What changed in this filing

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Item 1. Financial Statements

2025-11-04 compared with 2025-08-05 · 137 added, 114 removed, 594 unchanged (30% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

September 30,

CURRENT ASSETS:

8 unchanged sentences

Property and equipment, net

Restricted cash

Investments, long-term

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Common stock—$ 0.00001 par value;

500,000,000 shares authorized at June 30, 2025 and December 31, 2024, respectively;

57,537,869 and 57,144,887 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

500,000,000 shares authorized at September 30, 2025 and December 31, 2024, respectively;

57,596,358 and 57,144,887 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Additional paid in capital

9 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Net product revenue

11 unchanged sentences

Income tax expense

Unrealized income (loss) on investments

Unrealized income on investments

Comprehensive income

11 unchanged sentences

(loss) income

Balance as of March 31, 2025

Balance as of June 30, 2025

Unrealized loss on investments

1 unchanged sentence

Stock-based compensation

Balance as of June 30, 2025

Balance as of September 30, 2025

comprehensive

4 unchanged sentences

Stock-based compensation

Balance as of June 30, 2025

Balance as of September 30, 2025

comprehensive

1 unchanged sentence

(loss) income

Balance as of March 31, 2024

Balance as of June 30, 2024

Unrealized loss on investments

1 unchanged sentence

Stock-based compensation

Balance as of June 30, 2024

Balance as of September 30, 2024

comprehensive

5 unchanged sentences

Stock-based compensation

Balance as of June 30, 2024

Balance as of September 30, 2024

The accompanying notes are an integral part of the unaudited condensed consolidated financial statement s

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(In thousands, except share and per share data)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

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Acquired in-process research & development (IPR&D) expense

Stock-based and employee stock purchase compensation expense

Stock-based compensation

Stock appreciation rights market adjustment

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The Company is headquartered in Plymouth Meeting, Pennsylvania.

The Company is cultivating a differentiated neuroscience company, rooted in innovation and driven by a commitment to addressing the unmet needs of patients living with neurological diseases.

We are cultivating a differentiated neuroscience company, rooted in innovation and driven by a commitment to addressing the unmet needs of patients living with neurological diseases.

To date, we have focused on rare neurological diseases with a growing portfolio now spanning sleep/wake, neurobehavioral, and rare epilepsy, and we are harnessing scientific insights and pioneering approaches to advance meaningful treatments that help patients thrive.

In July 2017, Harmony entered into a License Agreement (the “2017 LCA”) with Bioprojet Société Civile de Recherche (“Bioprojet”) whereby Harmony acquired the exclusive right to commercialize the pharmaceutical compound pitolisant.

In July 2017, the Company entered into a License Agreement (the “2017 LCA”) with Bioprojet Société Civile de Recherche (“Bioprojet”) whereby the Company acquired the exclusive right to commercialize the pharmaceutical compound pitolisant.

Our lead product, WAKIX® (pitolisant) (“WAKIX”), is a first-in-class therapy with a novel mechanism of action designed to enhance histamine signaling in the brain by binding to H 3 receptors.

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Beyond narcolepsy, we are also advancing late-stage clinical programs exploring pitolisant in Prader-Willi syndrome (“PWS”) and continue to grow our impact in other rare neurological diseases.

In July 2022, we entered into a License and Commercialization Agreement (the “2022 LCA”) with Bioprojet whereby we obtained exclusive rights to manufacture, develop and commercialize one or more next generation pitolisant based products in the United States and Latin America.

In July 2022, the Company entered into a License and Commercialization Agreement (the “2022 LCA”) with Bioprojet whereby we obtained exclusive rights to manufacture, develop and commercialize one or more next generation pitolisant based products in the United States and Latin America.

Two of the next generations formulations, Pitolisant Gastro-Resistant (“Pitolisant GR”) and Pitolisant High-Dose (“Pitolisant HD”) are currently in clinical development.

Along with nurturing the growth of our original pipeline, our innovation strategy includes targeted business development that strengthens our foundation and strategically extends our patient reach as we look to expand our portfolio to new diseases beyond histaminergic science.

In October 2023, the Company completed a tender offer to acquire all of the outstanding shares of common stock of Zynerba Pharmaceuticals, Inc.

In October 2023, the Company acquired Zynerba Pharmaceuticals, Inc.

(together with its subsidiary, Zynerba Pharmaceutical Pty, Ltd., “Zynerba”).

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In April 2024, we expanded into orexin science through a sublicense agreement with Bioprojet for an orexin 2 receptor agonist (“BP1.15205”) in preclinical development for narcolepsy and other potential indications.

Under the sublicense agreement we obtained the exclusive right to develop, manufacture and commercialize BP1.15205 in the United States and Latin American territories, which are rights originally licensed from Teijin Pharma, the innovator of BP1.15205.

We further broadened our portfolio into rare epilepsy when the Company acquired all of the issued and outstanding capital stock of Epygenix Therapeutics, Inc.

Under the sublicense agreement the Company obtained the exclusive right to develop, manufacture and commercialize BP1.15205 in the United States and Latin American territories, which are rights originally licensed from Teijin Pharma, the innovator of BP1.15205.

We further broadened our portfolio into rare epilepsy when the Company acquired Epygenix Therapeutics, Inc.

(“Epygenix”) in April 2024.

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The unaudited condensed consolidated financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

The Company had retained earnings of $ 87,552 and $ 2,216 , as of June 30, 2025, and December 31, 2024, respectively.

As of June 30, 2025, the Company had cash, cash equivalents and investments of $ 672,282 .

The Company believes that its existing cash, cash equivalents and investments on hand as of June 30, 2025, as well as additional cash generated from operating and financing activities will meet its operational liquidity needs and fund potential investing activities for the next twelve months from the date of issuance of these unaudited condensed consolidated financial statements.

The Company had retained earnings of $ 138,417 and $ 2,216 , as of September 30, 2025, and December 31, 2024, respectively.

As of September 30, 2025, the Company had cash, cash equivalents and investments of $ 778,412 .

The Company believes that its existing cash, cash equivalents and investments on hand as of September 30, 2025, as well as additional cash generated from operating and financing activities will meet its operational liquidity needs and fund potential investing activities for at least the next twelve months from the date of issuance of these unaudited condensed consolidated financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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All intercompany accounts and transactions have been eliminated in consolidation.

The unaudited condensed consolidated balance sheet as of June 30, 2025, the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025, and 2024, and the unaudited condensed consolidated statements of operations and comprehensive income and the unaudited condensed consolidated statements of shareholders’ equity for the three and six months ended June 30, 2025, and 2024, are unaudited.

The unaudited condensed consolidated balance sheet as of September 30, 2025, the unaudited condensed consolidated statements of cash flows for the nine months ended September 30, 2025, and 2024, and the unaudited condensed consolidated statements of operations and comprehensive income and the unaudited condensed consolidated statements of shareholders’ equity for the three and nine months ended September 30, 2025, and 2024, are unaudited.

The balance sheet as of December 31, 2024, was derived from audited financial statements as of and for the year ended December 31, 2024.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements as of and for the year ended December 31, 2024, and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of June 30, 2025, and the results of its operations and its cash flows for the six months ended June 30, 2025, and 2024.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements as of and for the year ended December 31, 2024, and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position as of September 30, 2025, and the results of its operations and its cash flows for the nine months ended September 30, 2025, and 2024.

The unaudited condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year.

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These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Reclassifications

Certain prior period amounts within the unaudited condensed consolidated balance sheets have been reclassified to conform to current period presentation.

In particular, restricted cash was previously classified as a separate caption and is now included within other noncurrent assets.

The reclassification of this item had no impact on net income, earnings per share or accumulated deficit in current or prior periods

Significant Risks and Uncertainties

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the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its product candidates.

The Company currently has one commercially approved product, WAKIX, and there can be no assurance that the Company’s research and development efforts will result in successfully commercialized products in addition to WAKIX.

The Company currently has one commercialized product, WAKIX, and there can be no assurance that the Company’s research and development efforts will result in successfully commercialized products in addition to WAKIX.

Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies.

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The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts and disclosures in the unaudited condensed consolidated financial statements, including the notes thereto, and elsewhere in this report.

Actual results may differ significantly from estimates, which include rebates due pursuant to commercial and government contracts, accrued research and development expenses, stock-based compensation expense and income taxes.

Actual results may differ significantly from estimates, which include rebates payable pursuant to commercial and government contracts, accrued research and development expenses, stock-based compensation expense and income taxes.

Operating Segments

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Fair Value of Financial Instruments

The Company’s unaudited condensed consolidated financial statements include cash, cash equivalents, restricted cash, accounts payable, and accrued liabilities, all of which are short term in nature and, accordingly, approximate fair value.

The Company’s unaudited condensed consolidated financial statements include cash, cash equivalents, accounts payable, and accrued liabilities, all of which are short term in nature and, accordingly, approximate fair value.

It is the Company’s policy to measure non-financial assets and liabilities at fair value on a non-recurring basis.

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The pricing service utilizes industry standard valuation models whereby all significant inputs, including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, bids, offers, or other market-related data, are observable.

We validate valuations obtained from third-party services by obtaining market values from other pricing sources.

The Company did not classify any assets or liabilities as Level 3 as of June 30, 2025, or December 31, 2024.

We validate valuations obtained from third-party services by obtaining market values from

other pricing sources.

The Company did not classify any assets or liabilities as Level 3 as of September 30, 2025, or December 31, 2024.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents and restricted cash consist of cash and, if applicable, highly liquid investments with an original maturity of three months or less when purchased, including investments in money

market funds and debt securities that approximate fair value.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet and the statements of cash flows.

September 30,

Cash and cash equivalents

Restricted cash

Restricted cash included in other noncurrent assets

Total cash, cash equivalents, and restricted cash shown in the statements of cash flows

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Concentrations of Risk

Substantially all of the Company’s cash and money market funds are held in five financial institutions.

Substantially all of the Company’s cash and money market funds are held in six financial institutions.

Due to their size, the Company believes these financial institutions represent minimal credit risk.

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The Company monitors its exposure within accounts receivable and would record a reserve for uncollectible amounts, if necessary.

As of June 30, 2025, three customers accounted for 100 % of gross accounts receivable;

As of September 30, 2025, three customers accounted for 100 % of gross accounts receivable;

Caremark LLC (“CVS Caremark”), which accounted for 38 % of gross accounts receivable;

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and PANTHERx Specialty Pharmacy LLC (“Pantherx”), which accounted for 26 % of gross accounts receivable.

As of December 31, 2024, three customers accounted for 100 % of gross accounts receivable;

As of December 31, 2024, three customers accounted for 100 % of gross accounts

CVS Caremark, which accounted for 39 % of gross accounts receivable, Pantherx, which accounted for 31 % of gross accounts receivable;

and Accredo, which accounted for 30 % of gross accounts receivable.

For the six months ended June 30, 2025, three customers accounted for 100 % of gross product revenue;

For the nine months ended September 30, 2025, three customers accounted for 100 % of gross product revenue;

CVS Caremark accounted for 38 % of gross product revenue;

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and Pantherx accounted for 26 % of gross product revenue.

For the six months ended June 30, 2024, three customers accounted for 100 % of gross product revenue;

CVS Caremark accounted for 40 %

of gross product revenue;

For the nine months ended September 30, 2024, three customers accounted for 100 % of gross product revenue;

CVS Caremark accounted for 40 % of gross product revenue;

Accredo accounted for 33 % of gross product revenue;

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In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40).

ASU 2024-03 requires disclosure, in the notes to the financial statements, of specified information about certain costs and expenses, including amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each relevant expense caption, as well as a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.

captions that are not separately disaggregated quantitatively.

ASU 2024-03 also requires disclosure of the total amount of selling expenses and, in annual periods, an entity’s definition of selling expenses.

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The Company is currently evaluating the impact that ASU 2024-03 will have on the Company’s consolidated financial statements.

Acquisition of Zynerba

In October 2023, the Company completed a tender offer to purchase the outstanding common stock of Zynerba (“Zynerba Common Stock”) for (i) $ 1.1059 per share of Zynerba Common Stock (the “Common Cash Amount”), the aggregate amount of which was $ 60,000 and was paid at closing, plus (ii) one contingent value right (each, a “CVR”) per share of Zynerba Common Stock (the “Common CVR Amount”), which represents the right to receive up to approximately $ 2.5444 per share of Zynerba Common Stock, subject to the achievement of certain clinical, regulatory and sales-based milestones.

The Common CVR Amounts are to be paid in cash, subject to any applicable withholding of taxes and without interest.

The aggregate amount of consideration to acquire Zynerba Common Stock was $ 60,000 , excluding transaction-related fees of $ 2,645 and was paid by the Company using cash on hand.

In September 2025, the Company achieved a clinical milestone for ZYN002 that triggered a $ 15.0 million payment to CVR holders, which will be paid in the fourth quarter of 2025.

Acquisition of Epygenix

On April 30, 2024, the Company acquired all of the issued and outstanding capital stock of Epygenix pursuant to the terms of a stock purchase agreement.

In April 2024, the Company acquired Epygenix pursuant to the terms of a stock purchase agreement.

The Company paid the former stockholders of Epygenix up front consideration of $ 35,000 less a working capital adjustment.

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The carrying value and amortized cost of the Company’s available-for-sale debt securities, summarized by type of security, consisted of the following:

June 30, 2025

September 30, 2025

Commercial paper

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The investments classified as noncurrent have original maturity dates ranging from 1 - 2 years .

The Company did not have any available-for-sale debt security investments in a continuous unrealized loss position of greater than 12 months as of June 30, 2025, and December 31, 2024, respectively.

The Company did not have any available-for-sale debt security investments in a continuous unrealized loss position of greater than 12 months as of September 30, 2025, and December 31, 2024, respectively.

FAIR VALUE MEASUREMENTS

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We validate valuations obtained from third-party services by obtaining market values from other pricing sources.

The Company did not classify any assets or liabilities as Level 3 as of June 30, 2025, or December 31, 2024.

The Company did not classify any assets or liabilities as Level 3 as of September 30, 2025, or December 31, 2024.

The Company’s assets measured at fair value consisted of the following:

June 30, 2025

September 30, 2025

December 31, 2024

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Inventory, net consisted of the following:

September 30,

Raw materials

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This event triggered a milestone payment of $ 75,000 under the provisions of the 2017 LCA which the Company capitalized as an intangible asset.

The Company determined a useful life of 10 years for the intangible asset, and, as of June 30, 2025, the remaining useful life was 4.3 years.

The Company determined a useful life of 10 years for the intangible asset, and, as of September 30, 2025, the remaining useful life was 4.0 years.

In October 2020, the Company received FDA approval for the New Drug Application (“NDA”) for WAKIX for the treatment of cataplexy in adult patients with narcolepsy.

This event triggered a milestone payment of $ 100,000 under the provisions of the 2017 LCA which the Company capitalized as an intangible asset and paid in January of 2021.

The Company determined a useful life of 9 years for the intangible asset, and, as of June 30, 2025, the remaining useful life was 4.3 years.

The Company determined a useful life of 9 years for the intangible asset, and, as of September 30, 2025, the remaining useful life was 4.0 years.

In February 2022, the Company attained $ 500,000 in life-to-date aggregate net sales of WAKIX in the United States.

This event triggered a final $ 40,000 payment under the provisions of the 2017 LCA which the Company capitalized as an intangible asset and paid in March of 2022.

The Company determined a useful life of 7.6 years for the intangible asset, and, as of June 30, 2025, the remaining useful life was 4.3 years.

Amortization expense was $ 5,961 for each of the three months ended June 30, 2025, and 2024, respectively, and $ 11,922 for each of the six months ended June 30, 2025, and 2024, respectively, and is recorded in general and administrative on the unaudited condensed consolidated statements of operations and comprehensive income.

The Company determined a useful life of 7.6 years for the intangible asset, and, as of September 30, 2025, the remaining useful life was 4.0 years.

Amortization expense was $ 5,961 for each of the three months ended September 30, 2025, and 2024, respectively, and $ 17,883 for each of the nine months ended September 30, 2025, and 2024, respectively, and is recorded in general and administrative on the unaudited condensed consolidated statements of operations and comprehensive income.

The Company expects the future annual amortization expense for the unamortized intangible assets to be as follows:

Years ending December 31,

2025 (excluding the six months ended June 30, 2025)

2025 (excluding the nine months ended September 30, 2025)

The gross carrying amount and net book value of the intangible asset was as follows:

September 30,

Gross Carrying Amount

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The 2017 LCA also requires a fixed trademark royalty and a tiered royalty based on net sales, which is payable to Bioprojet on a quarterly basis.

The Company incurred $ 35,783 and $ 30,199 for the three months ended June 30, 2025, and 2024, respectively, and $ 65,340 and $ 54,937 for the six months ended June 30, 2025, and 2024, respectively for sales-based, trademark and tiered royalties recognized as cost of product sold.

As of June 30, 2025, and December 31, 2024, the Company had accrued $ 35,783 and $ 51,746 , respectively, for sales-based, trademark and tiered royalties.

The Company incurred $ 57,323 and $ 40,295 for the three months ended September 30, 2025, and 2024, respectively, and $ 122,663 and $ 95,232 for the nine months ended September 30, 2025, and 2024, respectively for sales-based, trademark and tiered royalties recognized as cost of product sold.

As of September 30, 2025, and December 31, 2024, the Company had accrued $ 57,323 and $ 51,746 , respectively, for sales-based, trademark and tiered royalties.

In July 2022, Harmony entered into the 2022 LCA with Bioprojet whereby Harmony obtained exclusive rights to manufacture, use and commercialize one or more new products based on pitolisant in the United States and Latin America, with the potential to add additional indications and formulations upon agreement of both parties.

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Under this agreement, the Company and CiRC will collaborate on the research and development of two discovery-stage candidates (together the “Candidates”) using cell replacement therapy for treatment of refractory epilepsies and treatment-resistant narcolepsy.

In connection with the CiRC Agreement, the Company paid CiRC an upfront fee of $ 15,000 , which the Company recognized as an IPR&D charge recorded in research and development within the unaudited condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2025.

In connection with the CiRC Agreement, the Company paid CiRC an upfront fee of $ 15,000 , which was recognized as an IPR&D charge recorded in research and development within the unaudited condensed consolidated statements of operations and comprehensive income for the nine months ended September 30, 2025.

The Company will also be obligated to pay $ 2,000 to CiRC upon the achievement of certain research milestones for each of the Candidates.

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Accrued expenses consisted of the following:

September 30,

Royalties due to Bioprojet

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Research and development

Milestone payments

Professional fees, consulting, and other services

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The debt issuance costs related to the TLA Term Loan will be amortized as additional interest expense over the loan term of the TLA Credit Agreement.

The fair value of the TLA Term Loan as of June 30, 2025, was $ 171,485 .

The fair value of the TLA Term Loan as of September 30, 2025, was $ 168,253 .

Long-term debt, net consisted of the following:

September 30,

Principal amount

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Long-term debt, net

Future minimum payments relating to long-term debt, net as of June 30, 2025, for the periods indicated below consisted of the following:

Future minimum payments relating to long-term debt, net as of September 30, 2025, for the periods indicated below consisted of the following:

Years ending December 31,

2025 (excluding the six months ended June 30, 2025)

2025 (excluding the nine months ended September 30, 2025)

Interest expense related to the Company’s long-term debt, net, is included in interest expense within the unaudited condensed consolidated statements of operations and comprehensive income and consisted of the following:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Interest on principal balance

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In June 2018, the Company entered into an operating lease for approximately fifteen thousand square feet of office space in Plymouth Meeting, PA, which was set to expire in May 2024.

The Company subsequently entered into two separate operating leases for additional office space in Plymouth Meeting, PA, which include approximately thirteen thousand square feet and seven thousand square feet of additional office space, respectively, and were extended through August 2025.

The terms of the lease payments provide for rental payments on a monthly basis and on a graduated scale.

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Our leases have remaining lease terms of less than 1 year to 3 years , some of which may include the option to extend or terminate the leases.

The Company recorded operating lease costs of $ 598 and $ 622 for the three months ended June 30, 2025, and 2024, respectively, and $ 1,065 and $ 1,131 for the six months ended June 30, 2025, and 2024, respectively.

As of June 30, 2025, the weighted-average remaining lease term for operating leases was 1.6 years and the weighted-average discount rate for operating leases was 7.72 %.

The Company recorded operating lease costs of $ 394 and $ 491 for the three months ended September 30, 2025, and 2024, respectively, and $ 1,459 and $ 1,622 for the nine months ended September 30, 2025, and 2024, respectively.

As of September 30, 2025, the weighted-average remaining lease term for operating leases was 1.7 years and the weighted-average discount rate for operating leases was 7.72 %.

Supplemental balance sheet information related to operating leases was as follows:

Classification

June 30, 2025

September 30, 2025

December 31, 2024

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Supplemental cash flow information related to operating leases was as follows:

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

Operating cash flows from operating leases

Right of use assets obtained in exchange for operating lease obligations

Future payments under non-cancelable operating leases with initial terms of one year or more as of June 30, 2025, consisted of the following:

Future payments under non-cancelable operating leases with initial terms of one year or more as of September 30, 2025, consisted of the following:

Years ending December 31,

2025 (excluding the six months ended June 30, 2025)

2025 (excluding the nine months ended September 30, 2025)

Total lease payments

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Any expenses, fines, fees, penalties, judgments or settlements that might be incurred by the Company in connection with proceedings could have a material adverse effect on the Company’s results of operations and financial condition.

As of June 30, 2025, there were no material claims or lawsuits outstanding other than the Abbreviated New Drug Application (“ANDA”) litigation discussed below .

As of September 30, 2025, there were no material claims or lawsuits outstanding other than the Abbreviated New Drug Application (“ANDA”) litigation discussed below .

ANDA Litigation

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On November 9, 2023, we, Bioprojet and Bioprojet’s wholly owned subsidiary, Bioprojet Pharma SAS (“Bioprojet Pharma”), filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against Lupin, Novugen and certain of their affiliates and agents in the United States District Court for the District of Delaware in response to the filing of their respective ANDAs with the FDA.

In June 2025, the Company reached an agreement with Lupin to resolve the dispute over Lupin’s ANDA to market a generic version of WAKIX.

Under the terms of the settlement agreement, the litigation between the parties in the United States District Court for the District of Delaware will be dismissed, and Lupin will have a license to sell its generic product beginning January 2030, or earlier under certain circumstances.

In October 2023, the Company and Bioprojet received notice from Novitium Pharma LLC (“Novitium”), pursuant to 21 U.S.C.

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On November 21, 2023, the Company, Bioprojet and Bioprojet Pharma filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against AET, Annora, Novitium and Zenara and certain of their affiliates and agents and for patent infringement of the ’430 patent against Annora, Novitium and Zenara and certain of their affiliates and agents in the United States District Court for the District of Delaware in response to their filing of their respective ANDAs with the FDA.

In March 2025, the Company reached an agreement with Annora to resolve the dispute over Annora’s ANDA for a generic pitolisant hydrochloride product.

Under the terms of the settlement agreement, the litigation between the parties in the United States District Court for the District of Delaware was ended on March 31, 2025, and Annora will have a license to sell its generic product beginning January 2030, or earlier under certain circumstances.

In October 2023, MSN Pharmaceuticals Inc.

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218873 (the “MSN ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® .

On December 8, 2023, MSN Laboratories Private Limited (“MSN”) filed a declaratory judgment action in the United States District Court for the Eastern District of Virginia against Bioprojet claiming that the ‘430 patent, the ’947 patent and the ‘197 patent will not be infringed by MSN’s generic version of WAKIX ® and that the ‘947 patent is invalid.

On December 8, 2023, MSN Laboratories Private Limited (“MSN”) filed a declaratory judgment action in the United States District Court for the Eastern

District of Virginia against Bioprojet claiming that the ‘430 patent, the ’947 patent and the ‘197 patent will not be infringed by MSN’s generic version of WAKIX ® and that the ‘947 patent is invalid.

On December 11, 2023, we, Bioprojet and Bioprojet Pharma filed a complaint in the United States District Court for the District of Delaware for patent infringement of the ‘430 patent, the ’947 patent and the ‘197 patent against MSN and MSN Pharma.

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In April 2024, the United States District Court for the District of Delaware issued a scheduling order consolidating the cases described above for all purposes up to and including trial (the “Scheduling Order”).

Scheduling Order set March 27, 2025, as the date for the hearing on claim construction and scheduled a four-day bench trial beginning on February 17, 2026.

The Scheduling Order set March 27, 2025, as the date for the hearing on claim construction and scheduled a four-day bench trial beginning on February 17, 2026.

In August 2024, the Company and Bioprojet received further notice from AET pursuant to 21 U.S.C.

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On January 24, 2025, we, Bioprojet and Bioprojet Pharma filed a complaint in the United States District Court for the District of Delaware for patent infringement of the ’947 patent and the ‘197 patent against Lupin.

In March 2025, the Company reached an agreement with Annora to resolve the dispute over Annora’s ANDA for a generic pitolisant hydrochloride product.

In June 2025, the Company reached an agreement with Lupin to resolve the dispute over Lupin’s ANDA to market a generic version of WAKIX.

As noted above, in June 2025, the Company reached an agreement with Lupin to resolve the dispute over Lupin’s ANDA to market a generic version of WAKIX.

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The October 2023 Repurchase Program may be suspended, terminated, or modified at any time for any reason.

During the three and six months ended June 30, 2025, and 2024, no shares of common stock were repurchased by the Company under the October 2023 Repurchase Program.

As of June 30, 2025, the remaining amount of common stock authorized for repurchases was $ 150,000 .

During the three and nine months ended September 30, 2025, and 2024, no shares of common stock were repurchased by the Company under the October 2023 Repurchase Program.

As of September 30, 2025, the remaining amount of common stock authorized for repurchases was $ 150,000 .

STOCK INCENTIVE PLAN AND STOCK-BASED COMPENSATION

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RSUs vest over the vesting period specified in the applicable award agreement, at achievement of a performance requirement, or upon change of control (as defined in the applicable plan).

As of June 30, 2025, there were 8,620,499 shares of common stock available for issuance under the 2020 Plan.

As of September 30, 2025, there were 8,603,721 shares of common stock available for issuance under the 2020 Plan.

The number of shares that may be issued under the 2020 Plan automatically increases on January 1 of each year in an amount equal to the lesser of (i) 4.0 % of the shares of the Company’s common stock outstanding on December 31 of the preceding year or (ii) an amount determined by the Company’s board of directors.

5 unchanged sentences

Stock Options

The following table summarizes stock option activity for the six months ended June 30, 2025:

The following table summarizes stock option activity for the nine months ended September 30, 2025:

Value ($000's)

3 unchanged sentences

Awards forfeited

Awards outstanding—June 30, 2025

Awards exercisable—June 30, 2025

Awards unvested—June 30, 2025

The weighted-average grant-date fair value of stock options granted during the six months ended June 30, 2025, was $ 24.24 .

The total intrinsic value of stock options exercised for the six months ended June 30, 2025, was $ 3,400 .

Awards outstanding—September 30, 2025

Awards exercisable—September 30, 2025

Awards unvested—September 30, 2025

The weighted-average grant-date fair value of stock options granted during the nine months ended September 30, 2025, was $ 36.24 .

The total intrinsic value of stock options exercised for the nine months ended September 30, 2025, was $ 4,214 .

Stock Appreciation Rights

The following table summarizes SARs activity for the six months ended June 30, 2025:

The following table summarizes SARs activity for the nine months ended September 30, 2025:

Value ($000's)

3 unchanged sentences

Awards forfeited

Awards outstanding—June 30, 2025

Awards exercisable—June 30, 2025

Awards outstanding—September 30, 2025

Awards exercisable—September 30, 2025

Restricted Stock Units

The following table summarizes RSU activity for the six months ended June 30, 2025:

The following table summarizes RSU activity for the nine months ended September 30, 2025:

Awards outstanding—December 31, 2024

2 unchanged sentences

Awards forfeited

Awards outstanding—June 30, 2025

Awards outstanding—September 30, 2025

Value of RSUs

The fair value of RSUs is equal to the value of the Company’s common stock on the grant date.

The weighted-average per share fair value of awards issued under the 2020 Plan during the six months ended June 30, 2025, and 2024 was $ 37.61 and $ 30.62 , respectively.

The weighted-average per share fair value of awards issued under the 2020 Plan during the nine months ended September 30, 2025, and 2024 was $ 37.61 and $ 30.62 , respectively.

Value of Stock Options and SARs

8 unchanged sentences

The assumptions used to value the awards are summarized in the following table.

June 30, 2025

September 30, 2025

December 31, 2024

7 unchanged sentences

Stock-Based Compensation Expense

Stock-based compensation expense for the three and six months ended June 30, 2025, and 2024, was recorded in the unaudited condensed consolidated statements of operations and comprehensive income in the following line items:

Three Months Ended June 30,

Six Months Ended June 30,

Stock-based compensation expense for the three and nine months ended September 30, 2025, and 2024, was recorded in the unaudited condensed consolidated statements of operations and comprehensive income in the following line items:

Three Months Ended September 30,

Nine Months Ended September 30,

Research and development expense

2 unchanged sentences

Stock-based compensation expense related to options and RSUs issued under the 2017 Plan and 2020 Plan is included in stockholder’s equity, and a liability for SARs is included in other non-current liabilities, in the Company’s unaudited condensed consolidated balance sheet.

As of June 30, 2025, the total unrecognized stock-based compensation expense was $ 59,155 and $ 25,038 for stock options and RSUs,

As of September 30, 2025, the total unrecognized stock-based compensation expense was $ 51,371 and $ 22,743 for stock options and RSUs,

respectively.

6 unchanged sentences

It is intended that the ESPP meet the requirements for an “employee stock purchase plan” under Section 423 of the Internal Revenue Code.

There were 11,772 and 10,707 shares issued under the ESPP for each of the three and six months ended June 30, 2025, and 2024, respectively.

The discount on the ESPP was $ 65 and $ 78 for the three months ended June 30, 2025, and 2024, respectively, and $ 125 and $ 158 for the six months ended June 30, 2025, and 2024, respectively, and is recorded within stock-based compensation expense.

There were 0 and 1,206 shares issued under the ESPP for the three months ended September 30, 2025, and 2024, respectively.

There were 11,772 and 11,913 shares issued under the ESPP for the nine months ended September 30, 2025, and 2024, respectively.

The discount on the ESPP was $ 76 and $ 72 for the three months ended September 30, 2025, and 2024, respectively, and $ 201 and $ 230 for the nine months ended September 30, 2025, and 2024, respectively, and is recorded within stock-based compensation expense.

SEGMENT INFORMATION

7 unchanged sentences

Net income is assessed by the CODM to make decisions on how to allocate resources, such as reinvesting profits into the rare neurological diseases segment or pursuing potential investing activities.

The following table summarizes segment revenue and significant segment expenses for the three and six months ended June 30, 2025, and 2024:

The following table summarizes segment revenue and significant segment expenses for the three and nine months ended September 30, 2025, and 2024:

Rare Neurological Diseases Segment

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Net product revenue

19 unchanged sentences

The following table sets forth the computation of basic and diluted net income per share:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Net income per share of common stock - basic

3 unchanged sentences

Securities outstanding and included in the computation above, utilizing the treasury stock method are as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Stock options, SARs, and RSUs to purchase common stock

Potential shares of common stock that were excluded from the computation of diluted weighted-average shares outstanding excluded from the numerator, are as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Stock options, SARs, and RSUs to purchase common stock

A reconciliation between the statutory federal income tax rate and the Company’s effective income tax rate for the three and six months ended June 30, 2025, and 2024 is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

On July 4, 2025, the "One Big Beautiful Bill Act" (the "OBBBA") was enacted into law.

The OBBBA contains several changes to corporate taxation, including the allowance of immediate expensing of domestic research and development expenses.

As a result, the Company recorded a $ 48,000 reduction to deferred tax assets related to domestic research and development expenses which is reflected in its condensed consolidated balance sheet as of September 30, 2025.

The reduction in deferred tax assets will reduce the amount of federal tax payments owed by the Company for the 2025 tax year.

There was no material impact to the Company’s expected tax rate as a result of this legislation.

A reconciliation between the statutory federal income tax rate and the Company’s effective income tax rate for the three and nine months ended September 30, 2025, and 2024 is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Federal income tax rate

4 unchanged sentences

The Company is a party to a right of use agreement with Paragon Biosciences, LLC (“Paragon”) whereby it has access to and the right to use certain office space leased by Paragon in Chicago, IL.

In addition, the Company received consulting services from Paragon during the three and six months ended June 30, 2025.

In addition, the Company received consulting services from Paragon during the nine months ended September 30, 2025.

Paragon is an entity that shares common ownership with the Company.

In addition, the Chairman of the Company’s board of directors is the Founder, Chairman and CEO of Paragon.

The Company incurred $ 255 and $ 72 for each of the three months ended June 30, 2025, and 2024, respectively, and incurred $ 328 and $ 145 for the six months ended June 30, 2025, and 2024, respectively, in expenses to Paragon, which are included in general and administrative in the unaudited condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2025, and December 31, 2024, there were no amounts due to or due from Paragon included in the unaudited condensed consolidated balance sheets.

The Company incurred $ 73 for each of the three months ended September 30, 2025, and 2024, and incurred $ 401 and $ 218 for the nine months ended September 30, 2025, and 2024, respectively, in expenses to Paragon, which are included in

general and administrative in the unaudited condensed consolidated statements of operations and comprehensive loss.

As of September 30, 2025, and December 31, 2024, there were no amounts due to or due from Paragon included in the unaudited condensed consolidated balance sheets.

In June 2025, the Company entered into the CiRC Agreement with CiRC, an entity controlled by Paragon.

The Company paid a $ 15,000 upfront payment to CiRC pursuant to the CiRC Agreement which was recorded as an IPR&D charge in research and development in the unaudited condensed consolidated statements of operations and comprehensive income.

As of June 30, 2025, there were no amounts due to or due from CiRC under the CiRC agreement.

As of September 30, 2025, there were no amounts due to or due from CiRC under the CiRC agreement.

Refer to Note 9, License Agreements , for further discussion regarding the CiRC Agreement.

SUBSEQUENT EVENT

On July 4, 2025, the "One Big Beautiful Bill Act" (the "OBBBA") was enacted into law.

The OBBBA contains several changes to corporate taxation, including the allowance of immediate expensing of domestic research and development expenses.

The Company is in the process of evaluating the impact of the OBBBA to our condensed consolidated financial statements.

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 1. Financial Statements