Zevra Therapeutics Inc.
11/05/2025 | Press release | Distributed by Public on 11/05/2025 16:21
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in Part II, Item 1A. "Risk Factors" of this Quarterly Report on Form 10-Q and Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 12, 2025, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a purpose-driven, commercial-stage company focused on bringing life-changing therapeutics to people living with rare diseases. With a data-driven scientific approach and patient-first perspective, we are overcoming complex challenges to deliver therapies to the rare disease community. We have a diverse portfolio of products and product candidates, which includes pre-clinical, clinical, and commercial stage assets. Our team has specialized expertise and a track record of success in advancing promising therapies that face complex clinical, regulatory, and commercial challenges with an approach that balances science with patient need.
As part of our commitment to serving the rare disease community, in February 2023, we changed our name to Zevra Therapeutics, Inc. Our name, Zevra, is the Greek word for zebra, which is the internationally recognized symbol for rare disease. This name reflects our intense focus and dedication to developing transformational, patient-focused therapies for rare diseases with limited or no treatment options available, or treatment areas with significant unmet needs.
Our five-year strategic plan is focused on the continued transformation of Zevra into a leading rare-disease company. In addition to the commercialization of OLPRUVA and the approval and subsequent launch of MIPLYFFA, in the third quarter of 2024 we discontinued our in-house drug discovery activities and closed our laboratory facilities in Iowa and Virginia to prioritize near-term resources for our late-stage clinical development and commercial opportunities. In the future, we plan to outsource our discovery and early development activities and further expand our pipeline through both internal development and our business development activities to collaborate, partner, and potentially acquire additional assets. We intend to target assets that we believe will allow us to leverage the expertise and infrastructure that we have built to help mitigate risk and enhance our probability of success. If we are successful, expanding our pipeline could be accretive to our value proposition and has the potential to create incremental long-term value for stockholders.
We continue to optimize and curate our IP portfolio through a variety of avenues to extract value for the benefit of stockholders. As part of our ongoing IP portfolio review, we licensed certain IP related to our pre-clinical stage prodrug of dextrorphan in April 2025 to an undisclosed party for an upfront payment of $250,000, potential future regulatory milestones of up to $8.45 million and single-digit royalties on net sales. This licensing revenue is included in revenue, net, on the unaudited condensed consolidated statements of operations for the nine months ended September 30, 2025.
On September 20, 2024, the FDA approved the New Drug Application ("NDA") for MIPLYFFA (arimoclomol), for use in combination with miglustat for the treatment of neurological manifestations of Niemann-Pick disease type C (NPC) in adult and pediatric patients 2 years of age and older. MIPLYFFA is an orally-delivered treatment for NPC, which is an ultra-rare and progressive neurodegenerative disease. In connection with this approval, we received a transferable rare pediatric disease priority review voucher ("PRV"). On April 1, 2025, we consummated the sale of the PRV, resulting in net proceeds of $148.3 million to us. MIPLYFFA has also been granted orphan medicinal product designation for the treatment of NPC by the European Commission. In November 2024, MIPLYFFA became commercially available for dispense in the United States.
On August 30, 2023, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Acer Therapeutics Inc. ("Acer"). On November 17, 2023 (the "Closing Date"), we completed the acquisition of Acer (the "Merger"). Pursuant to the Merger Agreement, Acer continues as a wholly-owned subsidiary of Zevra. The Merger included the acquisition of OLPRUVA (sodium phenylbutyrate) for oral suspension, which was approved by the FDA on December 27, 2022, for the treatment of certain urea cycle disorders (UCDs). In addition, we acquired Acer's pipeline of investigational product candidates, including celiprolol for the treatment of Vascular Ehlers-Danlos syndrome (VEDS) in patients with a confirmed type III collagen (COL3A1) mutation.
In May 2022, we purchased all of the assets and operations of Orphazyme A/S ("Orphazyme") related to arimoclomol and agreed to assume an estimated reserve clawback liability of $5.2 million related to revenue generated from the sale of arimoclomol for the treatment of NPC under the remunerated expanded access program in France, Accès Compassionnel ("French AC").
Our Product Candidates and Approved Products
We have built a diverse portfolio of products and product candidates through a combination of internal development and strategic investments through acquisition. For example, we have employed our proprietary Ligand Activated Technology (LAT®) platform to develop approved products (e.g., AZSTARYS) and clinical development candidates (KP1077IH and KP1077N). Through our business development efforts, we have added commercial products (MIPLYFFA and OLPRUVA) and a clinical development candidate (celiprolol). We also have a variety of product candidates and compounds that are clinical-stage and designed to address a variety of rare diseases and other indications.
Current commercial products and active development assets are summarized in the table below:
Active Zevra Commercial and Active Development Assets
| Parent Drug | Indication | Product / Candidate |
Development Status |
Next Milestone(s) | ||||||||||
| Arimoclomol |
Niemann-Pick disease type C (NPC) |
MIPLYFFA |
FDA Approved
European Expanded
Access Program ("EAP")
Marketing Authorisation Application ("MAA") Submitted to European Medicines Agency ("EMA") July 2025
|
Tracking U.S. Commercial
Progress
EMA Decision
|
||||||||||
| Sodium phenylbutyrate |
Urea Cycle Disorders (UCD) |
OLPRUVA | FDA Approved |
Tracking Commercial Progress |
||||||||||
| Celiprolol |
Vascular Ehlers Danlos Syndrome (VEDS) |
Celiprolol | Clinical - Phase 3 | Ongoing Phase 3 Trial Fully Enrolled | ||||||||||
| Serdexmethylphenidate |
Idiopathic Hypersomnia (IH) |
KP1077IH | Clinical - Phase 2 | Phase 3 Trial Ready; Seeking Strategic Alternatives | ||||||||||
| Serdexmethylphenidate | Narcolepsy | KP1077N | Clinical - Phase 1/2 | Phase 3 Trial Potential; Seeking Strategic Alternatives | ||||||||||
|
Serdexmethylphenidate and dexmethylphenidate |
Attention Deficit and Hyperactivity Disorder (ADHD) |
AZSTARYS |
FDA Approved and Partnered |
Collecting Royalties and Milestones |
||||||||||
These anticipated milestones are based on information currently available to us. Our current plans and expectations are subject to a number of uncertainties, risks and other important factors that could materially impact our plans, including risks which are not solely within our control. See Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 12, 2025, as updated by Part II, Item 1A. "Risk Factors" of this Quarterly Report on Form 10-Q.
MIPLYFFA
NPC is characterized by an inability of the body to transport cholesterol and lipids inside of cells. Symptoms of NPC include a progressive impairment of mobility, cognition, speech, and swallowing, often culminating in premature death. The incidence of NPC is estimated to be one in 100,000 to 130,000 live births. We estimate that there are approximately 2,000 individuals with NPC in the U.S. and Europe combined, of which approximately 900 are in the U.S. and 1,100 are in Europe, where there is a mature market with an approved treatment available for NPC. Of this estimated population, approximately 300 to 350 people have been diagnosed in the U.S. However, low diagnostic rates may affect the number of potential patients, and we believe that the availability of treatment options in the U.S. could increase awareness of the disease and assist in more accurately identifying patients.
On September 20, 2024, the FDA approved the NDA for MIPLYFFA, an orally-delivered treatment, in combination with miglustat, for NPC, which is an ultra-rare and progressive neurodegenerative disease. MIPLYFFA, the first FDA-approved treatment for NPC, is indicated for use in combination with miglustat for the treatment of neurological manifestations of NPC in adult and pediatric patients two years of age and older. In addition, we received a transferable rare pediatric disease PRV in conjunction with the approval. On April 1, 2025, we completed the previously disclosed sale of the PRV ("Asset Sale"). The Asset Sale was completed pursuant to the terms of an asset purchase agreement, dated February 26, 2025 (the "PRV Transfer Agreement"). Pursuant to the PRV Transfer Agreement, we received net proceeds of $148.3 million from the buyer upon the closing of the Asset Sale.
Effective therapies to treat NPC are desperately needed, and, for this reason, MIPLYFFA is currently being made available to NPC patients in France, Germany, and other EU member states under various EAPs. MIPLYFFA has also been granted orphan medicinal product designation for the treatment of NPC by the European Commission.
As of September 30, 2025, there were a total of 137 enrollments to receive MIPLYFFA. Our commercial plans will focus on continuing to raise awareness among people who are living with NPC that are diagnosed and untreated, or undiagnosed. For MIPLYFFA, an enrollment is a prescription submitted to our specialty pharmacy, initiating the benefits investigation process to determine reimbursement and can lead to a 30-day paid dispense of MIPLYFFA. Soon after approval of MIPLYFFA, the FDA approved a second therapy for NPC, AQNEURSA, which is approved for the treatment of neurological manifestations of NPC in adults and pediatric patients weighing ≥15 kg and is marketed by IntraBio, Inc.
To commercialize both of our commercial products, MIPLYFFA and OLPRUVA, in the U.S., we have built, or are making arrangements with third parties to perform, marketing, sales, medical affairs, distribution, managerial and other non-technical capabilities.
Zevra holds global rights to develop and commercialize MIPLYFFA. We continue to evaluate the potential to obtain regulatory approval for and to commercialize MIPLYFFA outside of the U.S. We are currently focusing on seeking regulatory approval in Europe, and filed an MAA in July 2025.
MIPLYFFA summary:
•Demonstrated halting of disease progression.MIPLYFFA in combination with miglustat demonstrated a clinically significant improvement compared to placebo as early as 12 weeks and a halting of progression of the disease through 12 months of treatment. Data from the 48-month Open Label Extension study confirms the effectiveness of MIPLYFFA in halting disease progression over multiple years.
•Ease of flexible administration as an oral treatment.MIPLYFFA is administered as an oral capsule that can be swallowed whole, opened and contents mixed with foods or liquids, or delivered through a feeding tube.
•Extensive clinical experience with favorable safety data.Over 600 patients have been treated with arimoclomol across various clinical trials and indications as well as through our NPC EAPs, with no safety findings of concern found.
•Advantageous regulatory designations.MIPLYFFA has been granted orphan medicinal product designation for the treatment of NPC by the European Commission. On April 1, 2025, we completed the sale of the PRV, which we received upon approval of MIPLYFFA.
OLPRUVA
OLPRUVA (sodium phenylbutyrate) for oral suspension is approved in the U.S. as adjunctive therapy to standard of care, which includes dietary management, for the chronic management of UCDs involving deficiencies of carbamylphosphate synthetase (CPS), ornithine transcarbamylase (OTC), or argininosuccinic acid synthetase (AS). OLPRUVA for oral suspension is a proprietary and novel formulation of sodium phenylbutyrate powder, packaged in pre-measured single-dose envelopes, that has shown bioequivalence to existing sodium phenylbutyrate powder but with a pH-sensitive polymer coating that is designed to minimize dissolution of the coating for up to five minutes after preparation.
UCDs are a group of rare genetic disorders that can cause harmful ammonia to build up in the blood, potentially resulting in brain damage and neurocognitive impairments, if ammonia levels are not controlled. Any increase in ammonia over time is serious. Therefore, it is important to adhere to any dietary protein restrictions and have alternative medication options to help control ammonia levels. Approximately 1 in 100,000 people have UCD, and there are an estimated 800 patients who are actively treated with nitrogen scavenging therapy in the U.S. While there are therapies currently approved for the treatment of UCDs - specifically RAVICTI, marketed by Amgen, Inc. (formerly Horizon Therapeutics) and PHEBURANE, marketed by Medunik USA - there remain unmet needs for this community of patients. OLPRUVA offers benefits over other UCD treatments by eliminating issues with palatability, offering improved portability with its single-dose envelopes, and being provided in a dosage personalized to the patient based on weight.
In the fourth quarter of 2023, we began generating revenue from the sale of OLPRUVA in the U.S. Zevra has a partnership with Relief Therapeutics SA ("Relief"), which has rights to commercialize OLPRUVA in various European countries, if approved.
In the second quarter of 2025, weassessed the results of its refined commercial efforts related to OLPRUVA. This was determined to be a triggering event that could result in a decrease in future expected cash flows and, thus, indicated that the carrying amount of the OLPRUVA asset group may not be fully recoverable. We performed an undiscounted cash flow analysis over the OLPRUVA asset group and determined that the carrying value of the asset group is not recoverable. We then estimated the fair value of the asset group to measure the impairment loss for the period. Significant assumptions used to determine this fair value measurement included projected sales driven by market share and product sales price estimates, associated expenses, growth rates, and the discount rate used to measure the fair value of the net cash flows associated with this asset group. We recorded an intangible asset impairment charge of $58.7 million in the unaudited condensed consolidated statement of operations for the nine months ended September 30, 2025.
OLPRUVA summary:
•OLPRUVA is available in the U.S. for the treatment of certain types of UCDs. OLPRUVA is an adjunctive therapy for the chronic management of adults and children weighing 20kg or greater with UCD from deficiencies of CPS, OTC, or AS.
•OLPRUVA is differentiated from currently available forms of phenylbutyrate.OLPRUVA is formulated to improve palatability while providing patients with a portable and discrete pre-measured dose.
Celiprolol
The Merger with Acer included the acquisition of celiprolol. We are advancing celiprolol as an investigational product candidate for the treatment of VEDS in patients with a confirmed type III collagen (COL3A1) mutation. Celiprolol is a selective adrenergic modulator ("SAM") that we believe would qualify as a new chemical entity ("NCE") if approved in the U.S. Celiprolol is currently approved in certain EU states for the treatment of hypertension and angina.
Ehlers-Danlos Syndrome is an inherited disorder caused by mutations in the genes responsible for the structure, production, or processing of collagen, an important component of the connective tissues in the human body, or proteins that interact with collagen. VEDS causes abnormal fragility in blood vessels, which can give rise to aneurysms, abnormal connections between blood vessels known as arteriovenous fistulas, arterial dissections, and spontaneous vascular ruptures, all of which can be potentially life-threatening. The incidence of VEDS is estimated to be one in 50,000 to 200,000 people. There are approximately 7,500 patients in the U.S.
Currently, there are no approved therapies anywhere in the world for VEDS. However, celiprolol, prescribed off label, has become the standard of care therapy for VEDS in some European countries. Medical intervention for VEDS focuses on surgery, symptomatic treatment, genetic counseling, and prophylactic measures, such as avoiding intense physical activity, scuba diving, and violent sports. Therefore, patients must adopt a "watch and wait" approach following any confirmed diagnosis. Unfortunately, many of these arterial events have high mortality associated with them; thus, a pharmacologic intervention that reduces the rate of events would be clinically meaningful.
Celiprolol received orphan drug designation from the FDA for the treatment of VEDS in 2015. In October 2018, a new celiprolol NDA was submitted to the FDA by Acer based on data obtained from the BBEST trial and was subsequently accepted by the FDA in October 2018 with priority review status. Following FDA review, Acer received a CRL from the FDA stating that it will be necessary to conduct an adequate and well-controlled trial to determine whether celiprolol reduces the risk of clinical events in patients with VEDS. Subsequently, Acer appealed the FDA decision. While the FDA denied the appeal, it described possible paths forward toward approval. In a May 2021 Type B meeting with the FDA, Acer discussed the conduct of an U.S.-based prospective, randomized, double-blind, placebo-controlled, decentralized clinical trial in patients with COL3A1 positive VEDS and sought the FDA's opinion on various proposed design features of the study.
Based on the FDA's feedback during the Type B meeting, we adopted a decentralized (virtual) event-based clinical trial design and use of an independent centralized adjudication committee with a primary endpoint based on clinical events associated with disease outcome. In April 2022, the FDA granted celiprolol Breakthrough Therapy designation in the U.S. for the treatment of patients with COL3A1-positive VEDS.
In July 2022, Acer initiated enrollment in a Phase 3 long-term event-driven clinical trial designed based on the discussions from the May 2021 Type B meeting with the FDA, also known as the DiSCOVER trial. The DiSCOVER trial intends to enroll 150 VEDS patients, with 100 patients receiving celiprolol and 50 patients receiving placebo. Recruitment in the Phase-3 trial was restarted mid-2024, and the trial has 44 enrolled participants as of September 30, 2025. We believe that celiprolol could address significant unmet needs, as there are currently no approved treatments for VEDS in the U.S. We have implemented a broad recruitment drive focusing on collaborating with medical clinics where most patients are being managed. This outreach is ongoing with significant interest and participation.
Celiprolol summary:
•Currently, no approved treatments for VEDS in the U.S.There are currently no approved treatments for VEDS in the U.S., and we believe that celiprolol, if approved, could be a significant innovation in the treatment of VEDS in the U.S. where current treatment options are focused primarily on surgical intervention.
•Unique pharmacological profile.Mechanism of action in VEDS patients is thought to be through vascular dilatation and smooth muscle relaxation, the effect of which is to reduce the mechanical stress on collagen fibers in the arterial wall, and thereby potentially less incidence of vascular ruptures.
•Evidence of efficacy in the EU and extensive clinical experience from multiple trials.Celiprolol has become the primary treatment for VEDS patients in several European countries. BBEST Clinical Trial data showed 76% reduction in risk of arterial events observed in COLA3A1+ subpopulation, with additional data from a long-term observational study in France.
•Regulatory designations.Celiprolol for VEDS has been granted Orphan Drug designation and Breakthrough Therapy designation and, we believe, would be deemed an NCE in the U.S. if approved.
•Solid patent protection through 2038.Celiprolol is generally protected by U.S. patents that will expire, after utilizing all appropriate patent term adjustments but excluding possible term extensions, in 2038.
KP1077
KP1077 is being developed and evaluated for the treatment of IH and narcolepsy. IH is a rare neurological sleep disorder affecting approximately 37,000 patients in the United States. The cardinal feature of IH is excessive daytime sleepiness ("EDS"), characterized by daytime lapses into sleep, or an irrepressible need to sleep that persists even with adequate or prolonged nighttime sleep. Additionally, those with IH have extreme difficulty waking, otherwise known as "sleep inertia," suffer from severe and debilitating brain fog, and may fall asleep unintentionally or at inappropriate times, also known as narcolepsy. These symptoms often further lead to reported memory problems, difficulty maintaining focus, and depression.
Narcolepsy is a rare, chronic, debilitating neurologic disorder of sleep-wake state instability that impacts up to 200,000 Americans and is primarily characterized by EDS and cataplexy (sudden loss of muscle tone while a person is awake) along with other manifestations of rapid eye movement and sleep dysregulation, which intrude into wakefulness. In most patients, narcolepsy is caused by the loss of hypocretin, a neuropeptide in the brain that supports sleep-wake state stability. Typical symptom onset occurs in adolescence or young adulthood, but it can take up to a decade to be properly diagnosed. Although there are several approved medications for narcolepsy, we believe a treatment option based on serdexmethylphenidate ("SDX"), our proprietary prodrug of d-methylphenidate ("d-MPH"), which has previously been classified as a Schedule IV controlled substance, may be beneficial.
There is currently only one approved product for the treatment of IH, XYWAV, developed by Jazz Pharmaceuticals. A second product, WAKIX, developed by Harmony Biosciences ("Harmony"), was originally approved for the treatment of EDS or cataplexy in adult patients with narcolepsy. In October 2023, Harmony announced that the difference in outcome for EDS when comparing WAKIX and placebo in its Phase 3 trial with IH patients did not reach statistical significance. Prescribers also utilize narcolepsy medications and various stimulant products "off-label" to treat IH symptoms, with methylphenidate, a stimulant which has been classified by the DEA as a Schedule II controlled substance, being one of the most commonly used stimulants for treating IH. While each of these medications can help to address certain IH symptoms, there are also potential shortcomings, including dosing inconvenience, serious adverse events, such as elevated blood pressure and heart rate, and significant drug-to-drug interactions ("DDIs"), including with medications used to manage contraception and depression. In addition, patients have indicated that the effectiveness of their current medication was poor.
We reported final data for the Phase 1 proof-of-concept study of SDX in the first quarter of 2022. Increased wakefulness, alertness, hypervigilance, and insomnia effects were reported by study participants, which we believe suggests that SDX produced targeted pharmacodynamic effects that have the potential to benefit patients with IH and other sleep disorders. In November 2022, we announced that the FDA has granted the orphan drug designation to SDX for the treatment of IH.
KP1077 utilizes SDX, our prodrug of d-MPH, as its active pharmaceutical ingredient. During the first quarter of 2022, we initiated a Phase 1 clinical trial comparing the cardiovascular safety of SDX to immediate-release and long-acting formulations of RITALIN, a commonly prescribed central nervous system ("CNS") stimulant. In September 2022, we announced topline data from our exploratory Phase 1 clinical trial, which showed the potential for higher dose formulations of SDX to be safe and well tolerated, while avoiding the potential for greater cardiovascular safety risk compared to immediate-release and long-acting formulations of RITALIN.
Based on the data, in December 2022, we announced the initiation of a double-blind, placebo-controlled, randomized-withdrawal, dose-optimizing, multicenter Phase 2 clinical trial evaluating the efficacy and safety of KP1077 for the treatment of IH. The trial concluded in March 2024 and provided meaningful information of the optimal dose and dosing regimen to inform Phase 3 trial design.
Clinically meaningful improvements were observed across all endpoints studied. The exploratory endpoints of sleep inertia and brain fog performed in-line with expectations and were stable when compared across a variety of other endpoints. Symptom improvements in patients receiving KP1077 were similar after both once-per-day and twice-per-day dosing.
KP1077 Summary:
•No drug-to-drug interactions observed to date.We have not observed drug-to-drug interactions in clinical drug-drug interaction studies.
•Possible reduction of abuse potential as a Schedule IV controlled substance.All other methylphenidate-based products have been designated as Schedule II controlled substances, which indicates stricter control over the prescribing and use of such products. KP1077's sole active pharmaceutical ingredient is SDX, which has been designated a Schedule IV controlled substance.
•No currently approved generic equivalent product.KP1077 contains SDX, our proprietary prodrug of d-methylphenidate, also known as the new chemical name, serdexmethylphenidate, by the U.S. Adopted Names Council of the American Medical Association, which means that there may be no generic equivalent product for KP1077 in most states, making drug-equivalent substitution potentially difficult at the pharmacy.
•Orphan drug designation.Because the size of the IH patient population is small, the FDA has granted KP1077 orphan drug designation for the treatment of IH. We believe KP1077 may potentially be eligible for fast-track and breakthrough therapy designation, which may provide various regulatory benefits for the development program.
AZSTARYS (Partnered product)
AZSTARYS contains d-MPH and our prodrug of d-MPH, SDX. On March 2, 2021, the FDA approved AZSTARYS as a once-daily treatment for attention deficit hyperactivity disorder (ADHD) in patients age six years and older. AZSTARYS is currently being marketed in the U.S. under our September 2019 collaboration and license agreement (the "AZSTARYS License Agreement") with Commave. Under the AZSTARYS License Agreement, we granted Commave an exclusive, worldwide license, to develop, manufacture, and commercialize AZSTARYS and any of our product candidates containing SDX and used to treat ADHD or any other CNS disease. In July 2020, we entered into the consulting agreement with Corium, Inc. ("Corium"), under which Corium and Commave, respectively, engaged us to guide the product development and regulatory activities for certain current and potential future products in their portfolio, as well as continue supporting preparation for the potential commercial launch of AZSTARYS.
Commave has tasked Corium, another affiliate of Gurnet Point Capital, L.P., to lead all commercialization activities for AZSTARYS in the U.S. Corium commercially launched AZSTARYS in the U.S. during the third quarter of 2021. In December 2021, Commave entered into a sublicense of commercialization rights for AZSTARYS in greater China to Shanghai Ark Biopharmaceutical Ltd.
Pursuant to the AZSTARYS License Agreement, Commave agreed to pay up to $63.0 million in milestone payments upon the occurrence of specified regulatory milestones related to AZSTARYS, including FDA approval and specified conditions with respect to the final approval label. In addition, Corium agreed to make additional payments upon the achievement of specified U.S. sales milestones of up to $420.0 million in the aggregate. Further, Commave will pay us quarterly, tiered royalty payments based on a percentage of net sales on a product-by-product basis. Corium also agreed to be responsible for and reimburse us for all of development, commercialization and regulatory expenses for any products or product candidates containing SDX, subject to certain limitations as set forth in the AZSTARYS License Agreement, including consultation fees to be paid to us for services provided to Corium in performing such activities.
In April 2021, we entered into the AZSTARYS Amendment ("AZSTARYS Amendment"), pursuant to which we and Commave agreed to modify the compensation terms of the AZSTARYS License Agreement. Commave paid us $10.0 million in connection with the execution of the AZSTARYS Amendment following the FDA approval of AZSTARYS in the United States. Corium also paid us $10.0 million following the SDX scheduling determination by the DEA, which occurred on May 7, 2021. In addition, the AZSTARYS Amendment increased the total remaining future regulatory and sales milestone payments related to AZSTARYS up to an aggregate of $590.0 million. The AZSTARYS License Agreement will continue on a product-by-product basis (i) until expiration of the royalty term for the applicable product candidate in the United States and (ii) perpetually for all other countries.
In May 2021, we announced that SDX, our proprietary prodrug of d-MPH and the primary active pharmaceutical ingredient in AZSTARYS, was classified as a Schedule IV controlled substance by the DEA. AZSTARYS is classified as a Schedule II controlled substance, as its formulation includes a 70:30 mixture of SDX (Schedule IV) and d-MPH (Schedule II), respectively.
Other Third-Party Agreements
Distributor Agreement
Our current single distributor for sales of our approved products, MIPLYFFA and OLPRUVA, is a specialty pharmacy provider. We, however, may establish additional specialty distributors or other retail pharmacies and certain medical centers or hospitals. In addition to distribution agreements, we may enter into arrangements with health care providers and payors that provide for government mandated and/or privately negotiated rebates with respect to the purchase of our products.
MIPLYFFA License Agreements
Prior to our acquisition of the assets of Orphazyme in May 2022, Orphazyme had entered into an asset purchase agreement with LadRx Corporation, which was assigned to XOMA (US) LLC, a wholly-owned subsidiary of XOMA Corporation ("XOMA"), in June 2023 ("XOMA License Agreement"). Under the XOMA License Agreement, XOMA is entitled to a mid-single digit percentage royalty with respect to net sales of MIPLYFFA as well as milestone payments based on future potential sales and regulatory milestones, including a $4.0 million regulatory milestone payment upon approval in the E.U.
OLPRUVA License Agreement
Pursuant to the Relief License Agreement, Zevra was obligated to pay royalties of 10%of U.S. net sales up to a maximum of $45.0 million, plus specified regulatory milestones, for total payments to Relief of up to $56.5 million. On April 10, 2025, the rights to this royalty were sold to Soleus Capital Management L.P.
Aquestive Termination Agreement
Under our March 2012 termination agreement with Aquestive Therapeutics ("Aquestive"), Aquestive has the right to receive a royalty amount equal to 10% of any value generated by AZSTARYS and any product candidates containing SDX. In connection with the AZSTARYS License Agreement, we paid Aquestive a royalty equal to 10% of the quarterly royalty payments and of the regulatory and net sales milestones.
Relief Exclusive License Agreement
As a condition to entering into the Merger Agreement, Acer and Relief entered into an exclusive license agreement on August 30, 2023 (the "Relief License Agreement"). Pursuant to the Relief License Agreement, Relief will hold exclusive development and commercialization rights for OLPRUVA in the EU, Liechtenstein, San Marino, Vatican City, Norway, Iceland, Principality of Monaco, Andorra, Gibraltar, Switzerland, United Kingdom, Albania, Bosnia, Kosovo, Montenegro, Serbia and North Macedonia ("Geographical Europe"). We have the right to receive a royalty of up to 10%of the net sales of OLPRUVA in Geographical Europe.
Results of Operations
Comparison of the three months ended September 30, 2025, and 2024 (in thousands):
| Three months ended September 30, | Period-to- | |||||||||||||||||||
| 2025 | 2024 | Period Change | ||||||||||||||||||
| Revenue, net | $ | 26,063 | $ | 3,695 | $ | 22,368 | ||||||||||||||
|
Cost of product revenue (excluding $315 and $1,545 in intangible asset amortization for the three months ended September 30, 2025, and 2024, respectively, shown separately below)
|
1,238 | 2,303 | (1,065) | |||||||||||||||||
| Intangible asset amortization | 315 | 1,545 | (1,230) | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Research and development | 3,432 | 10,945 | (7,513) | |||||||||||||||||
| Selling, general and administrative | 16,935 | 16,208 | 727 | |||||||||||||||||
| Total operating expenses | 20,367 | 27,153 | (6,786) | |||||||||||||||||
| Income (loss) from operations | 4,143 | (27,306) | 31,449 | |||||||||||||||||
| Other expense: | ||||||||||||||||||||
| Interest expense | (2,051) | (2,312) | 261 | |||||||||||||||||
| Fair value adjustment related to warrant and CVR liability | (5,506) | (4,746) | (760) | |||||||||||||||||
| Fair value adjustment related to investments | 124 | 90 | 34 | |||||||||||||||||
| Interest and other income, net | 2,313 | 1,049 | 1,264 | |||||||||||||||||
| Total other expense | (5,120) | (5,919) | 799 | |||||||||||||||||
| Loss before income taxes | (977) | (33,225) | 32,248 | |||||||||||||||||
| Income tax benefit | 433 | - | 433 | |||||||||||||||||
| Net loss | $ | (544) | $ | (33,225) | $ | 32,681 | ||||||||||||||
Net loss
Net loss for the three months ended September 30, 2025, was $0.5 million, compared to a net loss of $33.2 million for the three months ended September 30, 2024, an increase to net loss of $32.7 million. The increase was primarily attributable to an increase of $22.4 million in revenue, a decrease of $7.5 million in research and development expense, an increase of $1.3 million in interest and other income, net, and a decrease of $1.2 million in intangible asset amortization.
Revenue, net
Revenue for the three months ended September 30, 2025, was $26.1 million, compared to revenue of $3.7 million for the three months ended September 30, 2024, an increase of approximately $22.4 million. The increase was primarily due to an increase in product sales of MIPLYFFA of $22.4 million.
Cost of product revenue
Cost of product revenue for the three months ended September 30, 2025, decreased by $1.1 million compared to the cost of product revenue for the three months ended September 30, 2024. This decrease was primarily due to the inventory write-down of $2.0 million in the prior year with no comparable occurrence in the current year, partially offset by royalty costs related to product sales of MIPLYFFA.
Intangible asset amortization
Intangible asset amortization for the three months ended September 30, 2025, decreased by $1.2 million compared to the intangible asset amortization for the three months ended September 30, 2024, primarily due to definite-lived intangible assets acquired in the Merger no longer being amortized as a result of the impairment recorded as of and for the period ended June 30, 2025.
Research and development
Research and development expenses decreased by $7.5 million, from $10.9 million for the three months ended September 30, 2024, to $3.4 million for the three months ended September 30, 2025. The decrease was primarily driven by a decrease in spending for the Phase 2 clinical study in KP1077 and a decrease in personnel-related costs.
Selling, general and administrative
Selling, general and administrative expenses increased by $0.7 million, from $16.2 million for the three months ended September 30, 2024, to $16.9 million for the three months ended September 30, 2025. The period-over-period increase was primarily related to an increase in personnel-related costs, professional fees, and other expenses as we continue to build our commercial organization.
Other expense
Other expense for the three months ended September 30, 2025, was $5.1 million compared to other expense of $5.9 million for the three months ended September 30, 2024. The decrease was primarily attributable to an increase of $1.3 million in interest and other income, net, partially offset by a decrease in the fair value adjustment related to warrant and CVR liability of $0.8 million.
Comparison of the nine months ended September 30, 2025, and 2024 (in thousands):
| Nine months ended September 30, | Period-to- | |||||||||||||||||||
| 2025 | 2024 | Period Change | ||||||||||||||||||
| Revenue, net | $ | 72,345 | $ | 11,569 | $ | 60,776 | ||||||||||||||
|
Cost of product revenue (excluding $3,546 and $4,619 in intangible asset amortization for the nine months ended September 30, 2025, and 2024, respectively, shown separately below)
|
14,962 | 6,051 | 8,911 | |||||||||||||||||
| Intangible asset amortization | 3,546 | 4,619 | (1,073) | |||||||||||||||||
| Impairment of intangible assets | 58,710 | - | 58,710 | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Research and development | 10,123 | 33,743 | (23,620) | |||||||||||||||||
| Selling, general and administrative | 57,262 | 38,743 | 18,519 | |||||||||||||||||
| Total operating expenses | 67,385 | 72,486 | (5,101) | |||||||||||||||||
| Loss from operations | (72,258) | (71,587) | (671) | |||||||||||||||||
| Other income: | ||||||||||||||||||||
| Gain on sale of PRV | 148,325 | - | 148,325 | |||||||||||||||||
| Interest expense | (6,029) | (5,157) | (872) | |||||||||||||||||
| Fair value adjustment related to warrant and CVR liability | (1,379) | 4,660 | (6,039) | |||||||||||||||||
| Fair value adjustment related to investments | 119 | 64 | 55 | |||||||||||||||||
| Interest and other income, net | 5,234 | 2,248 | 2,986 | |||||||||||||||||
| Total other income | 146,270 | 1,815 | 144,455 | |||||||||||||||||
| Income (loss) before income taxes | 74,012 | (69,772) | 143,784 | |||||||||||||||||
| Income tax expense | (2,948) | - | (2,948) | |||||||||||||||||
| Net income (loss) | $ | 71,064 | $ | (69,772) | $ | 140,836 | ||||||||||||||
Net income (loss)
Net income for the nine months ended September 30, 2025, was $71.1 million, compared to net loss of $69.8 million for the nine months ended September 30, 2024, an increase in net income of approximately $140.8 million. The increase was primarily attributable to the gain on sale of the PRV of $148.3 million and an increase of $60.8 million in revenue, partially offset by $58.7 million in impairment of intangible assets and $11.7 million in inventory obsolescence.
Revenue, net
Revenue for the nine months ended September 30, 2025, was $72.3 million, compared to revenue of $11.6 million for the nine months ended September 30, 2024, an increase of approximately $60.8 million. The increase was primarily due to an increase in product sales of MIPLYFFA of $61.0 million.
Cost of product revenue
Cost of product revenue for the ninemonths ended September 30, 2025, increased by approximately $8.9 million compared to the cost of product revenue for the nine months ended September 30, 2024. The increase was primarily due to $11.7 million in inventory obsolescence for the nine months ended September 30, 2025, compared to $5.2 million in inventory obsolescence for the nine months ended September 30, 2024, as well as royalty costs related to product sales of MIPLYFFA.
Intangible asset amortization
Intangible asset amortization for the ninemonths ended September 30, 2025, decreased by $1.1 million compared to the intangible asset amortization for the ninemonths ended September 30, 2024,primarily due to definite-lived intangible assets acquired in the Merger no longer being amortized as a result of the impairment.
Impairment of intangible assets
Impairment of intangible assets for the nine months ended September 30, 2025, was $58.7 million and was composed of the impairment loss on the OLPRUVA definite-lived intangible asset. There was no comparable impairment in the prior year.
Research and development
Research and development expenses decreased by $23.6 million, from $33.7 million for the nine months ended September 30, 2024, to $10.1 million for the nine months ended September 30, 2025. The decrease was primarily driven by a decrease in spending for the Phase 2 clinical study in KP1077 and a decrease in personnel-related costs.
Selling, general and administrative
Selling, general and administrative expenses increased by approximately $18.5 million, from $38.7 million for the nine months ended September 30, 2024, to $57.3 million for the nine months ended September 30, 2025. The period-over-period increase was primarily related to an increase in personnel-related costs, professional fees, and other expenses as we continue to build our commercial organization.
Other income
Other income for the ninemonths ended September 30, 2025, was $146.3 million compared to other income of $1.8 million for the nine months ended September 30, 2024. The increase was primarily attributable to the gain on sale of the PRV of $148.3 million and an increase in interest and other income, net of $3.0 million, partially offset by a decrease in fair value adjustment related to warrant and CVR liability of $6.0 million.
Liquidity and Capital Resources
Sources of Liquidity
Through September 30, 2025, we have funded our research and development and operating activities primarily through the issuance of debt and equity and from product sales of MIPLYFFA and OLPRUVA, reimbursements received under the French AC, royalties or net sales milestone payments generated under the AZSTARYS License Agreement, our PRV sale consummated on April 1, 2025, and consulting agreements.As of September 30, 2025, we had cash, cash equivalents and investments of $230.4 million.
On February 26, 2025, we entered into the PRV Transfer Agreement, pursuant to which we agreed to sell the PRV to the buyer, subject to customary closing conditions. Pursuant to the PRV Transfer Agreement, the buyer agreed to pay us $150.0 million, payable in cash, upon the closing of the sale. On April 1, 2025, the asset sale was consummated, resulting in net proceeds of $148.3 million.
We have had recurring negative net operating cash flows throughout our operating history, and we cannot guarantee or predict when we may begin to consistently generate positive net cash flows from operations, or if at all. We expect that our sources of revenue will be from product sales of MIPLYFFA and OLPRUVA, reimbursements received under the French AC, royalties or net sales milestone payments generated under the AZSTARYS License Agreement, and any other future arrangements related to one or more of our products or product candidates.
Adequate additional financing may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or debt, the terms of these securities may restrict our ability to operate. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or altogether cease our research and development programs or future commercialization efforts.
Registration Statements on Form S-3
In connection with the Merger, we and Nantahala Capital Management, LLC ("Nantahala") concurrently entered into a registration rights agreement, pursuant to which we agreed to file a resale registration statement with respect to the resale of our common stock issuable to Nantahala. On February 5, 2024, we filed a registration statement on Form S-3 (File No. 333-276856) registering an aggregate of 2,269,721 shares of our common stock. On April 5, 2024, we filed an amendment to such registration statement, which was declared effective on April 8, 2024.
On June 4, 2024, we filed a registration statement on Form S-3 (File No. 333-279941) (the "June 2024 Registration Statement") under which we sell securities, including as may be issuable upon conversion, redemption, repurchase, exchange or exercise of securities, in one or more offerings up to a total aggregate offering price of $350.0 million, $75.0 million of which was allocated to the sale of the shares of common stock issuable under the 2024 ATM Agreement. The June 2024 Registration Statement was declared effective on June 13, 2024.
August 2024 Offering
On August 8, 2024, we entered into an underwriting agreement (the "Underwriting Agreement") with Cantor Fitzgerald & Co. and William Blair & Company, L.L.C., as representatives of the several underwriters named therein (collectively, the "Underwriters"), in connection with the offering, issuance and sale by us of 9,230,770 shares of our common stock at a public offering price of $6.50 per share, pursuant to the June 2024 Registration Statement and a related prospectus supplement dated August 8, 2024 filed with the SEC (the "August 2024 Offering"). Under the terms of the Underwriting Agreement, we also granted the Underwriters an option exercisable for 30 days to purchase up to an additional 1,384,615 shares of our common stock at the public offering price, less underwriting discounts and commissions, which the Underwriters exercised in full on August 9, 2024. The August 2024 Offering closed on August 12, 2024. Total shares issued were 10,615,385. Net proceeds from the offering were approximately $64.5 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We used the net proceeds of the offering to support the commercial launch activities for MIPLYFFA, continued commercial support for our other approved products and the continued development of celiprolol through potential NDA filings and other general corporate purposes.
Entry into 2024 ATM Agreement
On July 12, 2024, we entered into an equity distribution agreement (the "2024 ATM Agreement") with Citizens JMP Securities LLC ("Citizens JMP") under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $75.0 million through Citizens JMP as its sales agent. The issuance and sale, if any, of common stock by us under the 2024 ATM Agreement will be made pursuant to the June 2024 Registration Statement, the accompanying prospectus, and the related prospectus supplement dated July 12, 2024. Citizens JMP may sell the common stock by any method permitted by law deemed to be an "at the market offering" as defined in Rule 415 of the Securities Act. Citizens JMP will use commercially reasonable efforts to sell the common stock from time to time, based upon instructions from us (including any price, time or size limits or other customary parameters or conditions we may impose). We will pay Citizens JMP a commission equal to 3.0% in the aggregate of the gross sales proceeds of any common stock sold through Citizens JMP under the 2024 ATM Agreement. As of September 30, 2025, noshares have been issued or sold under the 2024 ATM Agreement.
Merger
The assets acquired and liabilities assumed in the Merger were recorded based on their acquisition date fair values. Consideration for the Merger was $72.6 million and consists of (i) approximately 2.96 million shares of Zevra common stock valued at $12.8 million, (ii) the Bridge Loan advances of $17.8 million, (iii) $12.0 million in cash paid to Nantahala; (iv) 2.27 million shares of Zevra Common Stock issued to Nantahala valued at $11.5 million based on the VWAP of shares of Zevra Common Stock during the 20 consecutive trading days ending on the trading date prior to August 30, 2023; (v) a secured promissory note payable by Zevra to Nantahala in the original principal amount of $5.0 million, (vi) $8.5 million in the estimated fair value of contingent consideration related to the CVRs, (vii) approximately 0.9 million shares of Zevra Common Stock issued to a former holder of Acer warrants valued at $4.0 million based on Zevra's common stock price on the Effective Date and (viii) $1.0 million in notes payable paid by the Company on Acer's behalf. In addition, effective as of immediately prior to the Effective Time, all of the outstanding and unexercised Acer stock options were automatically cancelled and ceased to exist without any cash or other consideration being paid or provided in respect thereof.
In connection with the closing of the Merger on November 17, 2023, each share of common stock of Acer was converted into the right to receive (i) 0.1210 fully paid and non-assessable shares of common stock of Zevra, par value $0.0001 per share, and (ii) one non-transferable CVR to be issued by Zevra, which will represent the right to receive one or more contingent payments up to an additional $76.0 million upon the achievement, if any, of certain commercial and regulatory milestones for Acer's OLPRUVA and celiprolol products within specified time periods. Certain additional cash payments are also possible pursuant to the CVRs with respect to milestones involving Acer's early-stage program ACER-2820 (emetine).
Stockholders Agreement
In connection with the Merger, a certain stockholder of Acer entered into, and Acer agreed to use its reasonable best efforts to cause certain other stockholders to enter into joinders to, a stockholders agreement with Zevra (the "Stockholders Agreement"). Pursuant to the Stockholders Agreement, the stockholders party thereto agreed to, or would agree to, among other things, vote all of their shares in Zevra that they own in favor of each nominee included in the Zevra board of director's slate of nominees for each election of directors and in favor of each matter approved by the Zevra board of directors and submitted to stockholders of Zevra for the approval of stockholders following the closing of the Merger and until the second anniversary of the Closing Date of the Merger (the "Trigger Date"). In addition, the stockholders party to the Stockholders Agreement will be subject to customary standstill provisions, subject to certain exceptions, until the Trigger Date.
Term Loans
On April 5, 2024 (the "Term Loans Closing Date"), we entered into a credit agreement (the "Credit Agreement") with HCR Stafford Fund II, L.P., HCR Potomac Fund II, L.P., and Perceptive Credit Holdings IV, LP (collectively, the "Lenders"), and Alter Domus (US) LLC, as administrative agent (the "Administrative Agent").
Under the terms of the Credit Agreement, the Lenders provided a senior secured loan facility to us in the aggregate principal amount of $100.0 million, which is divided into three tranches as follows: (i) $60.0 million, which was funded in full on the Term Loans Closing Date; (ii) $20.0 million, which was available to us in up to two drawings, each in an amount not to exceed $10.0 million, at our option until October 5, 2025; and; (iii) $20.0 million, which was available to us upon approval by the FDA of the NDA for MIPLYFFA for the treatment of NPC, at our option until December 31, 2024 (collectively, the "Term Loans"). We did not opt to draw down the amounts described in (ii) and (iii) above prior to their applicable expiration dates.
The principal amount of the Term Loans outstanding (the "Outstanding Principal Amount") will bear interest at a rate equal to 3-Month Term SOFR plus 7.00% per annum. If the net product sales for the calendar year ending December 31, 2025 exceed $100.0 million, the Outstanding Principal Amount will bear interest at 3-Month Term SOFR plus 6.00% per annum. If the net product sales for the calendar year ending December 31, 2025 do not exceed $100.0 million, then for any subsequent period of four consecutive fiscal quarters ending on or after March 31, 2026, in which net product sales exceed $125.0 million, the Outstanding Principal Amount will bear interest at 3-Month Term SOFR plus 6.50% per annum. In all cases, the 3-Month Term SOFR rate will be subject to a floor of 4.00% per annum. Interest will be payable quarterly in arrears on the last day of each calendar quarter. We have the option to pay up to 25% of the interest in-kind beginning on the Term Loans Closing Date, through and including June 30, 2026. The Term Loans will mature on the fifth anniversary of the Term Loans Closing Date. In connection with the Credit Agreement, we incurred approximately $2.2 million of costs, which primarily consisted of underwriting, legal and other professional fees, and are included as a reduction to the carrying amount of the related debt liability and are deferred and amortized over the remaining life of the financing using the effective interest method.
The Credit Agreement contains customary affirmative and negative covenants by us, which, among other things, will require us to provide certain financial reports to the Lenders, meet certain minimum net product sales amounts, and limit our ability to incur or guarantee additional indebtedness, engage in certain transactions, and effect a consolidation or merger without consent. In addition, as long as the line of credit remains active, we must maintain a minimum cash balance of $20.0 million to ensure that we can meet our immediate capital needs. Our obligations under the Credit Agreement may be accelerated upon customary events of default, including non-payment of principal, interest, fees and other amounts, covenant defaults, insolvency, material judgments, or inaccuracy of representations and warranties. The Term Loans are secured by a first priority perfected lien on, and security interest in, substantially all of our current and future assets. The proceeds of the Term Loans were used to refinance certain of our previously existing indebtedness. We will use the remaining proceeds to pay fees and expenses related to the debt financing and fund the development and commercialization of MIPLYFFA and our other approved products, and to further the development of its other product candidates.
Cash Flows
The following table summarizes our cash flows for the nine months ended September 30, 2025, and 2024(in thousands):
| Nine months ended September 30, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Net cash used in operating activities | $ | (7,114) | $ | (53,415) | ||||||||||
| Net cash provided by (used in) investing activities | 17,900 | (16,690) | ||||||||||||
| Net cash provided by financing activities | 9,518 | 81,312 | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 350 | (217) | ||||||||||||
| Net increase in cash and cash equivalents | $ | 20,654 | $ | 10,990 | ||||||||||
Operating Activities
For the nine months ended September 30, 2025, net cash used in operating activities of $7.1 million consisted of net income of $71.1 million, offset by $61.7 million in adjustments for non-cash items and changes in working capital of $16.5 million. Net income was primarily attributable to the sale of the PRV, as well as revenue received from product sales of MIPLYFFA and OLPRUVA, royalties generated under the AZSTARYS License Agreement, and reimbursements received under the French AC, partially offset by impairment and obsolescence charges and spend on R&D programs and operating costs. The adjustments for non-cash items primarily consisted of the gain on sale of PRV of $148.3 million, partially offset by impairment of intangible assets of $58.7 million, inventory obsolescence of $11.7 million, stock-based compensation expense of $8.4 million, $3.7 million of depreciation and amortization expense, and income tax expense of $2.9 million.
For the nine months ended September 30, 2024, net cash used in operating activities of $53.4 million consisted of a net loss of $69.8 million, changes in working capital of $1.8 million, partially offset by $18.2 million in adjustments for non-cash items. Net loss was primarily attributable to our spending on research and development programs and operating costs; partially offset by revenue received under the AZSTARYS License Agreement, and the EAP. The changes in working capital consisted of $10.6 million related to a change in accounts payable and accrued expenses, $4.2 million change in inventories, $0.4 million related to a change in operating lease liabilities, an increase of $0.5 million in prepaids and other assets and $1.0 million related to a change in other liabilities, partially offset by $9.6 million related to a change in accounts and other receivables, $0.4 million related to a change in operating lease right-of-use assets, and $4.8 million related to a change in discount and rebate liabilities. The adjustments for non-cash items primarily consisted of stock-based compensation expense of $10.9 million, an inventory obsolescence charge of $5.2 million, interest expense of $1.5 million, and $5.3 million related to depreciation, amortization and other items, partially offset by a change in the fair value of warrant and CVR liability of $4.7 million.
Investing Activities
For the nine months ended September 30, 2025, net cash provided by investing activities was $17.9 million, which was primarily attributable to proceeds from the sale of the PRV of $150.0 million and maturities of investments of $91.0 million, partially offset by $222.8 million in purchases of investments.
For the nine months ended September 30, 2024, net cash used in investing activities was $16.7 million, which was primarily attributable to purchases of investments of $41.5 million, partially offset by $24.8 million in maturities of investments.
Financing Activities
For the nine months ended September 30, 2025, net cash provided by financing activities was $9.5 million, which was primarily attributable to proceeds from the issuance of stock for warrants exercised of $6.0 million and options exercised or RSUs vested of $3.5 million.
For the nine months ended September 30, 2024, net cash provided by financing activities was $81.3 million, which was primarily attributable to proceeds from the issuance of debt of $59.0 million and proceeds from the issuance of stock of $65.8 million, partially offset by repayments of debt of $42.7 million.
Future Funding Requirements
We believe our available cash and cash equivalents, together with our ability to generate operating cash flow and our access to short-term and long-term borrowings, are sufficient to fund our existing and planned capital requirements for at least the next twelve months and the foreseeable future.
We maintain the majority of our cash and cash equivalents in accounts with major U.S. and multi-national financial institutions, and our deposits at these institutions exceed insured limits. Market conditions can impact the viability of these institutions. In the event of a failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or delay in accessing these funds could adversely affect our business and financial position.
Potential near-term sources of additional funding include:
•any product sales of MIPLYFFA;
•any product sales of OLPRUVA;
•any reimbursements received for arimoclomol under the French AC; and
•any royalties or net sales milestone payments generated under the AZSTARYS License Agreement.
We cannot guarantee that we will be able to generate sufficient proceeds from any of these potential sources to fund our operating expenses. We anticipate that our expenses will fluctuate substantially as we:
•continue our ongoing clinical trials and our product development activities for our pipeline of product candidates;
•seek regulatory approvals for any product candidates that successfully complete clinical trials;
•continue research and development and clinical trials of our product candidates;
•seek to discover and develop additional product candidates either internally or in partnership with other pharmaceutical companies;
•adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products;
•maintain, expand and protect our intellectual property portfolio; and
•incur additional legal, accounting and other expenses in operating as a public company.
To date, we have generated revenue from product sales of MIPLYFFA and OLPRUVA, reimbursements received under the French AC, royalties or net sales milestone payments generated under the AZSTARYS License Agreement, our PRV sale consummated on April 1, 2025 and consulting agreements. We expect that, for the foreseeable future, our sources of revenues will be from product sales of MIPLYFFA and OLPRUVA, reimbursements received under the French AC, royalties or net sales milestone payments generated under the AZSTARYS License Agreement, and any other future arrangements related to one or more of our products or product candidates. We cannot guarantee that our current commercialization strategies, or any strategy we adopt in the future, will be successful. For instance, we received milestone payments under the AZSTARYS License Agreement, but we cannot guarantee that we will earn any additional milestone or royalty payments under this agreement in the future. We also cannot guarantee that we will continue to receive reimbursements under the French AC or the extent of our success in commercializing MIPLYFFA or OLPRUVA. We also expect to continue to incur significant additional costs associated with operating as a public company.
We have based our estimates of our cash needs and cash runway on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. In addition, we cannot guarantee that we will be able to generate sufficient proceeds from product sales of MIPLYFFA and OLPRUVA, reimbursements received under the French AC, royalties or net sales milestone payments generated under the AZSTARYS License Agreement, or other funding transactions to fund our operating expenses. To meet any additional cash requirements, we may seek to sell additional equity or convertible securities that may result in dilution to our stockholders, issue additional debt or seek other third-party funding, including potential strategic transactions, such as licensing or collaboration arrangements. Because of the numerous risks and uncertainties associated with the development and commercialization of product candidates and products, we are unable to estimate the amounts of increased capital outlays and operating expenditures necessary to complete the commercialization and development of our partnered product or product candidates, should they obtain regulatory approval.
Adequate additional financing may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or debt, the terms of these securities may restrict our ability to operate. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or altogether cease our research and development programs and/or commercialization efforts.
Critical Accounting Estimates
This management's discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States. The preparation of our unaudited condensed consolidated financial statements requires us to make estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our unaudited condensed consolidated financial statements, as well as the reported revenues and expenses during the reported periods. We evaluate these estimates on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
Our critical accounting policies have not changed materially from those described in Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 12, 2025.
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