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What changed in Praxis Precision Medicines, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Praxis Precision Medicines, 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.

+487 added−463 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-28)

Top changes in Praxis Precision Medicines, Inc.'s 2025 10-K

487 paragraphs added · 463 removed · 381 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

108 edited+39 added−30 removed241 unchanged
Biggest changeThe ACA, among other things, subjected biological products to potential competition by lower-cost biosimilars; expanded the types of entities eligible for the 340B drug discount program; introduced a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; 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 and taxes on manufacturers of certain branded prescription drugs; and created a new Medicare Part D coverage gap discount program, which was replaced by a new manufacturer discount program on January 1, 2025 (as discussed below), in which manufacturers were required to offer 50% (increased to 70% pursuant to the Bipartisan Budget Act of 2018, or BBA, effective as of January 2019) point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.
Biggest changeThe ACA, among other things, subjected biological products to potential competition by lower-cost biosimilars; expanded the types of entities eligible for the 340B drug discount program; introduced a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; 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; and established annual fees and taxes on manufacturers of certain branded prescription drugs.
This first clinical study of vormatrigine was a randomized, double-blind, placebo-controlled single ascending dose, or SAD, and multiple ascending dose, or MAD, trial in healthy participants aged 18-55 years. Vormatrigine was generally well-tolerated at all tested doses. PK data demonstrated dose-dependent exposure, supporting once-daily dosing without titration to achieve potentially therapeutically effective drug concentration levels.
This first clinical study of vormatrigine was a randomized, double-blind, placebo-controlled single ascending dose, or SAD, and multiple ascending dose, or MAD, trial in healthy participants aged 18 to 55 years. Vormatrigine was generally well-tolerated at all tested doses. PK data demonstrated dose-dependent exposure, supporting once-daily dosing without titration to achieve potentially therapeutically effective drug concentration levels.
All statements made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. 26 Table of Contents
All statements made in any of our securities filings, including all forward-looking statements or 26 Table of Contents information, are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. 27 Table of Contents
The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of certain preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before each trial may be initiated; • performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug product for each intended use; • preparation and submission to the FDA of an NDA; • a determination by the FDA within 60 days of its receipt of an NDA to file the application for review; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • satisfactory completion of potential FDA audits of clinical trial sites to assess compliance with GCPs and the integrity of the clinical data; and • FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the United States.
The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of certain preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice regulations; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before each trial may be initiated; 12 Table of Contents • performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements to establish the safety and efficacy of the proposed drug product for each intended use; • preparation and submission to the FDA of an NDA; • a determination by the FDA within 60 days of its receipt of an NDA to file the application for review; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity; • satisfactory completion of potential FDA audits of clinical trial sites to assess compliance with GCPs and the integrity of the clinical data; and • FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the United States.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • Imposition of post-marketing studies or clinical trials to assess new safety risks, or restrictions under a REMS program; • Restrictions on the marketing, manufacturing or distribution of the product, complete withdrawal of the product from the market or product recalls; • Fines, warning letters, untitled letters or other enforcement-related letters or clinical holds on post-approval clinical trials; • Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals; • Consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • Mandated modification of promotional materials and labeling and the issuance of corrective information; 17 Table of Contents • Issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; • Product seizure or detention, or refusal to permit the import or export of products; or • Injunctions or the imposition of civil or criminal penalties.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: • Imposition of post-marketing studies or clinical trials to assess new safety risks, or restrictions under a REMS program; • Restrictions on the marketing, manufacturing or distribution of the product, complete withdrawal of the product from the market or product recalls; • Fines, warning letters, untitled letters or other enforcement-related letters or clinical holds on post-approval clinical trials; • Refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals; • Consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; • Mandated modification of promotional materials and labeling and the issuance of corrective information; • Issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; • Product seizure or detention, or refusal to permit the import or export of products; or • Injunctions or the imposition of civil or criminal penalties.
Ionis will be entitled to receive an additional one-time milestone payment of $5.0 million, or the Additional Milestone, upon the earliest to occur of the following (each, a Payment Trigger): (i) the first acceptance of an NDA filing for a product by the regulatory authority in a major market, (ii) we have both (a) received, in the aggregate, $300.0 million in cash since September 11, 2019 and (b) initiated the first clinical study with respect to a product or (iii) the closing of a change of control event affecting Praxis.
Ionis will be entitled to receive an additional one-time milestone payment of $5.0 million, or the Additional Milestone, upon the earliest to occur of the following (each, a Payment Trigger): (i) the first acceptance of an NDA filing for a product by the regulatory authority 11 Table of Contents in a major market, (ii) we have both (a) received, in the aggregate, $300.0 million in cash since September 11, 2019 and (b) initiated the first clinical study with respect to a product or (iii) the closing of a change of control event affecting Praxis.
Our competitors fall primarily into the following groups of treatment: • A pproved therapies for ET, such as propranolol, and off-label therapies, such as primidone. • Sodium channel blocker or similar ion channel-targeting programs in development for common epilepsies, including those of SK-Pharma, Xenon Pharmaceuticals, and Biohaven Pharmaceuticals, as well as other programs in clinical development targeting other mechanisms of action including those from Lundbeck and Stoke Therapeutics, and approved therapies including other existing ion channel blockers.
Our competitors fall primarily into the following groups of treatment: • Approved therapies for ET, such as propranolol, and off-label therapies, such as primidone. • Sodium channel blocker or similar ion channel-targeting programs in development for common epilepsies, including those of SK-Pharma, Xenon Pharmaceuticals, and Biohaven Pharmaceuticals, as well as other programs in clinical development targeting other mechanisms of action including those from Lundbeck and Stoke Therapeutics, and approved therapies including other existing ion channel blockers.
At the state level, legislatures in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures and, in some cases, designed to encourage importation from other countries and bulk purchasing.
At the state level, legislatures in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure, drug price reporting and other transparency measures and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Currently, there are no approved treatments for SCN2A-DEE, and the standard-of-care typically involves a regimen of many concurrent anti-seizure medications as well as medications for comorbidities. Despite these interventions, it is estimated that more than 80% of early-onset SCN2A-DEE patients live with uncontrolled seizures, and approximately 75% live with severe intellectual disability.
Currently, there are no approved treatments for SCN2A-DEE, and the standard-of-care typically involves a regimen of many concurrent anti-seizure medications as well as medications for comorbidities. Despite these interventions, it is estimated that more than 80% of SCN2A-DEE patients live with uncontrolled seizures, and approximately 75% live with severe intellectual disability.
Common Epilepsies (Focal Onset Seizures and Generalized Epilepsy) An estimated 3.5 million people in the United States suffer from common epilepsies, with FOS being the most common type of epilepsy, accounting for approximately 60% of all cases. FOS are characterized by seizures that originate in one side or area of the brain and affects one side of the body.
Common Epilepsies (FOS and Generalized Epilepsy) An estimated 3.5 million people in the United States suffer from common epilepsies, with FOS being the most common type of epilepsy, accounting for approximately 60% of all cases. FOS are characterized by seizures that originate in one side or area of the brain and affects one side of the body.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study, and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.
Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study, and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other 13 Table of Contents grounds, such as no demonstration of efficacy.
Orphan drug designation and exclusivity Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition (generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of the disease or condition will be recovered from sales of the product).
Orphan drug designation and exclusivity Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition (generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug 15 Table of Contents product available in the United States for treatment of the disease or condition will be recovered from sales of the product).
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available through the “Investors + Media” portion of our website free of charge as soon as reasonably practicable after we electronically 25 Table of Contents file such material with, or furnish it to, the SEC.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available through the “Investors + Media” portion of our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
These patent families disclose and claim small molecule KCNT1 blockers and methods of use in treating diseases, such as epilepsy, including epilepsy having certain KCNT1 mutations, and expire between 2040 and 2043. GABA A receptor positive allosteric modulators We own four patent families directed to GABA A receptor positive allosteric modulators.
These patent families disclose and claim small molecule KCNT1 blockers and methods of use in treating diseases, such as epilepsy, including epilepsy having certain KCNT1 mutations, and expire between 2040 and 2045. GABA A receptor positive allosteric modulators We own four patent families directed to GABA A receptor positive allosteric modulators.
T-type Calcium channel blockers We own fourteen patent families directed to T-type Calcium channel blockers. One patent family discloses and claims compositions of matter of certain T-type calcium channel modulators, including ulixacaltamide. This patent family has issued in many major pharmaceutical markets and is pending in others and expires in 2029.
T-type Calcium channel blockers We own sixteen patent families directed to T-type Calcium channel blockers. One patent family discloses and claims compositions of matter of certain T-type calcium channel modulators, including ulixacaltamide. This patent family has issued in many major pharmaceutical markets and is pending in others and expires in 2029.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (which began on January 1, 2025).
Among other things, the IRA requires manufacturers of certain drugs to 19 Table of Contents engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (which began on January 1, 2025).
During the exclusivity period, the FDA may not accept for review an Abbreviated New Drug Application, or ANDA, or a 505(b)(2) NDA submitted by another company for a 16 Table of Contents generic or follow-on version of the protected drug product, respectively, where the applicant does not own or have a legal right of reference to all the data required for approval.
During the exclusivity period, the FDA may not accept for review an Abbreviated New Drug Application, or ANDA, or a 505(b)(2) NDA submitted by another company for a generic or follow-on version of the protected drug product, respectively, where the applicant does not own or have a legal right of reference to all the data required for approval.
EMBRAVE study Part 1 of the EMBRAVE study was a 21-week open label cohort, in which participants received elsunersen for up to 13 weeks, designed to determine the safety and tolerability of intrathecal delivery of elsunersen. No treatment related AEs or SAEs were observed. Additionally, patients observed a marked reduction in seizures and increase in seizure-free days.
EMBRAVE study Part 1 of the EMBRAVE study was a 21-week open label cohort, in which participants received elsunersen for 16 weeks, designed to determine the safety and tolerability of intrathecal delivery of elsunersen. No treatment related AEs or SAEs were observed. Additionally, patients observed a marked reduction in seizures and increase in seizure-free days.
The FCPA also obligates companies whose securities are listed in the United States to comply with certain accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.
The FCPA also obligates companies whose securities are listed in the United States to comply with certain accounting provisions requiring the company to maintain books and records that accurately and fairly 25 Table of Contents reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.
Clinical trials 12 Table of Contents Clinical trials involve the administration of the product candidate to human subjects under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.
Clinical trials Clinical trials involve the administration of the product candidate to human subjects under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCP requirements, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.
Fast track, breakthrough therapy and priority review designations 15 Table of Contents The FDA is authorized to designate certain products for expedited development or review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs include fast track designation, breakthrough therapy designation and priority review designation.
Fast track, breakthrough therapy and priority review designations The FDA is authorized to designate certain products for expedited development or review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs include fast track designation, breakthrough therapy designation and priority review designation.
In issuing the CRL, the FDA may recommend actions that the applicant might take to place the NDA in condition for approval, including requests for additional information or clarification. If a CRL is 14 Table of Contents issued, the applicant may choose to either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application.
In issuing the CRL, the FDA may recommend actions that the applicant might take to place the NDA in condition for approval, including requests for additional information or clarification. If a CRL is issued, the applicant may choose to either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application.
We may need to conduct expensive pharmaco-economic studies in order to demonstrate the medical necessity and cost-effectiveness of our product candidates, if approved, in addition to the costs required to obtain the FDA approvals. Nonetheless, our product candidates may not be considered medically necessary or cost-effective.
We may need to conduct expensive pharmaco-economic studies in order to demonstrate the medical necessity and cost-effectiveness of our product candidates, if approved, in addition to the costs required to obtain the FDA approvals. Nonetheless, our 20 Table of Contents product candidates may not be considered medically necessary or cost-effective.
These agencies regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, 11 Table of Contents storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting, sampling and export and import of drug products.
These agencies regulate, among other things, the research and development, testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion, distribution, post-approval monitoring and reporting, sampling and export and import of drug products.
Additionally, MA may be granted to a similar product for the same indication at any time if (i) the second applicant can establish that its product, although similar, is safer, more 22 Table of Contents effective or otherwise clinically superior; (ii) the applicant consents to a second orphan medicinal product application; or (iii) the applicant cannot supply enough orphan medicinal product.
Additionally, MA may be granted to a similar product for the same indication at any time if (i) the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; (ii) the applicant consents to a second orphan medicinal product application; or (iii) the applicant cannot supply enough orphan medicinal product.
A third family is directed to titration methods of using ulixacaltamide and expires in 2041. A fourth patent family is directed to certain analog compounds 8 Table of Contents of ulixacaltamide and expires in 2040. A fifth patent family is directed to the adjunctive use of a beta blocker and/or certain anticonvulsants with ulixacaltamide and expires in 2043.
A third family is directed to titration methods of using ulixacaltamide and expires in 2041. A fourth patent family is directed to certain analog compounds of ulixacaltamide and expires in 2040. A fifth patent family is directed to the adjunctive use of a beta blocker and/or certain anticonvulsants with ulixacaltamide and expires in 2043.
Additionally, we have an exclusive collaboration and license agreement with Tenacia Biotechnology (Shanghai) Company, Ltd., a China-based portfolio company of Bain Capital, to develop and commercialize ulixacaltamide for the treatment of ET in China, Hong Kong, Macau and Taiwan. Ulixacaltamide has the potential to be developed for other indications, including Parkinson’s disease.
Additionally, we have an exclusive collaboration and license agreement with Tenacia Biotechnology (Shanghai) Company, Ltd., a China-based portfolio company of Bain Capital, to develop and commercialize ulixacaltamide for the treatment of ET in China, Hong Kong, Macau and Taiwan. In addition to ET, ulixacaltamide has the potential to be developed for other indications.
Laws and regulations governing international operations 24 Table of Contents If we further expand our operations outside of the United States, we must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we plan to operate.
Laws and regulations governing international operations If we further expand our operations outside of the United States, we must dedicate additional resources to comply with numerous laws and regulations in each jurisdiction in which we plan to operate.
Phase 2 EMBOLD study The EMBOLD study is a randomized, double-blind, placebo-controlled Phase 2 clinical trial evaluating the safety, tolerability, efficacy (motor seizure frequency) and PK of relutrigine in pediatric participants aged 2 to 18 years with DEEs, followed by an open-label extension, or OLE.
Phase 2 EMBOLD study The EMBOLD study was a randomized, double-blind, placebo-controlled Phase 2 clinical trial evaluating the safety, tolerability, efficacy (motor seizure frequency) and PK of relutrigine in pediatric participants aged 2 to 18 years with DEEs, followed by an open-label extension.
Key product features that would affect our ability to effectively compete with other therapeutics include the efficacy, safety, convenience, cost, effectiveness of promotional support and intellectual property protection of our products.
Key product features that would affect our ability to effectively compete with other therapeutics include the efficacy, safety, convenience, cost, effectiveness of 8 Table of Contents promotional support and intellectual property protection of our products.
While we believe that our technology, knowledge, experience and scientific personnel provide us with competitive advantages, we face substantial competition from many different sources, 7 Table of Contents including large and small pharmaceutical and biotechnology companies, academic research institutions, governmental agencies and public and private institutions.
While we believe that our technology, knowledge, experience and scientific personnel provide us with competitive advantages, we face substantial competition from many different sources, including large and small pharmaceutical and biotechnology companies, academic research institutions, governmental agencies and public and private institutions.
SYNGAP We own one patent family directed to compositions and methods for the treatment of disorders associated with loss-of-function mutations in SYNGAP1, which expires in 2041.
SYNGAP 10 Table of Contents We own one patent family directed to compositions and methods for the treatment of disorders associated with loss-of-function mutations in SYNGAP1, which expires in 2041.
In 21 Table of Contents March 2016, the EMA launched an initiative, the PRIME scheme, a voluntary scheme aimed at enhancing the EMA’s support for the development of medicines that target unmet medical needs.
In March 2016, the EMA launched an initiative, the PRIME scheme, a voluntary scheme aimed at enhancing the EMA’s support for the development of medicines that target unmet medical needs.
The delivery of healthcare in the EU, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for 23 Table of Contents national, rather than EU, law and policy.
The delivery of healthcare in the EU, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy.
To date, Cerebrum™ has generated three clinical stage product candidates, ulixacaltamide (formerly known as PRAX-944), vormatrigine (formerly known as PRAX-628) and relutrigine (formerly known as PRAX-562), as well as PRAX-020 which has been in-licensed by UCB Biopharma SRL, or UCB. Cerebrum™ has the potential to continue delivering first- and best-in-class orally available therapies for genetic CNS targets.
To date, Cerebrum™ has generated three clinical stage product candidates, ulixacaltamide, vormatrigine and relutrigine, as well as PRAX-020 which has been in-licensed by UCB Biopharma SRL, or UCB. Cerebrum™ has the potential to continue delivering first- and best-in-class orally available therapies for genetic CNS targets.
The regulatory landscape related to clinical trials in the EU has been subject to recent changes. The EU Clinical Trials Regulation, or CTR, which was adopted in April 2014 and repeals the EU Clinical Trials Directive, 20 Table of Contents became applicable on January 31, 2022.
The regulatory landscape related to clinical trials in the EU has been subject to recent changes. The EU Clinical Trials Regulation, or CTR, which was adopted in April 2014 and repeals the EU Clinical Trials Directive, became applicable on January 31, 2022.
One patent family discloses and claims salts and polymorphs of PRAX-114. Two patents are granted in the United States, which expire in 2039. A second patent family is directed to alternative salt forms of PRAX-114, and a U.S. patent has 9 Table of Contents issued, which expires in 2042.
One patent family discloses and claims salts and polymorphs of PRAX-114. Three patents are granted in the United States, which expire in 2039. A second patent family is directed to alternative salt forms of PRAX-114, and a U.S. patent has issued, which expires in 2042.
A ninth patent family is directed to methods of treatment using ulixacaltamide and expires in 2044. A tenth patent family is directed to methods of treatment using ulixacaltamide and expires in 2044.
A ninth patent family is directed to methods of treatment using ulixacaltamide and expires in 2044. A tenth patent family is directed to methods of treatment using ulixacaltamide and expires in 2044. An eleventh family is directed to methods of treatment using ulixacaltamide and expires in 2045.
Thus, the ACA will remain in effect in its current form. In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, in August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers.
In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, in August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions of Medicare payments to providers.
Item 1. Business BUSINESS COMPANY OVERVIEW We are a clinical-stage biopharmaceutical company translating insights from genetic epilepsies into the development of therapies for central nervous system, or CNS, disorders characterized by neuronal excitation-inhibition imbalance.
Item 1. Business BUSINESS COMPANY OVERVIEW We are a fully integrated, leading central nervous system, or CNS, precision neuroscience biopharmaceutical company translating insights from genetic epilepsies into the development of therapies for CNS disorders characterized by neuronal excitation-inhibition imbalance.
Orphan exclusivity will not bar approval of another product under certain circumstances, including if a subsequent product with the same active ingredient for the same disease or condition is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or to provide a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand.
Orphan exclusivity will not bar approval of another product under certain circumstances, including if a subsequent product with the same active ingredient is shown to be clinically superior to the approved product with respect to the same indication or use on the basis of greater efficacy or safety, or to provide a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet the needs relating to the approved indication or use of the patients with the relevant disease or condition.
Many of our competitors have substantially greater financial resources, expertise and capabilities in research and development, the regulatory approval process, manufacturing and marketing than we do. Smaller or early-stage companies may also prove to be significant competitors, particularly through merger and acquisition activity and sizeable collaborative arrangements with established companies.
Many of our competitors have sufficient financial resources, expertise and capabilities in research and development, the regulatory approval process, manufacturing and marketing to advance their portfolios. Smaller or early-stage companies may also prove to be significant competitors, particularly through merger and acquisition activity and sizeable collaborative arrangements with established companies.
Persistent sodium current blockers We own fifteen patent families directed to persistent sodium current blockers, including a patent family that relates to relutrigine and vormatrigine, two additional patent families that relate to relutrigine, and the remaining patent families relate to other persistent sodium current blockers.
Persistent sodium current blockers 9 Table of Contents We own sixteen patent families directed to persistent sodium current blockers, including a patent family that relates to relutrigine and vormatrigine, two additional patent families that relate to relutrigine, and the remaining patent families relate to other persistent sodium current blockers.
Since its enactment, there have been judicial, administrative, executive and legislative challenges to certain aspects of the ACA. On June 17, 2021 the U.S. Supreme Court dismissed the most recent judicial challenge to the 18 Table of Contents ACA brought by several states without specifically ruling on the constitutionality of the ACA.
Since its enactment, there have been judicial, administrative, executive and legislative challenges to certain aspects of the ACA. On June 17, 2021 the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in effect in its current form.
SCN2A-DEE Early onset SCN2A-DEE is a rare condition caused by a gain-of-function, or GoF, variant in the SCN2A gene. The SCN2A gene encodes the NaV1.2 subunit of brain sodium channels, which control neuronal excitability by regulating the flow of sodium ions into neurons.
SCN2A-DEE SCN2A-DEE is a rare condition caused by a mutation in the SCN2A gene. The SCN2A gene encodes the NaV1.2 subunit of brain sodium channels, which control neuronal excitability by regulating the flow of sodium ions into neurons.
Orphan product exclusivity means that the FDA may not approve any other applications for the same product for the same disease or condition for seven years.
Orphan product exclusivity means that the FDA may not approve any other applications for the same product for the same approved use or indication within the relevant rare disease or condition for seven years.
This FDA review process typically takes 10 months from the date the NDA is accepted for filing by the FDA (for a standard review) or six months from the filing date (for a priority review). Once the submission is accepted for filing, the FDA begins an in-depth substantive review.
This FDA review process typically takes 10 months from the date the NDA is accepted for filing by the FDA (for a standard review) or six months from the filing date (for a priority review).
There are two forms of therapeutically relevant sodium current: (1) persistent sodium current and (2) peak sodium current. Standard of care sodium channel targeting AEDs can produce severe toxicity at therapeutic doses from excessive inhibition of peak sodium current, as physiological levels of peak sodium current are required for normal neuronal function.
Standard of care sodium channel targeting AEDs can produce severe toxicity at therapeutic doses from excessive inhibition of peak sodium current, as physiological levels of peak sodium current are required for normal neuronal function.
While the EU Clinical Trials Directive required a separate CTA to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, much like the FDA and IRB respectively, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials.
The CTR notably harmonizes the assessment and supervision processes for clinical trials throughout the EU via a Clinical Trials Information System, or CTIS, which contains a centralized EU portal and database. 21 Table of Contents While the EU Clinical Trials Directive required a separate CTA to be submitted in each member state in which the clinical trial takes place, to both the competent national health authority and an independent ethics committee, much like the FDA and IRB respectively, the CTR introduces a centralized process and only requires the submission of a single application for multi-center trials.
The remaining patent families are directed to other TTCC blockers of various core structures and methods of use in treating diseases such as movement disorders, which expire in 2039 and 2040.
A twelfth family is directed to methods of treating Parkinson’s disease with ulixacaltamide and expires in 2045. The remaining patent families are directed to other TTCC blockers of various core structures and methods of use in treating diseases such as movement disorders, which expire in 2039 and 2040.
We are obligated to reimburse any out-of-pocket costs incurred by Ionis related to research activities, identification of a development candidate and conducting IND-enabling studies.
The design of the IND-enabling toxicology study was prepared and mutually agreed to by us and Ionis. We are obligated to reimburse any out-of-pocket costs incurred by Ionis related to research activities, identification of a development candidate and conducting IND-enabling studies.
In totality, there is significant unmet need for an effective and tolerable pharmacotherapy targeted for ET. Vormatrigine for Common Epilepsies (Focal Onset Seizures and Generalized Epilepsy) Vormatrigine is a next-generation, functionally selective small molecule targeting the hyperexcitable state of sodium-channels in the brain and is currently being developed as a once daily, oral treatment for adult focal onset epilepsy.
Vormatrigine for Common Epilepsies (Focal Onset Seizures and Generalized Epilepsy) Vormatrigine is a next-generation, functionally selective small molecule targeting the hyperexcitable state of sodium-channels in the brain and is currently being developed as a once daily, oral treatment for adult focal onset seizures, or FOS, and generalized epilepsy.
There is only one approved pharmacotherapy for ET, a beta blocker (propranolol), approved by the FDA for ET in 1986, that offers limited efficacy and poor tolerability and is contraindicated for comorbidities that affect a significant share of the ET population. Other CNS drugs are used off-label, though similarly are characterized by limited efficacy and poor tolerability.
Propranolol, a beta-blocker, is the only approved pharmacotherapy for ET offering limited efficacy and poor tolerability and is contraindicated for comorbidities that affect a significant share of the ET population. Other beta blockers and anti-convulsants are used off-label, though similarly are characterized by limited efficacy and tolerability.
Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated MAA assessment once a dossier has been submitted.
Product developers that benefit from PRIME designation can expect to be eligible for accelerated assessment but this is not guaranteed. 22 Table of Contents Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated MAA assessment once a dossier has been submitted.
Pediatric exclusivity, if granted, adds six months to existing regulatory exclusivity periods or patent terms. This six-month exclusivity may be granted based on the voluntary completion of a pediatric trial in accordance with an FDA-issued “Written Request” for such a trial. The FDA's issuance of a written request does not obligate the sponsor to complete the requested pediatric studies.
Pediatric exclusivity, if granted, adds six months to existing regulatory exclusivity periods or patent terms. This six-month exclusivity may be granted based on the voluntary completion of a pediatric trial in accordance with an FDA-issued “Written 17 Table of Contents Request” for such a trial.
Failure to comply with EU and member state laws that apply to the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of the MA, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties.
The aforementioned EU rules are generally applicable in the European Economic Area, or EEA, which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland. 23 Table of Contents Failure to comply with EU and member state laws that apply to the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of the MA, manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties.
A second family discloses other persistent sodium current blockers and generically claims relutrigine, as well as methods of treating diseases such as pediatric epilepsy. This patent family is pending in multiple jurisdictions and expires in 2037.
In this same patent family, vormatrigine is covered by two granted U.S. patents that will expire in 2039. A second family discloses other persistent sodium current blockers and generically claims relutrigine, as well as methods of treating diseases such as pediatric epilepsy. This patent family is pending in multiple jurisdictions and expires in 2037.
Led by our clinical-stage product candidate, elsunersen (formerly known as PRAX-222), Solidus™ has also generated three novel ASOs with preclinical proof of mechanism that we expect to nominate development candidates for in 2025 — PRAX-080 targeting PCDH19-related developmental epilepsy; PRAX-090 targeting SYNGAP1 loss-of-function, or LoF, mutation driven developmental epilepsy; and PRAX-100 targeting SCN2A LoF mutations, the predominant genetic link to de novo autism spectrum disorders.
Led by our clinical-stage product candidate, elsunersen, for SCN2A early-onset DEE, Solidus™ has also generated three novel ASOs with preclinical proof of mechanism that we expect to nominate development candidates for in the first half of 2026 — PRAX-080 targeting PCDH19 mosaic expression disorders; PRAX-090 targeting SYNGAP1 loss-of-function, or LoF, mutations, a leading cause of severe intellectual disability and epilepsy in developmental and epileptic encephalopathies, or DEEs; and PRAX-100 targeting SCN2A LoF mutations, the predominant genetic link to de novo autism spectrum disorders.
Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidates do not undergo unacceptable deterioration over their shelf life. 13 Table of Contents Marketing application submission and FDA review and approval Assuming successful completion of the required clinical testing, the results of preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.
Marketing application submission and FDA review and approval Assuming successful completion of the required clinical testing, the results of preclinical and clinical studies, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.
Either party may terminate the RogCon Agreement for material breach or insolvency of the other party. Additionally, we may terminate for convenience with prior written notice to RogCon.
Either party may terminate the RogCon Agreement for material breach or insolvency of the other party. Additionally, we may terminate for convenience with prior written notice to RogCon. Upon termination by either party, all rights and licenses granted by RogCon to us will revert back to RogCon.
To support them we offer a world-class portfolio of compensation and benefits, including medical, dental and vision plans, a discretionary bonus program structured to pay on a quarterly basis, 401k plan with match, wellness benefits, eligibility for equity awards and an employee stock purchase plan. AVAILABLE INFORMATION Our Internet address is http://praxismedicines.com.
To support them we offer a world-class portfolio of compensation and benefits, including medical, dental and vision plans, a discretionary bonus program structured to pay on a quarterly basis, 401k plan with match, wellness benefits including a monthly allowance that employees may apply toward a broad range of health and well-being expenses, eligibility for equity awards and an employee stock purchase plan.
The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facilities in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity. Before approving an NDA, the FDA typically will inspect the facilities where the product is manufactured.
Once the submission is accepted for filing, the FDA begins an in-depth substantive review. 14 Table of Contents The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facilities in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity.
Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could restrict or regulate post-approval activities and affect the ability of pharmaceutical companies to commercialize their products. In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies.
Coupled with ever-increasing EU and national regulatory burdens on those wishing to develop and market products, this could restrict or regulate post-approval activities and affect the ability of pharmaceutical companies to commercialize their products.
In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states.
However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA-approved labeling. 18 Table of Contents In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by the states.
In this patent family, relutrigine is covered by a patent that has granted in the United States, and patent applications pending in other potentially commercially relevant jurisdictions, which expire in 2039. In this same patent family, vormatrigine is covered by two granted U.S. patents that will expire in 2039.
In this patent family, relutrigine is covered by two patents that have granted in the United States, one that covers the composition of matter and one that covers a method of use. These patents both expire in 2039. The family also has patents and pending patent applications that cover relutrigine in other potentially commercially relevant jurisdictions, which expire in 2039.
It is based on increased interaction and early dialogue with companies developing promising medicines, to optimize their product development plans and speed up their evaluation to help them reach patients earlier. Product developers that benefit from PRIME designation can expect to be eligible for accelerated assessment but this is not guaranteed.
It is based on increased interaction and early dialogue with companies developing promising medicines, to optimize their product development plans and speed up their evaluation to help them reach patients earlier.
Cohort 1 will enroll approximately 40 patients between 2 and 18 years of age experiencing at least four motor seizures during a four-week baseline period. The primary endpoint will assess the change in seizure frequency. Patients will be randomized 1:1 to a drug arm or a sham procedure arm.
Cohort 1 will enroll patients between 2 and 18 years of age experiencing at least four motor seizures during a four-week baseline period. The primary endpoint will assess the change in seizure frequency. Patients will receive 1 mg of elsunersen intrathecally every 4 weeks for 24 weeks.
Reductions in the pricing of our medicinal products in one EU member state could affect the price in other EU member states and, thus, have a negative impact on our financial results.
It could also result from the application of external reference pricing mechanisms, which consist of arbitrage between low-priced and high-priced countries. Reductions in the pricing of our medicinal products in one EU member state could affect the price in other EU member states and, thus, have a negative impact on our financial results.
We intend to develop therapies that provide patients long-term relief from their disorders and significantly reduce the overall burden to patients and caregivers. Our development strategies are tailored to demonstrate these benefits.
We intend to develop therapies that provide patients long-term relief from their disorders and significantly reduce the overall burden to patients and caregivers. Our development strategies are tailored to demonstrate these benefits. CLINICAL STAGE PROGRAMS We have advanced four product candidates to clinical stage, including three small molecules through the Cerebrum™ platform and one ASO through the Solidus™ platform.
POWER1 is a parallel-arm study, comparing a treatment arm of 20 mg for six weeks followed by 30 mg for six weeks versus a placebo arm for 12 weeks. We anticipate topline results in the second half of 2025.
POWER1 is a parallel-arm study, comparing a treatment arm of 20 mg for six weeks followed by 30 mg for six weeks versus a placebo arm for 12 weeks, followed by an open-label extension. The primary endpoint is change in seizure frequency. We expect to announce topline results in the second quarter of 2026.
While standard-of-care sodium channel blockers inhibit persistent sodium current, they also block peak sodium current at therapeutic concentrations, which can cause significant AEs, such as ataxia, drowsiness and dizziness, and therefore have a very narrow Therapeutic Index, or TI, resulting in subpar outcomes for patients and significant need for better therapeutic options.
Standard-of-care sodium channel blockers modulate neuronal activity by targeting peak sodium current, which can reverse the pathological neuronal hyperexcitability that underlies many CNS conditions, but simultaneously affects the physiological cellular action potential firing required for a functioning nervous and cardiovascular system. 5 Table of Contents While standard-of-care sodium channel blockers inhibit persistent sodium current, they also block peak sodium current at therapeutic concentrations, which can cause significant AEs, such as ataxia, drowsiness and dizziness, and therefore have a very narrow Therapeutic Index, or TI, resulting in subpar outcomes for patients and significant need for better therapeutic options.
Phase 2a Photo-Paroxysmal Response study 4 Table of Contents We conducted a Phase 2a Photo-Paroxysmal Response, or PPR, study to evaluate the efficacy and safety of vormatrigine across two cohorts, dosed at 15 mg and 45 mg.
POWER3 Study We intend to initiate POWER3, a clinical trial evaluating vormatrigine as a single-agent treatment for FOS, in the first half of 2026. Phase 2a Photo-Paroxysmal Response Study We conducted a Phase 2a Photo-Paroxysmal Response, or PPR, study to evaluate the efficacy and safety of vormatrigine across two cohorts, dosed at 15 mg and 45 mg.
The FDA does not regulate the behavior of physicians in their choice of treatments, but it does restrict the manufacturer’s communications on the subject of off-label use of their products. However, companies may share truthful and not misleading information that is otherwise consistent with a product’s FDA-approved labeling.
The FDA does not regulate the behavior of physicians in their choice of treatments, but it does restrict the manufacturer’s communications on the subject of off-label use of their products.
Furthermore, these DEEs are associated with a high mortality rate and comorbidities such as developmental delay in addition to behavioral disorders, movement disorders, pain and sensory dysfunction and sleep disruptions. The understanding of the etiology of DEEs has been revolutionized by recent whole-exome sequencing initiatives that revealed over 60 genetic causes of epilepsy.
Furthermore, these DEEs are associated with a high mortality rate and comorbidities such as developmental delay in addition to behavioral disorders, movement disorders, pain and sensory dysfunction and sleep disruptions.
Finally, the FDA may designate an NDA for priority review if the product candidate treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. The FDA determines at the time that the marketing application is submitted, on a case-by-case basis, whether the product candidate represents a significant improvement when compared with other available therapies.
The FDA determines at the time that the marketing application is submitted, on a case-by-case basis, whether the product candidate represents a significant improvement when compared with other available therapies.
ENERGY Program Our ENERGY program for vormatrigine aims to generate efficacy, safety and PK data to serve as the basis of regulatory registrations globally. The program consists of four studies — EMPOWER, RADIANT, POWER1 and POWER2. EMPOWER Observational Study EMPOWER is an observational study in partnership with the Epilepsy Study Consortium that aims to better characterize seizure burden.
Data from patients in the RADIANT study demonstrated a robust seizure reduction, with vormatrigine being generally well tolerated. Our ENERGY program for vormatrigine aims to generate efficacy, safety and PK data to serve as the basis of regulatory registrations globally. ENERGY Program The ENERGY program consists of five studies — EMPOWER, RADIANT, POWER1, POWER2 and POWER3.
In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.
Some states have also enacted legislation creating so-called prescription drug affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.
Pursuant to the Ionis Agreement, we and Ionis each conducted certain research activities and Ionis was responsible for identifying a development candidate and conducting an IND-enabling toxicology study. The design of the IND-enabling toxicology study was prepared and mutually agreed to by us and Ionis.
Ionis Collaboration Agreement In September 2019, we and Ionis entered into the Ionis Agreement to discover and develop ASOs to treat forms of epilepsy caused by mutations of the SCN2A gene. Pursuant to the Ionis Agreement, we and Ionis each conducted certain research activities and Ionis was responsible for identifying a development candidate and conducting an IND-enabling toxicology study.
Each year thereafter, more Part B and Part D products will become subject to the HHS price negotiation program, although the program is currently subject to legal challenges.
Each year thereafter, more Part B and Part D products will become subject to the HHS price negotiation program, although the program is currently subject to legal challenges. More recently, the One Big Beautiful Bill Act, which was enacted in July 2025, imposes significant reductions in the funding of the Medicaid program.
CLINICAL STAGE PROGRAMS We have advanced four product candidates to clinical stage, including three small molecules through the Cerebrum™ platform and one ASO through the Solidus™ platform: Ulixacaltamide for Essential Tremor Our most advanced program, ulixacaltamide, is a differentiated and highly selective small molecule inhibitor of T-type calcium channels currently in Phase 3 clinical development for the treatment of Essential Tremor, or ET.
Ulixacaltamide for Essential Tremor Our most advanced program, ulixacaltamide, is a differentiated and highly selective small molecule inhibitor of T-type calcium channels in development for the treatment of essential tremor, or ET. The U.S.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeUnder the Federal Food, Drug, and Cosmetic Act, or FDCA, we will need to request a rare pediatric disease priority review voucher in our original NDA for our product candidates for which we have received rare pediatric disease designation.
Biggest changeDesignation of a drug product as a product for a rare pediatric disease does not guarantee that a NDA for such drug product will meet the eligibility criteria for a rare pediatric disease priority review voucher at the time the application is approved, including for the following reasons: • the product no longer meets the definition of a rare pediatric disease product; • the product contains an active ingredient (including any ester or salt of the active ingredient) that has been previously approved in another marketing application; • the application does not rely on clinical data derived from studies examining a pediatric population and dosages of the drug intended for that population; • the application is approved for a different adult indication than the rare pediatric disease for which the product is designated. 40 Table of Contents Under the Federal Food, Drug, and Cosmetic Act, or FDCA, we will need to request a rare pediatric disease priority review voucher in our NDA for our product candidates for which we have received rare pediatric disease designation.
The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.
The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.
Collaborations involving our research programs, or any product candidates we may develop, pose the following risks to us: • collaborators generally have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not properly obtain, maintain, enforce or defend intellectual property or proprietary rights relating to our product candidates or research programs, or may use our proprietary information in such a way as to expose us to potential litigation or other intellectual property related proceedings, including proceedings challenging the scope, ownership, validity and enforceability of our intellectual property; • collaborators may own or co-own intellectual property covering our product candidates or research programs that results from our collaboration with them, and in such cases, we may not have the exclusive right to commercialize such intellectual property or such product candidates or research programs; • we may need the cooperation of our collaborators to enforce or defend any intellectual property we contribute to or that arises out of our collaborations, which may not be provided to us; • collaborators may control certain interactions with regulatory authorities, which may impact our ability to obtain and maintain regulatory approval of our products candidates; 70 Table of Contents • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidates or research programs or that result in costly litigation or arbitration that diverts management attention and resources; • collaborators may decide to not pursue development and commercialization of any product candidates we develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates or research programs if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators may restrict us from researching, developing or commercializing certain products or technologies without their involvement; • collaborators with marketing and distribution rights to one or more product candidates may not commit sufficient resources to the marketing and distribution of such product candidates; • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control; • collaborators may grant sublicenses to our technology or product candidates or undergo a change of control and the sublicensees or new owners may decide to take the collaboration in a direction which is not in our best interest; • collaborators may become bankrupt, which may significantly delay our research or development programs, or may cause us to lose access to valuable technology, know-how or intellectual property of the collaborator relating to our products, product candidates or research programs; • key personnel at our collaborators may leave, which could negatively impact our ability to productively work with our collaborators; • collaborations may require us to incur short and long-term expenditures, issue securities that dilute our stockholders or disrupt our management and business; • if our collaborators do not satisfy their obligations under our agreements with them, or if they terminate our collaborations with them, we may not be able to develop or commercialize product candidates as planned; • collaborations may require us to share in development and commercialization costs pursuant to budgets that we do not fully control and our failure to share in such costs could have a detrimental impact on the collaboration or our ability to share in revenue generated under the collaboration; • collaborations may be terminated in their entirety or with respect to certain product candidates or technologies and, if so terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates or technologies; and • collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
Collaborations involving our research programs, or any product candidates we may develop, pose the following risks to us: • collaborators generally have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not properly obtain, maintain, enforce or defend intellectual property or proprietary rights relating to our product candidates or research programs, or may use our proprietary information in such a way as to expose us to potential litigation or other intellectual property related proceedings, including proceedings challenging the scope, ownership, validity and enforceability of our intellectual property; 71 Table of Contents • collaborators may own or co-own intellectual property covering our product candidates or research programs that results from our collaboration with them, and in such cases, we may not have the exclusive right to commercialize such intellectual property or such product candidates or research programs; • we may need the cooperation of our collaborators to enforce or defend any intellectual property we contribute to or that arises out of our collaborations, which may not be provided to us; • collaborators may control certain interactions with regulatory authorities, which may impact our ability to obtain and maintain regulatory approval of our products candidates; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our product candidates or research programs or that result in costly litigation or arbitration that diverts management attention and resources; • collaborators may decide to not pursue development and commercialization of any product candidates we develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates or research programs if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators may restrict us from researching, developing or commercializing certain products or technologies without their involvement; • collaborators with marketing and distribution rights to one or more product candidates may not commit sufficient resources to the marketing and distribution of such product candidates; • we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control; • collaborators may grant sublicenses to our technology or product candidates or undergo a change of control and the sublicensees or new owners may decide to take the collaboration in a direction which is not in our best interest; • collaborators may become bankrupt, which may significantly delay our research or development programs, or may cause us to lose access to valuable technology, know-how or intellectual property of the collaborator relating to our products, product candidates or research programs; • key personnel at our collaborators may leave, which could negatively impact our ability to productively work with our collaborators; • collaborations may require us to incur short and long-term expenditures, issue securities that dilute our stockholders or disrupt our management and business; • if our collaborators do not satisfy their obligations under our agreements with them, or if they terminate our collaborations with them, we may not be able to develop or commercialize product candidates as planned; • collaborations may require us to share in development and commercialization costs pursuant to budgets that we do not fully control and our failure to share in such costs could have a detrimental impact on the collaboration or our ability to share in revenue generated under the collaboration; • collaborations may be terminated in their entirety or with respect to certain product candidates or technologies and, if so terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates or technologies; and • collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
In addition to the factors discussed in this “Risk Factors” section, factors that may affect the trading price of our common stock include: • the commencement, enrollment, completion or results of our current clinical trials of our product candidates; • any delay in identifying and advancing a clinical candidate for our other programs; • any delay in our regulatory filings for our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • adverse results or delays, suspensions or terminations in future preclinical studies or clinical trials; • our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial; • adverse regulatory decisions, including failure to receive regulatory approval of any of our product candidates or the failure of a regulatory authority to accept data from preclinical studies or clinical trials conducted in other countries; 77 Table of Contents • changes in laws or regulations applicable to our product candidates, including but not limited to clinical trial requirements for approvals; • adverse developments concerning our manufacturers; • our inability to obtain adequate product supply for any approved product or inability to do so at acceptable prices; • our inability to establish collaborations, if needed; • our failure to commercialize our product candidates, if approved; • additions or departures of key scientific or management personnel; • unanticipated serious safety concerns related to the use of our product candidates; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our ability to effectively manage our growth; • actual or anticipated variations in quarterly operating results; • our cash position; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry, or product candidates in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • changes in the structure of the healthcare payment systems; • overall performance of the equity markets; • sales of our common stock by us or our stockholders in the future; • trading volume of our common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • general political and economic conditions; and • other events or factors, many of which are beyond our control.
In addition to the factors discussed in this “Risk Factors” section, factors that may affect the trading price of our common stock include: • the commencement, enrollment, completion or results of our current clinical trials of our product candidates; • any delay in identifying and advancing a clinical candidate for our other programs; • any delay in our regulatory filings for our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s review of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request for additional information; • adverse results or delays, suspensions or terminations in future preclinical studies or clinical trials; • our decision to initiate a clinical trial, not to initiate a clinical trial or to terminate an existing clinical trial; 78 Table of Contents • adverse regulatory decisions, including failure to receive regulatory approval of any of our product candidates or the failure of a regulatory authority to accept data from preclinical studies or clinical trials conducted in other countries; • changes in laws or regulations applicable to our product candidates, including but not limited to clinical trial requirements for approvals; • adverse developments concerning our manufacturers; • our inability to obtain adequate product supply for any approved product or inability to do so at acceptable prices; • our inability to establish collaborations, if needed; • our failure to commercialize our product candidates, if approved; • additions or departures of key scientific or management personnel; • unanticipated serious safety concerns related to the use of our product candidates; • introduction of new products or services offered by us or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors; • our ability to effectively manage our growth; • actual or anticipated variations in quarterly operating results; • our cash position; • our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • publication of research reports about us or our industry, or product candidates in particular, or positive or negative recommendations or withdrawal of research coverage by securities analysts; • changes in the market valuations of similar companies; • changes in the structure of the healthcare payment systems; • overall performance of the equity markets; • sales of our common stock by us or our stockholders in the future; • trading volume of our common stock; • changes in accounting practices; • ineffectiveness of our internal controls; • disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies; • significant lawsuits, including patent or stockholder litigation; • general political and economic conditions; and • other events or factors, many of which are beyond our control.
Accordingly, our future results could be harmed by a variety of factors, including: • economic weakness, including inflation, or political instability in particular non-U.S. economies and markets; • differing and changing regulatory requirements in non-U.S. countries; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States, including our ability to prosecute or maintain patents in Russia due to the sanctions imposed by the United States and other countries on Russia as a result of Russia’s invasion of Ukraine and our ability to enforce patents due to Russia's March 2022 decree that allows the use of inventions, utility models and industrial designs that are held by intellectual property owners from "unfriendly countries," including the United States, without the consent of or payment of any compensation to such owners; • difficulties in compliance with non-U.S. laws and regulations; • changes in non-U.S. regulations and customs, tariffs and trade barriers; • changes in non-U.S. currency exchange rates and currency controls; • changes in a specific country’s or region’s political or economic environment; • trade protection measures, import or export licensing requirements or other restrictive actions by U.S. or non-U.S. governments; • negative consequences from changes in tax laws; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • workforce uncertainty in countries where labor unrest is more common than in the United States; 72 Table of Contents • difficulties associated with staffing and managing international operations, including differing labor relations • potential liability under the Foreign Corrupt Practices Act, U.K.
Accordingly, our future results could be harmed by a variety of factors, including: • economic weakness, including inflation, or political instability in particular non-U.S. economies and markets; • differing and changing regulatory requirements in non-U.S. countries; • challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States, including our ability to prosecute or maintain patents in Russia due to the sanctions imposed by the United States and other countries on Russia as a result of Russia’s invasion of Ukraine and our ability to enforce patents due to Russia's March 2022 decree that allows the use of inventions, utility models and industrial designs that are held by intellectual property owners from "unfriendly countries," including the United States, without the consent of or payment of any compensation to such owners; • difficulties in compliance with non-U.S. laws and regulations; • changes in non-U.S. regulations and customs, tariffs and trade barriers; 73 Table of Contents • changes in non-U.S. currency exchange rates and currency controls; • changes in a specific country’s or region’s political or economic environment; • trade protection measures, import or export licensing requirements or other restrictive actions by U.S. or non-U.S. governments; • negative consequences from changes in tax laws; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • workforce uncertainty in countries where labor unrest is more common than in the United States; • difficulties associated with staffing and managing international operations, including differing labor relations; • potential liability under the Foreign Corrupt Practices Act, U.K.
Our ability to generate revenue and achieve profitability depends on many factors, including: • initiating and successfully completing research and preclinical and clinical development of our product candidates; • obtaining regulatory approvals for product candidates for which we successfully complete clinical development and clinical trials, if any; • developing a sustainable and scalable manufacturing process for our product candidates, as well as establishing and maintaining commercially viable supply relationships with third parties that can provide adequate products and services to support clinical activities and commercial demand of our product candidates; • identifying, assessing, acquiring and/or developing new product candidates; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; • launching and successfully commercializing product candidates for which we obtain regulatory approval, if any, either by collaborating with a partner or, if launched independently, by establishing a sales, marketing and distribution infrastructure; • obtaining and maintaining an adequate price for our product candidates in the countries where our products are commercialized, if any; 29 Table of Contents • obtaining adequate reimbursement for our product candidates from payors; • obtaining market acceptance of our product candidates as viable treatment options; • addressing any competing technological and market developments; • receiving milestone and other payments under any future collaboration arrangements; • maintaining, protecting, expanding and enforcing our portfolio of intellectual property rights, including patents, trade secrets and know-how; and • attracting, hiring and retaining qualified personnel.
Our ability to generate revenue and achieve profitability depends on many factors, including: • initiating and successfully completing research and preclinical and clinical development of our product candidates; • obtaining regulatory approvals for product candidates for which we successfully complete clinical development and clinical trials, if any; • developing a sustainable and scalable manufacturing process for our product candidates, as well as establishing and maintaining commercially viable supply relationships with third parties that can provide adequate products and services to support clinical activities and commercial demand of our product candidates; • identifying, assessing, acquiring and/or developing new product candidates; • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter; • launching and successfully commercializing product candidates for which we obtain regulatory approval, if any, either by collaborating with a partner or, if launched independently, by establishing a sales, marketing and distribution infrastructure; • obtaining and maintaining an adequate price for our product candidates in the countries where our products are commercialized, if any; • obtaining adequate reimbursement for our product candidates from payors; 30 Table of Contents • obtaining market acceptance of our product candidates as viable treatment options; • addressing any competing technological and market developments; • receiving milestone and other payments under any future collaboration arrangements; • maintaining, protecting, expanding and enforcing our portfolio of intellectual property rights, including patents, trade secrets and know-how; and • attracting, hiring and retaining qualified personnel.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA fraud provisions without actual knowledge of the statute or specific intent to violate it; • the federal Physician Payments Sunshine Act and its implementing regulations, which require manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician providers including physician providers including physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by the physicians and their immediate family members; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and • analogous U.S. state, local and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers, and may be broader in scope than their federal equivalents; state and foreign laws that require biopharmaceutical companies to comply with the biopharmaceutical industry’s voluntary compliance guidelines and other relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or drug pricing; state and local laws that require the registration of biopharmaceutical sales representatives.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA fraud provisions without actual knowledge of the statute or specific intent to violate it; • the federal Physician Payments Sunshine Act and its implementing regulations, which require manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician providers including physician assistants and nurse practitioners, and teaching hospitals, as well as ownership and investment interests held by the physicians and their immediate family members; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and • analogous U.S. state, local and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payor, including private insurers, and may be broader in scope than 49 Table of Contents their federal equivalents; state and foreign laws that require biopharmaceutical companies to comply with the biopharmaceutical industry’s voluntary compliance guidelines and other relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or drug pricing; state and local laws that require the registration of biopharmaceutical sales representatives.
For example: • others may be able to make or use compounds that are similar to the compositions of our product candidates but that are not covered by the claims of our patents or those of our licensors; • we or our licensors, as the case may be, may fail to meet our obligations to the U.S. government in regards to any in-licensed patents and patent applications funded by U.S. government grants, leading to the loss of patent rights; • we or our licensors, as the case may be, might not have been the first to file patent applications for these inventions; 56 Table of Contents • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not result in issued patents; • it is possible that there are prior public disclosures that could invalidate our or our licensors’ patents, as the case may be, or parts of our or their patents; • it is possible that others may circumvent our owned or in-licensed patents; • it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our products or technology similar to ours; • the laws of foreign countries may not protect our or our licensors’, as the case may be, proprietary rights to the same extent as the laws of the United States; • the claims of our owned or in-licensed issued patents or patent applications, if and when issued, may not cover our product candidates; • our owned or in-licensed issued patents may not provide us with any competitive advantages, may be narrowed in scope, or may be held invalid or unenforceable as a result of legal challenges by third parties; • the inventors of our owned or in-licensed patents or patent applications may become involved with competitors, develop products or processes which design around our patents or become hostile to us or the patents or patent applications on which they are named as inventors; • it is possible that our owned or in-licensed patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable; • we have engaged in scientific collaborations in the past, and are likely to continue to do so in the future.
For example: • others may be able to make or use compounds that are similar to the compositions of our product candidates but that are not covered by the claims of our patents or those of our licensors; • we or our licensors, as the case may be, may fail to meet our obligations to the U.S. government in regards to any in-licensed patents and patent applications funded by U.S. government grants, leading to the loss of patent rights; • we or our licensors, as the case may be, might not have been the first to file patent applications for these inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our pending patent applications will not result in issued patents; • it is possible that there are prior public disclosures that could invalidate our or our licensors’ patents, as the case may be, or parts of our or their patents; • it is possible that others may circumvent our owned or in-licensed patents; • it is possible that there are unpublished applications or patent applications maintained in secrecy that may later issue with claims covering our products or technology similar to ours; • the laws of foreign countries may not protect our or our licensors’, as the case may be, proprietary rights to the same extent as the laws of the United States; • the claims of our owned or in-licensed issued patents or patent applications, if and when issued, may not cover our product candidates; • our owned or in-licensed issued patents may not provide us with any competitive advantages, may be narrowed in scope, or may be held invalid or unenforceable as a result of legal challenges by third parties; • the inventors of our owned or in-licensed patents or patent applications may become involved with competitors, develop products or processes which design around our patents or become hostile to us or the patents or patent applications on which they are named as inventors; • it is possible that our owned or in-licensed patents or patent applications omit individual(s) that should be listed as inventor(s) or include individual(s) that should not be listed as inventor(s), which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable; • we have engaged in scientific collaborations in the past, and are likely to continue to do so in the future.
We have no prior experience as a company in the marketing, sale and distribution of biopharmaceutical products and there are significant risks involved in building and managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team.
However, we have no prior experience as a company in the marketing, sale and distribution of biopharmaceutical products and there are significant risks involved in building and managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team.
Any transition of the cloud services currently provided by an existing vendor to another cloud provider would be difficult to implement and will cause us to incur significant time and expense. Given this, any significant disruption of or interference with our use of these cloud computing services would negatively impact our operations and our business would be seriously harmed.
Any transition of the cloud services currently provided by an existing vendor to another vendor would be difficult to implement and will cause us to incur significant time and expense. Given this, any significant disruption of or interference with our use of these cloud computing services would negatively impact our operations and our business would be seriously harmed.
We have no committed source of additional capital and if we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of our product candidates or other research and development initiatives.
We have no committed source of additional capital and if we are unable to raise additional capital, if needed, in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of our product candidates or other research and development initiatives.
The degree of market acceptance of any product candidate, if approved for commercial sale, will depend on a number of factors, including: • efficacy and potential advantages compared to alternative treatments; • the ability to offer our products, if approved, for sale at competitive prices; • relative convenience and ease of administration compared to alternative treatments; • perceptions by the medical community, physicians, and patients, regarding the safety and effectiveness of our products and the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; 44 Table of Contents • the size of the market for such product candidate, based on the size of the patient subsets that we are targeting, in the territories for which we gain regulatory approval; • the recommendations with respect to our product candidates in guidelines published by various scientific organizations applicable to us and our product candidates; • the strength of sales, marketing and distribution support; • the timing of any such marketing approval in relation to other product approvals; • any restrictions on concomitant use of other medications; • support from patient advocacy groups; • the ability to obtain sufficient third-party coverage and adequate reimbursement; and • the prevalence and severity of any side effects.
The degree of market acceptance of any product candidate, if approved for commercial sale, will depend on a number of factors, including: • efficacy and potential advantages compared to alternative treatments; • the ability to offer our products, if approved, for sale at competitive prices; • relative convenience and ease of administration compared to alternative treatments; • perceptions by the medical community, physicians, and patients, regarding the safety and effectiveness of our products and the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the size of the market for such product candidate, based on the size of the patient subsets that we are targeting, in the territories for which we gain regulatory approval; • the recommendations with respect to our product candidates in guidelines published by various scientific organizations applicable to us and our product candidates; • the strength of sales, marketing and distribution support; • the timing of any such marketing approval in relation to other product approvals; • any restrictions on concomitant use of other medications; • support from patient advocacy groups; • the ability to obtain sufficient third-party coverage and adequate reimbursement; and • the prevalence and severity of any side effects.
From time to time, we publicly disclose preliminary or topline data from our clinical trials, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.
From time to time, we disclose preliminary or topline data from our clinical trials, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.
Our amended and restated bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any state law claims for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers and employees to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our bylaws 81 Table of Contents (in each case, as they may be amended from time to time) or (iv) any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein; provided, however, that this exclusive forum provision will not apply to any causes of action arising under the Securities Act or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware, or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware.
Our amended and restated bylaws provide that, unless we consent in writing to an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any state law claims for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers and employees to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our bylaws (in each case, as they may be amended from time to time) or (iv) any action asserting a claim that is governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein; provided, however, that this exclusive forum provision will not apply to any causes of action arising under the Securities Act or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware, or any other claim for which the federal courts have exclusive jurisdiction; and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware.
Third-party patents may exist which might be enforced against our current or future proprietary technologies and product candidates, resulting in either an injunction 57 Table of Contents prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology.
Third-party patents may exist which might be enforced against our current or future proprietary technologies and product candidates, resulting in either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties Moreover, disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our product candidates, technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under our collaborative development relationships; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology.
This concentration of ownership control may adversely affect the market price of our common stock by: • delaying, deferring or preventing a change in control; • entrenching our management and the board of directors; • impeding a merger, consolidation, takeover or other business combination involving us that other stockholders may desire; and/or 79 Table of Contents • discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
This concentration of ownership control may adversely affect the market price of our common stock by: • delaying, deferring or preventing a change in control; • entrenching our management and the board of directors; 80 Table of Contents • impeding a merger, consolidation, takeover or other business combination involving us that other stockholders may desire; and/or • discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.
There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution; • the federal civil and criminal false claims laws, including the FCA, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, 47 Table of Contents false, fictitious or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs; knowingly making, using or causing to be made or used, a false record or statement material to a false, fictitious or fraudulent claim or an obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government.
There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution; • the federal civil and criminal false claims laws, including the FCA, and civil monetary penalty laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false, fictitious or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs; knowingly making, using or causing to be made or used, a false record or statement material to a false, fictitious or fraudulent claim or an obligation to pay or transmit money or property to the federal government; or knowingly concealing or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government.
If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may be 48 Table of Contents subject to significant sanctions, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, reputational harm, exclusion from participation in federal and state funded healthcare programs, contractual damages and the curtailment or restricting of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws.
If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may be subject to significant sanctions, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, reputational harm, exclusion from participation in federal and state funded healthcare programs, contractual damages and the curtailment or restricting of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws.
Risks Related to Future Financial Condition We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product discovery and development programs or commercialization efforts. Our operations have consumed substantial amounts of cash since inception.
Risks Related to Future Financial Condition We may need additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product discovery and development programs or commercialization efforts. Our operations have consumed substantial amounts of cash since inception.
Replacing executive officers or 73 Table of Contents other key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to develop, gain regulatory approval of and commercialize products successfully.
Replacing executive officers or other key employees may be difficult and may take an extended period of time because of the limited number of 74 Table of Contents individuals in our industry with the breadth of skills and experience required to develop, gain regulatory approval of and commercialize products successfully.
In addition to the CMIA, California also enacted the CCPA, which requires covered businesses that process the personal information of California residents to, among other things: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; (ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information; and (iii) enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
In addition to the CMIA, California also enacted the California Consumer Privacy Act, or the CCPA, which requires covered businesses that process the personal information of California residents to, among other things: (i) provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; (ii) receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information; and (iii) enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf.
In addition, if our third party manufacturers are not able to optimize their manufacturing processes to increase the product yield for our product candidates, or if they are 69 Table of Contents unable to produce increased amounts of our product candidates while maintaining the quality of the product, then we may not be able to meet the demands of clinical trials or market demands, which could decrease our ability to generate profits and have a material adverse impact on our business and results of operation.
In addition, if our third party manufacturers are not able to optimize their manufacturing processes to increase the product yield for our product candidates, or if they are unable to produce increased amounts of our product candidates while maintaining the quality of the product, then we may not be able to meet the demands of clinical trials or market demands, which could decrease our ability to generate profits and have a material adverse impact on our business and results of operation.
If we cannot successfully negotiate sufficient ownership and commercial rights to any inventions that result from our use of a third-party collaborator’s materials, or if disputes arise with respect to the intellectual property developed with the use of a collaborator’s samples, or data developed 60 Table of Contents in a collaborator’s study, in cases where written agreements either do or do not exist, we may be limited in our ability to capitalize on the market potential of these inventions or developments.
If we cannot successfully negotiate sufficient ownership and commercial rights to any inventions that result from our use of a third-party collaborator’s materials, or if disputes arise with respect to the intellectual property developed with the use of a collaborator’s samples, or data developed in a collaborator’s study, in cases where written agreements either do or do not exist, we may be limited in our ability to capitalize on the market potential of these inventions or developments.
Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information or other restrictions; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS or similar program.
Later discovery of previously unknown problems with our product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information or other restrictions; imposition of post-market studies or clinical trials to assess new safety risks; or 44 Table of Contents imposition of distribution restrictions or other restrictions under a REMS or similar program.
If any of our product candidates ultimately receives regulatory approval, we expect to establish a marketing and sales organization with technical expertise and supporting distribution capabilities to commercialize each such product in major markets, which will be expensive and time consuming.
If any of our product candidates ultimately receives regulatory approval, we will need to establish a marketing and sales organization with technical expertise and supporting distribution capabilities to commercialize each such product in major markets, which will be expensive and time consuming.
Kelly, but they may terminate their employment with us at any time. The loss of their services might impede the achievement of our research, development and commercialization objectives. We do not maintain “key person” insurance for any of our executives or other employees.
Sniecinski, but they may terminate their employment with us at any time. The loss of their services might impede the achievement of our research, development and commercialization objectives. We do not maintain “key person” insurance for any of our executives or other employees.
If we are able to gain marketing approval for our product candidates, we will require significant additional amounts of cash in order to launch and commercialize such product candidates to the extent that such launch and commercialization are not the responsibility of a future collaborator that we may contract with in the future.
If we are able to gain marketing approval for our product candidates, we will require significant cash in order to launch and commercialize such product candidates to the extent that such launch and commercialization are not the responsibility of a future collaborator that we may contract with.
Even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful 31 Table of Contents commercialization of that product candidate.
Even if we were to obtain approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.
Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business.
Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, 50 Table of Contents government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our operations, financial performance and business.
If any of our product candidates is approved, we then intend to expand to clinical testing and potentially seek regulatory approvals in other neurological disease indications based on genetic and mechanistic overlap with the primary indication.
If any of our product candidates are approved, we then intend to expand to clinical testing and potentially seek regulatory approvals in other neurological disease indications based on genetic and mechanistic overlap with the primary indication.
To manage these growth activities, we must continue to implement and improve our managerial, operational, quality and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Our management may need to devote a significant amount of its attention to managing these growth activities.
To manage these growth activities, we must continue to implement and improve our managerial, operational, quality and financial systems, and continue to recruit and train additional qualified personnel. Our management may need to devote a significant amount of its attention to managing these growth activities.
Risks Related to the Commercialization of our Product Candidates 42 Table of Contents Risks Related to Post-Marketin g Regulatory Requirements Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or 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 products, when and if any of them are approved.
Risks Related to the Commercialization of our Product Candidates Risks Related to Post-Marketin g Regulatory Requirements Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subject to post-marketing restrictions or 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 products, when and if any of them are approved.
Any such changes could result in an increase in our or our shareholders’ tax liability or require changes in the manner in which we operate in 76 Table of Contents order to minimize or mitigate any adverse effects of changes in tax law or in the interpretation thereof.
Any such changes could 77 Table of Contents result in an increase in our or our shareholders’ tax liability or require changes in the manner in which we operate in order to minimize or mitigate any adverse effects of changes in tax law or in the interpretation thereof.
We anticipate that we will continue to incur significant losses for the foreseeable future. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable.
We may incur significant losses for the foreseeable future. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable.
On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three 52 Table of Contents to five years.
If a court of competent 59 Table of Contents jurisdiction finds us liable for any such claims, we may be prohibited from using certain intellectual property, trade secrets and confidential information, effectively blocking our ability to seek patent protection for our inventions and slowing or halting the progress of our clinical development and commercialization efforts.
If a court of competent jurisdiction finds us liable for any such claims, we may be prohibited from using certain intellectual property, trade secrets and confidential information, effectively blocking our ability to seek patent protection for our inventions and slowing or halting the progress of our clinical development and commercialization efforts.
There can be no assurance that any country that has price controls or reimbursement limitations for biopharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our product candidates. Historically, products launched in the EU do not follow price structures of the United States and generally prices tend to be significantly lower.
There can be no assurance that any country that has price controls or reimbursement limitations for biopharmaceutical products will allow favorable 47 Table of Contents reimbursement and pricing arrangements for any of our product candidates. Historically, products launched in the EU do not follow price structures of the United States and generally prices tend to be significantly lower.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible, or 61 Table of Contents require substantial time and monetary expenditure.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible, or require substantial time and monetary expenditure.
Any cyberattack, data breach or destruction or loss of data could result in a violation of applicable U.S. and international privacy, data protection and other laws, and subject us to litigation and governmental investigations and proceedings by federal, state and local regulatory entities in the United States and by international regulatory entities, resulting in exposure to material civil and/or criminal liability.
Any cyberattack, data breach or destruction or loss of data could result in a violation of applicable U.S. and international privacy, data protection and other laws, and subject us to litigation (including class actions) and governmental investigations and proceedings by federal, state and local regulatory entities in the United States and by international regulatory entities, resulting in exposure to material civil and/or criminal liability.
Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences following regulatory approval, if obtained. 34 Table of Contents Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.
Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences following regulatory approval, if obtained. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.
As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine 50 Table of Contents the impact future laws, regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to these laws or regulations.
As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to these laws or regulations.
In markets outside of the United States and EU, reimbursement and healthcare payment 53 Table of Contents systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. In December 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA, amending Directive 2011/24/EU, was adopted.
In markets outside of the United States and EU, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. In December 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA, amending Directive 2011/24/EU, was adopted.
Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United 66 Table of Contents States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.
Risks Related to Third-Party Manufacturers We contract with third parties for the manufacture of our product candidates. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or drugs or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.
Risks Related to Third-Party Manufacturers 69 Table of Contents We contract with third parties for the manufacture of our product candidates. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or drugs or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.
In addition, any testing by us conducted in connection with Section 404, or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement.
Any testing by us or our independent registered accounting firm conducted in connection with Section 404 may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement.
Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.
Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and 81 Table of Contents forms of the SEC.
Regulations associated with controlled substances govern manufacturing, labeling, packaging, testing, dispensing, production and procurement quotas, recordkeeping, reporting, handling, shipment and disposal. 40 Table of Contents These regulations increase the personnel needs and the expense associated with development and commercialization of product candidates including controlled substances. The DEA, and some states, conduct periodic inspections of registered establishments that handle controlled substances.
Regulations associated with controlled substances govern manufacturing, labeling, packaging, testing, dispensing, production and procurement quotas, recordkeeping, reporting, handling, shipment and disposal. These regulations increase the personnel needs and the expense associated with development and commercialization of product candidates including controlled substances. The DEA, and some states, conduct periodic inspections of registered establishments that handle controlled substances.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Certain of these laws impose joint and several liability, including in some instances regardless of fault or legality at 54 Table of Contents the time of occurrence.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Certain of these laws impose joint and several liability, including in some instances regardless of fault or legality at the time of occurrence.
If we or one of our licensors is a party to an interference or derivation proceeding involving a U.S. patent application on inventions owned by or in-licensed to us, we may incur substantial costs, divert management’s time and expend other resources, even if we are successful.
If we or one of our licensors is a party to an interference or derivation proceeding involving a U.S. patent application on inventions 64 Table of Contents owned by or in-licensed to us, we may incur substantial costs, divert management’s time and expend other resources, even if we are successful.
Our amended and restated bylaws designate certain courts as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Our amended and restated bylaws designate certain courts as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our 82 Table of Contents stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
We have needed and anticipate we will need additional capital in the future to continue our planned operations. To the extent that we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution.
We have needed and may need additional capital in the future to continue our planned operations. To the extent that we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution.
If a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our development or commercialization program under such collaboration could be delayed, diminished or terminated. We may face significant competition in seeking appropriate collaborations.
If a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our development or commercialization program under such collaboration could be delayed, diminished or terminated. 72 Table of Contents We may face significant competition in seeking appropriate collaborations.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized 80 Table of Contents override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.
Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.
Accordingly, to the extent we receive marketing approval for one or more of our product candidates, we and our 43 Table of Contents third-party partners will continue to expend time, money and effort in all areas of regulatory compliance, including promotional and labeling compliance, manufacturing, production, product surveillance and quality control.
Accordingly, to the extent we receive marketing approval for one or more of our product candidates, we and our third-party partners will continue to expend time, money and effort in all areas of regulatory compliance, including promotional and labeling compliance, manufacturing, production, product surveillance and quality control.
We do not currently have the infrastructure or internal capability to manufacture supplies of our product candidates for use in development and commercialization. We rely, and expect to continue to rely, on third-party manufacturers for the production of our product candidates for preclinical studies and clinical trials under the 68 Table of Contents guidance of members of our organization.
We do not currently have the infrastructure or internal capability to manufacture supplies of our product candidates for use in development and commercialization. We rely, and expect to continue to rely, on third-party manufacturers for the production of our product candidates for preclinical studies and clinical trials under the guidance of members of our organization.
Unless and until we can generate a substantial amount of revenue from our product candidates, we expect to finance our future cash needs through public or private equity offerings, debt financings, collaborations, licensing arrangements or other sources, 28 Table of Contents or any combination of the foregoing.
Unless and until we can generate a substantial amount of revenue from our product candidates, we expect to finance our future cash needs through public or private equity offerings, debt financings, collaborations, licensing arrangements or other sources, or any combination of the foregoing.
In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and 33 Table of Contents may interpret the information of the treated group more favorably given this knowledge.
In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge.
Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. Our collaborators may assert ownership or commercial rights to inventions they develop from research we support or that we develop or otherwise arising from the collaboration.
Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. 61 Table of Contents Our collaborators may assert ownership or commercial rights to inventions they develop from research we support or that we develop or otherwise arising from the collaboration.
Food and Drug Administration, or the FDA, or other regulatory authorities to perform clinical trials in addition to those that we 27 Table of Contents currently expect, or if there are any delays in establishing appropriate manufacturing arrangements for or in completing our clinical trials or the development of any of our product candidates.
Food and Drug Administration, or the FDA, or other regulatory authorities to perform clinical trials in addition to those that we currently expect, or if there are any delays in establishing appropriate manufacturing arrangements for or in completing our clinical trials or the development of any of our product candidates.
If the breadth or strength of protection provided by the patent applications that we hold with respect to our product candidates is threatened, it could 55 Table of Contents dissuade companies from collaborating with us to develop new or improved products and threaten our ability to commercialize our product candidates.
If the breadth or strength of protection provided by the patent applications that we hold with respect to our product candidates is threatened, it could dissuade companies from collaborating with us to develop new or improved products and threaten our ability to commercialize our product candidates.
We are currently evaluating (i) ulixacaltamide for the treatment of essential tremor, or ET, (ii) vormatrigine for the treatment of common epilepsies, including focal onset seizures and generalized epilepsy, (iii) relutrigine for the treatment of SCN2A development and epileptic encephalopathy, or SCN2A-DEE, SCN8A development and epileptic encephalopathy, or SCN8A-DEE, and broader DEEs; and (iv) elsunersen for the treatment of SCN2A-DEE.
We are currently evaluating (i) ulixacaltamide for the treatment of essential tremor, or ET, (ii) relutrigine for the treatment of SCN2A developmental and epileptic encephalopathy, or SCN2A-DEE, SCN8A-DEE, and broader DEEs; (iii) vormatrigine for the treatment of common epilepsies, including focal onset seizures and generalized epilepsy, and (iv) elsunersen for the treatment of early onset SCN2A-DEE.
We may seek orphan drug designation for other current and future product candidates. In the EU, orphan designation entitles a party to financial incentives such as reduction of fees, fee waivers, protocol assistance, and access to the centralized marketing authorization procedure.
We may seek orphan drug designation for other current and future product candidates. 39 Table of Contents In the EU, orphan designation entitles a party to financial incentives such as reduction of fees, fee waivers, protocol assistance, and access to the centralized marketing authorization procedure.
Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United 49 Table of Contents States, and the efficacy and longevity of current transfer mechanisms between the EEA and the United States remains uncertain.
Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EEA and the United States remains uncertain.
The effects of these changes are currently unclear as the USPTO only recently developed new regulations and procedures in connection with the America Invents Act and many of the substantive changes to patent law, including the “first-to-file” provisions, only became effective in March 2013.
The effects of these changes are currently unclear as the 57 Table of Contents USPTO only recently developed new regulations and procedures in connection with the America Invents Act and many of the substantive changes to patent law, including the “first-to-file” provisions, only became effective in March 2013.
In any patent infringement proceeding, there is a risk that a court will decide that a patent of ours is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue.
In any 65 Table of Contents patent infringement proceeding, there is a risk that a court will decide that a patent of ours is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue.
As a result, we may be required to conduct additional preclinical studies, alter our proposed clinical trial designs, or conduct additional clinical trials to satisfy the regulatory authorities in each of the jurisdictions in which we hope to conduct clinical trials and develop and market our products, if approved.
As a result, we may be required to conduct additional preclinical studies, alter our proposed clinical trial designs, or conduct additional clinical trials to satisfy the regulatory authorities in each of the jurisdictions in which we hope to conduct clinical trials and develop and market our product candidates, if approved.
Risks Related to Employees We depend heavily on our executive officers, principal consultants and others, and the loss of their services would materially harm our business.
Risks Related to Employees We depend heavily on our executive officers, principal consultants and others, and the loss of their services could materially harm our business.
Pending our use to fund operations, we may invest our cash and cash equivalents in a manner that does not produce income or that loses value.
Pending our use to fund operations, we may invest our cash, cash equivalents and marketable securities in a manner that does not produce income or that loses value.
In the event that we are subject to or affected by the CCPA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
In the event that we are subject to or 51 Table of Contents affected by the CCPA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
These actions could result in abandonment or lapse of our 66 Table of Contents patents or patent applications, resulting in partial or complete loss of patent rights in Russia. If such an event were to occur, it could have a material adverse effect on our business.
These actions could result in abandonment or lapse of our patents or patent applications, resulting in partial or complete loss of patent rights in Russia. If such an event were to occur, it could have a material adverse effect on our business.
If we are unable to effectively manage our expected growth, our expenses may increase more than expected, our ability to generate revenues could be reduced and we may not be able to implement our business strategy, including the successful commercialization of our product candidates.
If we are unable to effectively manage our 75 Table of Contents expected growth, our expenses may increase more than expected, our ability to generate revenues could be reduced and we may not be able to implement our business strategy, including the successful commercialization of our product candidates.
The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our common stock to decline and delay the development of our product candidates.
The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our common stock to decline and delay the development and, if approved, commercialization of our product candidates.
Violations of the GDPR can lead to potential fines of up to €20 million or 4% of the annual global revenues of the noncompliant undertaking, whichever is greater.
Violations of the GDPR can lead to potential fines of up to €20 million/£17.5 million or 4% of the annual global revenues of the noncompliant undertaking, whichever is greater.
In some countries, we may be required to conduct a clinical study or other studies that compare the cost-effectiveness of any of our product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval.
In some countries, we may be required to conduct a clinical 54 Table of Contents study or other studies that compare the cost-effectiveness of any of our product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval.
Risks Related to Research and Development and the Biopharmaceutical Industry Risks Related to Preclinical and Clinical Development The development and commercialization of drug products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time- 30 Table of Contents consuming, and inherently unpredictable.
Risks Related to Research and Development and the Biopharmaceutical Industry Risks Related to Preclinical and Clinical Development The development and commercialization of drug products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming, and inherently unpredictable.
It is difficult to monitor whether any future licensors will limit their use of the technology to these uses, and we may incur substantial expenses to enforce our rights to our licensed technology in the event of misuse.
It is difficult to monitor 59 Table of Contents whether any future licensors will limit their use of the technology to these uses, and we may incur substantial expenses to enforce our rights to our licensed technology in the event of misuse.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may 67 Table of Contents be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
Our success depends, and will likely continue to depend, upon our ability to retain the services of our current executive officers, principal consultants and others, including Marcio Souza, our President and Chief Executive Officer, and Timothy Kelly, our Chief Financial Officer. We have entered into employment agreements with Mr. Souza and Mr.
Our success depends, and will likely continue to depend, upon our ability to retain the services of our current executive officers, principal consultants and others, including Marcio Souza, our President and Chief Executive Officer, Timothy Kelly, our Chief Financial Officer and Megan Sniecinski, our Chief Operating Officer. We have entered into employment agreements with Mr. Souza, Mr. Kelly and Ms.
Many foreign regulatory bodies, such as the EMA, have similar approval 37 Table of Contents requirements. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted.
Many foreign regulatory bodies, such as the EMA, have similar approval requirements. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted.
For example, even if the FDA grants approval of a product candidate, comparable regulatory authorities in other jurisdictions, including Australia and Europe, must also approve the manufacturing, marketing and sale of the product candidate in those countries.
For example, even if the FDA grants approval of a product candidate, comparable regulatory authorities in other jurisdictions must also approve the manufacturing, marketing and sale of the product candidate in those countries.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeKey elements of our cybersecurity risk management program include but are not limited to: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • adoption of various cybersecurity software, including but not limited to cloud-based malware, ransomware and antivirus software, phishing monitoring and artificial intelligence-based anomaly detection; • a security team principally responsible for managing (1) our cybersecurity risk-assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; 82 Table of Contents • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, incident response personnel and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • security audits and a third-party risk assessment process for key service providers, suppliers and vendors.
Biggest changeKey elements of our cybersecurity risk management program include but are not limited to: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; 83 Table of Contents • adoption of layered cybersecurity controls, including enhanced identity and access controls, automated detection and remediation for email threats, endpoint and network protections, centralized security monitoring and retention of security logs sufficient to support investigations and audit evidence; • a security team principally responsible for managing (1) our cybersecurity risk-assessment processes, (2) our security controls, (3) our response to cybersecurity incidents, and (4) the ongoing improvement of our security posture through measurement, testing, threat-hunting and lessons-learned activities; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes, including 24/7 monitoring and additional technical expertise, and periodic penetration and vulnerability testing; • cybersecurity awareness training for our employees, including incident response personnel and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • security audits and a third-party risk assessment process for key service providers, suppliers and vendors based on our assessment of their criticality to our operations and respective risk profile.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations or financial condition.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
We have an Executive Compliance Committee consisting of executive officers and members from senior management across the regulatory, quality, legal, finance and people operations functions that takes steps to stay informed about and monitor efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through various means, which includes updates from our internal cybersecurity team, as relevant; review of any threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment.
We have an Executive Compliance Committee consisting of executive officers and members from senior management across the regulatory, quality, legal, finance and people operations functions that takes steps to stay informed about and monitor efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through various means, which includes updates from our internal cybersecurity team, as relevant; review of any threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.
Item 1C. Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and information. Our cybersecurity risk-management program includes a cybersecurity incident response plan.
Item 1C. Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and information.
We use the NIST CSF and such security best practices as a guide to help us monitor, identify, assess and manage cybersecurity risks relevant to our business; however, this does not imply that we meet any particular technical standards, specifications or compliance requirements.
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational and financial risk areas.
Our cybersecurity risk management program is integrated into our overall risk management framework, and shares common methodologies, reporting channels and governance processes across legal, compliance, strategic, operational and financial risk areas.
The Audit Committee receives periodic reports from management on our cybersecurity risks. In addition, management updates the Audit Committee, when it deems appropriate, regarding cybersecurity incidents it considers to be significant or potentially significant. The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
The Audit Committee receives regular updates from management on cybersecurity risks, control maturity and significant cybersecurity matters, including those related to systems surrounding commercial operations. In addition, management updates the Audit Committee, when it deems appropriate, regarding cybersecurity incidents it considers to be significant or potentially significant.
We have an internal cybersecurity team, reporting to our Chief Financial Officer, who is responsible for (i) managing our overall cybersecurity risk-management program; (ii) assessing and managing our risks from cybersecurity threats; and (iii) overseeing retained cybersecurity consultants and providers for additional external expertise.
The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. We maintain an internal cybersecurity team, reporting to our Chief Financial Officer, who is responsible for managing our cybersecurity risk-management program, assessing and mitigating cyber risks, and overseeing retained cybersecurity consultants and providers for additional external expertise.
We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework, or NIST CSF, also integrating security best practices typically used to support the Health Insurance Portability and Accountability Act, or HIPAA, and General Data Protection Regulation, or GDPR, implementations.
We design and assess our cybersecurity risk management program based on the National Institute of Standards and Technology Cybersecurity Framework, or NIST CSF, and integrate recognized security best practices relevant to our business.
Added
As our operations scale and we transition to commercialization, our cybersecurity risk management program is designed to scale accordingly, including through enhanced governance, layered security controls, third-party oversight and continuous monitoring.
Added
We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Facilities We sublease a facility containing 25,445 square feet of office space, which is located at 99 High Street, Boston, Massachusetts 02110. Our sublease expires on January 31, 2026. We believe that our current facility is sufficient to meet our current and near-term needs and that, should it be needed, suitable additional space will be available.
Biggest changeItem 2. Properties Facilities We sublease a facility containing 25,445 square feet of office space, which is located at 99 High Street, Boston, Massachusetts 02110. Our sublease expires on February 28, 2026. We have entered into a license agreement for our existing office space which commences on March 1, 2026 and expires on March 31, 2027.
Added
We 84 Table of Contents believe that our current facility is sufficient to meet our current and near-term needs and that, should it be needed, suitable additional space will be available.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe cannot predict the outcome of any such legal matters or claims, and despite the potential outcomes, the existence thereof may have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. 83 Table of Contents
Biggest changeWe cannot predict the outcome of any such legal matters or claims, and despite the potential outcomes, the existence thereof may have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Our Common Stock As of February 26, 2025, there were approximately two holders of record of shares 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.
Biggest changeThe 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. 86 Table of Contents Dividend Policy We have never declared or paid any cash dividends on our capital stock.
Recent Sales of Unregistered Securities We did not make any sales of unregistered securities during the three months ended December 31, 2024. Purchases of Equity Securities by the Issuer and Affiliated Purchasers There were no repurchases of shares of common stock made during the three months ended December 31, 2024.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers There were no repurchases of shares of common stock made during the three months ended December 31, 2025.
Dividend Policy We have never declared or paid any cash dividends on our capital stock. We currently intend to retain any future earnings to fund the development and expansion of our business, and therefore we do not anticipate paying cash dividends on our common stock in the foreseeable future.
We currently intend to retain any future earnings to fund the development and expansion of our business, and therefore we do not anticipate paying cash dividends on our common stock in the foreseeable future. Recent Sales of Unregistered Securities We did not make any sales of unregistered securities during the three months ended December 31, 2025.
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Stock Performance Graph The following performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of the Exchange Act or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any filing of Praxis Precision Medicines, Inc. under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
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The following graph illustrates a comparison for the five years ended December 31, 2025 of the cumulative total return for our common stock, the Nasdaq Composite and the Nasdaq Biotechnology Index, each of which assumes an initial investment of $100.
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Pursuant to applicable SEC rules, all values assume reinvestment of the full amount of all dividends, however no dividends have been declared on our common stock to date. Such returns are based on historical results and are not intended to suggest future performance. The comparisons shown in the graph below are based upon historical data.
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We caution that the stock price performance shown in the graph below is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock. Holders of Our Common Stock As of February 16, 2026, there were approximately two holders of record of shares of our common stock.

Item 7. Management's Discussion & Analysis

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

75 edited+22 added−16 removed62 unchanged
Biggest changeResearch and Development Expense The following table summarizes our research and development expenses for each period presented, along with the changes in those items (in thousands): Year Ended December 31, Change 2024 2023 Cerebrum™ $ 93,591 $ 31,680 $ 61,911 Solidus™ 5,738 19,009 (13,271) Personnel-related (including stock-based compensation) 43,407 28,904 14,503 Other indirect research and development expenses 9,677 7,173 2,504 Total research and development expenses $ 152,413 $ 86,766 $ 65,647 The $65.6 million increase in research and development expenses was primarily attributable to the following: • $61.9 million increase in expense related to our Cerebrum™ platform, driven primarily by: ◦ $49.8 million increase in spend for our ulixacaltamide program, primarily due to Essential3 study spend and Phase 1 trial spend, partially offset by completion of the Essential1 study in the prior year; 92 Table of Contents ◦ $11.4 million increase in spend for our vormatrigine program, primarily driven by spend for our ENERGY program and manufacturing-related spend; ◦ $2.3 million increase in spend for our relutrigine program, primarily related to EMBOLD Phase 2 clinical trial spend; partially offset by ◦ $1.6 million decrease in activities for our earlier stage assets; • $14.5 million increase in personnel-related costs mainly due to increased headcount and stock-based compensation expense; • $2.5 million increase in indirect expenses, primarily driven by increased consulting spend to support operations; partially offset by • $13.3 million decrease in expense related to our Solidus™ platform, primarily related to our elsunersen program, driven by a $6.9 million milestone payment to Ionis Pharmaceuticals Inc. upon initiation of our EMBRAVE study in the prior year, as well as prior year study activity.
Biggest changeResearch and Development Expense The following table summarizes our research and development expenses for the periods presented below, along with the changes in those items (in thousands): Year Ended December 31, Change 2025 2024 Cerebrum™ $ 185,497 $ 93,591 $ 91,906 Personnel-related (including stock-based compensation) 58,684 43,407 15,277 Solidus™ 10,742 5,738 5,004 Other indirect research and development expenses 12,192 9,677 2,515 Total research and development expenses $ 267,115 $ 152,413 $ 114,702 The $114.7 million increase in research and development expenses was primarily attributable to the following: • $91.9 million increase in expense related to our Cerebrum™ platform, driven primarily by: ▪ $55.8 million increase in spend for our vormatrigine program, primarily driven by increased spend across our ENERGY program clinical studies and Phase 1 study spend; 94 Table of Contents ▪ $38.9 million increase in spend for our relutrigine program, primarily related to our EMBOLD and EMERALD trial activities, manufacturing spend to support commercialization and Phase 1 study spend; ▪ $3.2 million increase in activities for our earlier stage assets as we advance our portfolio; partially offset by, ▪ $6.0 million decrease in spend for our ulixacaltamide program, primarily due to multiple Phase 1 studies completing in the prior year, partially offset by current year Essential3 spend and manufacturing spend to support commercialization; • $15.3 million increase in personnel-related costs due to increased headcount; and • $5.0 million increase in expense related to our Solidus™ platform, driven by elsunersen program spend for EMBRAVE Part A clinical trial and our EMBRAVE3 pivotal clinical trial.
In January 2024, we completed a public offering of: (i) an aggregate of 3,802,025 shares of our common stock at a public offering price of $35.50 per share, including the underwriters' full exercise of their option to purchase 633,750 additional shares of common stock, and (ii) pre-funded warrants to purchase 1,056,725 shares of common stock at a public offering price of $35.4999 per share of common stock underlying the warrants.
In January 2024, we completed a public offering of: (i) an aggregate of 3,802,025 shares of our common stock at a public offering price of $35.50 per share, including the underwriters' full exercise of their option to purchase 633,750 additional shares of common stock, and (ii) pre-funded warrants to purchase 1,056,725 shares of common stock at a public offering price of $35.4999 per share of common stock underlying the warrants.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $161.6 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $161.6 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
During the year ended December 31, 2024, we issued and sold an aggregate of 1,614,975 shares under the March 2024 Sales Agreement for aggregate net proceeds of $113.1 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2024, we issued and sold an aggregate of 1,614,975 shares under the March 2024 Sales Agreement for aggregate net proceeds of $113.1 million, after deducting commissions and offering expenses payable by us.
In April 2024, we completed a public offering of: (i) an aggregate of 3,849,558 shares of our common stock at a public offering price of $56.50 per share, including the underwriters' full exercise of their option to purchase 530,973 additional shares of common stock, and (ii) pre-funded warrants to purchase 221,238 shares of common stock at a public offering price of $56.4999 per share of common stock underlying the warrants.
In April 2024, we completed a public offering of: (i) an aggregate of 3,849,558 shares of our common stock at a public offering price of $56.50 per share, including the underwriters' full exercise of their option to purchase 530,973 additional shares of common stock, and (ii) pre-funded warrants to purchase 221,238 shares of common stock at a public offering price of $56.4999 per share of common stock underlying the warrants.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $216.0 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were approximately $216.0 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
Financing Activities During the year ended December 31, 2024, net cash provided by financing activities of $514.3 million consisted primarily of net proceeds from our January 2024 and April 2024 follow-on public offerings, our at-the-market offerings and our collaboration and license agreement with Tenacia.
During the year ended December 31, 2024, net cash provided by financing activities of $514.3 million consisted primarily of net proceeds from our January 2024 and April 2024 follow-on public offerings, our at-the-market offerings and our collaboration and license agreement with Tenacia.
This is due to the numerous risks and uncertainties associated with drug development, including the uncertainty of: • our ability to add and retain key research and development personnel; • the timing and progress of preclinical and clinical development activities; • the number and scope of preclinical and clinical programs we decide to pursue; • our ability to successfully complete clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; • our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize, our product candidates; 90 Table of Contents • our successful enrollment in and completion of clinical trials; • the costs associated with the development of any additional product candidates we identify in-house or acquire through collaborations; • our ability to discover, develop and utilize biomarkers to demonstrate target engagement, pathway engagement and the impact on disease progression of our product candidates; • our ability to establish and maintain agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our product candidates are approved; • the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone payments thereunder; • our ability to obtain and maintain patent, trade secret and other IP protection and regulatory exclusivity for our product candidates, if approved; • our receipt of marketing approvals from applicable regulatory authorities; • our ability to commercialize products, if approved, whether alone or in collaboration with others; and • the continued acceptable safety profiles of our product candidates.
This is due to the numerous risks and uncertainties associated with drug development, including the uncertainty of: • our ability to add and retain key research and development personnel; • the timing and progress of preclinical and clinical development activities; • the number and scope of preclinical and clinical programs we decide to pursue; • our ability to successfully complete clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; 92 Table of Contents • our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize, our product candidates; • our successful enrollment in and completion of clinical trials; • the costs associated with the development of any additional product candidates we identify in-house or acquire through collaborations; • our ability to discover, develop and utilize biomarkers to demonstrate target engagement, pathway engagement and the impact on disease progression of our product candidates; • our ability to establish and maintain agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our product candidates are approved; • the terms and timing of any collaboration, license or other arrangement, including the terms and timing of any milestone payments thereunder; • our ability to obtain and maintain patent, trade secret and other IP protection and regulatory exclusivity for our product candidates, if approved; • our receipt of marketing approvals from applicable regulatory authorities; • our ability to commercialize products, if approved, whether alone or in collaboration with others; and • the continued acceptable safety profiles of our product candidates.
The costs above comprise the following categories: • personnel-related expenses, including salaries, benefits and stock-based compensation expense; • expenses incurred under agreements with third parties, such as consultants, investigative sites and CROs, that conduct our preclinical and clinical studies and in-licensing arrangements; 89 Table of Contents • costs incurred to maintain compliance with regulatory requirements; • costs incurred with third-party contract development and manufacturing organizations to acquire, develop and manufacture materials for preclinical and clinical studies; and • depreciation, amortization and other direct and allocated expenses, including rent and other operating costs, such as information technology, incurred as a result of our research and development activities.
The costs above comprise the following categories: • personnel-related expenses, including salaries, benefits and stock-based compensation expense; 91 Table of Contents • expenses incurred under agreements with third parties, such as consultants, investigative sites and CROs, that conduct our preclinical and clinical studies and in-licensing arrangements; • costs incurred to maintain compliance with regulatory requirements; • costs incurred with third-party contract development and manufacturing organizations to acquire, develop and manufacture materials for preclinical and clinical studies; and • depreciation, amortization and other direct and allocated expenses, including rent and other operating costs, such as information technology, incurred as a result of our research and development activities.
Income Taxes Since our inception, we have not recorded any U.S. federal or state income tax benefits for the net losses we have incurred in each year or for our earned research and development tax credits due to our uncertainty of realizing a benefit from those items.
Income Taxes Since our inception, we have not recorded any U.S. federal or state income tax benefits for the net losses we have incurred in each year or for our earned research and development and orphan drug tax credits, due to our uncertainty of realizing a benefit from those items.
In March 2024, we entered into the March 2024 Sales Agreement with Jefferies to provide for the offering, issuance and sale of up to an aggregate amount of $150.0 million of common stock from time to time in at-the-market offerings.
In March 2024, we entered into an Open Market Sale Agreement, or the March 2024 Sales Agreement, with Jefferies, to provide for the offering, issuance, and sale of up to an aggregate amount of $150.0 million of common stock from time to time in at-the-market offerings.
We anticipate that our expenses will increase substantially if and as we: • advance the clinical development of our clinical-stage product candidates within our Cerebrum™ and Solidus™ platforms; • advance the development of any additional product candidates; • conduct research and continue preclinical development of potential product candidates; • make strategic investments in manufacturing capabilities; • maintain our IP portfolio and opportunistically acquire complementary IP; • seek to obtain regulatory approvals for our product candidates; • establish a sales, marketing, technology and distribution infrastructure and scale-up manufacturing capabilities to commercialize any products for which we may obtain regulatory approval; • when needed, add clinical, scientific, operational, financial and management information systems and personnel, including personnel to support our product development and potential future commercialization efforts and to support our operations as a public company; and • experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges.
We anticipate that our expenses will increase substantially if and as we: • continue to build a sales, marketing, technology and distribution infrastructure and scale-up manufacturing capabilities to commercialize any products for which we may obtain regulatory approval; 97 Table of Contents • advance the clinical development of our clinical-stage product candidates within our Cerebrum™ and Solidus™ platforms; • advance the development of any additional product candidates; • conduct research and continue preclinical development of potential product candidates; • make strategic investments in manufacturing capabilities; • maintain our IP portfolio and opportunistically acquire complementary IP; • seek to obtain regulatory approvals for our product candidates; • when needed, add clinical, scientific, operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts and to support our operations as a public company; and • experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges.
Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates, if approved. We have incurred recurring operating losses since inception, including net losses of $182.8 million and $123.3 million for the years ended December 31, 2024 and 2023, respectively.
Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our product candidates, if approved. We have incurred recurring operating losses since inception, including net losses of $303.3 million and $182.8 million for the years ended December 31, 2025 and 2024, respectively.
We may be required to make additional payments to Ionis including development milestone payments, additional milestone payments and sales royalties or sublicense fees. Either party may terminate the collaboration agreement upon material breach or insolvency of the other party. Ionis may terminate if we fail to achieve a performance milestone.
We may be required to make additional payments to Ionis including development milestone payments, additional milestone payments and sales royalties or sublicense fees. Either party may terminate the collaboration agreement upon material breach or insolvency of the other party. Ionis may 99 Table of Contents terminate if we fail to achieve a performance milestone.
Critical Accounting Policies and Significant Judgments and Estimates 97 Table of Contents Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States.
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States.
Recently Issued Accounting Pronouncements 98 Table of Contents We have reviewed all recently issued standards and have determined that, other than as disclosed in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, such standards will not have a material impact on our consolidated financial statements or do not otherwise apply to our current operations.
Recently Issued Accounting Pronouncements We have reviewed all recently issued standards and have determined that, other than as disclosed in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, such standards will not have a material impact on our consolidated financial statements or do not otherwise apply to our current operations.
When evaluating the adequacy of the accrued liabilities and prepaid expenses, we analyze progress of the studies or trials related to these services, including the phase or completion of events, invoices received and contracted costs.
When evaluating the adequacy of the accrued liabilities and prepaid expenses, we analyze progress of 100 Table of Contents the studies or trials related to these services, including the phase or completion of events, invoices received and contracted costs.
The 2023 Sales Agreement was terminated in January 2024. During the year ended December 31, 2024, we issued and sold an aggregate of 192,190 shares under the 2023 Sales Agreement for aggregate net proceeds of $5.3 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2024, we issued and sold an aggregate of 192,190 shares under the 2023 Sales Agreement for aggregate net proceeds of $5.3 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2024, we issued and sold an aggregate of 16,487 shares under the amended March 2024 Sales Agreement for aggregate net proceeds of $1.0 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2024, we issued and sold an aggregate of 16,487 shares under the amended March 2024 Sales Agreement for aggregate net proceeds of $1.0 million, after deducting commissions and offering expenses payable by us. The amended 2024 Sales Agreement was terminated in September 2025.
Our funding requirements and timing and amount of our operating expenditures will depend on many factors, including, but not limited to: • the scope, progress, results and costs of preclinical studies and clinical trials for our platforms and product candidates; • the number and characteristics of product candidates and technologies that we develop or may in-license; • the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • the costs necessary to obtain regulatory approvals, if any, for products in the United States and other jurisdictions, and the costs of post-marketing studies that could be required by regulatory authorities in jurisdictions where approval is obtained; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our IP rights and defending any IP-related claims; • the continuation of our existing licensing arrangements and entry into new collaborations and licensing arrangements; • the costs we incur in maintaining business operations; • the costs associated with being a public company; • the revenue, if any, received from commercial sales of any product candidates for which we receive marketing approval; • the effect of competing technological and market developments; and • the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for product candidates, although we currently have no commitments or agreements to complete any such acquisitions or investments in businesses.
Our funding requirements and timing and amount of our operating expenditures will depend on many factors, including, but not limited to: • the scope, progress, results and costs of preclinical studies and clinical trials for our platforms and product candidates; • the number and characteristics of product candidates and technologies that we develop or may in-license; • the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • the costs necessary to obtain regulatory approvals, if any, for products in the United States and other jurisdictions, and the costs of post-marketing studies that could be required by regulatory authorities in jurisdictions where approval is obtained; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our IP rights and defending any IP-related claims; • the continuation of our existing licensing arrangements and entry into new collaborations and licensing arrangements; • the costs we incur in maintaining business operations; • the costs associated with being a public company; • the revenue, if any, received from commercial sales of any product candidates for which we receive marketing approval; • the effect of competing technological and market developments; and • the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for product candidates, although we currently have no commitments or agreements to complete any such acquisitions or investments in businesses. 98 Table of Contents Identifying potential product candidates and conducting preclinical testing and clinical trials is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales.
Investing Activities During the year ended December 31, 2024, net cash used in investing activities of $248.5 million primarily related to purchases of marketable securities, partially offset by maturities of marketable securities. During the year ended December 31, 2023, net cash provided by investing activities of $39.0 million primarily related to maturities of marketable securities.
During the year ended December 31, 2024, net cash used in investing activities of $248.5 million primarily related to purchases of marketable securities, partially offset by maturities of marketable securities.
The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges and changes in operating assets and liabilities. 94 Table of Contents During the year ended December 31, 2024, net cash used in operating activities of $131.8 million was primarily due to our $182.8 million net loss and $10.9 million in changes in operating assets and liabilities primarily related to an increase in accrued expenses and accounts payable, partially offset by $40.1 million of non-cash charges primarily related to stock-based compensation.
During the year ended December 31, 2024, net cash used in operating activities of $131.8 million was primarily due to our $182.8 million net loss, partially offset by $10.9 million in changes in operating assets and liabilities primarily related to an increase in accrued expenses and accounts payable and $40.1 million of non-cash charges primarily related to stock-based compensation.
We were incorporated in 2015 and commenced operations in 2016. Since inception, we have devoted substantially all of our resources to developing our preclinical and clinical product candidates, building our intellectual property, or IP, portfolio, business planning, raising capital and providing general and administrative support for these operations.
Since inception, we have devoted substantially all of our resources to developing our preclinical and clinical product candidates, building our intellectual property, or IP, portfolio, business planning, raising capital and providing general and administrative support for these operations.
As discussed in Note 9 to our audited consolidated financial statements, we entered into an Option and License Agreement, or the Collaboration Agreement, with UCB Biopharma SRL, or UCB, in December 2022. We recognized $8.6 million and $2.4 million, respectively, of collaboration revenue from the Collaboration Agreement during the years ended December 31, 2024 and 2023.
As discussed in Note 8 to our audited consolidated financial statements, we entered into an Option and License Agreement, or the Collaboration Agreement, with UCB Biopharma SRL, or UCB, in December 2022. We recognized $8.6 million of collaboration revenue from the Collaboration Agreement during the year ended December 31, 2024.
Financial Operations Overview Revenue We have not generated any revenue from the sale of products since inception and do not expect to generate any revenue from the sale of products for several years, if at all.
See “—Liquidity and Capital Resources.” Financial Operations Overview Revenue We have not generated any revenue from the sale of products since inception and do not expect to generate any revenue from the sale of products for several years, if at all.
Overview As noted in our Company Overview in Part I of this report, we are a clinical-stage biopharmaceutical company translating insights from genetic epilepsies into the development of therapies for central nervous system, or CNS, disorders characterized by neuronal excitation-inhibition imbalance.
Overview As noted in our Company Overview in Part I of this report, we are a fully integrated, leading central nervous system, or CNS, precision neuroscience biopharmaceutical company translating insights from genetic epilepsies into the development of therapies for CNS disorders characterized by neuronal excitation-inhibition imbalance.
We have based this estimate on assumptions that may provide to be wrong, and we could exhaust our available capital resources sooner than we expect.
However, we have based this estimate on assumptions that may prove to be wrong and we could exhaust our capital resources sooner than we expect.
Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0015 per share exercise price for each underlying share. Total net proceeds generated from the offering were approximately $63.4 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, less the $0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were $567.1 million, after deducting underwriting discounts, commissions, and other offering expenses payable by us.
From inception through December 31, 2024, we have raised $1.1 billion in aggregate cash proceeds from such transactions, net of issuance costs. As of December 31, 2024, we had cash, cash equivalents, and marketable securities of $469.5 million.
From inception through December 31, 2025, we have raised $1.8 billion in aggregate cash proceeds from such transactions, net of issuance costs. As of December 31, 2025, we had cash, cash equivalents, and marketable securities of $926.1 million.
The purchase price per share for each pre-funded warrant represents the per share offering price for the common stock, less the $0.0015 per share exercise price for each underlying share. Total net proceeds generated from the offering were approximately $63.4 million, after deducting underwriting discounts, commissions and other offering expenses payable by us.
The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, less the $0.0001 per share exercise price of each underlying share. Total net proceeds generated from the offering were $567.1 million, after deducting underwriting discounts, commissions, and other offering expenses payable by us.
As of December 31, 2024 and 2023, we had U.S. federal and state net operating loss carryforwards which may be available to offset future taxable income and which begin to expire in 2035.
As of December 31, 2025 and 2024, we had U.S. federal and 93 Table of Contents state net operating loss carryforwards which may be available to offset future taxable income and which begin to expire in 2031.
In December 2024, we entered into an amendment to the March 2024 Sales Agreement with Jefferies, to provide for the offering, issuance, and sale of up to an aggregate amount of $250.0 million of common stock from time to time in at-the-market offerings.
In December 2023, we entered into an Open Market Sale Agreement, or the 2023 Sales Agreement, with Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $75.0 million of common stock from time to time in at-the-market offerings. The 2023 Sales Agreement was terminated in January 2024.
Liquidity and Capital Resources Sources of Liquidity Since our inception, we have incurred significant losses in each period. We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we may not generate revenue from sales of any products for several years, if at all.
Liquidity and Capital Resources Sources of Liquidity Since our inception, we have incurred significant losses in each period. We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, or awaiting regulatory review, and we may not generate meaningful revenue from product sales in the near term, if at all.
During the year ended December 31, 2023, we issued and sold an aggregate of 212,453 shares under the 2023 Sales Agreement for aggregate net proceeds of $4.0 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2025, we issued and sold an aggregate of 403,947 shares under the 2025 Sales Agreement for aggregate net proceeds of $40.5 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2023, we issued and sold an aggregate of 212,453 shares under the 2023 Sales Agreement for aggregate net proceeds of $4.0 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2025, we issued and sold an aggregate of 403,947 shares under the 2025 Sales Agreement for aggregate net proceeds of $40.5 million, after deducting commissions and offering expenses payable by us.
As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions.
Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies or other strategic transactions.
In December 2024, we entered into an amendment to the March 2024 Sales Agreement with Jefferies to provide for the offering, issuance and sale of up to an aggregate amount of $250.0 million of common stock from time to time in at-the-market offerings.
As of December 31, 2025, none of the pre-funded warrants have been exercised and all remained outstanding. In December 2024, we entered into an amendment to the March 2024 Sales Agreement with Jefferies to provide for the offering, issuance, and sale of up to an aggregate amount of $250.0 million of common stock from time to time in at-the-market offerings.
During the year ended December 31, 2024, we issued and sold an aggregate 88 Table of Contents of 16,487 shares under the amended March 2024 Sales Agreement for aggregate net proceeds of $1.0 million, after deducting commissions and offering expenses payable by us. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $469.5 million.
During the year ended December 31, 2024, we issued and sold an aggregate of 16,487 shares under the amended March 2024 Sales Agreement for aggregate net 90 Table of Contents proceeds of $1.0 million, after deducting commissions and offering expenses payable by us. The amended 2024 Sales Agreement was terminated in September 2025.
We are unable to estimate the exact amount of our working capital requirements, but based on our current operating plan, we believe that our current cash, cash equivalents and marketable securities will be sufficient to fund our operating expenditures and capital expenditure requirements into 2028.
We are unable to estimate the exact amount of our working capital requirements, but based on our current operating plan, we believe that our cash, cash equivalents and marketable securities as of December 31, 2025, together with proceeds from our follow-on public offering in January 2026, will be sufficient to fund our operating expenditures and capital expenditure requirements into 2028.
During the year ended December 31, 2023, we issued and sold an aggregate of 952,794 shares under the 2021 Sales Agreement for aggregate net proceeds of $24.1 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2025, we issued and sold an aggregate of 1,351,689 shares under the amended March 2024 Sales Agreement for aggregate net proceeds of $83.3 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2023, net cash used in operating activities of $111.1 million was primarily due to our $123.3 million net loss and $14.0 million in changes in operating assets and liabilities primarily related to a decrease in accrued expenses and accounts payable, partially offset by $26.2 million of non-cash charges primarily related to stock-based compensation.
During the year ended December 31, 2025, net cash used in operating activities of $249.1 million was primarily due to our $303.3 million net loss, partially offset by $22.7 million in changes in operating assets and liabilities primarily related to an increase in accrued expenses and accounts payable and $31.5 million of non-cash charges primarily related to stock-based compensation.
Plan of Operation and Future Funding Requirements We expect our expenses to increase substantially in connection with our ongoing research and development activities, particularly as we advance the preclinical activities and clinical trials of our product candidates. As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future.
Plan of Operation and Future Funding Requirements We expect our expenses to increase substantially in connection with our ongoing research and development activities, particularly as we advance the preclinical activities and clinical trials of our product candidates, and our commercialization activities as we prepare for the potential approval of our product candidates.
The following table reflects our research and development expenses, including direct expenses summarized by platform and indirect or shared operating costs recognized as research and development expenses during each period presented (in thousands): Year Ended December 31, 2024 2023 Cerebrum™ $ 93,591 $ 31,680 Solidus™ 5,738 19,009 Personnel-related (including stock-based compensation) 43,407 28,904 Other indirect research and development expenses 9,677 7,173 Total research and development expenses $ 152,413 $ 86,766 Research and development activities are central to our business model.
The following table reflects our research and development expenses, including direct expenses summarized by platform and indirect or shared operating costs recognized as research and development expenses during the periods presented below (in thousands): Year Ended December 31, 2025 2024 Cerebrum™ $ 185,497 $ 93,591 Solidus™ 10,742 5,738 Personnel-related (including stock-based compensation) 58,684 43,407 Other indirect research and development expenses 12,192 9,677 Total research and development expenses $ 267,115 $ 152,413 Research and development activities are central to our business model.
Cash Flows The following table provides information regarding our cash flows for each period presented (in thousands): Year Ended December 31, 2024 2023 Net cash (used in) provided by: Operating activities $ (131,757) $ (111,136) Investing activities (248,494) 38,950 Financing activities 514,323 91,871 Net increase in cash, cash equivalents and restricted cash $ 134,072 $ 19,685 Operating Activities Our cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements to support the business.
Cash Flows The following table provides information regarding our cash flows for the periods presented below (in thousands): 96 Table of Contents Year Ended December 31, 2025 2024 Net cash (used in) provided by: Operating activities $ (249,068) $ (131,757) Investing activities (311,148) (248,494) Financing activities 702,173 514,323 Net increase in cash, cash equivalents and restricted cash $ 141,957 $ 134,072 Operating Activities Our cash flows from operating activities are greatly influenced by our use of cash for operating expenses and working capital requirements to support the business.
We terminated the 2021 Sales Agreement in June 2023. During the year ended December 31, 2023, we issued and sold an aggregate of 952,794 shares under the 2021 Sales Agreement for aggregate net proceeds of $24.1 million, after deducting commissions and offering expenses payable by us.
During the year ended December 31, 2025, we issued and sold an aggregate of 1,351,689 shares under the amended March 2024 Sales Agreement for aggregate net proceeds of $83.3 million, after deducting commissions and offering expenses payable by us.
As of December 31, 2024, we had an accumulated deficit of $836.7 million. We expect to incur significant expenses and operating losses for the foreseeable future as we expand our research and development activities.
As of December 31, 2025, we had an accumulated deficit of $1.1 billion. We expect to incur significant expenses for the foreseeable future as we expand our research and development activities and prepare for commercialization of our product candidates.
We anticipate that our expenses will be maintained or increased in connection with our ongoing activities, as we: • advance our lead product candidate, ulixacaltamide, through completion of the Phase 3 Essential3 clinical trial program for ET; • advance relutrigine (formally PRAX-562) in the EMBOLD and EMERALD clinical trials; • advance vormatrigine (formerly PRAX-628) in efficacy clinical trials for focal onset seizures or generalized epilepsy; • advance elsunersen (formerly PRAX-222) into the pivotal stage of the program; • advance our preclinical candidates to clinical trials; • further invest in our pipeline; • further invest in our manufacturing capabilities; • seek regulatory approval for our product candidates; • maintain, expand, protect and defend our IP portfolio; • acquire or in-license technology; • establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval; and • when needed, increase our headcount to support our development efforts and any future commercialization efforts.
We anticipate that our expenses will be maintained or increased in connection with our ongoing activities, as we: • prepare for the potential commercialization of ulixacaltamide, for which we have submitted an NDA to the FDA, after successful completion of our Phase 3 Essential3 program for ET; • prepare for the potential commercialization of relutrigine, for which we have submitted an NDA to the FDA after a successful interim analysis in the EMBOLD clinical trial, and advance relutrigine in the EMERALD clinical trial; • advance vormatrigine in the ENERGY clinical trials for focal onset seizures or generalized epilepsy; • advance elsunersen in the EMBRAVE Part A clinical trial and EMBRAVE3 pivotal clinical trial; • advance our preclinical candidates to clinical trials; • further invest in our pipeline; • further invest in our manufacturing capabilities; • continue to seek regulatory approval for our product candidates; • maintain, expand, protect and defend our IP portfolio; • acquire or in-license technology; • continue building our sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval; and • increase our headcount to support our development and commercialization efforts. 89 Table of Contents As a result, we will need substantial capital to support our continuing operations and pursue our growth strategy.
We have historically experienced negative cash flows from operating activities as we have invested in developing our portfolio, drug discovery efforts and related infrastructure.
We have historically experienced negative cash flows from operating activities as we have invested in developing our portfolio, drug discovery efforts and related infrastructure. The cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges and changes in operating assets and liabilities.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates to third parties that we would otherwise prefer to develop and market ourselves. 96 Table of Contents Contractual Obligations and Commitments We have entered into certain agreements under which we have incurred or may in the future incur obligations and commitments that could have a material impact on our capital resources.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates to third parties that we would otherwise prefer to develop and market ourselves.
In November 2021, we entered into an Open Market Sale Agreement, or the 2021 Sales Agreement, with Jefferies LLC, or Jefferies, to provide for the offering, issuance and sale of up to an aggregate amount of $125.0 million of common stock from time to time in at-the-market offerings for which Jefferies acted as sales agent.
In September 2025, we entered into a Sales Agreement, or the 2025 Sales Agreement, with TD Securities (USA) LLC, or TD Cowen, to provide for the offering, issuance and sale of up to an aggregate of $250.0 million of common stock from time to time in at-the-market offerings.
During the year ended December 31, 2023, net cash provided by financing activities of $91.9 million consisted primarily of net proceeds from our June 2023 follow-on public offering of $63.4 million and from at-the-market offerings of $28.2 million.
Financing Activities During the year ended December 31, 2025, net cash provided by financing activities of $702.2 million consisted primarily of net proceeds from our October 2025 follow-on public offering, net proceeds from our at-the-market offerings, and proceeds from the exercise of options and employee stock purchase plan purchases.
If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions. 87 Table of Contents Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability.
If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions.
We are a development stage company and we have not generated any revenue from product sales, and do not expect to do so for several years, if at all. All of our product candidates are still in preclinical and clinical development.
We are a development stage company and we have not generated any revenue from product sales. All of our product candidates are in preclinical and clinical development or awaiting regulatory approval.
However, we have based this estimate on assumptions that may prove to be wrong and we could exhaust our capital resources sooner than we expect. 95 Table of Contents Because of the numerous risks and uncertainties associated with product development and potential collaborations with third parties for the development of our product candidates, we may incorrectly estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates.
Because of the numerous risks and uncertainties associated with product development and potential collaborations with third parties for the development of our product candidates, we may incorrectly estimate the timing and amounts of increased capital outlays and operating expenses associated with completing the research and development of our product candidates.
We have also initiated the POWER1 study, a double-blind, placebo-controlled, 12-week study in focal onset seizures, with topline results expected in the second half of 2025, and plan to begin enrollment in the POWER2 study, a third efficacy study, in the second half of 2025.
For our POWER1 study, a double-blind, placebo-controlled, 12-week study in focal onset seizures, we expect to announce topline results in the second quarter of 2026. POWER2, our third efficacy study, is enrolling patients, with completion expected in the second half of 2026 and topline results expected in 2027.
Through this approach, we have established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy. For our most advanced product candidate under the Cerebrum™ platform, ulixacaltamide, our Phase 3 Essential3 clinical trials in essential tremor, or ET, are ongoing. A pre-planned interim analysis of Study 1 was conducted in the first quarter of 2025.
Through this approach, we have established a diversified, multimodal CNS portfolio with four clinical-stage product candidates across movement disorders and epilepsy. For our ulixacaltamide program within the Cerebrum™ platform, we announced positive topline results for the two studies in the Phase 3 Essential3 program in essential tremor, or ET, in October 2025.
We do not currently have any committed external source of funds. Market volatility could also adversely impact our ability to access capital as and when needed.
Market volatility could also adversely impact our ability to access capital as and when needed.
As of December 31, 2024, all warrants associated with this offering were exercised on a cashless basis with no proceeds received by us. 93 Table of Contents In December 2023, we entered into the 2023 Sales Agreement with Jefferies to provide for the offering, issuance and sale of up to an aggregate amount of $75.0 million of common stock from time to time in at-the-market offerings.
As of December 31, 2025, none of the pre-funded warrants have been exercised and all remained outstanding. In December 2024, we entered into an amendment to the March 2024 Sales Agreement with Jefferies to provide for the offering, issuance, and sale of up to an aggregate amount of $250.0 million of common stock from time to time in at-the-market offerings.
In June 2023, we completed a public offering of: (i) an aggregate of 4,296,646 shares of common stock at a public offering price of $14.25 per share, including the underwriters' full exercise of their option to purchase 619,979 additional shares of common stock, and (ii) pre-funded warrants to purchase 470,000 shares of common stock at a public offering price of $14.2485 per share.
In October 2025, we completed a public offering of: (i) an aggregate of 3,527,072 shares of our common stock at a public offering price of $157.00 per share, including the underwriters' full exercise of their option to purchase 501,592 additional shares of common stock, and (ii) pre-funded warrants to purchase 318,470 shares of common stock at a public offering price of $156.9999 per share of common stock underlying the warrants.
In June 2023, we completed a public offering of: (i) an aggregate of 4,296,646 shares of common stock at a public offering price of $14.25 per share, including the underwriters' full exercise of their option to purchase 619,979 additional shares of common stock, and (ii) pre-funded warrants to purchase 470,000 shares of common stock at a public offering price of $14.2485 per share.
In October 2025, we completed a public offering of: (i) an aggregate of 3,527,072 shares of our common stock at a public offering price of $157.00 per share, including the underwriters' full exercise of their option to purchase 501,592 additional shares of common stock, and (ii) pre-funded warrants to purchase 318,470 shares of common stock at a public offering price of $156.9999 per share of common stock underlying the warrants.
In November 2021, we entered into the 2021 Sales Agreement with Jefferies to provide for the offering, issuance and sale of up to an aggregate amount of $125.0 million of common stock from time to time in at-the-market offerings for which Jefferies acted as sales agent. We terminated the 2021 Sales Agreement in June 2023.
In September 2025, we entered into a Sales Agreement, or the 2025 Sales Agreement, with TD Securities (USA) LLC, or TD Cowen, to provide for the offering, issuance and sale of up to an aggregate of $250.0 million of common stock from time to time in at-the-market offerings.
Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table summarizes our consolidated statements of operations for each period presented (in thousands): Year Ended December 31, Change 2024 2023 Collaboration revenue $ 8,553 $ 2,447 $ 6,106 Operating expenses: Research and development 152,413 86,766 65,647 General and administrative 56,305 42,054 14,251 Total operating expenses 208,718 128,820 79,898 Loss from operations (200,165) (126,373) (73,792) Other income: Other income, net 17,346 3,096 14,250 Total other income 17,346 3,096 14,250 Net loss $ (182,819) $ (123,277) $ (59,542) Collaboration Revenue The $6.1 million increase in collaboration revenue is associated with an increase in revenue recorded under the Collaboration Agreement with UCB that was executed in December 2022.
Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 The following table summarizes our consolidated statements of operations for the periods presented below (in thousands): Year Ended December 31, Change 2025 2024 Collaboration revenue $ — $ 8,553 $ (8,553) Operating expenses: Research and development 267,115 152,413 114,702 General and administrative 59,083 56,305 2,778 Total operating expenses 326,198 208,718 117,480 Loss from operations (326,198) (200,165) (126,033) Other income: Other income, net 22,930 17,346 5,584 Total other income 22,930 17,346 5,584 Net loss $ (303,268) $ (182,819) $ (120,449) Collaboration Revenue The $8.6 million decrease in collaboration revenue is associated with a decrease in revenue recorded under the Collaboration Agreement with UCB that was executed in December 2022.
As of December 31, 2024 and 2023, we also had federal and state research and development tax credit carryforwards which may be available to offset future income tax liabilities and which begin to expire in 2032. 91 Table of Contents Income taxes are determined at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits and other permanent differences.
As of December 31, 2025 and 2024, we also had federal and state research and development tax credit and orphan drug tax credit carryforwards which may be available to offset future income tax liabilities and which begin to expire in 2032.
Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if ever. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives. Adequate additional funds may not be available to us on acceptable terms, or at all.
In addition, our product candidates, if approved, may not achieve commercial success. Accordingly, we may need to obtain substantial additional funds to achieve our business objectives. Adequate additional funds may not be available to us on acceptable terms, or at all. We do not currently have any committed external source of funds.
In December 2024, UCB exercised its option to in-license global development and commercialization rights under the terms of the Collaboration Agreement. Operating Expenses Research and Development Expenses The nature of our business and primary focus of our activities generate a significant amount of research and development costs.
Operating Expenses Research and Development Expenses The nature of our business and primary focus of our activities generate a significant amount of research and development costs.
In December 2024, UCB exercised its option to in-license global development and commercialization rights for a development candidate as part of the Collaboration Agreement.
In December 2024, UCB exercised its option to in-license global development and commercialization rights for a development candidate as part of the Collaboration Agreement. As such, we have no further research service obligations under the terms of the Collaboration Agreement and did not record any associated revenue during the year ended December 31, 2025.
As of December 31, 2024, 152,145 warrants associated with this offering were exercised on a cashless basis with no cash proceeds received by us.
No cash proceeds associated with the exercise were received by us. As of December 31, 2025, a total of 704,225 pre-funded warrants associated with this offering remained outstanding.
Our income tax provision may be significantly affected by changes to our estimates. There was no income tax provision recognized for the years ended December 31, 2024 and 2023.
Income taxes are determined at the applicable tax rates adjusted for non-deductible expenses, research and development tax credits, orphan drug tax credits, and other permanent differences. Our income tax provision may be significantly affected by changes to our estimates. The income tax provision recognized for the years ended December 31, 2025 and 2024 was not material.
We expect that our cash, cash equivalents, and marketable securities as of December 31, 2024 will be sufficient to fund our operating expenditures and capital expenditure requirements necessary to advance our research efforts and clinical trials int o 2028. The analysis included consideration of our current financial needs and ongoing research and development plans.
We expect that our cash, cash equivalents, and marketable securities as of December 31, 2025, combined with proceeds from our January 2026 follow on public offering, will be sufficient to fund our operating expenditures and capital expenditure requirements necessary to advance our operating activities into 2028.
As of December 31, 2024, 152,145 warrants associated with this offering were exercised on a cashless basis with no cash proceeds received by us.
During the year ended December 31, 2024, 152,145 pre-funded warrants were exercised via a 95 Table of Contents cashless exercise, resulting in 152,142 shares of common stock issued. No cash proceeds associated with the exercise were received by us.
We sublease building space in Boston, Massachusetts. Our sublease will expire on January 31, 2026. As of December 31, 2024, our operating lease commitments for the remainder of the lease term were $1.4 million.
As of December 31, 2025, our operating lease commitments for the remainder of the lease term were $0.1 million. Additionally, we have entered into a license agreement for our existing office space in Boston, Massachusetts that commences on March 1, 2026 and expires on March 31, 2027. Our financial commitments for the term of the license agreement are $1.5 million.
We initiated the EMPOWER study, an observational study of vormatrigine in patients with epilepsy, in the third quarter of 2024, and initiated or plan to initiate three efficacy studies. The first efficacy study, RADIANT, is an open label eight-week study in patients with focal onset seizures or generalized epilepsy that is currently enrolling, with topline results expected by mid-year 2025.
In the second half of 2025, we announced positive results from our RADIANT Phase 2 open-label study evaluating the PK, safety and efficacy of vormatrigine in patients with FOS or generalized epilepsy. We initiated the EMPOWER study, an observational study of vormatrigine in patients with epilepsy, in the third quarter of 2024.
As of December 31, 2024, all warrants associated with this offering were exercised on a cashless basis with no proceeds received by us.
During the year ended December 31, 2025, 200,355 pre-funded warrants were exercised via cashless exercise, resulting in 200,349 shares of common stock issued. No cash proceeds associated with the exercise were received by us. As of December 31, 2025, a total of 704,225 pre-funded warrants associated with this offering remained outstanding.
We are currently enrolling the second cohort of the EMBRAVE study in Brazil, with topline results expected in the first half of 2026, and plan to initiate EMBRAVE3, a Phase 3 registrational study, by mid-year 2025. For further details on our business, refer to the Business section of Part I of this report.
We anticipate nominating a development candidate for PRAX-080, PRAX-090 and PRAX-100 in the first half of 2026. For further details on our business, refer to the Business section of Part I of this report. We were incorporated in 2015 and commenced operations in 2016.
Removed
The Independent Data Monitoring Committee, or IDMC, overseeing the interim analysis of Study 1 of the Essential3 program has provided Praxis with the outcome of such analysis.
Added
We submitted a New Drug Application, or NDA, for ulixacaltamide for the treatment of ET to the FDA, and have commenced commercial preparations and pre-launch activities.
Removed
Based on the predefined decision framework for Study 1, the IDMC has recommended that the study be stopped for futility, due to the results being unlikely to meet the primary efficacy endpoint under the parameters set by the statistical model.
Added
For our relutrigine program within the Cerebrum™ platform, in December 2025, we announced positive results from the registrational cohort of the EMBOLD study in SCN2A and SCN8A developmental and epileptic encephalopathies, or DEEs, after receiving a recommendation from the Data Monitoring Committee to stop the study early for efficacy.
Removed
The committee also indicated that some underlying assumptions of the statistical model might have influenced this outcome and encouraged us to explore alternative analysis methods.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are not required to provide the information required by this Item 7A until our Quarterly Report on Form 10-Q for the first quarter after the fiscal year in which it is determined that we are no longer a smaller reporting company. 99 Table of Contents
Added
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risk related to changes in interest rates.
Added
Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates, particularly because cash, cash equivalents and marketable securities we may hold at any time may be in the form of money market funds or marketable debt securities or may be invested in U.S.
Added
Treasury and U.S. government agency obligations. However, because of the low risk profile of the instruments in our portfolio at any given time, an immediate change in market interest rates of 100 basis points would not have a material impact on our financial position or results of operations. 101 Table of Contents

Other PRAX 10-K year-over-year comparisons