What changed in this filing

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Item 1. Financial Statements

2026-08-04 compared with 2026-05-07 · 153 added, 129 removed, 585 unchanged (33% of the section changed)

34 unchanged sentences

Common stock—$ 0.00001 par value;

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

500,000,000 shares authorized at June 30, 2026 and December 31, 2025, respectively;

58,120,695 and 57,726,170 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

Additional paid in capital

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(In thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net product revenue

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stockholders’

(loss) income

Balance as of March 31, 2026

Unrealized loss on investments

Restricted stock unit tax withholding, net of stock option exercises

Stock-based compensation

Balance as of June 30, 2026

comprehensive

stockholders’

Balance as of December 31, 2025

2 unchanged sentences

Stock-based compensation

Balance as of June 30, 2026

comprehensive

stockholders’

(loss) income

Balance as of March 31, 2025

Unrealized loss on investments

Restricted stock unit tax withholding, net of stock option exercises

Stock-based compensation

Balance as of June 30, 2025

comprehensive

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Stock-based compensation

Balance as of March 31, 2025

Balance as of June 30, 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)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

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Payment of upfront fee related to license agreements

Net cash (used in) provided by investing activities

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

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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 and cataplexy in pediatric patients six years and older in 2024 and 2026, respectively.

Since its initial U.S.

Food and Drug Administration (the “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.

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.

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

In April 2024, we expanded into orexin science through a sublicense agreement with Bioprojet for an orexin 2 receptor agonist (“BP-205”) which is now in clinical development for narcolepsy and other potential central nervous systems (“CNS”) indications.

Under the sublicense agreement the Company obtained the exclusive right to develop, manufacture and commercialize BP-205 in the United States and Latin American territories, which are rights originally licensed from Teijin Pharma, the innovator of BP-205.

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(“Epygenix”) in April 2024.

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.

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 the treatment of refractory epilepsy (together, the “Candidates”), in each case, based on a cell replacement therapy approach for the treatment of these disorders.

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 $ 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.

The Company had retained earnings of $ 268,822 and $ 160,903 , as of June 30, 2026, and December 31, 2025, respectively.

As of June 30, 2026, the Company had cash, cash equivalents and investments of $ 962,459 .

The Company believes that its existing cash, cash equivalents and investments on hand as of June 30, 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 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 unaudited condensed consolidated balance sheet as of June 30, 2026, the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 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 and six months ended June 30, 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, 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 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 June 30, 2026, and the results of its operations and its cash flows for the six months ended June 30, 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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the Company’s ability to obtain regulatory approval to market its products;

competition from products manufactured and sold or being developed by other companies, including generic competition;

competition from products sold and/or being developed by other companies, including generic competition;

the price of, and demand for, the Company’s products, if approved;

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and the Company’s ability to raise capital.

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

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.

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.

The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property.

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other pricing sources.

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

The Company did not classify any assets or liabilities as Level 3 as of June 30, 2026, or December 31, 2025.

Cash, Cash Equivalents and Restricted Cash

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Short-term and long-term investments are carried at fair value and unrealized gains and losses are recorded as a component of accumulated comprehensive income in stockholders’ equity.

Interest income earned on cash and investment balances, accretion of the discount on investments in debt securities, amortization of premiums and realized gains and losses, if any, are recorded in interest income on the unaudited condensed consolidated statement of operations and comprehensive income.

Interest income earned on cash and investment balances, accretion of the discount on investments in debt securities, amortization of premiums and realized gains and losses, if any, are recorded in interest income in the unaudited condensed consolidated statement of operations and comprehensive income.

Realized gains and losses that result from the sale of investments are determined on a specific identification basis.

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Concentrations of Risk

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

Substantially all of the Company’s cash and money market funds are held in three 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 March 31, 2026, three customers accounted for 100 % of gross accounts receivable;

As of June 30, 2026, three customers accounted for 100 % of gross accounts receivable;

Accredo Health Group, Inc.

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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

As of December 31, 2025, three customers accounted for 100 % of gross accounts receivable;

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;

For the six months ended June 30, 2026, 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 25 % of gross product revenue.

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

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

CVS Caremark accounted for 38 % of gross product revenue;

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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.

This pronouncement did not have a material impact on its unaudited condensed consolidated financial statements during the three and six months ended June 30, 2026.

Recently Issued Accounting Pronouncements

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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:

March 31, 2026

June 30, 2026

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 March 31, 2026, and December 31, 2025, 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 June 30, 2026, and December 31, 2025, respectively.

FAIR VALUE MEASUREMENTS

Money market funds are classified as Level 1 fair value instruments.

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.

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 March 31, 2026, or December 31, 2025.

Investments in available-for-sale debt securities are classified as Level 2 and carried at fair value, which the Company estimates 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 Company validates 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, 2026, or December 31, 2025.

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

March 31, 2026

June 30, 2026

December 31, 2025

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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 March 31, 2026, the remaining useful life was 3.5 years.

The Company determined a useful life of 10 years for the intangible asset, and, as of June 30, 2026, the remaining useful life was 3.3 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 March 31, 2026, the remaining useful life was 3.5 years.

The Company determined a useful life of 9 years for the intangible asset, and, as of June 30, 2026, the remaining useful life was 3.3 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 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 determined a useful life of 7.6 years for the intangible asset, and, as of June 30, 2026, the remaining useful life was 3.3 years.

Amortization expense was $ 5,961 for each of the three months ended June 30, 2026, and 2025, respectively, and $ 11,922 for each of the six months ended June 30, 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,

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

2026 (excluding the six months ended June 30, 2026)

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

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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.

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.

Harmony paid an initial, non-refundable $ 30,000 licensing fee in October 2022 and additional payments of up to $ 155,000 are potentially due under the 2022 LCA upon the achievement of certain future development and sales-based milestones.

In July 2022, Harmony entered into the 2022 LCA with Bioprojet whereby Harmony obtained exclusive rights to develop, manufacture 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.

Harmony paid an initial, non-refundable $ 30,000 licensing fee in October 2022 and additional payments of up to $ 155,000 are potentially due upon the achievement of certain future development and sales-based milestones.

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

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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.

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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

In August 2021, the Company entered into an asset purchase agreement with ConSynance Therapeutics, Inc.

(the “APA”) to acquire HBS-102 (formerly referred to as “CSTI-100”), a potential first-in-class molecule with a novel mechanism of action.

Under the terms of the APA, the Company acquired full development and commercialization rights globally, with the exception of Greater China, for $ 3,500 .

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.

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.

CiRC Agreement

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In addition, the Company has an option to obtain an exclusive license for each of the Candidates that would grant the Company global rights to develop, manufacture and commercialize each Candidate.

Upon exercise of each option, the Company would be obligated to pay an option exercise fee of $ 8,000 , or $ 16,000 in the aggregate if the options related to both Candidates were to be exercised, and the Company would be obligated upon achievement to pay future development, regulatory and sales-based milestones, as well as royalties on sales of any product derived from the Candidates.

Upon exercise of each option, the Company would be obligated to pay an option exercise fee of $ 8,000 , or $ 16,000 in the aggregate related to both Candidates, and the Company would be obligated upon achievement to pay future development, regulatory and sales-based milestones, as well as royalties on sales of any product derived from the Candidates.

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.

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 expands the intellectual property estate of the Company, as well as a co-exclusive license, under which the Company and Novitium intend to develop an amorphous 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 in the unaudited condensed consolidated statements of operations and comprehensive income for the six months ended June 30, 2026.

The Company 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 February 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 in the unaudited condensed consolidated statements of operations and comprehensive income for the six months ended June 30, 2026.

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.

The Company incurred $ 60,775 and $ 35,783 for the three months ended June 30, 2026, and 2025, respectively, and $ 102,681 and $ 65,340 for the six months ended June 30, 2026, and 2025, respectively, for sales-based, trademark and tiered royalties recognized as cost of product sold.

As of June 30, 2026, and December 31, 2025, the Company had accrued $ 60,775 and $ 65,819 , respectively, for sales-based, trademark and tiered royalties.

ACCRUED EXPENSES

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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 March 31, 2026, was $ 156,408 .

The fair value of the TLA Term Loan as of June 30, 2026, was $ 151,369 .

Long-term debt, net consisted of the following:

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Long-term debt, net

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

Future minimum payments relating to long-term debt, net as of June 30, 2026, for the periods indicated below consisted of the following:

Years ending December 31,

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

2026 (excluding the six months ended June 30, 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

Six Months Ended

Interest on principal balance

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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.

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.

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 June 30, 2026.

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.

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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 %.

The Company recorded operating lease costs of $ 535 and $ 598 for the three months ended June 30, 2026, and 2025, respectively, and $ 1,034 and $ 1,065 for the six months ended June 30, 2026, and 2025 respectively.

As of June 30, 2026, the weighted-average remaining lease term for operating leases was 4.0 years and the weighted-average discount rate for operating leases was 7.59 %.

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

Classification

March 31, 2026

June 30, 2026

December 31, 2025

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

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 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 March 31, 2026, consisted of the following:

Future payments under non-cancelable operating leases with initial terms of one year or more as of June 30, 2026, consisted of the following:

Years ending December 31,

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

2026 (excluding the six months ended June 30, 2026)

Total lease payments

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From time to time, the Company is subject to claims and suits arising in the ordinary course of business.

The Company accrues such liabilities when they are known, if they are deemed probable and can be reasonably estimated.

The Company accrues such liabilities when they are known, if they are deemed probable and can be reasonably

Accruals may be adjusted from time to time, as appropriate, in light of new information.

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

As of June 30, 2026, 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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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 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.

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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 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.

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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 July 2030 if WAKIX receives pediatric exclusivity, 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.

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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.

Rebuttal briefs were filed on May 7, 2026, and reply briefs were filed on May 21, 2026.

Oral arguments are scheduled for October 22, 2026.

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

Patent Infringement Litigation

On April 20, 2026, the Company, along with its exclusive licensor Novitium, filed a lawsuit against AET, 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.

On June 22, 2026, the defendants filed their answer to our complaint, along with counterclaims alleging various antitrust counterclaims against either the Company or the Company and Novitium.

On July 6, 2026, the parties stipulated that defendants Sandoz Private Limited and Sandoz GmbH be dismissed without prejudice, which stipulation was granted on July 7, 2026.

On July 21, 2026, the defendants filed an amended answer updating the complaint to remove those parties.

STOCKHOLDERS’ EQUITY

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

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 .

During the three and six months ended June 30, 2026, and 2025, no shares of common stock were repurchased by the Company under the October 2023 Repurchase Program.

As of June 30, 2026, 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 March 31, 2026, there were 7,333,147 shares of common stock available for issuance under the 2020 Plan.

As of June 30, 2026, there were 7,040,302 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.

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Stock Options

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

The following table summarizes stock option activity for the six months ended June 30, 2026:

Value ($000's)

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Awards forfeited

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.

Awards outstanding—June 30, 2026

Awards exercisable—June 30, 2026

Awards unvested—June 30, 2026

The weighted-average grant-date fair value of stock options granted during the six months ended June 30, 2026, and 2025, was $ 21.90 and $ 24.24 , respectively.

The total intrinsic value of stock options exercised for the six months ended June 30, 2026, and 2025, was $ 2,462 and $ 3,400 , respectively.

Stock Appreciation Rights

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

The following table summarizes SARs activity for the six months ended June 30, 2026:

Value ($000's)

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Awards forfeited

Awards outstanding—March 31, 2026

Awards exercisable—March 31, 2026

Awards outstanding—June 30, 2026

Awards exercisable—June 30, 2026

Restricted Stock Units

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

The following table summarizes RSU activity for the six months ended June 30, 2026:

Awards outstanding—December 31, 2025

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Awards forfeited

Awards outstanding—March 31, 2026

Awards outstanding—June 30, 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 three months ended March 31, 2026, and 2025 was $ 36.76 and $ 38.25 , respectively.

The weighted-average per share fair value of awards issued under the 2020 Plan during the six months ended June 30, 2026, and 2025 was $ 36.76 and $ 37.61 , respectively.

Value of Stock Options and SARs

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

March 31, 2026

June 30, 2026

December 31, 2025

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Stock-Based Compensation Expense

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,

Stock-based compensation expense for each of the three and six months ended June 30, 2026, and 2025, 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,

Research and development expense

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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 March 31, 2026, the total unrecognized stock-based compensation expense was $ 57,995 and $ 33,769 for stock options and RSUs,

As of June 30, 2026, the total unrecognized stock-based compensation expense was $ 59,273 and $ 28,079 for stock options and RSUs,

respectively.

These amounts will be recognized in the Company’s consolidated statement of operations over a weighted average period of 3.0 years and 3.1 years for stock options and RSUs, respectively.

These amounts will be recognized in the Company’s consolidated statement of operations over a weighted average period of 2.9 years for each of stock options and RSUs .

Employee Stock Purchase Plan

The 2020 Employee Stock Purchase Plan (“ESPP”) was adopted by the Company’s Board of Directors on April 30, 2021.

The 2020 Employee Stock Purchase Plan (“ESPP”) was adopted by the Company on April 30, 2021.

The ESPP permits eligible employees to purchase shares of the Company’s common stock at a 15 % discount from the lesser of the fair market value per share of the Company’s common stock on the first day of the offering period or the fair market value of the Company’s common stock on the purchase date.

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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 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.

There were 15,066 and 11,772 shares issued under the ESPP for each of the three and six months ended June 30, 2026, and 2025, respectively.

The discount on the ESPP was $ 85 and $ 65 for the three months ended June 30, 2026, and 2025, respectively, and $ 174 and $ 125 for the six months ended June 30, 2026, and 2025, respectively, and is recorded within stock-based compensation expense.

SEGMENT INFORMATION

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rare neurological diseases.

The rare neurological diseases segment consists of the Company’s commercial product, WAKIX, and its potential product candidates that focus on patients living with rare neurological diseases who have unmet needs.

The Company currently derives all of its revenue from sales of WAKIX, which is used in the treatment of EDS and cataplexy in adult patients with narcolepsy and the treatment of EDS in pediatric patients six years and older with narcolepsy and manages its business activities on a consolidated basis.

The rare neurological diseases segment consists of the Company’s commercial product, WAKIX, and its potential product candidates that focus on patients living with rare neurological diseases.

The Company currently derives all of its revenue from sales of WAKIX and manages its business activities on a consolidated basis.

The accounting policies of the rare neurological diseases segment are consistent with those described in Note 3, Summary of Significant Accounting Policies , and the measure of segment assets is reported on the consolidated balance sheets as total assets.

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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 months ended March 31, 2026, and 2025:

Three Months Ended March 31,

The following table summarizes segment revenue and significant segment expenses for each of the three and six months ended June 30, 2026, and 2025:

Rare Neurological Diseases Segment

Three Months Ended June 30,

Six Months Ended June 30,

Net product revenue

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Net income per share of common stock - basic

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Stock options, SARs, and RSUs to purchase common stock

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,

Three Months Ended June 30,

Six Months Ended June 30,

Stock options, SARs, and RSUs to purchase common stock

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,

statutory federal income tax rate of 21.0 % and the Company’s effective income tax rate for the three and six months ended June 30, 2026, after the adoption of ASU 2023-09, is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Federal statutory rate

3 unchanged sentences

Other nontaxable or nondeductible items

Other adjustments

Effective tax rate

1 unchanged sentence

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,

statutory federal income tax rate of 21.0 % and the Company’s effective tax rate for the three and six months ended June 30, 2025, prior to the adoption of ASU 2023-09, is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Federal income tax rate

4 unchanged sentences

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

The Company incurred $ 72 and $ 255 for the three months ended June 30, 2026, and 2025, respectively, and incurred $ 145 and $ 328 for the six months ended June 30, 2026, and 2025, respectively, of expenses related to Paragon, which are included in general and administrative in the unaudited condensed consolidated statements of operations and comprehensive income.

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

As of June 30, 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