What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-14 · 60 added, 53 removed, 228 unchanged (33% of the section changed)

10 unchanged sentences

On September 20, 2022, we received approval from the FDA for PEDMARK ® (sodium thiosulfate injection) to reduce the risk of ototoxicity associated with cisplatin in pediatric patients one month of age and older with localized, non-metastatic solid tumors.

This approval makes PEDMARK ® the first and only treatment approved by the FDA in this area of unmet medical need.

approval makes PEDMARK ® the first and only treatment approved by the FDA in this area of unmet medical need.

On October 17, 2022, we announced commercial availability of PEDMARK ® in the U.S.

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in early 2025.

In the U.S., we sell PEDMARK ® through an experienced field force and medical science liaisons who are helping to educate the medical communities and patients about cisplatin induced ototoxicity and our programs supporting patient access to PEDMARK ® .

In the U.S., we sell PEDMARK ® through an experienced field force.

Further, the Company utilizes medical science liaisons who are helping to educate the medical communities and patients about cisplatin induced ototoxicity and our programs supporting patient access to PEDMARK ® .

We received Orphan Drug Exclusivity for PEDMARK ® in January 2023, which provides seven years of market exclusivity from its FDA approval on September 20, 2022, until September 20, 2029.

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Ensuring seamless access for advocacy groups, payers, and providers is also a priority, along with activating patients and caregivers through disease education to drive demand for PEDMARK ® .

Key activities supporting these objectives include an expanded sales team with a strong track record in both academic and community settings, partnerships with group purchasing organizations, and specialty pharmacy offerings such as home infusions, white bag delivery, and direct billing.

Key activities supporting these objectives include an expanded sales team with a strong track record in both academic and

community settings, partnerships with group purchasing organizations, and specialty pharmacy offerings such as home infusions, white bag delivery, and direct billing.

Furthermore, digital materials, a digital speaker bureau to engage pediatric oncologists, audiologists, nurses, and pharmacists, along with a patient access services hub and ongoing support from advocacy groups, are all integral components of the strategy.

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In early 2025, Norgine announced the launch of PEDMARQSI ® in Germany and the U.K.

Tariffs and One Big Beautiful Bill Act

In addition, the U.S.

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Based on current information, we do not believe the impact of tariffs on our business, financial condition or results of operations will be material.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The Company is currently evaluating the impact of the OBBBA on the Company’s consolidated condensed financial statements and related disclosures

Results of Operations

Three months ended June 30, 2025 versus three months ended June 30, 2024:

Three months ended September 30, 2025 versus three months ended September 30, 2024:

Three Months Ended

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In thousands of U.S.

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

PEDMARK product sales, net

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Interest expense

Unrealized foreign exchange gain/(loss)

Unrealized foreign exchange loss

Interest income

● The Company recorded net product sales of $9,652 in the second quarter of 2025 compared to $7,262 in 2024 as the Company increased market penetration and access for PEDMARK and as the Company expanded its focus to the adolescent and young adult (AYA) population.

Further, the Company recorded $243 related to the Norgine royalties in 2025.

● The Company recorded net product sales of $12,462 in the third quarter of 2025 compared to $6,974 in the same product in 2024 as the Company increased market penetration and access for PEDMARK ® and as the Company expanded its focus to the adolescent and young adult (AYA) population.

Further, the Company recorded $70 product sales related to the Norgine royalties in the three months ended September 30, 2025.

● Selling and marketing expenses include distribution costs, logistics, shipping and insurance, advertising, wages commissions and out-of-pocket expenses.

We recorded $4,354 in selling and marketing expenses for the three-month period ended June 30, 2025, as compared to $4,672 for 2024.

The decrease is largely related to the elimination of European pre commercial activities in 2024 which were completed after the Norgine transaction offset by select increased commercial and marketing activities.

● There was a $92 increase in general and administrative expenses for the three-month period ended June 30, 2025 compared to 2024.

● The value of our Processa shares declined by $1 for the three-month period ended June 30, 2025.

● Amortization expense decreased by $10 for the three-month period ended June 30, 2025 as compared to the same period in 2024.

● Interest expense decreased by $450 for the three-month period ended June 30, 2025 compared to the same period in 2024.

We recorded $5,210 in selling and marketing expenses for the three-month period ended September 30, 2025, as compared to $4,601 for the same period in 2024.

The increase is largely related to the Company’s increased commercial and marketing efforts in the United States.

● There was a $631 increase in general and administrative expenses for the three-month period ended September 30, 2025 compared to the same period in 2024.

● Interest expense decreased by $439 for the three-month period ended September 30, 2025, compared to the same period in 2024.

The decrease was driven mainly by lower long-term debt due to Company’s debt paydown of $13,000 in December 2024.

● Interest income decreased in the three-month period ended June 30, 2025 as compared to the same period in 2024 by $399, due to lower average cash balances in money market accounts for the comparable periods.

Six months ended June 30, 2025, versus six months ended June 30, 2024:

Six Months Ended

● Interest income decreased in the three-month period ended September 30, 2025, as compared to the same period in 2024 by $364, due to lower average cash balances in money market accounts for the comparable periods.

Nine months ended September 30, 2025, versus nine months ended September 30, 2024:

Nine Months Ended

In thousands of U.S.

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

PEDMARK product sales, net

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Net (loss) / income

● The Company recorded net product sales of $18,403 in the first half of 2025 compared to $14,681 in 2024 as the Company increased market penetration and access for PEDMARK and as the Company expanded its focus to the adolescent and young adult (AYA) population.

● The Company recorded net product sales of $30,865 in the first three quarters of 2025 compared to $21,655 in the same product in 2024 as the Company increased market penetration and access for PEDMARK ® and as the Company expanded its focus to the adolescent and young adult (AYA) population.

For the nine months ended September 30, 2025 the Company recorded $390 in Norgine royalties within product sales.

Further, the Company recorded $17,958 in licensing revenue related to the Norgine transaction in 2024.

● Selling and marketing expenses include distribution costs, logistics, shipping and insurance, advertising, wages commissions and out-of-pocket expenses.

We recorded $7,301 in selling and marketing expenses for the six-month period ended June 30, 2025, as compared to $9,881 for 2024.

The decrease is largely related to the elimination of European pre commercial activities in 2024 which were completed after the Norgine transaction.

● There was a $365 increase in general and administrative expenses for the six-month period ended June 30, 2025 compared to 2024.

There was an increase in the following expense categories:

● We recorded $12,510 in selling and marketing expenses for the nine-month period ended September 30, 2025, as compared to $14,482 for the same product in 2024.

The decrease is largely related to the elimination of European pre commercial activities in 2024 which were completed after the Norgine transaction offset by increased commercial infrastructure spending in the United States including personnel and marketing expenses..

● There was a $996 increase in general and administrative expenses for the nine-month period ended September 30, 2025 compared to the same period in 2024.

There was an increase in the comparable periods in the following expense categories:

salaries with increased headcount;

consulting and professional costs;

and intellectual property expenses related to ongoing litigation.

● The value of our Processa shares declined by $2 for the six-month period ended June 30, 2025.

For the same period in 2024, there was a loss of $11.

● Amortization expense decreased by $17 for the six-month period ended June 30, 2025 as compared to the same period in 2024.

● Interest expense decreased by $892 for the six-month period ended June 30, 2025 compared to the same period in 2024.

and intellectual property expenses related to ongoing patent litigation.

● Amortization expense decreased by $26 for the nine-month period ended September 30, 2025 as compared to the same period in 2024.

● Interest expense decreased by $1,331 for the nine-month period ended September 30, 2025, compared to the same period in 2024.

The decrease was driven mainly by lower debt balance on long-term debt due to Company’s debt paydown of $13,000 in December 2024.

● Interest income decreased in the six-month period ended June 30, 2025 as compared to the same period in 2024 by $360, due to lower average cash balances in money market accounts for the comparable periods.

● Interest income decreased in the nine-month period ended September 30, 2025, as compared to the same period in 2024 by $724, due to lower average cash balances in money market accounts for the comparable periods.

Liquidity and Capital Resources

Selected Asset and Liability Data (thousands):

June 30, 2025

September 30, 2025

December 31, 2024

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Stockholders’ deficit

● There was a $7,929 net decrease in cash and cash equivalents between June 30, 2025, and December 31, 2024.

The net decrease was primarily the result of seasonally higher cash operating expenses in the first half and the timing of working capital collections as the Company’s net sales increased.

● The increase in other current assets of $4,599 between June 30, 2025, and December 31, 2024, primarily relates to an increase in accounts receivable from increased net product sales during the period.

● Current liabilities at June 30, 2025, increased $1,495 compared to December 31, 2024.

● Working capital decreased by $4,825 between June 30, 2025, and December 31, 2024.

The following table illustrates a summary of cash flows data for the six-month periods of June 30, 2025 and 2024:

● There was a $4,687 net decrease in cash and cash equivalents between September 30, 2025, and December 31, 2024.

The net decrease was primarily the result of cash operating expenses and the timing of working capital collections as the Company’s net sales increased.

● The increase in other current assets of $6,627 between September 30, 2025, and December 31, 2024, primarily relates to an increase in accounts receivable from increased net product sales during the period.

● Current liabilities at September 30, 2025, increased $2,896 compared to December 31, 2024.

● Working capital decreased by $956 between September 30, 2025, and December 31, 2024.

The following table illustrates a summary of cash flows data for the nine-month periods of September 30, 2025 and 2024:

Selected Cash Flow Data

Six Months Ended June 30,

Nine Months Ended September 30,

(dollars and shares in thousands)

Net cash (used in)/provided by operating activities

Net cash provided by / (used in) financing activities

Net cash provided by investing activities

Net cash provided by financing activities

Net cash flow

The net cash used in operating activities for the six-month period ended June 30, 2025 was approximately $8,004 as compared to $30,660 net cash provided by operating activities during the same period in 2024.

There was a increase in net loss of $12,244 in the six-month period ended June 30, 2025, as compared to the same period in 2024.

The comparable decrease in net cash flow is primarily a result of the proceeds received from the Norgine transaction during the first six months of 2024.

The net cash used in operating activities for the nine-month period ended September 30, 2025 was approximately $6,511 as compared to $28,454 net cash provided by operating activities during the same period in 2024.

There was an increase in net loss of $6,108 in the nine-month period ended September 30, 2025, as compared to the same period in 2024.

The comparable decrease in net cash flow is primarily a result of the proceeds received from the Norgine transaction during 2024 of approximately $43,200.

We continue to pursue various strategic alternatives including collaborations with other pharmaceutical and biotechnology companies.

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our business development activities;

new regulatory requirements implemented by regulatory authorities;

new regulatory requirements implemented

by regulatory authorities;

the timing and outcome of any regulatory review process;

1 unchanged sentence

Outstanding Share Information

Our outstanding share data as of June 30, 2025 and December 31, 2024 was as follows (in thousands):

Our outstanding share data as of September 30, 2025 and December 31, 2024 was as follows (in thousands):

September 30,

Outstanding Share Type

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We invest excess cash and cash equivalents in high credit quality investments held by financial institutions in accordance with our investment policy designed to protect the principal investment.

At June 30, 2025, we had approximately $1,984 in our cash accounts and $16,721 in savings and money market accounts.

At September 30, 2025, we had approximately $1,660 in our cash accounts and $20,288 in savings and money market accounts.

While we have never experienced any loss or write down of our money market investments since our inception, the amounts we hold in money market accounts are substantially above the $250 amount insured by the FDIC and may lose value.

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A summary of our critical accounting policies and use of estimates are presented in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation” of our Annual Report.

There have been no material changes to our critical accounting policies and use of estimates during the six months ended June 30, 2025.

There have been no material changes to our critical accounting policies and use of estimates during the nine months ended September 30, 2025.

Credit Losses

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We also used historical data to estimate forfeiture experience.

In valuing options granted in the periods ended June 30, 2025, we used the following weighted average assumptions:

In valuing options granted in the periods ended September 30, 2025, we used the following weighted average assumptions:

Black-Scholes Model Assumptions

June 30, 2025

September 30, 2025

Expected dividend

3 unchanged sentences

Expected life

1.5 - 6.0 years

Performance-Based Units

In May 2025, the Board of Directors approved a performance-based unit, or PSU, grant whereby vesting depends on certain revenue performance milestones over the next year.

In May and August 2025, the Board of Directors approved PSU grants whereby vesting depends on certain revenue performance milestones over the next year.

The Company estimates the likelihood of achievement of performance milestones for all PSU awards at the end of each reporting period.

To the extent those awards or portions thereof are considered probable of being achieved, such awards or portions thereof are expensed over the performance period.

As of June 30, 2025, the Company deems the achievement of a portion of the performance milestones to be probable.

As of September 30, 2025, the Company deems the achievement of the performance milestones to be probable.

Common shares and warrants

6 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis