including factors unrelated to our operating performance.
Alternatively, if a court were to find the choice of forum provision contained in our restated charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition. Item 1B. Unresolved Staff Comments None.
Alternatively, if a court were to find the choice of forum provision contained in our restated charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition. 31 Item 1B. Unresolved Staff Comments None.
If any of these outcomes occur, we may not receive approval for our product candidates, which could negatively impact our business, financial condition, or results of operations. We are subject to extensive laws and regulations related to data privacy, and our failure to comply with these laws and regulations could harm our business.
If any of these outcomes occur, we may not receive approval for our product candidates, which could negatively impact our business, financial condition, or results of operations. 23 We are subject to extensive laws and regulations related to data privacy, and our failure to comply with these laws and regulations could harm our business.
Because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any of our products can be commercialized, any related patent may expire or remain in existence for only a short period following commercialization, thus reducing any advantage of the patent, which could adversely affect our ability to protect future product development and, consequently, our operating results and financial position. 24 If we cannot maintain the confidentiality of our proprietary technology and other confidential information, our ability to receive patent protection and our ability to protect valuable information owned by us may be imperiled.
Because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any of our products can be commercialized, any related patent may expire or remain in existence for only a short period following commercialization, thus reducing any advantage of the patent, which could adversely affect our ability to protect future product development and, consequently, our operating results and financial position. 25 If we cannot maintain the confidentiality of our proprietary technology and other confidential information, our ability to receive patent protection and our ability to protect valuable information owned by us may be imperiled.
Because of the breadth of these laws and the narrowness of their exceptions and safe harbors, it is possible that some of our business activities could be subject to challenge under one or more of these laws. The U.S.
Because of the breadth of these laws and the narrowness of their exceptions and safe harbors, it is possible that some of our business activities could be subject to challenge under one or more of these laws. 18 The U.S.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile. 28 If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile. 29 If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
Further, we cannot provide assurance that competitors will not infringe the trademarks we use, or that we will have adequate resources to enforce these trademarks. 25 Changes in either U.S. patent law or interpretation of such laws could diminish the value of patents in general, thereby impairing our ability to protect our products .
Further, we cannot provide assurance that competitors will not infringe the trademarks we use, or that we will have adequate resources to enforce these trademarks. 26 Changes in either U.S. patent law or interpretation of such laws could diminish the value of patents in general, thereby impairing our ability to protect our products .
There is no assurance that a jury and/or court would find in our favor on questions of infringement, validity or enforceability. 26 Others may claim an ownership interest in our intellectual property, which could expose us to litigation and have an adverse effect on our prospects .
There is no assurance that a jury and/or court would find in our favor on questions of infringement, validity or enforceability. 27 Others may claim an ownership interest in our intellectual property, which could expose us to litigation and have an adverse effect on our prospects .
As of December 31, 2024, our remaining federal NOLs were generated after the 2017 tax year. Our significant state NOLs as of December 31, 2024 were generated in IL and TN, which begin to expire in 2037 and 2034, respectively.
As of December 31, 2025, our remaining federal NOLs were generated after the 2017 tax year. Our significant state NOLs as of December 31, 2025, were generated in IL and TN, which begin to expire in 2037 and 2035, respectively.
Federal false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, or causing to be made, a false statement to get a false claim paid. 19 Over the past few years, several pharmaceutical and other health care companies have been prosecuted under these laws for a variety of alleged promotional and marketing activities, such as: allegedly providing free trips, free goods, sham consulting fees and grants and other monetary benefits to prescribers; reporting to pricing services inflated average wholesale prices that were then used by federal programs to set reimbursement rates; engaging in off-label promotion that caused claims to be submitted to Medicare or Medicaid for non-covered, off-label uses; and submitting inflated best price information to the Medicaid Rebate Program to reduce liability for Medicaid rebates.
Over the past few years, several pharmaceutical and other health care companies have been prosecuted under these laws for a variety of alleged promotional and marketing activities, such as: allegedly providing free trips, free goods, sham consulting fees and grants and other monetary benefits to prescribers; reporting to pricing services inflated average wholesale prices that were then used by federal programs to set reimbursement rates; engaging in off-label promotion that caused claims to be submitted to Medicare or Medicaid for non-covered, off-label uses; and submitting inflated best price information to the Medicaid Rebate Program to reduce liability for Medicaid rebates.
As of March 10, 2025, we had 26,817,535 shares of common stock outstanding, all of which, other than shares held by our directors and certain officers, are eligible for sale in the public market, subject in some cases to compliance with the requirements of Rule 144, including volume limitations and manner of sale requirements.
As of March 17, 2026, we had 27,284,491 shares of common stock outstanding, all of which, other than shares held by our directors and certain officers, are eligible for sale in the public market, subject in some cases to compliance with the requirements of Rule 144, including volume limitations and manner of sale requirements.
We cannot be sure that we will receive these necessary approvals or that these approvals will be granted in a timely fashion. We also cannot guarantee that we will be able to enhance and optimize output in our commercial manufacturing process.
We cannot be sure that we will receive these necessary approvals or that these approvals will be granted in a timely fashion. We also cannot guarantee that we will be able to enhance and optimize output in our commercial manufacturing process. If we cannot enhance and optimize output, we may not be able to reduce our costs over time.
Provisions in our amended and restated certificate of incorporation provide that the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for: ● any derivative action or proceeding brought on our behalf; ● any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers or other employees; ● any action asserting a claim against us or any of our directors, officers or other employees arising pursuant to any provision of Delaware law or our charter documents; or ● any action asserting a claim against us or any of our directors, officers or other employees governed by the internal affairs doctrine, but excluding actions to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. 30 In addition, unless we consent in writing to the selection of an alternative forum, the Federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Provisions in our amended and restated certificate of incorporation provide that the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for: ● any derivative action or proceeding brought on our behalf; ● any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers or other employees; ● any action asserting a claim against us or any of our directors, officers or other employees arising pursuant to any provision of Delaware law or our charter documents; or ● any action asserting a claim against us or any of our directors, officers or other employees governed by the internal affairs doctrine, but excluding actions to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.
The market price of our common stock could be subject to significant fluctuations. The price of our stock may change in response to variations in our operating results and also may change in response to other factors, including factors specific to companies in our industry many of which are beyond our control.
The price of our stock may change in response to variations in our operating results and also may change in response to other factors, including factors specific to companies in our industry many of which are beyond our control.
As a result, you may not be able to sell your shares of our common stock in short time periods, or possibly at all, and the price per share of our common stock may fluctuate significantly.
As a result, you may not be able to sell your shares of our common stock in short time periods, or possibly at all, and the price per share of our common stock may fluctuate significantly. 28 The trading price of the shares of our common stock may continue to be volatile, and purchasers of our common stock could incur substantial losses.
The stock market in general, and early stage public companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies.
The trading price of our common stock has fluctuated significantly in the past and is likely to be volatile. The stock market in general, and early stage public companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies.
An active, liquid and orderly trading market for our shares may not continue to be developed or sustained . Our common stock is listed on the Nasdaq Global Market. However, trading volume has been limited and a more active public market for our common stock may not develop or be sustained over time.
Our common stock is listed on the Nasdaq Global Market. However, trading volume has been limited and a more active public market for our common stock may not develop or be sustained over time. The market price of our common stock could be subject to significant fluctuations.
If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved.
If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates, if approved. 19 Our contract manufacturers will be subject to ongoing periodic unannounced inspections by the FDA and corresponding state and foreign agencies for compliance with GMPs and similar regulatory requirements.
If we market our existing approved products or any of our new product candidates in a manner that violates health care fraud and abuse laws, or if we violate government price reporting laws, we may be subject to civil or criminal penalties .
If we market our existing approved products or any of our new product candidates in a manner that violates health care fraud and abuse laws, we may be subject to civil or criminal penalties . The FDA enforces laws and regulations, which require that the promotion of pharmaceutical products be consistent with the approved prescribing information.
In addition to the risks associated with enforcement activities and potential contractual liabilities, our ongoing efforts to comply with evolving laws and regulations at the federal and state level may be costly and require ongoing modifications to our policies, procedures and systems.
As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business. 24 In addition to the risks associated with enforcement activities and potential contractual liabilities, our ongoing efforts to comply with evolving laws and regulations at the federal and state level may be costly and require ongoing modifications to our policies, procedures and systems.
The existence of comprehensive privacy laws in different states in the country makes our compliance obligations more complex and costly and may increase the likelihood that we may be subject to enforcement actions or otherwise incur liability for noncompliance. 23 Further, regulations promulgated pursuant to HIPAA impose 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 for or on behalf of such covered entities, and their covered subcontractors.
Further, regulations promulgated pursuant to HIPAA impose 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 for or on behalf of such covered entities, and their covered subcontractors.
However, a court may determine that this provision is unenforceable. Ownership portions held by our executives and directors may limit our stockholders ’ ability to influence corporate matters . Our directors and executive officers beneficially own approximately 16.9% of our common stock.
Ownership portions held by our executives and directors may limit our stockholders ’ ability to influence corporate matters . As of December 31, 2025, our directors and executive officers beneficially own approximately 18.8% of our common stock.
For example, algorithms may be flawed, data sets may be insufficient, of poor quality, or contain biased information; and inappropriate or controversial data practices by data scientists, engineers, and end-users could impair results.
Artificial intelligence-based software is increasingly being used in the biopharmaceutical and healthcare industries. As with many developing technologies, artificial intelligence-based software presents risks and challenges. For example, algorithms may be flawed, data sets may be insufficient, of poor quality, or contain biased information; and inappropriate or controversial data practices by data scientists, engineers, and end-users could impair results.
If we cannot enhance and optimize output, we may not be able to reduce our costs over time. 20 We may not be able to establish agreements with third parties with whom we wish to collaborate and, if we are able to establish them, we may not be able to establish them on commercially reasonable terms, which could result in alterations or delays of our development and commercialization plans .
If we are required to identify and qualify an alternative supplier or manufacturing site, or to implement redundant supply, we could experience delays, increased cost of goods, supply interruptions or shortages, and adverse impacts on our development and commercialization plans. 20 We may not be able to establish agreements with third parties with whom we wish to collaborate and, if we are able to establish them, we may not be able to establish them on commercially reasonable terms, which could result in alterations or delays of our development and commercialization plans .
Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.
Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. Risks Related to Owning Our Common Stock An active, liquid and orderly trading market for our shares may not continue to be developed or sustained .
Other events that we do not currently anticipate or that we currently deem immaterial may also affect our results of operations and financial condition. Risks Relating to Our Business We may need to grow the size of our organization, and we could experience difficulties in managing this growth .
Other events that we do not currently anticipate or that we currently deem immaterial may also affect our results of operations and financial condition. Risks Relating to Pricing, Reimbursement and Market Access The Inflation Reduction Act and related Medicare reforms may adversely affect the prices we realize and the demand for our products.
Our contract manufacturers will be subject to ongoing periodic unannounced inspections by the FDA and corresponding state and foreign agencies for compliance with GMPs and similar regulatory requirements. We will not have control over our contract manufacturers’ compliance with these regulations and standards.
We will not have control over our contract manufacturers’ compliance with these regulations and standards.
Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock. We may be at an increased risk of securities class action litigation . Historically, securities class action litigation has often been brought against a company following a decline in the market price of its securities.
Any sales of securities by these stockholders could have a material adverse effect on the trading price of our common stock. 30 Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable .
We are performing a study to determine if we have triggered any “ownership change” limitations. We may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership some of which may be outside of our control.
We do not currently expect IRC Sections 382 and 383 to significantly impact our ability to utilize our tax attributes based on ownership changes through December 31, 2025. However, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership some of which may be outside of our control.
Removed
Current and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our product candidates and affect the prices we may obtain .
Added
The Inflation Reduction Act of 2022 (the “IRA”), and related federal and state healthcare reforms, have introduced new and evolving mechanisms that may affect the prices we realize for our products and the demand for our products over time.
Removed
In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the health care system that could prevent or delay marketing approval for our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell our product candidates.
Added
These mechanisms include, among others, inflation-based rebates under Medicare Parts B and D that can require payments when certain reported prices increase faster than inflation; changes to the Medicare Part D benefit beginning in 2025 that redistribute financial liability among manufacturers, plans and the government while capping patient out-of-pocket costs; and a program under which certain drugs may become subject to price negotiation on a defined timetable.
Removed
Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.
Added
The applicability and impact of these mechanisms will evolve over time based on our portfolio mix and the characteristics of individual products.
Removed
We do not know whether additional legislative changes will be enacted, or whether the FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition, increased scrutiny by the U.S.
Added
For example, whether and when a product becomes subject to the Medicare drug price negotiation program depends, among other factors, on the time elapsed since FDA approval and other selection criteria, and inflation‑based rebates in Medicare Parts B and D apply when prices increase faster than inflation.
Removed
Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product labeling and post-marketing testing and other requirements. For additional information on legislative and regulatory changes, see the Item 1. Business—Healthcare Reform section.
Added
Changes in our portfolio, utilization and payer mix could therefore alter our exposure to negotiation, inflation‑based rebates, and the redesigned Medicare Part D benefit, including our financial responsibility under the new benefit structure. Implementation will occur through ongoing regulatory actions, the outcomes of which remain uncertain.
Removed
In the United States, the Medicare Modernization Act (“MMA”) changed the way Medicare covers and pays for pharmaceutical products. The legislation expanded Medicare coverage for drug purchases by the elderly and introduced a new reimbursement methodology based on average sales prices for drugs.
Added
Even where our current products are not immediately selected for negotiation or have limited Medicare utilization, these changes may alter channel economics, increase our obligations, reduce the net prices we realize, and adversely affect patient access and demand.
Removed
In addition, this legislation authorized Medicare Part D prescription drug plans to use formularies where they can limit the number of drugs that will be covered in any therapeutic class. As a result of this legislation and the expansion of federal coverage of drug products, we expect that there will be additional pressure to contain and reduce costs.
Added
Certain statutory exemptions may apply to particular products based on their indications, approval history or other factors; however, exemptions are narrow and can change with future legislation, guidance or changes in our product portfolio. The IRA, its implementing regulations and related guidance continue to evolve, and the scope and timing of their impact on our business remains uncertain.
Removed
These cost reduction initiatives and other provisions of this legislation could decrease the coverage and price that we receive for our product candidates and could seriously harm our business.
Added
Our participation in U.S. government price reporting and discount programs imposes complex and evolving obligations that could adversely affect the net prices we realize and expose us to significant liabilities. Our participation in U.S. government price reporting and discount programs materially affects the net prices we realize and requires us to comply with complex and evolving legal and reporting obligations.
Removed
While the MMA applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates, and any reduction in reimbursement that results from the MMA may result in a similar reduction in payments from private payors.
Added
For example, under the Medicaid Drug Rebate Program, we must calculate and report Average Manufacturer Price (“AMP”) and, where applicable, Best Price, and pay rebates to states. Recalculations or restatements—whether due to errors, new interpretations, government audits or other factors—can be retroactive and may require us to pay additional rebates.
Removed
In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively referred to as the Health Care Reform Law, was enacted, which substantially changes the way health care is financed by both governmental and private insurers, and significantly impacts the U.S. pharmaceutical industry.
Added
These obligations can also affect pricing and refund requirements under the 340B Drug Pricing Program, including through recalculation of ceiling prices and controls intended to prevent duplicate discounts. In addition, our products may be subject to pricing and discount requirements under the U.S.
Removed
The Health Care Reform Law, among other things, imposed reporting requirements on manufacturers related to drug samples and financial relationships with physicians and teaching hospitals, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees on manufacturers of certain branded prescription drugs, and established a Medicare Part D coverage gap discount program.
Added
Department of Veterans Affairs and Federal Supply Schedule programs, including obligations tied to Non-Federal Average Manufacturer Price (“Non-FAMP”), Federal Ceiling Price (“FCP”) and related certifications, as well as TRICARE rebate requirements.
Removed
Some of the provisions of the Health Care Reform Law have yet to be implemented, and there have been judicial and Congressional challenges to certain aspects of the Health Care Reform Law, as well as recent efforts by the Trump administration to repeal or replace certain aspects of the Health Care Reform Law.
Added
Government authorities continue to increase scrutiny of these programs, and noncompliance (including inaccurate reporting, failure to timely report changes, or failure to implement required controls) may result in significant refunds, civil monetary penalties, contractual damages, suspension or termination from participation in government programs, reputational harm, and potential liability under the False Claims Act.
Removed
Since January 2017, former President Trump had signed two executive orders and other directives designed to delay, circumvent or loosen certain requirements mandated by the Health Care Reform Law. Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the Health Care Reform Law.
Added
Third-party coverage and reimbursement and healthcare cost containment initiatives, including formulary controls and utilization management, may constrain our future revenues. Our ability to successfully commercialize our products and product candidates depends in significant part on the extent to which governmental authorities, commercial insurers and other third-party payors provide coverage for, and establish adequate reimbursement levels for, our products.
Removed
While Congress has not passed comprehensive repeal legislation, two bills affecting the implementation of certain taxes under the Health Care Reform Law have been signed into law.
Added
Even if a product is approved, payors may limit or exclude coverage, place the product at a disadvantageous formulary tier, require prior authorization, impose step-therapy or other utilization management restrictions, or require patients to pay higher out-of-pocket costs.
Removed
The Tax Act included a provision which repealed, effective January 1, 2019, the tax-based shared responsibility payment imposed by the Health Care Reform Law on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” On January 22, 2018, former President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain Health Care Reform Law-mandated fees, including the so-called “Cadillac” tax on certain high-cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices.
Added
Pharmacy benefit managers (“PBMs”) and payors may also increase their leverage through formulary exclusions, restrictive network arrangements, and demands for greater rebates, discounts or other price concessions, which can increase our gross-to-net reductions and reduce realized prices. In addition, treatment guidelines, clinical pathways, and health technology assessment frameworks may influence prescribing behavior and coverage determinations.
Removed
The Bipartisan Budget Act of 2018, among other things, amended the Health Care Reform Law, effective January 1, 2019, to increase from 50% to 70% the point-of-sale discount that is owed by pharmaceutical manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly referred to as the “donut hole”.
Added
If coverage and reimbursement are inadequate, delayed or more restrictive than we anticipate, or if our gross-to-net reductions increase, our sales, profitability and results of operations could be adversely affected.
Removed
On December 14, 2018, a Texas U.S. District Court Judge ruled that the Health Care Reform Law is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act. In June 2021, the U.S. Supreme Court overturned the 2018 Texas U.S. District Court decision.
Added
We may operate or support patient services and assistance programs, and government scrutiny of these activities could require us to curtail such programs, reducing patient access and adversely affecting demand for our products. We may operate or support patient services, including product access hubs, patient assistance programs, or programs that help patients address out-of-pocket costs.
Removed
It is unclear how subsequent appeals, and other efforts to repeal and replace the Health Care Reform will impact our business. We cannot predict the impact on our business of changes to current laws and regulations.
Added
Government authorities have increased scrutiny of these activities, including our interactions with third-party service providers and independent charitable foundations, and the application of fraud and abuse laws to certain patient support arrangements. Evolving guidance, audits, investigations or enforcement actions could require us to modify, curtail or discontinue some of these programs or arrangements.
Removed
However, any changes that lower reimbursements for products for which we may obtain regulatory approval, or that impose administrative and financial burdens on us, could adversely affect our business. 18 In addition, other legislative changes have been proposed and adopted in the United States since the Health Care Reform Law was enacted.
Added
If patient services or assistance programs are reduced or not available on terms that support patient access, patients may be unable to afford our products, prescription abandonment may increase, and demand and net sales could decline. Investigations or enforcement actions could also result in significant costs, penalties, settlements, or reputational harm.
Removed
These changes include, among others, aggregate reductions of Medicare payments to providers of up to 2% per fiscal year. We expect that additional state and federal health care reform measures will be adopted in the future, which may alter or completely replace the existing health care financing structure.
Added
If we obtain or seek marketing authorizations and commercialization outside the United States, we may be subject to pricing controls and health technology assessment processes that could delay commercialization and reduce net prices.
Removed
Any of these reform measures could limit the amounts that federal and state governments will pay for health care products and services, which could result in reduced demand for any such product candidate that we may have developed or additional pricing pressures on our business.
Added
If we obtain or seek marketing authorizations and commercialization in jurisdictions outside the United States, we may be subject to national price controls, reimbursement reviews, reference pricing, and health technology assessment (“HTA”) processes that can delay launch timing, require additional comparative effectiveness or other evidence, and reduce the net prices we realize.
Removed
Further, there has been heightened governmental scrutiny in the United States of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics.
Added
For example, in the European Union, HTA reforms are being implemented on a phased basis and may include Joint Clinical Assessments for certain products, which could increase evidentiary requirements and affect timing and pricing negotiations.
Removed
Such scrutiny has resulted in several recent congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.
Added
Any delay or reduction in reimbursement or pricing in non-U.S. markets could adversely affect our revenues and profitability. 10 Risks Relating to Our Business We may need to grow the size of our organization, and we could experience difficulties in managing this growth .
Removed
For example, the Trump administration released a “Blueprint” to lower drug prices and reduce out-of-pocket costs of drugs that contains additional proposals to increase drug manufacturer competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list price of their products, and reduce the out-of-pocket costs of drug products paid by consumers.
Added
We are also subject to evolving cybersecurity disclosure and reporting requirements, included those adopted by the SEC, and any cybersecurity incident could require us to make public disclosures and could result in regulatory scrutiny or litigation, increase our costs, and harm our reputation.
Removed
Department of Health and Human Services, Office of Inspector General, proposed modifications to the federal Anti-Kickback Statute discount safe harbor for the purpose of reducing the cost of drug products to consumers which, among other things, if finalized, will affect discounts paid by manufacturers to Medicare Part D plans, Medicaid managed care organizations and pharmacy benefit managers working with these organizations.
Added
We are subject to Drug Supply Chain Security Act requirements, and failure to comply could disrupt our distribution and result in enforcement action. We are subject to requirements under the Drug Supply Chain Security Act (“DSCSA”) and related state and federal laws governing the pharmaceutical distribution supply chain.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThird-party risks are included within our broader overall risk assessment process, and cybersecurity considerations are considered during the selection and oversight of our third -party service providers. 31 Governance Our board of directors, in coordination with the Audit Committee, oversees our risk management program, including the management of risks associated with cybersecurity threats.
Biggest changeThird-party risks are included within our broader overall risk assessment process, and cybersecurity considerations are considered during the selection and oversight of our third -party service providers. Governance Our board of directors, in coordination with the Audit Committee, oversees our risk management program, including the management of risks associated with cybersecurity threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We conduct all of our administrative activities for Eton Pharmaceuticals, Inc. at our 5,507 square foot leased office space located at 21925 W. Field Parkway, Suite 235, Deer Park, Illinois 60010. The lease for this facility expires in March 2027. We consider our current facilities suitable and adequate to meet our current needs. Item 3.
Biggest changeItem 2. Properties We conduct all of our administrative activities for Eton Pharmaceuticals, Inc. at our 8,079 square foot leased office space located at 21925 W. Field Parkway, Suite 235, Deer Park, Illinois 60010. The lease for this facility expires in January 2031. We consider our current facilities suitable and adequate to meet our current needs. Item 3.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the Nasdaq Global Market under the symbol “ETON.” The closing price of our common stock on the Nasdaq Global Market on December 31, 2024, the last trading date in 2024, was $13.32 per share.
Biggest changeItem 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the Nasdaq Global Market under the symbol “ETON.” The closing price of our common stock on the Nasdaq Global Market on December 31, 2025, the last trading date in 2025, was $16.91 per share.
Record Holders As of March 10, 2025, we had four holders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Record Holders As of March 17, 2026, we had four holders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. The closing price per share of our common stock on March 10, 2025 was $13.69. Dividends We have never declared or paid a cash dividend on our common stock.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. The closing price per share of our common stock on March 17, 2026 was $18.92. Dividends We have never declared or paid a cash dividend on our common stock.

Item 7. Management's Discussion & Analysis

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

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Biggest changeGeneral and Administrative Expenses G&A expenses consist primarily of employee compensation expenses, selling and advertising/promotional expenses, legal and professional fees, business insurance and FDA fees associated with approved products. We anticipate that our G&A expenses will increase to support our business growth, particularly with respect to sales and marketing activities and additional personnel.
Biggest changeThe increase in R&D expenses was primarily due to a $2.2 million NDA filing fee for ET-600 and increased expenses associated with our ET-700 and ET-800 project development activities. 33 General and Administrative Expenses General and administrative expenses (“G&A”) expenses consist primarily of employee compensation expenses, selling and advertising/promotional expenses, legal and professional fees, business insurance and FDA fees associated with approved products.
We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Arrangements that include rights to additional goods or services that are exercisable at a customer’s discretion are generally considered options.
We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Arrangements that include rights to additional goods that are exercisable at a customer’s discretion are generally considered options.
We recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time. For the years ended December 31, 2022, 2023 and 2024, all revenues recognized in the Statements of Operations were point in time sales to our customers.
We recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) each performance obligation is satisfied at a point in time. For the years ended December 31, 2023, 2024 and 2025, all revenues recognized in the Statements of Operations were point in time sales to our customers.
The Company stores its INCRELEX®, ALKINDI SPRINKLE®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone inventory at its pharmacy distributor customer locations, and sales are recorded when stock is pulled and shipped to fulfill specific patient orders. The Company recognizes revenue and cost of sales from products sold to wholesalers upon delivery to the wholesaler location.
The Company stores its INCRELEX®, ALKINDI SPRINKLE®, KHINDIVI TM , GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone inventory at its pharmacy distributor customer locations, and sales are recorded when stock is pulled and shipped to fulfill specific patient orders. The Company recognizes revenue and cost of sales from products sold to wholesalers upon delivery to the wholesaler location.
However, our projected estimates for our product development spending, administrative expenses and our working capital requirements could be inaccurate, or we may experience growth more quickly or on a larger scale than we expect, any of which could result in the depletion of capital resources more rapidly than anticipated and could require us to seek additional financing earlier than we expect to support our operations.
However, our projected estimates for our product development spending, administrative expenses and our working capital requirements could change significantly, or we may experience growth more quickly or on a larger scale than we expect, any of which could result in the depletion of capital resources more rapidly than anticipated and could require us to seek additional financing earlier than we would expect to support our operations.
At contract inception, once we determine the contract falls within the scope of ASC 606, we assess the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct.
At contract inception, once we determine the contract falls within the scope of ASC 606, we assess the goods promised within each contract and determine those that are performance obligations and assesses whether each promised good is distinct.
The Company has developed estimates for future returns and chargebacks and the impact of other discounts and fees it pays, although INCRELEX®, ALKINDI SPRINKLE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone sales are not subject to returns.
The Company has developed estimates for future returns and chargebacks and the impact of other discounts and fees it pays, although INCRELEX®, ALKINDI SPRINKLE®, KHINDIVI TM , GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone sales are not subject to returns.
Risk Factors. ” Overview We are an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases. We currently have seven commercial rare disease products: INCRELEX®, ALKINDI SPRINKLE®, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone. The Company has six additional product candidates in late-stage development: ET-400, ET-600, Amglidia®, ET-700, ET-800 and ZENEO® hydrocortisone autoinjector.
Risk Factors. ” Overview Eton is an innovative pharmaceutical company focused on developing and commercializing treatments for rare diseases. We currently have eight commercial rare disease products: INCRELEX®, ALKINDI SPRINKLE®, KHINDIVI TM , GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous and Nitisinone. We have five additional product candidates in late-stage development: ET-600, Amglidia®, ET-700, ET-800 and ZENEO® hydrocortisone autoinjector.
ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.
Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods.
Our 2024 gross profit of $23.4 million was up from $21.1 million in 2023 primarily as a result of higher product sales for ALKINDI SPRINKLE® and Carglumic Acid.
Our 2024 gross profit of $23.4 million was up from $21.1 million in 2023 primarily as a result of higher product sales for ALKINDI SPRINKLE® and Carglumic Acid. For the years ended December 31, 2024 and 2023, we incurred $3.3 million and $3.3 million in R&D expenses, respectively, and $22.8 million and $18.9 million of G&A expenses, respectively.
The Company sells its INCRELEX®, ALKINDI SPRINKLE®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone products to pharmacy distributor customers which provide order fulfilment and inventory storage/distribution services. The Company may sell products in the U.S. to wholesale pharmaceutical distributors, who then sell the product to hospitals and other end-user customers.
The Company sells its INCRELEX®, ALKINDI SPRINKLE®, KHINDIVI TM , GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone products to pharmacy distributor customers which provide order fulfilment and inventory storage/distribution services.
The Company has no significant obligations to wholesalers to generate pull-through sales. 35 For its INCRELEX®, ALKINDI SPRINKLE®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone products, the Company bills at the initial product list price which are subject to offsets for patient co-pay assistance and potential state Medicaid reimbursements which are recorded as a reduction of net revenues at the date of sale/shipment.
The Company uses a third-party logistics (“3PL”) vendor to process and fulfill orders and has concluded it is the principal in the sales to wholesalers because it controls access to the 3PL vendor services rendered and directs the 3PL vendor activities. 36 For its INCRELEX®, ALKINDI SPRINKLE®, KHINDIVI TM , GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous, and Nitisinone products, the Company bills at the initial product list price which are subject to offsets for patient co-pay assistance and potential state Medicaid reimbursements which are recorded as a reduction of net revenues at the date of sale/shipment.
While our significant accounting policies are described in more detail in Note 3 to our Financial Statements included herein, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements. 34 Revenue Recognition for Contracts with Customers We account for contracts with our customers in accordance with Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers.
Our actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in Note 3 to our Financial Statements included herein, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
The increase in cash from financing activities was primarily the result of net proceeds received from expanding our credit agreement with SWK Holdings Corporation (“SWK”) in 2024 and proceeds received from the issuance of common stock in a private placement offering compared to repayment of long-term debt in 2023 and 2022.
The decrease in cash from financing activities during the twelve-months ended December 31, 2025 was primarily associated with net proceeds received from expanding our credit agreement with SWK Holdings Corporation ("SWK") and proceeds from common stock issued in a private placement offering in 2024.
Cash Flows The following table sets forth a summary of our cash flows for the years ended December 31, 2024, 2023 and 2022 (in thousands): Year ended Year ended Year ended December 31, 2024 December 31, 2023 December 31, 2022 Net cash from operating activities $ 969 $ 6,815 $ 4,821 Net cash from investing activities (40,014 ) (775 ) (2,788 ) Net cash flows from financing activities 32,593 (957 ) (134 ) Net change in cash and cash equivalents $ (6,452 ) $ 5,083 $ 1,899 The decrease in cash from operating activities was primarily the result of an increase in prepaid expenses associated with FDA filing fees in addition to higher inventory purchases in the current year.
Cash Flows The following table sets forth a summary of our cash flows for the years ended December 31, 2025, 2024 and 2023 (in thousands): Year ended Year ended Year ended December 31, 2025 December 31, 2024 December 31, 2023 Net cash from (used in) operating activities $ 10,524 $ 969 $ 6,815 Net cash from (used in) investing activities (333 ) (40,014 ) (775 ) Net cash flows from (used in) financing activities 815 32,593 (957 ) Net change in cash and cash equivalents $ 11,006 $ (6,452 ) $ 5,083 During the twelve-months ended December 31, 2025, 2024 and 2023, net cash from operating activities was $10.5 million, $1.0 million and $6.8 million, respectively.
At the end of each financial reporting period prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value of our common stock and updated assumption inputs in the Black-Scholes option-pricing model (“BSM”). The Company estimates the fair value of stock-based option awards using the BSM.
The fair value of these awards and assumptions inputs are measured using the Black-Scholes option-pricing model (“BSM”). The Company estimates the fair value of stock-based option awards using the BSM.
The majority of our spend in R&D is to third parties we contract with to develop and test our products and development of partner milestone payments. 33 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Net revenues of $31.6 million in 2023 included $5.5 million of licensing revenue from the sale of our neurology product royalty streams to Azurity in June 2023.
The majority of our spend in research and development (“R&D”) expenses is to third parties we contract with to develop, test our products and the development of partner milestone payments. During the twelve-months ended December 31, 2025, we incurred $7.8 million of R&D expenses, compared to $3.3 million during the twelve-months ended December 31, 2024.
We believe that our existing funding and revenues from our approved products will be sufficient for at least the next twelve months of our operations.
Liquidity and Capital Resources As of December 31, 2025, we had total assets of $92.1 million, cash and cash equivalents of $25.9 million and working capital of $22.1 million. We believe that our revenues and cash flows from our product portfolio will be sufficient for at least the next twelve months of our operations.
See Note 6 — Debt for additional information on the SWK loan in Notes to our Financial Statements. Critical Accounting Policies Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
As discussed further in Note 14, we are in a full income tax valuation allowance position and the income tax effect on pre-tax non-GAAP adjustments is commensurate with the performance measure. 35 Critical Accounting Policies Our financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
Investing activities in 2024 consisted of the purchase of product licensing rights associated with INCRELEX®, GALZIN® and PKU GOLIKE®, while investing activities in 2023 and 2022 consist primarily of the purchase of product licensing rights for Nitisinone and Betaine, respectively.
The decrease in net cash used in investing activities during the twelve-months ended December 31, 2025 was primarily attributable to one-time cash outflows for the business combination of INCRELEX® and the purchase of product licensing rights associated with GALZIN® and PKU GOLIKE®, which were cash outflows during the twelve-months ended December 31, 2024.
The $0.3 million increase in G&A expenses was primarily due to personnel additions to support our growing business. We incurred a net loss of $0.9 million and $9.0 million for the years ended December 31, 2023 and 2022, respectively.
We anticipate that our G&A expenses will increase to support our business growth, particularly with respect to sales and marketing activities and additional personnel. During the twelve-months ended December 31, 2025 and 2024, we incurred $35.8 million and $22.8 million, respectively, of G&A expenses.
Removed
Results of Operations We have realized revenues from the sale of our ALKINDI SPRINKLE®, Carglumic Acid, and Biorphen products in 2022, as well as the launch of Betaine in 2023, and the launch of Nitisinone and PKU GOLIKE® products in 2024. We also realized revenue from the sale of our hospital products portfolio to Dr. Reddy’s Laboratories S.A. (“Dr.
Added
Results of Operations Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 During the twelve months ended December 31, 2025, we had $80.0 million in total revenues that generated a gross profit of $42.7 million, compared to total revenues of $39.0 million during the twelve-months ended December 31, 2024 that generated a gross profit of $23.4 million during the period.
Removed
Reddy's”) in 2022, and the sale of our neurology product royalty streams to Azurity in 2023. We anticipate continued growth of our commercialized products as well as commercializing additional product candidates in 2025 and beyond.
Added
During the twelve-months ended December 31, 2025, we had product sales and royalties, net of $76.7 million, compared to product sales and royalties, net of $38.5 million during the twelve-months ended December 31, 2024, an increase of $38.2 million.
Removed
For the years ended December 31, 2024 and 2023, we incurred $3.3 million and $3.3 million in research and development ("R&D") expenses, respectively, and $22.8 million and $18.9 million of general and administrative (“G&A”) expenses, respectively.
Added
The increase in product sales and royalties, net was the result of increased sales volume of our INCRELEX®, ALKINDI SPRINKLE® and GALZIN® products in the current year. Licensing revenue during the twelve-months ended December 31, 2025 was $3.3 million, compared to $0.5 million in licensing revenue during the twelve-months ended December 31, 2024.
Removed
Research and Development Expenses We currently have eight employees that support our overall product development function.
Added
The increase in licensing revenue during the twelve-months December 31, 2025 was due to $1.8 million from our out-licensing of INCRELEX® rights outside of the U.S. and $1.5 million from the recognition of a development milestone event associated with our divestiture of DS-200.
Removed
Net revenues of $21.3 million in 2022 included $10.0 million of licensing revenue, consisting of $5.0 million from Azurity on the launch of Zonisamide and $5.0 million from the hospital products sale to Dr. Reddy's.
Added
During the twelve-months ended December 31, 2024, we recognized $0.5 million in licensing revenue associated with the sale of our DS-200 product candidate in September 2024. Cost of Sales During the twelve-months ended December 31, 2025, total costs of sales was $37.2 million, compared to $15.6 million in total costs of sales during the twelve-months ended December 31, 2024.
Removed
Net product revenue of $26.1 million in 2023 increased by $14.8 million from $11.3 million in 2022 primarily as a result of product sales growth for ALKINDI SPRINKLE® and Carglumic Acid.
Added
The increase in total costs of sales during the twelve-months December 31, 2025, was due to increases in INCRELEX® and ALKINDI SPRINKLE® product sales and higher commissions with respect to our out-licensing of INCRELEX® rights outside of the U.S.
Removed
Our 2023 gross profit of $21.1 million was up from $14.3 million in 2022 primarily as a result of growth in ALKINDI SPRINKLE® and Carglumic Acid, as well as the sale of our neurology product royalty streams to Azurity.
Added
Gross profit during the twelve-months ended December 31, 2025 was $42.7 million or 53.5% as a percentage of total net revenues, compared to gross profit of $23.4 million or 60.0% as a percentage of total net revenues during the twelve-months ended December 31, 2024.
Removed
For the years ended December 31, 2023 and 2022, we incurred $3.3 million and $4.0 million of R&D expenses, respectively, and $18.9 million and $18.6 million of G&A expenses, respectively. The $0.7 million decrease in R&D was driven by hospital products development in 2022 that were sold and, therefore, did not recur in 2023.
Added
The decrease in gross profit during the twelve-months ended December 31, 2025 was primarily attributable to higher commission with respect to our out-licensing of INCRELEX® rights outside of the U.S. Research and Development Expenses We currently have twelve employees that support our overall product development function.
Removed
General and Administrative Expenses G&A expenses consisted primarily of employee compensation expenses, selling and advertising/promotional expenses, legal and professional fees, business insurance and FDA fees. We anticipate that our G&A expenses will increase to support our business growth. Research and Development Expenses We had eight employees that supported our overall product development function.
Added
The increase in G&A expenses during the twelve-months ended December 31, 2025 was primarily attributable to an increase in product advertising and promotional expenses, higher stock-based compensation expense and an increase in compensation and benefit expenses due to an increase in general and administrative headcount during the current year.
Removed
The majority of our spend in R&D was to third parties we contracted with to develop and test our products in addition to development partner milestone payments. Liquidity and Capital Resources As of December 31, 2024, we had total assets of $76.1 million, cash and cash equivalents of $14.9 million and working capital of $21.1 million.
Added
The increase in cash from operating activities during the twelve-months ended December 31, 2025 was primarily due to higher cash collections from product sales, a filing fee refund from the FDA related to ET-400 and the collection of a licensing milestone payment.
Removed
Our actual results may differ from these estimates under different assumptions or conditions.
Added
The decrease in cash from operating activities during December 31, 2024 as compared to December 31, 2023, was primarily associated with an increase in prepaid expenses associated with FDA filing fees in addition to higher inventory purchases in the current year.
Removed
Sales to wholesalers are made pursuant to purchase orders subject to the terms of a master agreement, and delivery of individual shipments represent performance obligations under each purchase order.
Added
During the twelve-months ended December 31, 2025, 2024 and 2023, net cash used in investing activities was $0.3 million, $40.0 million and $0.8 million, respectively.
Removed
The Company uses a third-party logistics (“3PL”) vendor to process and fulfill orders and has concluded it is the principal in the sales to wholesalers because it controls access to the 3PL vendor services rendered and directs the 3PL vendor activities.
Added
During the twelve-months ended December 31, 2023, we purchased the product licensing rights for Nitisinone. During the twelve-months ended December 31, 2025 and 2024, net cash from financing activities was $0.8 million and $32.6 million, respectively, compared to net cash used in financing activities during the twelve months ended December 31, 2023 of $1.0 million.
Added
During the twelve-months ended December 31, 2023, net cash used in financing activities primarily represented $1.2 million in debt repayments to SWK, partially offset by proceeds received from stock option exercises and employee stock purchase plan proceeds. Non-GAAP Financial Measures EBITDA, which is derived from GAAP income or loss from operations, then excluding interest, taxes, depreciation and amortization.
Added
Adjusted EBITDA is defined as net income or before interest expense, income taxes, depreciation and intangible amortization, stock-based compensation expense, restructuring charges, acquisition and divestiture-related costs, and other non-recurring items, non-GAAP net income and non-GAAP earnings per share are used and provided by us as non-GAAP financial measures.
Added
These non-GAAP financial measures are intended to provide additional information on our performance, operations and profitability. Adjustments to our GAAP figures as well as EBITDA includes non-recurring acquisition or divestiture-related costs, fees related to refinancing activities, as well as non-cash items such as share-based compensation, inventory step-up expense, depreciation and amortization, non-cash interest expense, and other non-cash adjustments.
Added
Certain other special items or substantive events may also be included in the non-GAAP adjustments periodically when their magnitude is significant within the periods incurred.
Added
We maintain an established non-GAAP policy that guides the determination of what costs or gains will be included in non-GAAP adjustments. 34 We believe that these non-GAAP financial measures, when considered together with the GAAP figures, can enhance an overall understanding of our financial and operating performance.
Added
The non-GAAP financial measures are included with the intent of providing investors with a more complete understanding of our historical financial results and trends and to facilitate comparisons between periods. In addition, these non-GAAP financial measures are among the indicators our management uses for planning and forecasting purposes and measuring our performance.
Added
These non-GAAP financial measures should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The non-GAAP financial measures used by us may be calculated differently from, and therefore may not be comparable to, non-GAAP financial measures used by other companies.
Added
EBITDA, adjusted EBITDA and non-GAAP net income, and the related per share amounts, were as follows (in thousands, except share and per share amounts): December 31, December 31, 2025 2024 GAAP net loss $ (4,601 ) $ (3,823 ) Depreciation 41 50 Intangible amortization expense 4,003 1,096 Interest expense (including debt discount amortization and non-cash interest expenses) 4,781 2,005 Income tax expense 43 15 EBITDA $ 4,267 $ (657 ) Other non-GAAP adjustments: Inventory step-up expense (1) 5,094 — Stock-based compensation (2) 5,512 3,165 Severance expense (3) 335 — Acquisition/divestiture-related costs (4) 581 415 Total of Other non-GAAP adjustments 11,522 3,580 Adjusted EBITDA $ 15,789 $ 2,923 GAAP loss before income tax $ (4,558 ) $ (3,808 ) Non-GAAP adjustments: Depreciation (5) 41 50 Intangible amortization expense (6) 4,003 1,096 Inventory step-up expense (1) 5,094 - Stock-based compensation (2) 5,512 3,165 Severance expense (3) 335 — Acquisition/divestiture-related costs (4) 581 415 Total pre-tax non-GAAP adjustments 15,566 4,726 Income tax effect of pre-tax non-GAAP adjustments (7) 235 49 Total non-GAAP adjustments 15,331 4,677 Non-GAAP Net Income $ 10,773 $ 869 Weighted average number of common shares outstanding, basic 26,908 25,895 Weighted average number of common shares outstanding, diluted 31,046 27,458 GAAP income (loss) per share - Basic $ (0.17 ) $ (0.15 ) Non-GAAP adjustments 0.57 0.18 Non-GAAP earnings per share - Basic $ 0.40 $ 0.03 GAAP income (loss) per share - Basic $ (0.17 ) $ (0.15 ) Non-GAAP adjustments 0.49 0.17 Non-GAAP earnings per share - Diluted $ 0.32 $ 0.02 (1) During the twelve months ended December 31, 2025, we recognized in cost of sales $5,094 for inventory step-up expense primarily attributable to INCRELEX® inventory revalued in connection with this business combination.
Added
(2) Represents share-based compensation expense associated with our stock option and restricted stock unit stock unit grants to our employees and non-employee directors and our employee share purchase plan. (3) Represents severance and benefit expenses associated with role redundancy within commercial operations during the first quarter of 2025.
Added
(4) Represents legal expense and other divestiture-related costs associated with the out-licensing of the INCRELEX® commercial rights in territories outside of the U.S. (5) Represents depreciation expense related to our property and equipment. (6) Intangible amortization expenses are associated with our intellectual property rights related to INCRELEX®, GALZIN®, PKU GOLIKE®, Carglumic Acid, Betaine Anhydrous and Nitisinone.
Added
(7) Income tax adjustments on pre-tax non-GAAP adjustments represent the estimated income tax impact of each pre-tax non-GAAP adjustment based on the effective income tax rate for the period.
Added
Revenue Recognition for Contracts with Customers We account for contracts with our customers in accordance with Accounting Standards Codification (“ASC”) 606 — Revenue from Contracts with Customers. ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+1 added−1 removed2 unchanged
Biggest changeWe do not believe we have any material exposure to interest rate risk in the current interest rate environment and the short duration of the invested funds we hold. Declines in interest rates would reduce our investment income but would not have a material effect on our financial condition or results of operations.
Biggest changeDeclines in interest rates would reduce our investment income but would not have a material effect on our financial condition or results of operations. We do not currently have exposure to foreign currency risk. We are subject to interest rate risk in connection with our variable rate credit agreement.
As of December 31, 2024, our cash equivalents only included cash deposits at our bank. From time to time, we do have cash investments in short-term money market or U.S. treasury bills.
As of December 31, 2025, our cash equivalents included cash deposits at our bank and cash investments in short-term money market funds. We do not believe we have any material exposure to interest rate risk in the current interest rate environment and the short duration of the invested funds we hold.
Removed
We do not currently have exposure to foreign currency risk. 36
Added
Our principal interest rate exposure relates to our credit agreement, which bears interest rates that are indexed against Secured Overnight Financing Rate (“SOFR”) plus 6.75%. As of December 31, 2025, we had outstanding borrowings under our credit agreement totaling $30.0 million, excluding unamortized debt issuance costs and accrued exit fees. 37

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