Zevra Therapeutics Inc.
11/03/2026 | Press release | Distributed by Public on 11/03/2026 16:17
Quarterly Report for Quarter Ending September 30, 2026 (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, 2025, filed with the SEC on March 9, 2026, as supplemented in Part II, Item 1A. "Risk Factors" of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on May 6, 2026, 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 commercial-stage company with a late-stage pipeline committed to redefining what is possible in bringing life-changing therapeutics to people living with rare diseases. We are focused on broadening access through geographic expansion opportunities, progressing our pipeline toward key milestones, and delivering meaningful therapeutics. Our vision is realized through disciplined execution of our strategic plan and our core values - patient centricity, integrity, accountability, innovation, and courage - which guide our efforts to deliver long-term value. The commercialization of our lead product, MIPLYFFA (arimoclomol), marketed in the United States for Niemann-Pick disease type C ("NPC"), a rare, progressive neurodegenerative disorder, provides a strong corporate foundation and demonstrates our ability to advance therapies from development to market.
In February 2023, we changed our name to Zevra Therapeutics, Inc. Zevra is the Greek word for zebra, which is the internationally recognized symbol for rare disease. This name reflects our intense focus and dedication to developing transformational, patient-focused therapies for rare diseases with limited or no treatment options available, or treatment areas with significant unmet needs.
Our strategic plan is focused on transforming Zevra into a leading rare-disease company. We are prioritizing the commercialization and global expansion of MIPLYFFA, while OLPRUVA remains commercially available. We are also advancing the development of our clinical stage asset, celiprolol, and plan to further expand our pipeline through inorganic growth. We intend to become the preferred partner for assets that we believe will allow us to leverage the expertise and infrastructure that we have built to help mitigate risk and enhance our probability of success.
On September 20, 2024, the U.S. Food and Drug Administration ("FDA") approved the New Drug Application ("NDA") for MIPLYFFA, for use in combination with miglustat for the treatment of neurological manifestations of NPC in adult and pediatric patients two years of age and older, and MIPLYFFA became commercially available for dispense in the United States in November 2024. 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. Arimoclomol has also been granted orphan medicinal product designation for the treatment of NPC by the European Commission. We are pursuing regulatory approval of arimoclomol in Europe and filed a Marketing Authorization Application ("MAA") with the European Medicines Agency ("EMA") in July 2025. In July 2026, we announced that the Committee for Medicinal Products for Human Use (CHMP) of the EMA adopted a negative opinion regarding the MAA. Under European regulatory procedures, we have requested a re-examination of the CHMP opinion.
On November 17, 2023, we completed the acquisition of Acer Therapeutics, Inc. ("Acer"), pursuant to which Acer became a wholly-owned subsidiary of Zevra. This included the acquisition of OLPRUVA (sodium phenylbutyrate) for oral suspension, which was approved by the FDA on December 22, 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.
On March 13, 2026, we entered into an Asset Purchase and Settlement Agreement (the "Commave Settlement Agreement") with Commave Therapeutics SA ("Commave") to sell all of our rights to certain assets relating to our SDX portfolio, including AZSTARYS and KP1077, to Commave and to resolve pending litigation related to claims arising under the Collaboration and License Agreement between the parties dated September 3, 2019, as amended (the "AZSTARYS License Agreement"). Under the Commave Settlement Agreement, the AZSTARYS License Agreement was terminated in its entirety.
While we have recently had several quarters of positive net cash flows from operations, we previously had recurring negative net operating cash flows, and we cannot guarantee that we can continue to generate positive net cash flows from operations. Net cash provided by (used in) operating activities for the nine months ended September 30, 2026, and 2025, was $33.2 million and $(7.1)
million, respectively. We expect to continue to incur significant expenses and minimal positive net cash flows from operations or negative net cash flows from operations for the near future, and those expenses and losses may fluctuate significantly from quarter-to-quarter and year-to-year. We anticipate that our expenses will fluctuate substantially as we:
•continue building and maintaining our ongoing commercial capabilities to support the commercialization of our approved products;
•continue clinical trials for celiprolol or initiate preclinical studies, clinical trials and product development activities for future product candidates;
•seek regulatory approvals for any product candidates that may successfully complete clinical trials;
•seek to discover, license or acquire, and develop additional product candidates;
•adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products;
•maintain, expand and protect our intellectual property portfolio;
•incur additional legal, accounting and other expenses in operating as a public company; and
•add operational systems and personnel, if needed, to support any future commercialization efforts.
Our Product Candidates and Approved Products
Our 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 | Status and IP | ||||||||
| Arimoclomol | Niemann-Pick disease type C (NPC) | MIPLYFFA |
FDA Approval: Sep. 20, 2024; Orphan Drug Exclusivity ("ODE") through 2031; IP through 2041
|
||||||||
| Arimoclomol |
NPC
|
Arimoclomol
|
Global Expanded Access Program ("EAP")
Marketing Authorisation Application ("MAA") for arimoclomol under review by EMA, Submitted July 28, 2025
|
||||||||
| Sodium phenylbutyrate |
Urea Cycle Disorders (UCD) |
OLPRUVA | FDA Approval: Dec. 22, 2022; IP through 2036 | ||||||||
| Celiprolol |
Vascular Ehlers Danlos Syndrome (VEDS) |
Celiprolol | Clinical - Phase 3 trial ongoing; IP potential through 2038 | ||||||||
MIPLYFFA
NPC is an ultra-rare and progressive neurodegenerative disease 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 United States and Europe combined, of which approximately 900 are in the United States and 1,100 are in Europe, where there is a mature market with an approved treatment available for NPC. Of this estimated population, approximately 300 to 350 people have been diagnosed in the United States. NPC is clinically heterogeneous, with significant variability in symptom presentation and rate of progression. Although it has traditionally been considered a pediatric disease due to its genetic origins, nearly half of the people treated with MIPLYFFA are adults. Low diagnostic rates may affect the number of potential patients, and we believe that the availability of treatment options in the United States 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, for NPC. 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 sale of the PRV and received net proceeds of $148.3 million.
Effective therapies to treat NPC are desperately needed, and, for this reason, arimoclomol is currently being made available to NPC patients in France, Germany, and other EU member states, along with select territories outside of Europe under our global EAP. Arimoclomol has also been granted orphan medicinal product designation for the treatment of NPC by the European Commission. In July 2025, we filed an MAA. In July 2026, we announced that the CHMP of the EMA adopted a negative opinion regarding the MAA. We have requested a re-examination of the CHMP opinion.
In June 2026, Zevra published positive results of an open-label pediatric substudy in the peer reviewed journal Molecular Genetics and Metabolism Reports. This multicenter substudy evaluated arimoclomol, in addition to concomitant miglustat, in patients with a confirmed diagnosis of NPC1 or NPC2 aged 6 to <24 months at study enrollment over up to 36 months of treatment. In the five patients enrolled, arimoclomol was generally well tolerated, with no new safety signals, and pharmacokinetic results were consistent with older pediatric populations. Developmental assessments showed variable delays, reflecting underlying phenotypic heterogeneity. Although limited by small sample size, the study provides preliminary evidence supporting initiation of MIPLYFFA in this age group.
As of September 30, 2026, there were a total of 197 enrollments to receive MIPLYFFA. 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. Our commercial plans focus on raising awareness among people who are living with NPC that are diagnosed and untreated, or undiagnosed.
To commercialize MIPLYFFA in the United States, we have built in-house capabilities, and have 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.
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 slowing 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 global EAP, with limited safety findings. Further, in a pediatric sub-study of patients aged 6-24 months, arimoclomol was well tolerated following at least 12 months of treatment with no new safety concerns observed.
•Advantageous regulatory designations. Arimoclomol has been granted orphan medicinal product designation for the treatment of NPC by the European Commission.
OLPRUVA
UCDs are a group of rare genetic disorders that can cause harmful ammonia to build up in the blood, potentially resulting in brain damage and neurocognitive impairments, if ammonia levels are not controlled. Any increase in ammonia over time is serious. 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 United States. While there are therapies currently approved for the treatment of UCDs, we believe that OLPRUVA offers benefits over other UCD treatments by eliminating issues with palatability, offering improved portability with its single-dose envelopes, and being provided in a dosage personalized to the patient based on weight.
OLPRUVA (sodium phenylbutyrate) for oral suspension is approved in the United States 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 to help minimize the unpleasant taste of the sodium phenylbutyrate powder.
In the fourth quarter of 2023, we began generating revenue from the sale of OLPRUVA in the United States. Zevra has a partnership with Relief Therapeutics SA ("Relief"), which has rights to commercialize OLPRUVA in various European countries, if approved. For the three and nine months ended September 30, 2026, we had $0.2 million and $0.7 million in revenue, respectively, from sales of OLPRUVA. We have made the decision to scale back our sales and marketing efforts for OLPRUVA as we evaluate the path forward and weigh strategic alternatives.
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.
•Currently evaluating strategic alternatives. We have had limited success in commercializing OLPRUVA in the United States, and we are currently evaluating the path forward and weighing strategic alternatives.
Celiprolol
Ehlers-Danlos Syndrome (EDS) is a rare 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. Vascular Ehlers-Danlos Syndrome (VEDS) is the most severe of the 13 types of EDS and causes abnormal fragility in large to medium sized arteries and hollow organs, such as the uterus and colon. This fragility can result in aneurysms, abnormal connections between blood vessels known as arteriovenous fistulas, arterial dissections, and spontaneous vascular and organ 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 United States.
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 adrenoceptor modulator ("SAM") that would qualify as a new chemical entity ("NCE") if approved in the United States. Celiprolol is currently approved in certain EU states for the treatment of hypertension and angina.
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 complete response letter ("CRL") from the FDA stating that it will be necessary to conduct an adequate and well-controlled trial to determine whether celiprolol reduces the risk of clinical events in patients with VEDS. Subsequently, Acer appealed the FDA decision. While the FDA denied the appeal, it described possible paths forward toward approval. In a May 2021 Type B meeting with the FDA, Acer discussed the conduct of a U.S.-based prospective, randomized, double-blind, placebo-controlled, decentralized clinical trial in patients with COL3A1 positive VEDS and sought the FDA's opinion on various proposed design features of the study.
Based on the FDA's feedback during the Type B meeting, Acer adopted a decentralized (virtual) event-based clinical trial design and use of an independent centralized adjudication committee with a primary endpoint based on clinical events associated with disease outcome. In April 2022, the FDA granted celiprolol Breakthrough Therapy designation in the United States for the treatment of patients with COL3A1-positive VEDS.
In July 2022, Acer initiated enrollment in a Phase 3 long-term event-driven clinical trial designed based on the discussions from the May 2021 Type B meeting with the FDA, also known as the DiSCOVER trial. 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 72 enrolled participants as of September 30, 2026. 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. In parallel, we actively engaged the FDA in a Type C meeting in the first quarter of 2026 to discuss regulatory options to potentially accelerate the development program and plan to continue the dialogue with regulators going forward with a follow-up meeting in the fourth quarter of 2026.
Celiprolol summary:
•Currently, no approved treatments for VEDS in the United States. There are currently no approved treatments for VEDS in the United States, and we believe that celiprolol, if approved, could be a significant innovation in the treatment of VEDS where current treatment options are focused primarily on surgical intervention.
•Unique pharmacological profile. Mechanism of action in VEDS patients is thought to be through vascular dilatation and smooth muscle relaxation, the effect of which is to reduce the mechanical stress on collagen fibers in the arterial wall, potentially resulting in less incidence of vascular and hollow organ ruptures.
•Evidence of efficacy in Europe and extensive clinical experience from multiple trials. 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 COL3A1+ 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 United States if approved before any other celiprolol product.
•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.
License Agreements
XOMA License Agreement (MIPLYFFA)
In May 2022, we purchased all the assets and operations of Orphazyme A/S ("Orphazyme") related to arimoclomol. Prior to this acquisition, 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. and a $5.0 million sales milestone payment upon annual sales of $100.0 million. XOMA was acquired by Ligand Pharmaceuticals in July 2026.
Relief Termination Agreement and Relief License Agreement (OLPRUVA)
In connection with our acquisition of Acer, Acer and Relief entered into a termination agreement on August 28, 2023 (the "Relief Termination Agreement"). Pursuant to the Relief Termination Agreement, we are obligated to pay royalties of 10% of U.S. net sales of OLPRUVA 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, Relief sold the rights to this royalty to Soleus Capital Management L.P., and in December 2025, Relief merged with NeuroX Group SA, and the combined company now operates as MindMaze Therapeutics Holding SA.
Acer and Relief also entered into an exclusive license agreement on August 28, 2023 (the "Relief License Agreement"). Pursuant to the Relief License Agreement, Relief holds 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, 2026 and 2025 (in thousands):
| Three months ended September 30, | Period-to- | |||||||||||||||||||
| 2026 | 2025 | Period Change | ||||||||||||||||||
| Revenue, net | $ | 37,756 | $ | 26,063 | $ | 11,693 | ||||||||||||||
|
Cost of product revenue (excluding $315 and $315 in intangible asset amortization for the three months ended September 30, 2026, and 2025, respectively, shown separately below)
|
(1,794) | (1,238) | 556 | |||||||||||||||||
| Intangible asset amortization | (315) | (315) | - | |||||||||||||||||
| Impairment of intangible assets | - | - | - | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Research and development | (4,937) | (3,432) | 1,505 | |||||||||||||||||
| Selling, general and administrative | (19,130) | (16,935) | 2,195 | |||||||||||||||||
| Total operating expenses | (24,067) | (20,367) | 3,700 | |||||||||||||||||
| Income from operations | 11,580 | 4,143 | 7,437 | |||||||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest expense | - | (2,051) | 2,051 | |||||||||||||||||
| Fair value adjustment related to warrant and CVR liability | 5,143 | (5,506) | 10,649 | |||||||||||||||||
| Fair value adjustment related to investments | (39) | 124 | (163) | |||||||||||||||||
| Interest and other income, net | 3,034 | 2,313 | 721 | |||||||||||||||||
| Total other income (expense) | 8,138 | (5,120) | 13,258 | |||||||||||||||||
| Income (loss) before income taxes | 19,718 | (977) | 20,695 | |||||||||||||||||
| Income tax (expense) benefit | (510) | 433 | (943) | |||||||||||||||||
| Net income (loss) | $ | 19,208 | $ | (544) | 19,752 | |||||||||||||||
Net Income (Loss)
Net income for the three months ended September 30, 2026, was $19.2 million, compared to a net loss of $0.5 million for the three months ended September 30, 2025, an increase to net income of $19.8 million. The increase was primarily attributable to an increase in revenue of $11.7 million, an increase in fair value adjustment related to warrant and CVR liability of $10.6 million, an increase in interest and other income, net, of $0.7 million, and a decrease in interest expense of $2.1 million, partially offset by a decrease in tax benefit of $0.9 million.
Revenue, net
Revenue for the three months ended September 30, 2026, was $37.8 million, compared to revenue of $26.1 million for the three months ended September 30, 2025, an increase of $11.7 million. The increase was primarily attributable to an increase in product sales of MIPLYFFA of $11.6 million.
Cost of product revenue
Cost of product revenue for the three months ended September 30, 2026, was $1.8 million, an increase of $0.6 million compared to cost of product revenue of $1.2 million for the three months ended September 30, 2025. The increase was primarily due to an increase in royalty costs related to increased product sales of MIPLYFFA.
Intangible asset amortization
Intangible asset amortization for the three months ended September 30, 2026, of $0.3 million was consistent when compared to intangible asset amortization of $0.3 million for the three months ended September 30, 2025.
Research and development
Research and development expenses increased by $1.5 million, from $3.4 million for the three months ended September 30, 2025, to $4.9 million for the three months ended September 30, 2026. This increase was due primarily to our ongoing arimoclomol efforts and our continued investment in the celiprolol development program.
Selling, general and administrative
Selling, general and administrative expenses increased by approximately $2.2 million, from $16.9 million for the three months ended September 30, 2025, to $19.1 million for the three months ended September 30, 2026. This increase was primarily due to commercial related costs.
Other income (expense)
Other income (expense) increased from $5.1 million of expense for the three months ended September 30, 2025, to $8.1 million of income for the three months ended September 30, 2026. The increase in income was primarily attributable to an increase in fair value adjustment related to warrant and CVR liability of $10.6 million, a decrease in interest expense of $2.1 million, and an increase in interest and other income, net, of $0.7 million,
Income tax (expense) benefit
Income tax (expense) benefit increased by $0.9 million, from $0.4 million benefit for the three months ended September 30, 2025, to $0.5 million expense for the three months ended September 30, 2026, due to the tax provision associated with increased income in the current quarter.
Results of Operations
Comparison of the nine months ended September 30, 2026 and 2025 (in thousands):
| Nine months ended September 30, | Period-to- | |||||||||||||||||||
| 2026 | 2025 | Period Change | ||||||||||||||||||
| Revenue, net | $ | 113,639 | $ | 72,345 | $ | 41,294 | ||||||||||||||
|
Cost of product revenue (excluding $947 and $3,546 in intangible asset amortization for the nine months ended September 30, 2026, and 2025, respectively, shown separately below)
|
(5,216) | (14,962) | (9,746) | |||||||||||||||||
| Intangible asset amortization | (947) | (3,546) | (2,599) | |||||||||||||||||
| Impairment of intangible assets | - | (58,710) | (58,710) | |||||||||||||||||
| Gain on sale of future royalties, intellectual property, and other assets, net | 43,314 | - | 43,314 | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Research and development | (13,815) | (10,123) | 3,692 | |||||||||||||||||
| Selling, general and administrative | (56,472) | (57,262) | (790) | |||||||||||||||||
| Total operating expenses | (70,287) | (67,385) | 2,902 | |||||||||||||||||
| Income (loss) from operations | 80,503 | (72,258) | 152,761 | |||||||||||||||||
| Other (expense) income: | ||||||||||||||||||||
| Gain on sale of PRV | - | 148,325 | (148,325) | |||||||||||||||||
| Loss on extinguishment of debt | (2,756) | - | (2,756) | |||||||||||||||||
| Loss on derivative liability | (7,216) | - | (7,216) | |||||||||||||||||
| Interest expense | (1,711) | (6,029) | 4,318 | |||||||||||||||||
| Fair value adjustment related to warrant and CVR liability | (297) | (1,379) | 1,082 | |||||||||||||||||
| Fair value adjustment related to investments | (395) | 119 | (514) | |||||||||||||||||
| Interest and other income, net | 9,189 | 5,234 | 3,955 | |||||||||||||||||
| Total other (expense) income | (3,186) | 146,270 | (149,456) | |||||||||||||||||
| Income before income taxes | 77,317 | 74,012 | 3,305 | |||||||||||||||||
| Income tax expense | (11,467) | (2,948) | (8,519) | |||||||||||||||||
| Net income | $ | 65,850 | $ | 71,064 | $ | (5,214) | ||||||||||||||
Net income
Net income for the nine months ended September 30, 2026, was $65.9 million, and was comprised of revenue of $113.6 million, a gain on sale of future royalties, intellectual property, and other assets, net, of $43.3 million under the Commave Settlement Agreement, interest and other income, net of $9.2 million, partially offset by cost of product revenue of $5.2 million, intangible asset amortization of $0.9 million, research and development expense of $13.8 million, selling, general and administrative costs of $56.5 million, loss on derivative liability of $7.2 million, loss on extinguishment of debt of $2.8 million, interest expense of $1.7 million, fair value adjustments of $0.7 million and income tax expense of $11.5 million.
Net income for the nine months ended September 30, 2025 was $71.1 million, and was comprised of revenue of $72.3 million, a gain on sale of PRV of $148.3 million, interest and other income, net of $5.2 million, partially offset by cost of product revenue of $15.0 million (including inventory obsolescence charges of $11.7 million), intangible asset amortization of $3.5 million, impairment of intangible assets of $58.7 million, research and development of $10.1 million, selling, general and administrative costs of $57.3 million, interest expense of $6.0 million, fair value adjustments of $1.3 million and income tax expense of $2.9 million.
Revenue, net
Revenue for the nine months ended September 30, 2026, was $113.6 million, compared to revenue of $72.3 million for the nine months ended September 30, 2025, an increase of $41.3 million. The increase was primarily attributable to an increase in revenues under the global EAP of $15.4 million and an increase in product sales of MIPLYFFA of $27.9 million, partially offset by a decrease in royalty revenue of $1.9 million.
Cost of product revenue
Cost of product revenue for the nine months ended September 30, 2026, was $5.2 million, a decrease of $9.7 million compared to cost of product revenue of $15.0 million for the nine months ended September 30, 2025. The decrease was primarily due to a decrease in the write-down of unsaleable inventory, partially offset by an increase in royalty costs related to increased product sales of MIPLYFFA.
Intangible asset amortization
Intangible asset amortization for the nine months ended September 30, 2026, was $0.9 million, a decrease of $2.6 million compared to intangible asset amortization of $3.5 million for the nine months ended September 30, 2025. The decrease was a result of definite-lived intangible assets acquired in the acquisition of Acer 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 increased by $3.7 million, from $10.1 million for the nine months ended September 30, 2025, to $13.8 million for the nine months ended September 30, 2026. This increase was primarily driven by an increase in spending for ongoing arimoclomol research and development efforts and the celiprolol Phase 3 study.
Selling, general and administrative
Selling, general and administrative expenses decreased by approximately $0.8 million, from $57.3 million for the nine months ended September 30, 2025, to $56.5 million for the nine months ended September 30, 2026. This decrease was primarily related to a decrease in third party spending and professional fees, partially offset by an increase in personnel related costs.
Other (expense) income
Other expense for the nine months ended September 30, 2026 was $3.2 million and consisted of a loss on extinguishment of debt of $2.8 million, loss on derivative liability of $7.2 million, interest expense of $1.7 million, and fair value adjustments of $0.7 million, partially offset by interest and other income, net of $9.2 million.
Other income for the nine months ended September 30, 2025 was $146.3 million and was attributable to a gain on sale of PRV of $148.3 million, interest and other income, net of $5.2 million, partially offset by interest expense of $6.0 million, and fair value adjustments of $1.3 million.
Income tax expense
Income tax expense increased by $8.5 million, from $2.9 million for the nine months ended September 30, 2025, to $11.5 million for the nine months ended September 30, 2026, due to the tax provision associated with increased income in the current period excluding the gain on sale of PRV for which income tax expense was recognized in the fourth quarter of 2024.
Liquidity and Capital Resources
Sources of Liquidity
Through September 30, 2026, we have funded our research and development and operating activities primarily through the issuance of debt and equity and from product sales of MIPLYFFA and OLPRUVA, reimbursements received under the global EAP, royalties or net sales milestone payments generated under the AZSTARYS License Agreement, payments received under the Commave Settlement Agreement, our PRV sale consummated on April 1, 2025, and consulting agreements. As of September 30, 2026, we had cash, cash equivalents and investments of $270.9 million.
While we have recently had several quarters of positive net cash flows from operations, we cannot guarantee that we can continue to generate positive net cash flows from operations. We expect that our sources of revenue will be from product sales of approved products, product reimbursements received under the global EAP, and any other future arrangements related to one or more of our products or product candidates.
If needed, adequate additional financing may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or debt, the terms of these securities may restrict our ability to operate. 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 Statement on Form S-3
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 may sell securities in one or more offerings up to a total aggregate offering price of $350.0 million, $75.0 million of which was allocated to the sale of the shares of common stock issuable under the 2024 ATM Agreement (as described further below). The June 2024 Registration Statement was declared effective on June 13, 2024.
2024 ATM Agreement
On July 12, 2024, we entered into an equity distribution agreement (the "2024 ATM Agreement") with Citizens JMP Securities LLC ("Citizens JMP") under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $75.0 million through Citizens JMP as our sales agent. 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, 2026, no shares have been issued or sold under the 2024 ATM Agreement.
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, 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 draw down the amounts described in (ii) and (iii) above prior to their applicable expiration dates. The proceeds of the Term Loans were used to refinance certain existing indebtedness of us and our subsidiaries. We used the remaining proceeds to pay fees and expenses related to the debt financing and commercialization of MIPLYFFA and OLPRUVA, and to further the development of other product candidates.
On March 12, 2026, we repaid in full all outstanding obligations under the Credit Agreement. As of the date of repayment, the aggregate principal amount outstanding under the Credit Agreement was approximately $63.1 million (which includes accrued paid-in-kind interest of approximately $3.1 million), plus accrued and unpaid cash interest of $1.4 million. Under the terms of the Credit Agreement, we were also required to pay a final payment premium of $1.8 million, a make-whole amount and prepayment premium of $7.2 million and legal fees of approximately $0.1 million. The Term Loans were secured by a first priority perfected lien on, and security interest in, substantially all current and future assets of ours and certain subsidiaries that were guarantors thereunder. Upon repayment, the Credit Agreement and all related loan documents were terminated, and all liens and security interests granted thereunder were released. We recognized a loss on extinguishment of debt of $2.8 million in the unaudited condensed consolidated statements of operations during the nine months ended September 30, 2026.
Cash Flows
The following table summarizes our cash flows for the nine months ended September 30, 2026, and 2025 (in thousands):
| Nine months ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Net cash provided by (used in) operating activities | $ | 33,221 | $ | (7,114) | ||||||||||
| Net cash provided by investing activities | 76,218 | 17,900 | ||||||||||||
| Net cash (used in) provided by financing activities | (49,668) | 9,518 | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (29) | 350 | ||||||||||||
| Net increase in cash and cash equivalents | $ | 59,742 | $ | 20,654 | ||||||||||
Operating Activities
For the nine months ended September 30, 2026, net cash provided by operating activities of $33.2 million consisted of net income of $65.9 million, in addition to changes in working capital of $4.3 million, partially offset by $36.9 million in adjustments for non-cash items. Net income was primarily attributable to income generated under the Commave Settlement Agreement, as well as revenue received from approved product sales, and reimbursements received under the global EAP. This income was partially offset by ongoing operating expenses to support our commercial organization and the resulting gain from the Commave Settlement Agreement, as well as the debt payoff. In addition to the aforementioned transactions, the adjustments for non-cash items primarily consisted of income tax expense of $5.6 million, stock-based compensation expense of $8.7 million, fair value adjustment related to warrant and CVR liability of $0.3 million and a gain on foreign currency exchange rates of $2.7 million.
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 global EAP, 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.
Investing Activities
For the nine months ended September 30, 2026, net cash provided by investing activities was $76.2 million, which was primarily attributable to sales and maturities of investments of $188.2 million and sale of future royalties, intellectual property, and other assets, net, of $48.9 million, partially offset by $160.4 million in investment purchases.
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.
Financing Activities
For the nine months ended September 30, 2026, net cash used in financing activities was $49.7 million, which was primarily attributable to the repayment of debt of $60.1 million and the payments for employee taxes related to stock awards of $1.5 million, partially offset by proceeds from the issuance of stock for warrants exercised of $9.2 million and proceeds from issuance of common stock for options exercised of $2.3 million.
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.
Future Funding Requirements
We believe our available cash, cash equivalents and investments, together with our ability to generate operating cash flow, 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, cash equivalents and investments 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:
•sales of our approved products;
•reimbursements received for arimoclomol under the global EAP; and
•potential sales of common stock by us under the 2024 ATM Agreement or any other offering of securities made pursuant to the June 2024 Registration Statement.
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 building and maintaining our ongoing commercial capabilities to support the commercialization of our approved products;
•continue clinical trials for celiprolol or initiate preclinical studies, clinical trials and product development activities for future product candidates;
•seek regulatory approvals for any product candidates that may successfully complete clinical trials;
•seek to discover, license or acquire, and develop additional product candidates;
•adapt our regulatory compliance efforts to incorporate requirements applicable to marketed products;
•maintain, expand and protect our intellectual property portfolio;
•incur additional legal, accounting and other expenses in operating as a public company; and
•add operational systems and personnel, if needed, to support any future commercialization efforts.
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 sales of approved products, reimbursements received under the global EAP, 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 that may be necessary.
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, 2025, filed with the SEC on March 9, 2026.
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