What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2025-11-04 · 216 added, 233 removed, 498 unchanged (47% of the section changed)

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(In thousands, except share and per share data)

September 30,

CURRENT ASSETS:

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NONCURRENT ASSETS:

Property and equipment, net

Investments, long-term

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Common stock—$ 0.00001 par value;

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

500,000,000 shares authorized at March 31, 2026 and December 31, 2025, respectively;

57,867,389 and 57,726,170 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Additional paid in capital

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Retained earnings

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(In thousands, except share and per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Net product revenue

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Income tax expense

Unrealized income on investments

Unrealized (loss) income on investments

Comprehensive income

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stockholders’

(loss) income

Balance as of June 30, 2025

Unrealized loss on investments

Exercise of options

Stock-based compensation

Balance as of September 30, 2025

comprehensive

stockholders’

Balance as of December 31, 2025

Unrealized gain on investments

Exercise of options and restricted stock units

Stock-based compensation

Balance as of September 30, 2025

comprehensive

stockholders’

(loss) income

Balance as of June 30, 2024

Unrealized (loss) on investments

Exercise of options

Restricted stock unit tax withholding, net of stock option exercises

Stock-based compensation

Balance as of September 30, 2024

Balance as of March 31, 2026

comprehensive

stockholders’

(loss) income

Balance as of December 31, 2024

Unrealized loss on investments

Exercise of stock options and restricted stock units

Unrealized gain on investments

Restricted stock unit tax withholding, net of stock option exercises

Stock-based compensation

Balance as of September 30, 2024

Balance as of March 31, 2025

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)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

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Purchase of property and equipment

Acquisition of Epygenix Therapeutics, Inc., net of cash acquired

Payment of upfront fee related to research collaboration, option and license agreement

Net cash used in investing activities

Payment of upfront fee related to license agreements

Net cash (used in) provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

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Net cash used in financing activities

NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period

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Cash paid during the year for interest

Cash paid during the year for taxes

Cash paid during the year for income taxes net of refunds received

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

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ORGANIZATION AND DESCRIPTION OF BUSINESS

Harmony Biosciences Holdings, Inc., and its consolidated subsidiaries (the “Company”), was founded in July 2017 as Harmony Biosciences II, LLC, a Delaware limited liability company.

Harmony Biosciences Holdings, Inc., and its consolidated subsidiaries (the “Company” or “Harmony”), was founded in July 2017 as Harmony Biosciences II, LLC, a Delaware limited liability company.

The Company converted to a Delaware corporation named Harmony Biosciences II, Inc.

in September 2017 and, in February 2020, the Company changed its name to Harmony Biosciences Holdings, Inc.

The Company’s operations are conducted in its wholly owned subsidiaries, Harmony Biosciences, LLC (“Harmony”), and Harmony Biosciences Management, Inc.

The Company’s operations are conducted in its wholly owned subsidiaries, Harmony Biosciences, LLC, and Harmony Biosciences Management, Inc.

The Company is headquartered in Plymouth Meeting, Pennsylvania.

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.

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

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.

Since its initial FDA approval in 2019 for excessive daytime sleepiness (“EDS”) in adult patients with narcolepsy, WAKIX has subsequently been approved for cataplexy in adult patients in 2020 and EDS in pediatric patients six years and older in 2024.

Since its initial FDA approval in 2019 for excessive daytime sleepiness (“EDS”) in adult patients with narcolepsy, WAKIX has subsequently been approved for cataplexy in adult patients in 2020, and EDS and cataplexy in pediatric patients six years and older in 2024 and 2026, respectively.

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.

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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 acquired Zynerba Pharmaceuticals, Inc.

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

Zynerba was a clinical-stage pharmaceutical company focused on innovative, pharmaceutically produced transdermal cannabidiol therapies for orphan neurobehavioral disorders, including Fragile X Syndrome and 22q deletion syndrome.

As of July 1, 2024, Zynerba Pharmaceuticals, Inc.

was renamed and is known as Harmony Biosciences Management, Inc.

In April 2024, we expanded into orexin science through a sublicense agreement with Bioprojet for an orexin 2 receptor agonist (“BP-205”) in preclinical development for narcolepsy and other potential indications.

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As a result, the Company now has an exclusive license relating to the use of clemizole hydrochloride, initially for the treatment of Dravet Syndrome (“DS”) and Lennox-Gastaut Syndrome (“LGS”), and a liquid formulation of lorcaserin for the treatment of developmental and epileptic encephalopathies.

In June 2025, we entered into a research collaboration, option and license agreement (the “CiRC Agreement”) with CiRC Biosciences, Inc.

(“CiRC”), a related party.

Under this agreement, Harmony and CiRC will collaborate on the research and development of two discovery-stage candidates, CBS105 for treatment-resistant narcolepsy and CBS104 for refractory epilepsy (together, the “Candidates”), using cell replacement therapy for the treatment of refractory epilepsies and treatment-resistant narcolepsy .

We are exploring an opportunity to evaluate a novel amorphous form of pitolisant targeting larger CNS indications.

Our current efforts are focused on formulation optimization with new modes of delivery and towards a Phase 1 PK study.

LIQUIDITY AND CAPITAL RESOURCES

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 $ 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.

The Company had retained earnings of $ 193,391 and $ 160,903 , as of March 31, 2026, and December 31, 2025, respectively.

As of March 31, 2026, the Company had cash, cash equivalents and investments of $ 870,473 .

The Company believes that its existing cash, cash equivalents and investments on hand as of March 31, 2026, 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 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 unaudited condensed consolidated balance sheet as of March 31, 2026, the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2026, and 2025, and the unaudited condensed consolidated statements of operations and comprehensive income and the unaudited condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2026, and 2025, are unaudited.

The balance sheet as of December 31, 2025, was derived from audited financial statements as of and for the year ended December 31, 2025.

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 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, 2025, 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 March 31, 2026, and the results of its operations and its cash flows for the three months ended March 31, 2026, and 2025.

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, 2025.

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 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.

and the Company’s ability to raise capital.

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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other pricing sources.

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

The Company did not classify any assets or liabilities as Level 3 as of March 31, 2026, or December 31, 2025.

Cash, Cash Equivalents and Restricted Cash

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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

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

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;

As of March 31, 2026, three customers accounted for 100 % of gross accounts receivable;

Accredo Health Group, Inc.

(“Accredo”), which accounted for 41 % of gross accounts receivable;

Caremark LLC (“CVS Caremark”), which accounted for 33 % of gross accounts receivable;

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

As of December 31, 2025, 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 nine months ended September 30, 2025, three customers accounted for 100 % of gross product revenue;

Accredo, which accounted for 45 % of gross accounts receivable, CVS Caremark, which accounted for 36 % of gross accounts receivable;

and PantherX, which accounted for 19 % of gross accounts receivable.

For the three months ended March 31, 2026, three customers accounted for 100 % of gross product revenue;

CVS Caremark accounted for 37 % of gross product revenue;

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and Pantherx accounted for 27 % of gross product revenue.

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

For the three months ended March 31, 2025, three customers accounted for 100 % of gross product revenue;

CVS Caremark accounted for 40 % of gross product revenue;

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and Pantherx accounted for 25 % of gross product revenue.

The Company depends on a single supplier of the active pharmaceutical ingredient (“API”) for its commercial product, WAKIX, and single API suppliers for each of its potential product candidates.

The Company depends on two suppliers of the active pharmaceutical ingredient (“API”) for its commercial product, WAKIX, and single API suppliers for each of its potential product candidates.

Share Repurchases

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Business combinations and asset acquisitions are accounted for in accordance with FASB ASC 805 Business Combinations .

Refer to Note 4, Acquisitions , for a more detailed discussion of the Company’s acquisition of Epygenix.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) No.

2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 is intended to improve reportable segment disclosures primarily through enhanced disclosure of reportable segment expenses and requires that a public entity that has a single reportable segment provide all the disclosures required by ASU 2023-07 and all existing segment disclosures in Topic 280.

This ASU was effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption was permitted.

ASU 2023-07 was required to be applied retrospectively to all prior periods presented in the financial statements.

The Company adopted this guidance in the fourth quarter of 2024.

This pronouncement addresses disclosures only and had no impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) No 2023-09, “Income Taxes (Topic 740):

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ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

Early adoption was permitted.

The Company adopted this guidance in the fourth quarter of 2025 on a prospective basis.

This pronouncement addresses disclosures only and had no impact on its consolidated financial results.

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software .

ASU 2025-06 makes targeted improvements to accounting for and disclosure of software costs under ASC 350-40.

This ASU is effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

The guidance may be adopted prospectively, retrospectively, or via a modified prospective transition method.

Early adoption is permitted.

The Company is currently evaluating the impact that ASU 2023-09 will have on its condensed consolidated financial statements.

The Company early adopted this guidance in the first quarter of 2026 on a prospective basis.

This pronouncement did not have a material impact on its unaudited condensed consolidated financial statements during the three months ended March 31, 2026.

Recently Issued Accounting Pronouncements

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.

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

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning

after December 15, 2027.

The guidance may be applied prospectively or retrospectively.

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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

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.

In addition, the Company will be obligated to pay up to $ 130,000 upon the achievement of development and regulatory milestones and up to $ 515,000 upon the achievement of certain sales-based milestones, in each case to Epygenix’s former stockholders.

As a result, the Company now has an exclusive license relating to the use of clemizole, initially for the treatment of DS and LGS.

The acquisition of Epygenix was accounted for as an asset acquisition under ASC Topic 805, Business Combinations.

The Company did not acquire any outputs and there was not an acquired substantive process in place to create outputs.

The Company recognized the acquired assets and assumed liabilities based on the consideration paid, including transaction costs, on a relative fair value basis, and after first allocating the preliminary excess of the fair value of net assets acquired over the purchase price consideration to certain qualifying assets, principally, the IPR&D asset.

In accordance with the accounting for asset acquisitions, an entity that acquires IPR&D assets in an asset acquisition follows the guidance in ASC Topic 730, Research and Development, which requires that both tangible and intangible identifiable research and development assets with no alternative future use be allocated a portion of the consideration transferred and recorded as research and development expense at the acquisition date.

As a result, the Company recorded a charge of $ 17,095 related to acquired in-process research and development expense during the year ended December 31, 2024.

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

September 30, 2025

March 31, 2026

Commercial paper

Corporate debt securities

government securities

Total short-term investments

Commercial paper

Corporate debt securities

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Total short-term investments

Commercial paper

Corporate debt securities

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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 September 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 March 31, 2026, and December 31, 2025, respectively.

FAIR VALUE MEASUREMENTS

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Investments in available-for-sale debt securities are classified as Level 2 and carried at fair value, which we estimate utilizing a third-party pricing service.

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.

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 September 30, 2025, or December 31, 2024.

The Company did not classify any assets or liabilities as Level 3 as of March 31, 2026, or December 31, 2025.

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

September 30, 2025

March 31, 2026

December 31, 2025

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Inventory, net consisted of the following:

September 30,

Raw materials

Work in process

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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 September 30, 2025, the remaining useful life was 4.0 years.

The Company determined a useful life of 10 years for the intangible asset, and, as of March 31, 2026, the remaining useful life was 3.5 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 September 30, 2025, the remaining useful life was 4.0 years.

The Company determined a useful life of 9 years for the intangible asset, and, as of March 31, 2026, the remaining useful life was 3.5 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 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 determined a useful life of 7.6 years for the intangible asset, and, as of March 31, 2026, the remaining useful life was 3.5 years.

Amortization expense was $ 5,961 for each of the three months ended March 31, 2026, and 2025, 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 nine months ended September 30, 2025)

2026 (excluding the three months ended March 31, 2026)

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 $ 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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In addition, there are other payments due upon achievement of development milestones for new indications and formulations as agreed upon by both parties.

also requires a fixed trademark royalty and a tiered royalty based on net sales upon commercialization, which will be payable to Bioprojet on a quarterly basis.

In April 2024, the Company announced that it entered into a sublicense agreement with Bioprojet for an orexin-2 receptor agonist (the “Licensed Compound”) to be evaluated for the treatment of narcolepsy and other potential indications (the “Sublicense”).

The 2022 LCA also requires a fixed trademark royalty and a tiered royalty based on net sales upon commercialization, which will be payable to Bioprojet on a quarterly basis.

other potential indications (the “Sublicense”).

Under the Sublicense, the Company obtained the exclusive right to develop, manufacture and commercialize the Licensed Compound in the United States and Latin American territories (the “Licensed Territories”), which are rights that Bioprojet originally licensed from Teijin Pharma, the innovator of the Licensed Compound.

The Licensed Compound is currently in pre-clinical development with an Investigational Medicinal Product Dossier (“IMPD”) Application currently anticipated in the second half of 2025.

Under the Sublicense, the Company paid Bioprojet an upfront license fee of $ 25,500 , which the Company recognized as an IPR&D charge recorded in research and development within the consolidated statements of operations and comprehensive income for the year ended December 31, 2024, and will also be obligated to pay up to $ 127,500 upon achievement of development and regulatory milestones and up to $ 240,000 upon achievement of sales-based milestones, as well as royalty rates in the mid-teens on any sales of product using the Licensed Compound in the Licensed Territories.

In November 2025, the Company achieved a clinical milestone for BP-205 that triggered a $ 4,250 payment to Bioprojet under the Sublicense, which was paid in December 2025.

The Company will also be obligated to pay up to $ 123,250 upon achievement of development and regulatory milestones and up to $ 240,000 upon achievement of sales-based milestones, as well as royalty rates in the mid-teens on any sales of product using the Licensed Compound in the Licensed Territories.

ConSynance Agreement

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The Company accounted for the transaction as an asset acquisition as substantially all of the fair value of the assets acquired was concentrated in a single identified asset.

In March 2023, the Company achieved a preclinical milestone, which triggered a $ 750 payment under the provisions of the APA, which the Company recognized as an IPR&D charge recorded in research and development within the consolidated statement of operations and comprehensive income for the year ended December 31, 2023.

In September 2024, the Company achieved a milestone for preclinical proof-of-concept, which triggered a $ 1,000 payment under the provisions of the APA, which the Company recognized as an IPR&D charge recorded in research and development within the consolidated statement of operations and comprehensive income for the year ended December 31, 2024.

In March 2023, the Company achieved a preclinical milestone, which triggered a $ 750 payment under the provisions of the APA.

In September 2024, the Company achieved a milestone for preclinical proof-of-concept, which triggered a $ 1,000 payment under the provisions of the APA.

There are additional payments due under the APA upon the achievement of certain milestones including $ 19,000 for development milestones, $ 44,000 for regulatory milestones and $ 110,000 for sales milestones.

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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 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.

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 audited consolidated statements of operations and comprehensive income for the year ended December 31, 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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Refer to Note 18, Related-Party Transactions , for further discussion of related party considerations for the CiRC Agreement.

Novitium Agreement

In January 2026, the Company entered into a license agreement ( the “Novitium License Agreement”) with Novitium Pharma LLC (“Novitium”), which includes an exclusive license to additional intellectual property that will expand the intellectual property estate of the Company, as well as a co-exclusive license, under which the Company and Novitium intend to develop a novel formulation of pitolisant in broad CNS indications outside of sleep/wake.

Pursuant to the Novitium License Agreement, the Company paid an upfront license 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 three months ended March 31, 2026, and will also be obligated to pay $ 10,000 upon the achievement of certain development milestones, as well as low single-digit royalties on net sales of current and future pitolisant based products.

MSN Agreement

On February 25, 2026 (the “MSN Effective Date”), the Company entered into a license agreement (the “MSN License Agreement”) with MSN Laboratories Private Limited (“MSN”), which includes an exclusive, royalty-bearing license, with the right to grant sublicenses, to additional intellectual property, including pending licensed patents, under which the Company intends to develop a new formulation of pitolisant in broad CNS indications outside of sleep/wake.

Pursuant to the MSN License Agreement, the Company paid an upfront license fee of $ 17,000 , 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 three months ended March 31, 2026.

In addition, the Company will be obligated to pay $ 25,000 upon approval of the pending licensed patents by the United States Patent and Trademark Office (“USPTO”), which amount the Company must deposit into an escrow account within nine months from the MSN Effective Date, and which will be returned to the Company if approval by the USPTO does not occur by November 25, 2027.

In addition, the Company will be obligated to pay low single-digit royalties on net sales of future products that include a new formulation of pitolisant.

The Company incurred $ 41,906 and $ 29,557 for the three months ended March 31, 2026, and 2025, respectively, for sales-based, trademark and tiered royalties recognized as cost of product sold.

As of March 31, 2026, and December 31, 2025, the Company had accrued $ 41,906 and $ 65,819 , respectively, for sales-based, trademark and tiered royalties.

ACCRUED EXPENSES

Accrued expenses consisted of the following:

September 30,

Royalties due to Bioprojet

Rebates and other sales deductions

1 unchanged sentence

Research and development

Milestone payments

Professional fees, consulting, and other services

Legal and professional fees

Other expenses

3 unchanged sentences

The repayment schedule for the TLA Term Loan consists of quarterly $ 3,750 principal payments, which commenced on December 31, 2023, increasing to quarterly $ 5,000 principal payments beginning on December 31, 2025, with a $ 115,000 payment due on the maturity date of July 26, 2028.

The TLA Term Loan bears interest at a per annum rate equal to, at the Company’s option, (i) a base rate plus a specified margin ranging from 2.50 % to 3.00 %, based on the Company’s senior secured net leverage ratio (as defined in the TLA Credit Agreement) or (ii) Term SOFR plus a credit spread adjustment of 0.10 % plus a specified margin ranging from 3.50 % to 4.00 %, based on the Company’s senior secured net leverage ratio.

The TLA Term Loan bears interest at a per annum rate equal to, at the Company’s option, (i) a base rate plus a specified margin ranging

from 2.50 % to 3.00 %, based on the Company’s senior secured net leverage ratio (as defined in the TLA Credit Agreement) or (ii) Term SOFR plus a credit spread adjustment of 0.10 % plus a specified margin ranging from 3.50 % to 4.00 %, based on the Company’s senior secured net leverage ratio.

The net cash received related to the TLA Term Loan as a result of the transactions, less debt issuance costs of $ 2,997 , was $ 197,003 .

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 September 30, 2025, was $ 168,253 .

The fair value of the TLA Term Loan as of March 31, 2026, was $ 156,408 .

Long-term debt, net consisted of the following:

September 30,

Principal amount

3 unchanged sentences

Long-term debt, net

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

Future minimum payments relating to long-term debt, net as of March 31, 2026, for the periods indicated below consisted of the following:

Years ending December 31,

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

2026 (excluding the three months ended March 31, 2026)

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

Nine Months Ended

September 30,

Interest on principal balance

1 unchanged sentence

Total term loan interest expense

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 October 2025.

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

The TLA Credit Agreement contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions.

As of March 31, 2026, the Company had an event of default, which dated back to July 2025, related to a nonfinancial covenant due to a delay in a subsidiary joining the TLA Credit Agreement as a guarantor.

On May 4, 2026, the Company entered into a Waiver and Consent Agreement with the Administrative Agent and certain lenders, whereby the event of default was waived.

The Company has made all required principal and interest payments on time in connection with the TLA Credit Agreement and is in compliance with all covenants as of May 7, 2026, the date of issuance of these condensed consolidated financial statements.

In June 2018, the Company entered into an operating lease for three office suites of approximately fifteen thousand square feet, seven thousand square feet and thirteen thousand square feet in Plymouth Meeting, PA, which was set to expire in November 2025.

In November 2025, the Company entered into an operating lease amendment (the “PM Lease Amendment”) extending the lease through March 31, 2031.

The terms of the PM Lease Amendment provide for fixed rental payments on a monthly basis and on a graduated scale.

Additionally, the terms of the PM Lease Amendment provide the Company with an option to extend the lease for two additional five-year periods and an option to early terminate the lease effective on the forty-first month, which options were not considered in the determination of the operating lease right-of-use asset (“ROU asset”) or operating lease liability as neither option is reasonably certain to be exercised by the Company.

The Company also leases a fleet of automobiles that are primarily used by its sales force and are classified as operating leases.

1 unchanged sentence

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

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 $ 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 %.

Our leases have remaining lease terms of less than 1 year to approximately 5 years , some of which may include the option to extend or terminate the leases.

The Company recorded operating lease costs of $ 499 and $ 467 for the three months ended March 31, 2026, and 2025, respectively.

As of March 31, 2026, the weighted-average remaining lease term for operating leases was 4.4 years and the weighted-average discount rate for operating leases was 7.60 %.

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

Classification

September 30, 2025

March 31, 2026

December 31, 2025

7 unchanged sentences

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

September 30, 2025

September 30, 2024

March 31, 2026

March 31, 2025

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 September 30, 2025, consisted of the following:

Future payments under non-cancelable operating leases with initial terms of one year or more as of March 31, 2026, consisted of the following:

Years ending December 31,

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

2026 (excluding the three months ended March 31, 2026)

Total lease payments

8 unchanged sentences

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

As of March 31, 2026, there were no material claims or lawsuits outstanding other than the Abbreviated New Drug Application (“ANDA”) litigation discussed below .

ANDA Litigation

6 unchanged sentences

8,486,947 (“’947 patent”) and 8,207,197 (“’197 patent”).

On September 27, 2023, the Company and Bioprojet received notice from Novugen Pharma Sdn.

The ’947 patent and the ‘197 patent are listed with respect to WAKIX ® in the FDA’s Orange Book and will expire in September 2029 and March 2030, respectively.

The Lupin Notice Letter asserts that their generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable.

In November 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 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 December 2024, the Company and Bioprojet received further notice from Lupin pursuant to 21 U.S.C.

§ 355(j) et seq.

and 21 C.F.R.

§ 314.95 et seq .

(the “Second Lupin Notice Letter”) that Lupin has submitted the Lupin ANDA to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ‘947 patent and the ‘197 patent.

The Second Lupin Notice Letter asserts that its generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable.

In January 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.

I n 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 July 2030 if WAKIX receives pediatric exclusivity, or earlier under certain circumstances.

In September 2023, the Company and Bioprojet received notice from Novugen Pharma Sdn.

(“Novugen”) pursuant to 21 U.S.C.

2 unchanged sentences

§ 314.95 et seq.

“Novugen Notice Letter”) that Novugen has submitted ANDA No.

(the “Novugen Notice Letter”) that Novugen had submitted ANDA No.

218834 (the “Novugen ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ’947 patent and ’197 patent.

The ’947 patent and the ‘197 patent are listed with respect to WAKIX ® in the FDA’s Orange Book and will expire in September 2029 and March 2030, respectively.

The Lupin Notice Letter and the Novugen Notice Letter assert that their generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable.

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.

The Novugen Notice Letter asserts that their generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable.

In November 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 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 October 2024, the Company reached an agreement with Novugen Pharma to resolve the dispute over Novugen’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 November 4, 2024, and Novugen will have a license to sell its generic product beginning July 2030 if WAKIX receives pediatric exclusivity, or earlier under certain circumstances.

In October 2023, the Company and Bioprojet received notice from Novitium, pursuant to 21 U.S.C.

§ 355(j) et seq.

3 unchanged sentences

218495 (the “Novitium ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of U.S.

8,354,430 (the “’430 patent”), which is also listed with respect to WAKIX ® in the FDA’s Orange Book and will expire in February 2026, ’947 patent, and ’197 patent.

On October 12, 2023, the Company and Bioprojet received notice from Zenara Pharma Pvt.

8,354,430 (the “’430 patent”), which is also listed with respect to WAKIX ® in the FDA’s Orange Book and will expire in February 2026.

The Novitium Notice Letter asserts that its generic product will not infringe the ‘430 patent, ’947 patent and the ‘197 patent and/or that the ‘430 patent, ’947 patent and the ‘197 patent are invalid or unenforceable.

In November 2023, the Company, Bioprojet and Bioprojet Pharma filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against Novitium and certain of their affiliates and agents and for patent infringement of the ’430 patent against Novitium 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 January 2026, the Company reached an agreement with Novitium to resolve the dispute over Novitium’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 Novitium will have a license to sell its generic product beginning July 2030 if WAKIX receives pediatric exclusivity, or earlier under certain circumstances .

In October 2023, the Company and Bioprojet received notice from Zenara Pharma Pvt.

(“Zenara”), pursuant to 21 U.S.C.

4 unchanged sentences

218796 (the “Zenara ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ’430 patent, ’947 patent and the ’197 patent.

On October 14, 2023, the Company and Bioprojet received notice from AET Pharma US, Inc.

The Zenara Notice Letter asserts that its generic product will not infringe the ‘430 patent, ’947 patent and the ‘197 patent and/or that the ‘430 patent, ’947 patent and the ‘197 patent are invalid or unenforceable.

In November 2023, the Company, Bioprojet and Bioprojet Pharma filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against Zenara and certain of their affiliates and agents and for patent infringement of the ’430 patent against 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 January 2026, the Company reached an agreement with Hikma (to whom Zenara transferred its ANDA) to resolve the dispute over Hikma’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 Hikma will have a license to sell its generic product beginning March 2030 if WAKIX receives pediatric exclusivity, or earlier under certain circumstances.

In October 2023, the Company and Bioprojet received notice from AET Pharma US, Inc.

(“AET”), pursuant to 21 U.S.C.

4 unchanged sentences

218892 (the “AET ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ’947 patent and the ’197 patent.

On October 16, 2023, the Company and Bioprojet received notice from Annora Pharma Private Limited (“Annora”), pursuant to 21 U.S.C.

AET’s Notice Letter asserts that AET’s generic product will not infringe the ’947 patent and the ‘197 patent and/or that ’947 patent and the ‘197 patent are invalid or unenforceable.

In November 2023, the Company, Bioprojet and Bioprojet Pharma filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against AET 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 August 2024, the Company and Bioprojet received further notice from AET pursuant to 21 U.S.C.

§ 355(j) et seq.

1 unchanged sentence

§ 314.95 et seq .

(the “Second AET Notice Letter”) that AET has submitted the AET ANDA to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ‘947 patent and the ‘197 patent.

The Second AET Notice Letter asserts that its generic product will not infringe the ’947 patent and the ‘197 patent and/or that the ’947 patent and the ‘197 patent are invalid or unenforceable.

In August 2024, 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 AET.

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

§ 355(j) et seq.

and 21 C.F.R.

§ 314.95 et seq.

(the “Annora Notice Letter”), that Annora has submitted ANDA No.

218832 (the “Annora ANDA”) to the FDA and is seeking regulatory approval to market a generic version of WAKIX ® before the expiration of the ’430 patent, the ’947 patent and the ’197 patent.

AET’s Notice Letter asserts that AET’s generic product will not infringe the ’947 patent and the ‘197 patent and/or that ’947 patent and the ‘197 patent are invalid or unenforceable.

The Annora Notice Letter asserts that its generic product will not infringe the ‘430 patent, ’947 patent and the ‘197 patent and/or that the ‘430 patent, ’947 patent and the ‘197 patent are invalid or unenforceable.

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 November 2023, the Company, Bioprojet and Bioprojet Pharma filed a complaint for patent infringement of the ’947 patent and the ‘197 patent against Annora and certain of their affiliates and agents and for patent infringement of the ’430 patent against Annora 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.

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 July 2030 if WAKIX receives pediatric exclusivity, or earlier under certain circumstances.

In October 2023, MSN Pharmaceuticals Inc.

1 unchanged sentence

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 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.

On January 12, 2024, the declaratory judgment action was transferred from the United States District Court for the Eastern District of Virginia to the United States District Court for the District of Delaware.

In December 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.

In December 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.

In January 2024, the declaratory judgment action was transferred from the United States District Court for the Eastern District of Virginia to the United States District Court for the District of Delaware.

In January 2026, the Company reached an agreement with MSN to resolve the dispute over MSN’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.

The remaining terms of the settlement agreement remain confidential.

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”).

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.

§ 355(j) et seq.

and 21 C.F.R.

§ 314.95 et seq .

On August 13, 2024, 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 AET.

In October 2024, the Company reached an agreement with Novugen Pharma to resolve the dispute over Novugen’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 November 4, 2024, and Novugen will have a license to sell its generic product beginning January 2030, or earlier under certain circumstances.

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

§ 355(j) et seq.

and 21 C.F.R.

§ 314.95 et seq .

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.

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.

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.

The resolution of one or more of the ANDA litigation matters against the Company could have a significant negative effect on the Company’s results of operations.

The Scheduling Order set March 27, 2025, as the date for the hearing on claim construction and scheduled a bench trial that began on February 17, 2026, and concluded on February 19, 2026.

Opening post-trial briefs were filed on April 9, 2026.

Rebuttal briefs are due May 7, 2026, and reply briefs are due May 21, 2026.

The resolution of any ANDA litigation matter against the Company could have a significant negative effect on the Company’s results of operations.

STOCKHOLDERS’ EQUITY

6 unchanged sentences

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

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 .

During the three months ended March 31, 2026, and 2025, no shares of common stock were repurchased by the Company under the October 2023 Repurchase Program.

As of March 31, 2026, the remaining amount of common stock authorized for repurchases was $ 150,000 .

STOCK INCENTIVE PLAN AND STOCK-BASED COMPENSATION

4 unchanged sentences

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

As of March 31, 2026, there were 7,333,147 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 nine months ended September 30, 2025:

The following table summarizes stock option activity for the three months ended March 31, 2026:

Value ($000's)

3 unchanged sentences

Awards forfeited

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 .

Awards outstanding—March 31, 2026

Awards exercisable—March 31, 2026

Awards unvested—March 31, 2026

The weighted-average grant-date fair value of stock options granted during the three months ended March 31, 2026, and 2025 was $ 23.38 and $ 25.50 , respectively.

The total intrinsic value of stock options exercised for the three months ended March 31, 2026, and 2025, was $ 594 and $ 2,157 , respectively.

Stock Appreciation Rights

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

The following table summarizes SARs activity for the three months ended March 31, 2026:

Value ($000's)

3 unchanged sentences

Awards forfeited

Awards outstanding—September 30, 2025

Awards exercisable—September 30, 2025

Awards outstanding—March 31, 2026

Awards exercisable—March 31, 2026

Restricted Stock Units

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

The following table summarizes RSU activity for the three months ended March 31, 2026:

Awards outstanding—December 31, 2025

2 unchanged sentences

Awards forfeited

Awards outstanding—September 30, 2025

Awards outstanding—March 31, 2026

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 nine months ended September 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 three months ended March 31, 2026, and 2025 was $ 36.76 and $ 38.25 , respectively.

Value of Stock Options and SARs

8 unchanged sentences

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

September 30, 2025

March 31, 2026

December 31, 2025

7 unchanged sentences

Stock-Based Compensation Expense

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,

Stock-based compensation expense for the three months ended March 31, 2026, and 2025, was recorded in the unaudited condensed consolidated statements of operations and comprehensive income in the following line items:

Three Months Ended March 31,

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

As of March 31, 2026, the total unrecognized stock-based compensation expense was $ 57,995 and $ 33,769 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 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.

There were no shares issued under the ESPP for the three months ended March 31, 2026, and 2025, respectively.

The discount on the ESPP was $ 89 and $ 60 for the three months ended March 31, 2026, and 2025, 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 nine months ended September 30, 2025, and 2024:

Rare Neurological Diseases Segment

Three Months Ended September 30,

Nine Months Ended September 30,

The following table summarizes segment revenue and significant segment expenses for the three months ended March 31, 2026, and 2025:

Three Months Ended March 31,

Net product revenue

13 unchanged sentences

(d) General and administrative excluding stock-based compensation, depreciation and amortization.

(d) General and administrative excluding stock-based compensation and amortization.

(e) Other segment items include other expense, net and IPR&D charges .

3 unchanged sentences

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

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

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 September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

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 September 30,

Nine Months Ended September 30,

The following table represents the shares of common stock excluded from the diluted earnings per share calculation because their effect would have been anti-dilutive:

Three Months Ended March 31,

Stock options, SARs, and RSUs to purchase common stock

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,

A reconciliation of the differences between the U.S.

statutory federal income tax rate of 21.0 % and the Company’s effective income tax rate for the three months ended March 31, 2026, after the adoption of ASU 2023-09, is as follows:

Three Months Ended March 31,

Federal statutory rate

State income taxes, net of federal tax effect*

Orphan drug credit

Research and development credit

Other nontaxable or nondeductible items

Effective tax rate

* State taxes in Illinois made up the majority (greater than 50%) of the tax effect in this category.

A reconciliation of the differences between the U.S.

statutory federal income tax rate of 21.0 % and the Company’s effective tax rate for the three months ended March 31, 2025, prior to the adoption of ASU 2023-09, is as follows:

Three Months Ended March 31,

Federal income tax rate

Stock-based compensation

Nondeductible IPR&D

Valuation allowance

RELATED-PARTY TRANSACTIONS

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 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 $ 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.

Paragon Biosciences, LLC (“Paragon”) is an entity that shares common ownership with the Company.

In addition, the Chairman of the Company’s board of directors was the President and owner of the entity.

The Company is party to a right of use agreement with Paragon whereby it has access to and the right to use certain office space leased by Paragon in Chicago, Illinois.

The Company incurred $ 73 for each of the three months ended March 31, 2026, and 2025, respectively, of expenses pursuant to the right of use agreement with Paragon, which are included in general and administrative in the unaudited condensed consolidated statements of operations and comprehensive income.

As of March 31, 2026, and December 31, 2025, 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 September 30, 2025, there were no amounts due to or due from CiRC under the CiRC agreement.

As of March 31, 2026, and December 31, 2025, there were no amounts due to or due from CiRC under the CiRC agreement.

Refer to Note 8, License Agreements , for further discussion regarding the CiRC Agreement.

SUBSEQUENT EVENTS

Patent Infringement Litigation

On April 20, 2026, the Company, along with its exclusive licensor Novitium, filed a lawsuit against AET Pharma US, Inc., AET Laboratories Private Limited, Alfred E.

Tiefenbacher (GmbH & Co.

KG), Sandoz Inc., Sandoz Private Limited, and Sandoz GmbH, alleging that the defendants’ actions in connection with the filing of AET’s ANDA No.

218892 infringe one or more claims of U.S.

The case was filed in the United States District Court for the District of Delaware, and assigned case no.

26-cv-00453-JLH.

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