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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-27 · 114 added, 110 removed, 294 unchanged (43% of the section changed)

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We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Form 10-K, including those set forth under “Forward-looking Statements” and “Risk Factors,” as revised and supplemented by those risks described from time to time in other reports which we file with the SEC.

Our discussion and analysis of our financial condition and results of operations for the year ended Decemebr 31, 2024 as compared to December 31, 2023 are discussed below.

Our discussion and analysis of our financial condition and results of operations for the year ended December 31, 2025 as compared to December 31, 2024 are discussed below.

For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

We are building a leading, diversified biopharmaceutical company committed to improving the lives of people living with serious medical conditions.

We have developed, licensed, and acquired a portfolio of meaningfully differentiated products for use in the treatment of moderate to severe pain and attention deficit hyperactivity disorder (“ADHD”), consisting of Jornay PM (“Jornay”), Belbuca, Xtampza ER, Nucynta ER and Nucynta IR (collectively the “Nucynta Products”), and Symproic, in the United States.

Jornay is a central nervous system (“CNS”) stimulant prescription medicine that contains methylphenidate HCl, which was approved by the U.S.

Food and Drug Administration (“FDA”) in August 2018 for the treatment of attention deficit hyperactivity disorder (“ADHD”) in people six years of age and older and currently the only FDA-approved stimulant medication that is dosed in the evening.

We began recognizing product revenue related to Jornay in September 2024 following our acquisition of Ironshore Therapeutics Inc.

Our mission is to build a leading, diversified biopharmaceutical company committed to improving the lives of people living with serious medical conditions.

We have developed, licensed, and acquired a portfolio of meaningfully differentiated products for use in the treatment of attention deficit hyperactivity disorder (“ADHD”) and moderate to severe pain.

We commercialize our products, consisting of Jornay PM, Belbuca, Xtampza ER, Nucynta ER and Nucynta IR (collectively the “Nucynta Products”), and Symproic, in the United States.

Jornay PM is a central nervous system (“CNS”) stimulant prescription medicine that contains methylphenidate HCl, a Schedule II methylphenidate, which was approved by the U.S.

Food and Drug Administration (“FDA”) in August 2018 for the treatment of ADHD in people six years of age and older and currently the only FDA-approved stimulant medication that is dosed in the evening.

We began recognizing product revenue related to Jornay PM in September 2024 following our acquisition of Ironshore Therapeutics Inc.

(“Ironshore”) (the “Ironshore Acquisition”).

Belbuca is a buccal film that contains buprenorphine, a Schedule III opioid, and was approved by the FDA in October 2015 for severe and persistent pain that requires an extended treatment period with a daily opioid analgesic and for which alternative options are inadequate.

Symproic was approved by the FDA in March 2017 for the treatment of opioid-induced constipation (“OIC”) in adult patients with chronic non-cancer pain, including patients with chronic pain related to prior cancer or its treatment who do not require frequent (e.g., weekly) opioid dosage escalation.

We began shipping and recognizing product revenue related to Belbuca in March 2022 following our acquisition of BioDelivery Sciences International, Inc.

Xtampza ER, an abuse-deterrent, oral formulation of oxycodone, was approved by the FDA in April 2016 for the management of severe and persistent pain that requires an extended treatment period with a daily opioid analgesic and for which alternative treatment options are inadequate.

Xtampza ER, an abuse-deterrent, extended-release, oral formulation of oxycodone, is a Schedule II opioid and was approved by the FDA in April 2016 for the management of severe and persistent pain that requires an extended treatment period with a daily opioid analgesic and for which alternative treatment options are inadequate.

We commercially launched Xtampza ER in June 2016.

The Nucynta Products are extended-release (“ER”) and immediate-release (“IR”) formulations of tapentadol.

The Nucynta Products are extended-release (“ER”) and immediate-release (“IR”) oral formulations of tapentadol, a Schedule II opioid.

In November 2008, the FDA approved Nucynta ER and Nucynta IR.

Nucynta ER is indicated for the management of severe and persistent pain that requires an extended treatment period with a daily opioid analgesic, including neuropathic pain associated with diabetic peripheral neuropathy in adults, and for which alternate treatment options are inadequate.

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We began shipping and recognizing product revenue on the Nucynta Products in January 2018 and began marketing the Nucynta Products in February 2018.

In August 2023, the FDA granted New Patient Population exclusivity in pediatrics for Nucynta IR.

In August 2023, the FDA granted New Patient Population exclusivity for Nucynta IR in pediatric patients.

This grant extended the period of U.S.

exclusivity for Nucynta IR from June 27, 2025 to July 3, 2026.

In June 2024, the FDA granted pediatric exclusivity to the Nucynta Products for an additional six months, to January 3, 2027 for Nucynta IR and December 27, 2025 for Nucynta ER.

We have entered into an authorized generic agreement with Hikma Pharmaceuticals USA Inc.

(“Hikma”), pursuant to which we granted Hikma rights relating to an authorized generic version of the Nucynta Products in the United States.

In January 2026, a generic equivalent of Nucynta IR 50mg, 75mg and 100mg tablets was approved under an abbreviated New Drug Application (“ANDA”) filed by a third party with the FDA, which carves out pediatric use from its label.

As a result of the anticipated launch of the third-party generic equivalent of Nucynta IR, Hikma launched a generic version of Nucynta IR on February 25, 2026.

Hikma is expected to launch a generic version of Nucynta ER in the first quarter of 2026.

Symproic, an oral formulation of naldemedine, was approved by the FDA in March 2017 for the treatment of opioid-induced constipation (“OIC”) in adult patients with chronic non-cancer pain, including patients with chronic pain related to prior cancer or its treatment who do not require frequent (e.g., weekly) opioid dosage escalation.

We began shipping and recognizing product revenue related to Symproic in March 2022 following our acquisition of BDSI.

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Product Revenues

Product revenues through the year ended December 31, 2024 were generated from sales of Jornay, Belbuca, Xtampza ER, the Nucynta Products, and Symproic.

Product revenues through the year ended December 31, 2025 were generated from sales of Jornay PM, Belbuca, Xtampza ER, the Nucynta Products, and Symproic.

In accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, (“ASC 606”) product sales are recorded upon delivery of products to customers (upon the transfer of control of the product to the customer), net of a provision for estimated chargebacks, rebates, sales incentives and allowances, distribution service fees, and returns.

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Interest Expense

Interest expense consists primarily of cash and non-cash interest costs related to our debt, including the term loan issued in March 2022 in connection with the BDSI Acquisition and refinancing our 2020 Term Loan (the “2022 Term Loan”), the term loan issued in July 2024 in connection with the Ironshore Acquisition (the “2024 Term Loan”), convertible notes issued in February 2020 in connection with the Nucynta Acquisition (the “2026 Convertible Notes”), and convertible notes issued in February 2023 (the “2029 Convertible Notes”).

Interest expense consists primarily of cash and non-cash interest costs related to our debt, including term loans, delayed draw term loans, a revolving credit facility, and convertible notes.

Our term loans consist of the term loan issued in December 2025 (the “2025 Term Loan”), which was issued along with a delayed draw term loan and revolving credit facility (collectively, the “2025 Credit Facility”), as well as the term loan issued in July 2024 in connection with the Ironshore Acquisition (the “2024 Term Loan”) and the term loan issued in March 2022 in connection with the BDSI Acquisition (the “2022 Term Loan”).

Our convertible notes consist of the convertible notes issued in February 2023 (the “2029 Convertible Notes”) and the convertible notes issued in February 2020 in connection with the Nucynta Acquisition (the “2026 Convertible Notes”).

Interest Income

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Provisions for rebates and incentives are based on the estimated amount of rebates and incentives to be claimed on the related sales from the period.

As our rebates and incentives are based on products dispensed to patients, we are required

to estimate the expected value of claims at the time of product delivery to distributors.

As our rebates and incentives are based on products dispensed to patients, we are required to estimate the expected value of claims at the time of product delivery to distributors.

Given that distributors sell the product to pharmacies, which in turn dispense the product to patients, claims can be submitted significantly after the related sales are recognized.

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If actual results vary, we may need to adjust these estimates, which could have an effect on earnings in the period of the adjustment.

Provisions for product returns, including returns for Jornay, Belbuca, Xtampza, the Nucynta Products, and Symproic, are based on product-level returns rates, including processed as well as unprocessed return claims, in addition to relevant market events and other factors.

Provisions for product returns, including returns for Jornay PM, Belbuca, Xtampza ER, the Nucynta Products, and Symproic, are based on product-level returns rates, including processed as well as unprocessed return claims, in addition to relevant market events and other factors.

Estimates of the future product returns are made at the time of revenue recognition to determine the amount of consideration to which we expect to be entitled (that is, excluding the products expected to be returned).

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Business Combination Accounting and Valuation of Acquired Assets

We completed the Ironshore Acquisition in September 2024 and the BDSI Acquisition in March 2022, both of which were accounted for as business combinations.

To determine whether the acquisitions should be accounted for as business combinations or as asset acquisitions, we made certain judgments regarding whether the acquired set of activities and assets met the definition of a business.

We completed the Ironshore Acquisition in September 2024, which was accounted for as a business combination.

To determine whether the acquisition should be accounted for as a business combination or as an asset acquisition, we make judgments regarding whether the acquired set of activities and assets met the definition of a business.

Judgment is required in assessing whether the acquired processes or activities, along with their inputs, would be substantive to constitute a business, as defined by U.S.

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Any adjustments not based on facts and circumstances existing at the acquisition date, or if subsequent to the conclusion of the measurement period, will be recorded to our consolidated statements of operations.

Intangible Assets

We record the fair value of acquired finite-lived intangible assets as of the transaction date.

Intangible assets are then amortized over their estimated useful lives using either the straight-line method, or if reliably determinable, based on the pattern in which the economic benefit of the asset is expected to be utilized, which is generally based on our cash flow projections.

Future events, such as competition, technological advances, or other changes, are subject to uncertainty and could cause subsequent evaluations to cash flow projections.

We test intangible assets for potential impairment whenever triggering events or circumstances present an indication of impairment.

If the sum of expected undiscounted future cash flows of the intangible assets (or asset group) is less than the carrying amount of such assets, the intangible assets would be written down to the estimated fair value, calculated based on the present value of expected future cash flows.

As of December 31, 2024, our intangible assets included those acquired in connection with the Ironshore Acquisition, the BDSI Acquisition, and the Nucynta Intangible Asset.

We utilize the asset and liability method of accounting for income taxes.

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Cost of product revenues (excluding intangible asset amortization) 95,418 88,801

Intangible asset amortization and impairment

Total cost of products revenues

Intangible asset amortization 221,892 165,304

Total cost of product revenues 317,310 254,105

Gross profit 463,257 377,344

Operating expenses

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Provision for income taxes 29,749 29,378

Net income $ 62,870 $ 69,190

Product revenues, net

Product revenues, net were $780.6 million for the year ended December 31, 2025 (“2025”), compared to $631.4 million for the year ended December 31, 2024 (“2024”), representing a $149.2 million increase.

The $64.6 million increase is primarily due to increases in revenue for Jornay of $37.2 million, Belbuca of $29.2 million, and Xtampza ER of $14.0 million, partially offset by decreases in revenue for the Nucynta Products of $14.3 million and Symproic of $1.4 million.

The increase in revenue for Jornay of $37.2 million is due to the acquisition of the product from Ironshore in 2024.

The increase in revenue for Belbuca of $29.2 million is primarily due to higher sales volume, gross price, and lower gross-to-net adjustments related to provisions for rebates, partially offset by higher gross-to-net adjustments related to provisions for chargebacks.

The increase in revenue for Xtampza ER of $14.0 million is primarily due to lower gross-to-net adjustments related to provisions for rebates and higher gross price, partially offset by lower sales volume.

The decrease in revenue for the Nucynta Products of $14.3 million is primarily due to lower sales volume and higher gross-to-net adjustments related to provisions for rebates, partially offset by higher gross price.

The $149.2 million increase was primarily due to increases in revenue for Jornay PM of $111.7 million, the Nucynta Products of $19.8 million, Belbuca of $10.4 million, and Xtampza ER of $8.0 million, partially offset by decreases in revenue for Symproic and other of $0.7 million.

The increase in revenue for Jornay PM of $111.7 million was due to 2025 including a full year of product revenues compared to a partial year in 2024 as the product was acquired from the Ironshore Acquisition in September 2024.

The increase in revenue for the Nucynta Products of $19.8 million was primarily due to lower gross-to-net adjustments related to provisions for rebates and higher gross price, partially offset by lower sales volume.

The increase in revenue for Belbuca of $10.4 million was primarily due to lower gross-to-net adjustments related to provisions for rebates and higher gross price, partially offset by higher gross-to-net adjustments related to provisions for chargebacks and lower sales volume.

The increase in revenue for Xtampza ER of $8.0 million was primarily due to lower gross-to-net adjustments related to provisions for rebates, including the recognition of $3.2 million related to certain rebate settlements during 2025.

In addition, revenue increased due to higher gross price partially offset by lower sales volume.

Cost of product revenues

Cost of product revenues (excluding intangible asset amortization) was $95.4 million for 2025, compared to $88.8 million for 2024.

The $6.0 million decrease was primarily related to 2023 including higher cost of product revenues related to the step-up basis in inventory acquired from BDSI, partially offset by cost of product revenues for Jornay as well as higher sales volume in 2024 for Belbuca.

The $6.6 million increase was primarily due to 2025 including a full year of cost of product revenues for Jornay PM compared to a partial year in 2024 as the product was acquired from the Ironshore Acquisition in September 2024.

In addition, cost of product revenues increased due to 2025 including $3.1 million of royalty expense related to the Company’s license agreement with Grünenthal that is subject to future recovery, partially offset by lower current period royalty expense.

Intangible asset amortization was $221.9 million for 2025, compared to $165.3 million for 2024.

The $19.5 million increase in intangible asset amortization was primarily related to the Ironshore Acquisition in 2024.

This increase was partially offset by a decrease as a result of the FDA granting New Patient Population exclusivity for Nucynta IR until July 3, 2026 in the third quarter of 2023, resulting in an extension of the estimated useful life of the underlying intangible asset and a reduction of amortization expense recognized in 2024.

The $56.6 million increase in intangible asset amortization was primarily related to 2025 including a full year of amortization from the intangible asset acquired in the Ironshore Acquisition in September 2024.

Operating expenses

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The $74.4 million increase was primarily related to:

● an increase in acquisition related expense of $24.3 million due to the Ironshore Acquisition;

● an increase in salaries, wages and benefits of $23.1 million primarily due to additional headcount added in September 2024 as a result of the Ironshore Acquisition, including the sales force that promotes Jornay, as well as expenses incurred as a result of the CEO transition announced in May 2024, including higher stock-based compensation expense of $3.7 million related to accelerated equity awards and higher severance, benefits, and related expenses incurred of $3.1 million;

● an increase in sales and marketing expenses of $9.5 million, primarily due to expenses incurred to support the ongoing commercialization of Jornay following the Ironshore Acquisition in September 2024;

● an increase in regulatory fees of $1.8 million primarily due to fees incurred for Jornay following the Ironshore Acquisition in September 2024;

• an increase in salaries, wages and benefits of $49.4 million primarily due to additional headcount added in 2025 as a result of the Ironshore Acquisition, including the expansion of the sales force that promotes Jornay PM in 2025, as well as expenses incurred as a result of certain executive transitions announced in 2025, including stock-based compensation expense of $2.6 million related to accelerated equity awards and severance, benefits, and related expenses incurred of $1.4 million;

• an increase in sales and marketing expenses of $37.6 million, primarily due to expenses incurred to support Jornay PM following the Ironshore Acquisition in September 2024;

• an increase in audit and legal expenses of $4.9 million primarily due to expenses related to litigation;

partially offset by:

● an overall decrease in audit and legal expenses of $9.5 million, primarily due to an $8.5 million litigation settlement during 2023 and lower litigation related expenses.

• a decrease in acquisition related expenses of $20.1 million, as 2024 included transaction costs and other expenses incurred shortly after the Ironshore Acquisition that did not recur at the same level in 2025.

Gain on fair value remeasurement of contingent consideration was $1.2 million for 2025, compared to $2.9 million for 2024.

The $1.7 million decrease was due to the revaluation of the contingent consideration associated with the Ironshore Acquisition and reflects the liability being reduced to zero in 2025 after the related milestone was not achieved.

Interest expense and Interest income

Interest expense was $82.3 million for 2025, compared to $74.0 million for 2024.

The $9.3 million decrease was primarily due to lower interest expense associated with the 2022 Term as a result of a lower average overall principal balance during 2024, as well as a lower interest rate on the 2024 Term Loan.

The $8.3 million increase was primarily due to higher interest expense of $8.8 million related to the deferred royalty obligation that was assumed as part of the Ironshore Acquisition in September 2024.

Interest expense from term loans was materially consistent in 2025 compared to 2024 due to the refinancing of our term loans in the third quarter of 2024 and the fourth quarter of 2025, which resulted in a lower interest rate offset by a higher principal balance.

Interest income was $11.3 million for 2025, compared to $14.0 million for 2024.

The $1.6 million decrease was primarily due to lower interest rates earned on cash equivalents and marketable securities as well as a lower overall average balance invested in 2024 compared to 2023.

The $2.7 million decrease was primarily due to lower interest rates earned on cash equivalents and marketable securities in 2025 compared to 2024.

Loss on extinguishment of debt

Loss on extinguishment of debt was $16.0 million for 2025, compared to $11.3 million for 2024.

The $12.2 million decrease was due to 2023 including a $23.5 million loss on extinguishment resulting from the repurchase of $117.4 million of the 2026 Convertible Notes in 2023.

In 2024, the remaining $26.4 million of the 2026 Convertible Notes were redeemed, resulting in a $7.2 million loss on extinguishment in 2024.

In addition, in 2024, assumed debt from the Ironshore Acquisition was redeemed, resulting in a loss on extinguishment of $4.1 million in 2024.

The $4.7 million increase was due to 2025 including a $16.0 million loss on extinguishment resulting from the repayment of the 2024 Term Loan.

In 2024, the remaining $26.4 million of the 2026 Convertible Notes were redeemed, resulting in a $7.2 million loss on extinguishment.

In addition, in 2024, assumed debt from the Ironshore Acquisition was extinguished, resulting in a loss on extinguishment of $4.1 million.

The provision for income taxes was $29.7 million for 2025, compared to $29.4 million for 2024.

The $1.8 million increase is primarily due to higher earnings before taxes in 2024, partially offset by 2023 including higher non-deductible costs associated with debt extinguishments.

The $0.3 million increase was primarily due to higher nondeductible items in 2025 compared to 2024, including the impact of nondeductible officer compensation, stock compensation, and provision-to-return adjustments, partially offset by lower earnings before taxes.

The effective tax rate was 32.1% and 29.8% for 2025 and 2024, respectively.

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and cash inflows from sales of our products.

We are primarily dependent on the commercial success of Jornay, Belbuca, Xtampza, and the Nucynta Products.

In July 2024, we amended and replaced our 2022 Term Loan with the 2024 Term Loan, which consisted of a $320.8 million initial term loan and a $325.0 million delayed draw term loan.

We used the proceeds of the initial term loan to refinance in full all outstanding indebtedness under the 2022 Term Loan.

We used the proceeds of the delayed draw term loan to fund a portion of the consideration to complete the Ironshore Acquisition and, to pay fees and expenses in connection with the Ironshore Acquisition and the 2024 Term Loan.

We will use the remainder for general corporate purposes.

We are primarily dependent on the commercial success of Jornay PM, Belbuca, Xtampza ER, and the Nucynta Products.

In December 2025, we entered into the 2025 Credit Agreement, which consists of the $580.0 million 2025 Term Loan, a $300.0 million of delayed draw term loan commitments, and a $100.0 million revolving credit facility, which is fully available as of December 31, 2025.

The 2025 Term Loan was used to repay in full the remaining outstanding obligations under the 2024 Term Loan and to pay fees and expenses relating to the entry into the 2025 Credit Agreement and the remainder for general corporate purposes.

As of December 31, 2025, the outstanding principal balance of the 2025 Term Loan was $580.0 million, of which $29.0 million in principal payments are due within the next 12 months.

As of December 31, 2024, the outstanding principal balance of the Convertible Notes was $241.5 million, which is due in 2029.

As of December 31, 2025, the outstanding principal balance of the 2029 Convertible Notes was $241.5 million.

As of December 31, 2025, and December 31, 2024, we had $231.3 million and $70.6 million in cash and cash equivalents, respectively.

Although our current assets of $482.3 million and current liabilities of $508.1 million resulted in a working capital deficit as of December 31, 2024, we believe that our cash, cash equivalents, and marketable securities as of December 31, 2024, together with expected cash inflows from operations, will enable us to fund our operating expenses, debt service and capital expenditure requirements under our current business plan for the foreseeable future.

We believe that our cash, cash equivalents, and marketable securities as of December 31, 2025, together with expected cash inflows from operations, will enable us to fund our operating expenses, debt service and capital expenditure requirements under our current business plan for the foreseeable future.

Borrowing Arrangements and Equity Offerings

The following transactions represent our material borrowing arrangements and equity offerings:

the 2024 Term Loan, and the 2029 Convertible Notes.

Our material borrowing arrangements and equity offerings are the 2025 Credit Facility and the 2029 Convertible Notes.

Refer to Note 14, Debt , for more information.

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Net cash used in investing activities (63,532) (287,759)

Net cash (used in) provided by financing activities

Net (decrease) increase in cash, cash equivalents and restricted cash

Net cash used in financing activities (110,245) (60,603)

Net increase (decrease) in cash, cash equivalents and restricted cash $ 155,546 $ (143,382)

Operating activities.

Cash provided by operating activities was $329.3 million in 2025, compared to $205.0 million in 2024.

The $69.7 million decrease in cash provided by operating activities was primarily due to $60.9 million of cash used to settle certain liabilities assumed from Ironshore at the Acquisition in September 2024, including the settlement of $28.4 million of Ironshore cash-settled share-based awards liabilities, $23.5 million of accrued operating liabilities, and $9.0 million of Ironshore cash-settled warrant liabilities.

In addition, $20.7 million of acquisition-related expenses were paid in 2024, including $9.6 million in employee-related expenses, $7.8 million in transaction costs, $1.1 million in Ironshore directors and officers insurance expense, and $2.2 million in other acquisition related expenses in 2024 related to the Ironshore Acquisition.

These decreases were partially offset by increases in cash flow from operating results, which reflects operating earnings, after adjustment for non-cash items that are included in net income.

The $124.3 million increase in cash provided by operating activities was primarily due to the increase in cash flow from operating results after adjustment for non-cash items that are included in net income as well as due to changes in working capital, which were significantly impacted by the payment of assumed liabilities from Ironshore in 2024.

Investing activities.

Cash used in investing activities was $63.5 million in 2025, compared to $287.8 million in 2024.

The $217.0 million increase in cash used in investing activities was primarily due to $267.5 million cash paid to acquire Ironshore (net of cash acquired) and $18.8 million increase in purchases of marketable securities, partially offset by $70.6 million increase in maturities of marketable securities.

The $224.3 million decrease in cash used in investing activities was primarily due 2024 including $267.5 million of cash used to acquire Ironshore (net of cash acquired), partially offset by a $43.2 million increase in cash used in investing in marketable securities.

Financing activities.

Cash used in financing activities was $110.2 million in 2025, compared to $60.6 million in 2024.

The $79.6 million decrease was primarily due to:

● an increase in proceeds received from the modification of term loans of $313.2 million;

● a decrease in repayments of term notes of $54.7 million;

● a decrease in cash used to repurchase common stock of $15.0 million;

● an increase in cash provided from stock option exercises of $1.6 million;

The $49.6 million increase in cash used in financing activities was primarily due to:

• an increase in cash used for repayments of term loans of $527.7 million;

• an increase in deferred purchase price payments related to the Ironshore Acquisition of $7.6 million;

partially offset by:

● the payoff of assumed debt from Ironshore of $164.6 million in 2024;

● the repurchase of a portion of our 2026 Convertible Notes and issuance of our 2029 Convertible Notes which resulted in net proceeds of $96.6 million in 2023;

● the $33.2 million cash settlement of the remaining 2026 Convertible Notes in 2024;

● an increase in payments for employee stock tax withholdings of $10.8 million.

• an increase in cash provided by term note financings of $252.0 million;

• 2024 including the repayment of assumed debt from the Ironshore Acquisition of $164.6 million, which did not recur in 2025;

• a decrease in cash used to repurchase common stock of $34.9 million;

• 2024 including the redemption of $33.2 million of the remaining 2026 Convertible Notes, which did not recur in 2025.

Funding requirements

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• payment of income taxes;

● deferred royalty obligation in connection with Jornay;

• deferred royalty obligation in connection with Jornay PM;

• operating lease obligations;

• minimum purchase obligations in connection with our contract manufacturer;

● contingent payment upon the achievement of a financial milestone based on net revenues of Jornay.

• contingent payment upon the achievement of a financial milestone based on net revenues of Jornay PM.

In addition, we have significant potential future capital requirements, including:

• we may enter into business development transactions, including acquisitions, collaborations, licensing arrangements and equity investments, that require additional capital;

● any judgements rendered against us in connection with any of the litigation matters set forth in Note 13, Commitments and Contingencies , to our financial statements;

● in January 2024, our Board of Directors authorized a share repurchase program for the repurchase of up to $150.0 million of shares of our common stock through June 30, 2025.

• any judgments rendered against us in connection with any of the litigation matters set forth in Note 13, Commitments and Contingencies , to our financial statements;

• in July 2025, our Board of Directors authorized a new share repurchase program for the repurchase of up to $150.0 million of shares of our common stock through December 31, 2026.

As of December 31, 2025, $150.0 million remained available for share repurchases under the 2025-2026 Repurchase Program.

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Contractual Obligations

Our contractual obligations as of December 31, 2024 that will affect our future liquidity include our term loan, including interest;

Our contractual obligations as of December 31, 2025 that will affect our future liquidity include our term loans, including interest;

convertible senior notes, including interest;

operating lease obligations;

deferred royalty obligation, and purchase obligations.

For further detail regarding our term notes and convertible senior notes, refer to Note 14, Debt.

deferred royalty obligation;

and purchase obligations.

For further detail regarding our term loans and convertible senior notes, refer to Note 14, Debt.

For further detail regarding our deferred royalty obligation, refer to Note 15, Deferred Royalty Obligation.

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To supplement our financial results presented on a GAAP basis, we have included information about certain non-GAAP financial measures.

We believe the presentation of these non-GAAP financial measures, when viewed with our results under GAAP and the accompanying reconciliations, provide analysts, investors, lenders, and other third parties with insights into how we evaluate normal operational activities, including our ability to generate cash from operations, on a comparable year-over-year basis and manage our budgeting and forecasting.

comparable year-over-year basis and manage our budgeting and forecasting.

In addition, certain non-GAAP financial measures, primarily Adjusted EBITDA, are used to measure performance when determining components of annual compensation for substantially all non-sales force employees, including senior management.

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The amount and/or frequency of these restructuring expenses are not part of our underlying business;

● we exclude litigation settlements from adjusted EBITDA, as well as any applicable income items or credit adjustments due to subsequent changes in estimates.

• we exclude litigation settlements and contingencies that are subject to recovery from adjusted EBITDA, as well as any applicable income items, credit adjustments, or recoveries due to subsequent changes in estimates.

This does not include our legal fees to defend claims, which are expensed as incurred;

• we exclude acquisition related expenses as the amount and/or frequency of these expenses are not part of our underlying business.

Acquisition related expenses include transaction costs, which primarily consisted of financial advisory, banking, legal, and regulatory fees, and other consulting fees, incurred to complete the acquisition, employee-related expenses (severance cost and benefits) for terminated employees after the acquisition, and miscellaneous other acquisition related expenses incurred;

Acquisition related expenses include transaction costs, which primarily consisted of financial advisory, banking, legal, and regulatory fees, and other consulting fees, incurred to complete the acquisition, employee-related expenses (severance cost and benefits) for terminated employees after the acquisition, legal defense expenses for specific acquired claims that relate to acts that occurred prior to our acquisition, and miscellaneous other acquisition related expenses incurred;

• we exclude recognition of the step-up basis in inventory from acquisitions (i.e., the adjustment to record inventory from historic cost to fair value at acquisition) as the adjustment does not reflect the ongoing expense associated with sale of our products as part of our underlying business;

• we exclude losses on extinguishments of debt as these expenses are episodic in nature and do not directly correlate to the cost of operating our business on an ongoing basis;

• we exclude executive transition expenses from adjusted EBITDA as the amount and/or frequency of these expenses are episodic in nature and do not directly correlate to the cost of operating our business on an ongoing basis;

• we exclude other expenses, from time to time, that are episodic in nature and do not directly correlate to the cost of operating our business on an ongoing basis.

7 unchanged sentences

Provision for income taxes 29,749 29,378

Depreciation 4,182 3,856

Amortization 221,892 165,304

Stock-based compensation 41,906 32,400

Litigation settlements

Litigation settlements and contingencies 3,058 —

Recognition of step-up basis in inventory 5,431 5,269

CEO transition expense

Executive transition expense 1,397 3,051

Acquisition related expenses 4,175 24,329

3 unchanged sentences

Adjusted EBITDA was $460.5 million for 2025 compared to $401.2 million for 2024.

The $34.2 million increase was primarily due to higher revenues of $64.6 million, partially offset by higher salaries, wages and benefits (excluding stock-based compensation and CEO transition expense) of $14.7 million and higher sales and marketing expenses of $9.5 million.

The $59.3 million increase was primarily due to higher revenues of $149.2 million, partially offset by higher salaries, wages and benefits (excluding stock-based compensation and executive transition expense) of $41.6 million, higher sales and marketing expenses of $37.6 million, and higher audit and legal fees of $4.9 million.

The following is a summary of 2025 quarterly Adjusted EBITDA:

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

First Quarter Second Quarter Third Quarter Fourth Quarter

(in thousands)

4 unchanged sentences

Provision for income taxes 705 5,042 11,929 12,073

Depreciation 1,091 1,135 1,033 923

Amortization 55,473 55,473 55,473 55,473

Stock-based compensation 11,524 10,818 9,811 9,753

Litigation settlements

Litigation settlements and contingencies — — 3,058 —

Recognition of step-up basis in inventory 3,477 1,954 — —

CEO transition expense

Executive transition expense 1,397 — — —

Acquisition related expenses 1,289 935 1,552 399

9 unchanged sentences

Stock-based compensation 41,906 32,400

Litigation settlements

CEO transition expense

Executive transition expense 1,397 3,051

Acquisition related expenses 4,175 24,329

4 unchanged sentences

The $86.7 million increase was primarily driven by:

● an increase in salaries, wages, and benefits (excluding stock-based compensation and CEO transition expense) of $14.7 million, primarily due to increases in personnel costs for employees retained following the Ironshore Acquisition;

● an increase in regulatory fees of $1.8 million, primarily due to fees incurred for Jornay following the Ironshore Acquisition in September 2024.

• an increase in salaries, wages, and benefits (excluding stock-based compensation and executive transition expense) of $41.6 million, primarily due to additional headcount added as a result of the Ironshore Acquisition;

• an increase in sales and marketing expenses of $37.6 million, primarily due to expenses incurred to support the ongoing commercialization of Jornay PM following the Ironshore Acquisition in September 2024;

• an increase in audit and legal fees of $4.9 million, primarily due to expenses related to litigation expenses.

The following is a summary of 2025 quarterly adjusted operating expenses:

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

First Quarter Second Quarter Third Quarter Fourth Quarter

(in thousands)

1 unchanged sentence

Stock-based compensation 11,524 10,818 9,811 9,753

Litigation settlements

CEO transition expense

Executive transition expense 1,397 — — —

Acquisition related expenses 1,289 935 1,552 399

12 unchanged sentences

Loss on extinguishment of debt 15,994 11,329

Amortization 221,892 165,304

Stock-based compensation 41,906 32,400

Litigation settlements

Litigation settlements and contingencies 3,058 —

Recognition of step-up basis in inventory 5,431 5,269

CEO transition expense

Executive transition expense 1,397 3,051

Acquisition related expenses 4,175 24,329

1 unchanged sentence

Income tax effect of above adjustments (1)

(71,599) (62,880)

Total adjustments $ 226,413 $ 185,617

1 unchanged sentence

Adjusted weighted-average shares — diluted (2)

39,701,693 40,424,180

Adjusted earnings per share (2)

$ 7.42 $ 6.45

(1) The income tax effect of the adjustments was calculated by applying our blended federal and state statutory rate to the adjustments that have a tax effect.

3 unchanged sentences

As such, adjusted weighted-average shares – diluted includes shares related to the assumed conversion of our convertible notes and the associated cash interest expense added-back to non-GAAP adjusted net income.

For the years ended December 31, 2024 and 2023, adjusted weighted-average shares – diluted includes 6,606,305 and 6,793,421 shares, respectively, attributable to our convertible notes.

For the years ended December 31, 2025 and 2024, adjusted weighted-average shares – diluted includes 6,606,305 attributable to our convertible notes.

In addition, adjusted earnings per share includes other potentially dilutive securities to the extent that they are not antidilutive.

The following is a summary of 2025 quarterly adjusted net income and adjusted earnings per share:

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

First Quarter Second Quarter Third Quarter Fourth Quarter

(in thousands, except share and per share data)

2 unchanged sentences

Loss on extinguishment of debt — — — 15,994

Amortization 55,473 55,473 55,473 55,473

Stock-based compensation 11,524 10,818 9,811 9,753

Litigation settlements and contingencies — — 3,058 —

Recognition of step-up basis in inventory 3,477 1,954 — —

CEO transition expense

Executive transition expense 1,397 — — —

Acquisition related expenses 1,289 935 1,552 399

1 unchanged sentence

Income tax effect of above adjustments (1)

(18,737) (17,871) (15,453) (19,538)

Total adjustments $ 55,004 $ 52,306 $ 55,765 $ 63,338

1 unchanged sentence

Adjusted weighted-average shares — diluted (2)

39,446,458 39,075,703 39,439,890 40,076,457

Adjusted earnings per share (2)

$ 1.49 $ 1.68 $ 2.25 $ 2.04

(1) The income tax effect of the adjustments was calculated by applying our blended federal and state statutory rate to the adjustments that have a tax effect.

1 unchanged sentence

As such, the non-GAAP effective tax rates for the three months ended March 31, June 30, September 30, and December 31, 2025 were 25.4%, 25.5%, 21.7%, and 23.6%, respectively.

(2) Adjusted weighted-average shares - diluted were calculated using the “if-converted” method for the convertibles notes in accordance with ASC 260, Earnings per Share .

(2) Adjusted weighted-average shares - diluted were calculated using the “if-converted” method for the convertible notes in accordance with ASC 260, Earnings per Share .

For the three months ended March 31, June 30, September 30, and December 31, 2024, adjusted weighted-average shares – diluted includes 7,509,104, 6,606,305, 6,606,305, and 6,606,305 shares, respectively, attributable to our convertible notes.

For the three months ended March 31, June 30, September 30, and December 31, 2025, adjusted weighted-average shares – diluted includes 6,606,305 shares attributable to our convertible notes.

In addition, adjusted earnings per share includes other potentially dilutive securities to the extent that they are not antidilutive.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis