Item 7. Management’s Discussion and Analysis
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed in “Risk Factors” and in other parts of this Annual Report on Form 10-K.
Company Overview
We are a biopharmaceutical company focused on the development and commercialization of innovative cardiovascular medicines. Our approved product CARDAMYST TM (etripamil) nasal spray is available in the United States and is the first and only U.S. Food and Drug Administration, or the “FDA,” approved self-administered treatment for use by patients anywhere, anytime an attack of paroxysmal supraventricular tachycardia, or “PSVT,” occurs. We continue to seek, either directly or through collaboration with our partners, marketing approval from regulatory agencies responsible for regions outside the United States. We are also developing etripamil for the indication of atrial fibrillation with rapid ventricular rate, or “AFib-RVR”.
We are currently focusing our efforts and financial resources on (i) the commercialization of CARDAMYST TM (etripamil) nasal spray for the treatment of PSVT, (ii) the development of etripamil for the treatment of AFib-RVR and (iii) corporate development activities that have the potential to increase company value through strategic collaborations.
PSVT Market Overview
On December 12, 2025, we announced the FDA approved our first commercial product, CARDAMYST™ (etripamil) nasal spray, a prescription medication for the conversion of acute symptomatic episodes of PSVT to sinus rhythm in adults. We have currently begun focusing on the commercialization of CARDAMYST, which became available in retail pharmacies in the first quarter of 2026. PSVT is a condition that causes a patient’s heart to suddenly start beating faster than normal. It can be life-altering as PSVT is highly symptomatic, characterized by unpredictable attacks of a racing heart, often exceeding 150 beats per minute. Symptoms of PSVT arise suddenly and may include palpitations, sweating, chest pressure or pain, shortness of breath, sudden onset of fatigue, lightheadedness or dizziness, fainting, and anxiety, causing many patients to interrupt their daily activities at the time of symptom-onset. The impact and morbidity from an episode of PSVT can be especially detrimental in patients with underlying cardiovascular or medical conditions, such as heart failure, obstructive coronary disease, or dehydration. The uncertainty of when such an attack of PSVT will strike or how long it will persist is often anxiety-provoking, reducing patients’ quality of life and preventing participation in many desired activities. Drugs approved for the treatment of attacks of PSVT include adenosine, verapamil, and diltiazem, with all being administered intravenously under medical supervision, usually in the emergency department. Other oral drugs are sometimes used to treat attacks in a concept called “pill in the pocket.” However, those drugs have never been proven effective or safe and are not approved for this use. Doctors are often frustrated by the limited effective treatment options with the only approved options involving prolonged, unpleasant, and costly trips to the emergency department or, for some patients, an invasive ablation procedure. PSVT can be traumatic for patients, frustrating for healthcare providers, and costly for payors. With no pharmaceutical innovation in the treatment of PSVT for more than 30 years and a movement in the healthcare system to enable patient-centered care, we believe there is an opportunity to help patients living with PSVT to take greater control over their PSVT.
We believe that PSVT is a large and under-recognized market which we estimate affects more than two million Americans. From this diagnosed population, we define the immediate target addressable market for CARDAMYST as approximately 50% of patients with PSVT who have sufficient disease burden that they are compelled to seek care for their condition and are primarily managed by approximately 40,000 healthcare providers composed primarily of clinical cardiologists, interventional cardiologists and electrophysiologists. The remaining patients with PSVT can become addressable over time, as they are inconsistently managed (cycling in and out of the healthcare system). Furthermore, PSVT is expected to
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increase in diagnosed prevalence in coming years as wearable electrocardiogram, or “ECG,” technology (e.g., smartphone, watches) becomes both more adept at diagnosing PSVT and more widely used by patients and clinical practitioners, in turn shortening the time to diagnosis.
Following the release of data from the RAPID clinical study, in market research, cardiologists reported a willingness to prescribe CARDAMYST to approximately 50% of the patients with PSVT in their care, which suggests approximately 500,000 to 800,000 patients can potentially be treated with CARDAMYST in peak years. Additionally, we believe that this cardiology-identified group of patients may use CARDAMYST to treat a median of three to five episodes per year, based on the projected number of self-reported longer and more intense episodes experienced by patients, as well as the patient utilization experience in our Phase 3 clinical trials. This implies a peak demand potential in the United States for CARDAMYST of 2.5 million to 4 million episodes treated per year.
Current treatment for PSVT also consumes significant healthcare resources. Research published in the American Journal of Cardiology in 2020 shows that total healthcare expenditures in the year following a diagnosis of PSVT ranged from $20,000 to $30,000 per patient which were significantly higher than the expenditures observed for patients without PSVT. These significant increases included increased emergency department visits and hospitalization costs. Of note, catheter ablations following diagnosis represented only 23% of this increased spend, meaning most costs were unrelated to ablations. Recent data from the Healthcare Cost and Utilization Project, or “HCUP,” database indicate that in 2019 there were approximately 140,000 emergency department, or “ED,” visits for PSVT when coded (for billing) in the primary diagnostic position, and a total of approximately 525,000 ED visits when PSVT was coded in any diagnostic position. Of these, approximately 25% of ED admissions for PSVT resulted in a hospital admission. HCUP estimates a total of approximately 40,000 to approximately 120,000 inpatient admissions for PSVT in 2019 (based again if a PSVT billing code was found in the primary versus any diagnostic position). Despite the effectiveness of catheter ablation, claims data suggests that only approximately 15% of patients with PSVT are ablated over a three-year period, leading to a total of approximately 100,000 catheter ablations annually. In total, up to $15.0 billion is spent annually in the United States on the management of PSVT.
PSVT Continued Development Highlights
In November 2025, we submitted our marketing authorization application, or “MAA,” to the European Medicines Agency, or “EMA,” for review for approval to market etripamil nasal spray, under the trade name TACHYMIST TM , in the European Union. The MAA utilizes much of the clinical, manufacturing and quality data package that was submitted in the NDA which lead to the US FDA approval.
In January 2025, our licensing partner, Corxel Pharmaceuticals, or “Corxel,” formerly Ji Xing Pharmaceuticals Limited, JIXING, announced that the Center for Drug Evaluation, or “CDE,” of the National Medical Products Administration, or “NMPA,” of the People’s Republic of China has accepted the New Drug Application, or “NDA,” for etripamil nasal spray for the treatment of PSVT. The NDA to the NMPA included data from the successful Phase 3 JX02002 clinical trial of etripamil nasal spray in patients with PSVT in China in addition to data included in the NDA that Milestone submitted to the FDA.
The 500-patient Phase 3 trial (JX02002) met its primary endpoint, with a Kaplan Meier analysis shows a statistically significantly greater proportion of patients who self-administered etripamil converted from PSVT to sinus rhythm within 30 minutes compared to placebo (40.5% vs. 15.9%, respectively; hazard ratio [HR] = 3.00; 95% CI 1.58-5.71; p<0.001). Statistically significant (p<0.05) results were also shown for the secondary efficacy endpoints for percent of patients’ PSVT converted to sinus rhythm by 10, 15, 45 and 60 minutes after self-administration of study drug.
Corxel further reported that, overall, treatment emergent adverse events were comparable between treatment groups, and there were no reported serious adverse events related to etripamil. The safety and tolerability data from the JX02002 trial were consistent with previous clinical studies. This important study further expands the etripamil global development program to more than 2,000 unique patients treated with etripamil.
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Etripamil Nasal Spray for the Treatment of AFib-RVR
Similar to our approach for PSVT, we believe that etripamil has the potential to help people experiencing a symptomatic episode of AFib-RVR to self-treat and to conveniently, reliably, and quickly reduce their elevated heart rate, with the goal of reducing the need for emergency department utilization. We completed a successful Phase 2 study, named “ReVeRA” or the “ReVeRA study”, in patients presenting urgently with episodes of AFib-RVR to the emergency department. We have published the ReVeRA study and results, which demonstrated that patients receiving etripamil nasal spray experienced rapid and statistically superior ventricular rate reduction and improved symptom-relief compared to placebo, with safety and tolerability findings generally consistent with those observed in our PSVT program. We believe these data support the continued development of etripamil, self-administered in the medically unmonitored setting, for the treatment of AFib-RVR.
Incorporating FDA’s guidance, we have developed a Phase 3 registrational program to evaluate self-administered etripamil as a potential treatment for patients with AFib-RVR. We intend to pursue a supplemental new drug application, or “sNDA,” regulatory approval pathway for a potential second indication for etripamil in Afib-RVR. As such, we will leverage the PSVT indication and PSVT program data, along with a single pivotal Phase 3 study in patients with AFib-RVR.
AFib-RVR Market Overview
Atrial Fibrillation, or “AFib,” is a common cardiac arrhythmia with an irregular and often rapid heart rate that is often markedly symptomatic and, without proper treatment, can increase the risk of stroke, heart failure, and other cardiovascular complications. A common complication of AFib is a rapid heart rate, also referred to as AFib-RVR, which is frequently defined as a heart rate ≥ 110 beats per minute. The occurrence of a rapid ventricular rate, or “RVR,” in patients with atrial fibrillation increases the likelihood of marked symptoms including heart palpitations, shortness of breath and weakness. There are two commonly used pharmacological approaches to chronically manage AFib, rhythm control and rate control. Regardless of the chronic approach, break-through episodes of rapid heart rate occur frequently; and when faced with a sudden episode of AFib-RVR, acute rate control is needed, with most treatments being AV-nodal targeted drugs such as a beta blocker or calcium channel blocker. These treatments can be given intravenously; however, this requires a burdensome trip to an emergency department which may lead to a hospital admission. Acute treatment can be attempted with an oral rate-control drug; however, such agents often fail to provide immediate or dependable ventricular rate control because they have a 30- to 90-minute delayed onset of action. As a result, many patients require faster and more reliable rate reduction and symptom resolution, leading them to seek acute medical care in the emergency department for intravenous rate control and/or electrical cardioversion of their atrial fibrillation. Furthermore, the chronic administration of oral rate-control drugs does not broadly prevent episodes of AFib-RVR. Similar to PSVT, patients may feel a loss of control by needing to visit the emergency department for overcoming their AFib-RVR episode and the unpredictable nature of these episodes, which can occur anytime and anywhere. Doctors have expressed frustration at the lack of options for patients to self-manage these acute rate attacks; and payor organizations would prefer to treat the AFib-RVR attacks in a more cost effective and time-efficient manner.
An estimated 10 million Americans suffer from AFib. The prevalence of AFib is expected to grow to greater than 12 million by 2030. A subset of patients with AFib experiences episodes of abnormally high heart rate, most often accompanied by palpitations, shortness of breath, dizziness, and weakness. While these episodes, known as AFib-RVR, may be treated by oral calcium channel blockers and/or beta blockers, patients frequently seek acute care in the ED to address symptoms. In 2019, nearly 1.1 million patients were admitted to the emergency department due to AFib symptoms. Initial data suggests that approximately 60% of all AFib emergency department visits were attributable to AFib-RVR, as symptoms driving patients to seek care generally become more pronounced at higher heart rates. Treatment for such symptoms typically includes medically supervised intravenous administration of calcium channel blockers or beta blockers, or electrical cardioversion. With little available data for AFib-RVR, we believe, based on our initial market research, that 30% to 40% of patients with AFib experience one or more symptomatic episodes of RVR per year that require treatment, suggesting a current target addressable market of approximately three to four million patients for etripamil in patients with AFib-RVR.
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We believe that etripamil has the potential to be developed such that it can be used by patients to rapidly reduce their heart rate to provide a supplemental option to either the acute oral rate or rhythm control strategy their physician would use. When presented with a target product profile reflecting this potential use case, cardiologists and electrophysiologists, in a 2021 market research study perceived utility in the product profile and indicated that they would prescribe to approximately two-thirds of their patients that experience episodes of AFib-RVR. They further indicated that a rapidly-acting intranasal calcium channel blocker could serve as a “bridge” to the longer onset times of acute oral agents. According to physicians, it can take hours for patients to feel an alleviation of symptoms using acute oral rate or rhythm control. During this time, patients may experience concerning symptoms that often prompt them to seek emergency care. We believe that the combination of convenient delivery, potency, rapid onset and short duration of action of etripamil has the potential to move the current treatment setting for some acute episodes of AFib out of the burdensome and costly emergency department.
Current AFib management consumes significant healthcare resources in the United States. The American Heart Association published a report in 2016 summarizing the current and projected cost burden of cardiovascular diseases in the United States. This report suggests atrial fibrillation resulted in $25 billion in direct medical costs in 2016 (approximately 7% of all cardiovascular diseases) and another $7 billion in indirect costs (i.e., up to $32 billion in total costs). Additionally, the forecasted growth in atrial fibrillation prevalence is anticipated to result in healthcare expenditures of $46 billion in direct costs and $10 billion in indirect costs in the United States by 2030.
AFib-RVR Clinical Development Highlights
In November 2023, we presented positive Phase 2 data from the ReVeRA study as a Featured Science Presentation at the American Heart Association Scientific Meetings (Philadelphia, PA) and as simultaneously published in Circulation: Arrhythmia and Electrophysiology . The randomized, double-blinded, placebo-controlled ReVeRA trial of etripamil nasal spray enrolled 87 patients and dosed 56 patients aged 18 years and older with AFib who urgently presented experiencing AFib and a ventricular rate of 110 or more beats per minute, or “bpm.” The trial was designed to assess the magnitude, rapidity, and duration of reduction and the patient satisfaction with treatment using an established patient reported outcome, or “PRO,” tool. Data showed that delivery of etripamil nasal spray (70 mg) significantly and rapidly reduced ventricular rate, in a pattern consistent with the drug’s pharmacologic profile. Etripamil achieved the primary endpoint with a high degree of statistical significance; patients experienced a ventricular rate reduction of 29.91 bpm (95% confidence interval: -40.31, -19.52; p<0.0001) in the etripamil arm relative to placebo. The absolute maximum reduction in rate in the etripamil arm was 34.97 bpm. Using the Treatment Satisfaction Questionnaire 9, or “TSQM-9,” PRO, compared to placebo, patients treated with etripamil demonstrated significant improvements in two satisfaction ratings: effectiveness (p<0.0001) and relief of symptoms (p=0.0002), with the degrees of improvement consistent with those customarily described as clinically meaningful. Treatment-emergent serious adverse events, or “TESAEs,” were rare and the most common (≥ 5%) adverse events were mild or moderate in intensity and included nasal discomfort, rhinorrhea, increased lacrimation, throat irritation and dizziness. Further trial details are below in this document.
During 2024, we met with the FDA on the ReVeRA study, during which the FDA confirmed its guidance from our Pre-IND meeting (2023) regarding the availability of a sNDA pathway for the marketing approval for etripamil for the indication of AFib-RVR. The sNDA pathway potentially permits a single pivotal efficacy study to be sufficient for filing for marketing approval if etripamil is already approved for PSVT. FDA further concurred with respect to key proposed study elements including powering, inclusion criteria, patient population, and statistical analyses, and offered clarification with respect to the endpoints to guide the design of the Phase 3 study. In our mid-2023 Pre-IND meeting, the FDA provided guidance that our primary endpoint can be the reduction of ventricular rate, and the primary analysis would be performed on the intent to treat, or “ITT,” population. In addition, the study would have to show statistical significance (p<0.05) on the key secondary endpoint of symptom relief as a patient benefit, also in the ITT population. The secondary endpoint could use a PRO measure, and various PROs were discussed with the FDA. We have finalized the Phase 3 study protocol following FDA’s review and obtained concurrence with the FDA to proceed.
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The Phase 3 study will be conducted in a medically unmonitored setting (e.g., at-home) in a manner very similar to the conduct of our Phase 3 development program for PSVT. The Phase 3 AFib-RVR study will enroll patients with a history of symptomatic AFib episodes, and will use a self-administered, repeat-dose regimen of 70 mg per dose (the dose and dosing approach that was studied in the RAPID trial in patients with PSVT). The Phase 3 study’s target population will be patients with verified history of AFib-RVR, and the ITT population will be all patients self-administering the study drug for perceived AFib-RVR. The primary endpoint is the mean change from baseline ventricular rate to nadir ventricular rate for patients treated with etripamil versus placebo, as was studied in the ReVeRA trial in AFib-RVR. The key secondary endpoint will be based on a PRO of symptomatic improvement, discussed with the FDA, which is similar to the PRO questions utilized in our PSVT and AFib-RVR programs. The study has been powered and sized based upon approximately 150 events from 150 unique patients with a history of symptomatic episodes of AFib-RVR.
Operations Overview
Since the commencement of our operations in 2003, we have devoted substantially all of our resources to performing research and development activities in support of our product development efforts, hiring personnel, raising capital to support and expand such activities, providing general and administrative support for these operations and, more recently, preparing for commercialization. We have historically operated our business using a significant outsourcing model. As such, our team is currently composed of a relatively smaller core of employees who direct a significantly larger number of team members who are outsourced in the forms of vendors and consultants to enable execution of our operational plans. On December 12, 2025, we announced that the FDA approved our first commercial product, CARDAMYST™ (etripamil) nasal spray, a prescription medication for the conversion of acute symptomatic episodes of paroxysmal supraventricular tachycardia, or “PSVT,” to sinus rhythm in adults. As a result, we expect our future commercial expenses will increase as we invest in the infrastructure, personnel, and operational expenses required to commercialize CARDAMYST in the United States. We also expect inventory balances to increase as we capitalize costs related to the production of CARDAMYST for commercial sale in the United States . In addition, we expect to continue to incur significant research and development and general administrative expenses related to our operations as we advance etripamil nasal spray for the treatment AFib-RVR and continue to invest in the resources needed to support a developing commercialized public company.
Since inception, we have incurred significant operating losses. For the years ended December 31, 2025 and 2024, we recorded net losses of $63.1 million and $41.5 million, respectively. As of December 31, 2025, we had an accumulated deficit of $430.6 million. We expect to continue to incur significant losses for the foreseeable future. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on commercialization of CARDAMYST and the development of an additional etripamil indication. We had $73.0 million of cash and cash equivalents and $32.9 million of short-term investments at December 31, 2025.
We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. Our net losses may fluctuate significantly from period to period, depending on the timing of our planned clinical trials and expenditures on other research and development activities. We expect our expenses will increase over time as we:
• continue our ongoing and planned development of etripamil, including future Phase 3 clinical trials for the treatment of AFib-RVR and potential Phase 4 clinical trials for treatment of PSVT;
• seek, either directly or through collaboration with our partners, marketing approval for etripamil nasal spray for the treatment of PSVT from regulatory agencies responsible for regions outside the United States;
• seek marketing approvals for etripamil for the treatment of AFib-RVR and other cardiovascular indications;
• increase our sales, marketing, manufacturing, and distribution capability, either directly or indirectly through third parties;
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• build a portfolio of product candidates through development, or the acquisition of in-license of drugs, product candidates or technologies;
• initiate preclinical studies and clinical trials for etripamil for any additional indications we may pursue, including the clinical trials for the treatment of atrial fibrillation and rapid ventricular rate as well as other areas of unmet medical need, and for any additional product candidates that we may pursue in the future;
• maintain, protect, and expand our intellectual property portfolio;
• hire additional clinical, regulatory, and scientific personnel;
• add operational, financial, and management information systems and personnel, or other general & administrative personnel, including personnel to support our product development and potential expansion of our future commercialization efforts; and
• incur additional legal, accounting, insurance and other expenses associated with operating as a public company.
Recent Developments
As previously disclosed, on March 27, 2023, we entered into a Purchase and Sale Agreement, or the “Royalty Purchase Agreement,” with RTW Royalty I DAC, an affiliate of RTW Investments, LP, or “RTW,” pursuant to which RTW agreed to purchase, following U.S. Food and Drug Administration approval of etripamil for the treatment of PSVT (subject to certain conditions), at a purchase price of $75.0 million, the right to receive tiered quarterly royalty payments, or the “royalty interest,” on net product sales of CARDAMYST (etripamil) in the United States.
On January 12, 2026, we closed the sale of the royalty interest under the Royalty Purchase Agreement and received cash of $75.0 million from RTW.
The Macroeconomic Climate
Inflation rates may materially adversely affect our business and corresponding financial position and cash flows. Inflationary factors, changes to interest rates, and overhead costs may adversely affect our operating results. Interest and inflation rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. Additionally, geopolitical events, including war and terrorism, banking instabilities, ongoing changes to U.S. and international tariffs and other trade restrictions and trade barriers, renegotiation of international trade agreements, or further escalations of trade tensions, and other U.S. geopolitical issues affecting other territories and employee availability and wage increases, and economic markets all of which may result in additional stress on our working capital resources. The ongoing trade tensions between the U.S. and other jurisdictions have resulted in multiple rounds of tariffs and anticipated tariffs affecting pharmaceuticals and pharmaceutical ingredients, including finished drug products, manufacturing equipment, and related supplies. In any event, the dynamic and unpredictable tariff and trade landscape may create substantial uncertainty and planning challenges for our operations.
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Components of Results of Operations
License revenue
We generated $1.5 million of license revenue for the year ended December 31, 2025, compared to no revenue generated for the year ended December 31, 2024. The current year license revenue was the result of having reached a milestone pursuant to our License and Collaboration Agreement, dated May 15, 2021, with Corxel Pharmaceuticals, or “Corxel,” formerly known as Ji Xing Pharmaceuticals Limited, such party being referred to as “Ji Xing” and, such agreement, as the “Ji Xing License Agreement,” due upon the successful NDA approval by the FDA in the U.S. of etripamil for the treatment of PSVT. For additional information about our Revenue, see Note 2, “Summary of Significant Accounting Policies”, and Note 3, “Revenue” in the accompanying notes to our consolidated financial statements.
Research and Development Expenses
Research and development expenses consist primarily of salaries and fees paid to external service providers, as well as personnel costs, including share-based compensation expense, and other related compensation expenses. We expense research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress to completion of specific tasks using information and data provided to us by our vendors, collaborators and third-party service providers.
To date, the majority of our research and development expenses have been related to the preclinical and clinical development of etripamil inclusive of manufacturing costs pre-FDA approval. As we advance etripamil or other product candidates for other indications, we expect to allocate our direct external research and development costs across each of the indications or product candidates. Further, we expect our research and development costs to increase for the development of etripamil in AFib-RVR, and we expect our research and development expenses related to the development of etripamil for PSVT to decrease as a percentage of our total research and development expenses.
The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming and is subject to uncertainties and delays. As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of our product candidates, if at all.
We recognize the benefit of Canadian research and development tax credits as a reduction of research and development costs for fully refundable investment tax credits.
General and Administrative Expenses
General and administrative expenses include personnel and related compensation costs, expenses for outside professional services, lease expenses, insurance expenses and other general administrative expenses. Personnel costs consist of salaries, bonuses, benefits, related payroll taxes, and share-based compensation. Outside professional services consist of legal, accounting, and audit services and other consulting fees.
We expect to continue to incur expenses as a public company, including expenses related to compliance with the rules and regulations of the Securities and Exchange Commission, or “SEC,” and those of any national securities exchange on which our securities are traded, additional insurance expenses, investor relations activities, and other administrative and professional services.
Commercial Expenses
Commercial expenses consist primarily of personnel and related compensation costs, market and health economic research, and market development activities for PSVT and, to a lesser extent, AFib-RVR. The focus of these expenses is three-fold: first, we want to leverage rigorous primary and secondary research to fully understand our target disease states from the perspective of the patient, healthcare provider, and payer; second, we want to understand and document the burden of
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disease posed by PSVT and AFib-RVR from an epidemiology, healthcare resource use, and cost perspective; and third, we want to engage our target patient, physician, and payer stakeholders with evidence-based and compliant educational materials that serve to increase the awareness and understanding of the impact of PSVT and AFib-RVR on patients and the overall healthcare system.
We anticipate our commercial expenses will increase as we invest in the infrastructure, personnel, and operational expenses required to commercialize CARDAMYST in the United States.
Interest Income
Interest income primarily consists of interest income from our cash equivalents and short-term investments.
Interest Expense
Interest expense primarily consists of contractual debt interest expense and the amortization of debt costs.
Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024
Year ended December 31,
(in thousands)
2025
2024
$ Change
% Change
Revenue
$
1,546
$
—
$
1,546
100.0%
Operating expenses
Research and development, net of tax credits
$
18,108
$
14,357
$
3,751
26.1%
General and administrative
17,274
16,742
532
3.2%
Commercial
28,304
11,003
17,301
157.2%
Total operating expenses
63,686
42,102
21,584
51.3%
Loss from operations
(62,140)
(42,102)
(20,038)
47.6%
Interest income
2,920
4,164
(1,244)
(29.9)%
Interest expense
(3,838)
(3,581)
(257)
7.2%
Net loss
$
(63,058)
$
(41,519)
$
(21,539)
51.9%
License revenue
We recorded $1.5 million of license revenue for the year ended December 31, 2025, compared to no revenue recorded for the year ended December 31, 2024. The license revenue for the year ended December 31, 2025 was the result of having reached a milestone pursuant to our License and Collaboration Agreement, dated May 15, 2021, with Corxel Pharmaceuticals, or “Corxel,” formerly known as Ji Xing Pharmaceuticals Limited, such party being referred to as “Ji Xing” and, such agreement, as the “Ji Xing License Agreement,” due upon the successful NDA approval by the FDA for CARDAMYST for the treatment of PSVT in the United States.
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Research and Development Expenses
The following table shows our research and development expenses by type of activity for the periods indicated.
Year ended December 31,
(in thousands)
2025
2024
$ Change
% Change
Clinical
$
7,356
$
6,596
$
760
11.5%
Drug manufacturing and formulation
5,772
4,145
1,627
39.3%
Regulatory and other costs
5,325
3,875
1,450
37.4%
Less: R&D tax credits
(345)
(259)
(86)
33.2%
Total R&D expenses
$
18,108
$
14,357
$
3,751
26.1%
Research and development expenses increased by $3.8 million, or 26.1%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase was primarily due to higher consulting and outside service costs. These higher costs were partially offset by lower personnel-related costs.
General and Administrative
General and administrative expenses increased $0.5 million, or 3.2%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. This increase was driven primarily by an increase in outside service costs and higher personnel costs.
Commercial
Commercial expenses increased by $17.3 million, or 157.2%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. This increase is primarily a result of additional personnel costs, professional costs, and other operational expenses related to preparation for the launch of CARDAMYST.
Interest Income
Interest income was $2.9 million and $4.2 million for the year ended December 31, 2025 and 2024, respectively. The decrease in interest income in 2025 was driven decreasing interest rates and a smaller average investment balance in 2025 when compared to 2024.
Interest Expense
Interest expense remained materially consistent for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Liquidity and Capital Resources
Sources of Liquidity
We have incurred operating losses and experienced negative operating cash flows since our inception, and we anticipate continuing to incur losses for the foreseeable future. As of December 31, 2025, we had cash, cash equivalents, and short-term investments of $106.0 million and an accumulated deficit of $430.6 million.
O n July 11, 2025, we entered into an underwriting agreement, or the “Underwriting Agreement,” related to an underwritten public offering, or the “2025 Offering,” of (i) 31,500,000 of our common shares, accompanying Series A common warrants, or the “Series A Common Warrants,” to purchase an aggregate of 31,500,000 common shares and accompanying Series B common warrants, or the “Series B Common Warrants,” to purchase an aggregate of 31,500,000 common shares, at a combined public offering price of $1.50 per share and accompanying Series A Common Warrant and Series B Common Warrant and (ii) in lieu of common shares to certain investors that so choose, pre-funded warrants or the “2025
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Pre-Funded Warrants” and, together with the Series A Common Warrants and the Series B Common Warrants, the “Warrants,” to purchase 3,502,335 common shares, accompanying Series A Common Warrants to purchase an aggregate of 3,502,335 common shares and accompanying Series B Common Warrants to purchase an aggregate of 3,502,335 common shares, at a combined public offering price of $1.499 per Pre-Funded Warrant and accompanying Series A Common Warrant and Series B Common Warrant, which represented the combined public offering price for the Common Shares and accompanying Common Warrants less the $0.001 per share exercise price for each such Pre-Funded Warrant.
The net proceeds to the Company from the 2025 Offering were $48.6 million after deducting underwriting commissions and other offering expenses payable by us, in the amount of $3.9 million.
On February 28, 2024, we entered into an underwriting agreement related to an underwritten public offering, or the “February 2024 Offering,” of 16,666,667 of our common shares, without par value, at a public offering price of $1.50 per share and, in lieu of common shares to certain investors, pre-funded warrants to purchase 3,333,333 common shares, or the “2024 Pre-Funded Warrants,” at a public offering price of $1.499 per 2024 Pre-Funded Warrants. Each of the 2024 Pre-Funded Warrants has an exercise price of $0.001 per share. The 2024 Pre-Funded Warrants were exercisable immediately upon issuance, subject to certain beneficial ownership limitations. Under the terms of the agreement, we granted the underwriters party thereto an option to purchase up to an additional 3,000,000 common shares at the same price per share as the other common shares sold in this offering, which was exercised by such underwriters in full on February 29, 2024.
The net proceeds to us from the February 2024 Offering, including the proceeds from the exercise by the underwriters of their option to purchase the additional 3,000,000 common shares in full, was $31.9 million after deducting underwriting commissions and offering expenses payable by us.
On July 29, 2020, we entered into an Open Market Sale Agreement SM , or the “Original Sale Agreement,” with respect to an at-the-market offering program, or the “ATM Program,” under which we could issue and sell our common shares having an aggregate offering price of up to $50.0 million through Jefferies LLC, or “Jefferies,” as sales agent or principal. On March 18, 2025, we entered into an Amended and Restated Open Market Sale Agreement SM , or the “Amended Agreement,” with Jefferies. The Amended Agreement amends and restates, in its entirety, the Original Sale Agreement. Under the Amended Agreement, we may issue and sell its common shares, no par value per share, for an aggregate offering price of up to $77.8 million (which includes the $2.8 million of sales previously made pursuant to the Original Sale Agreement through the date the Amended Agreement was entered into), or the “ATM Shares.” The ATM Shares will be sold pursuant to our shelf registration statement on Form S-3 (File No. 333-283162). We previously issued 361,236 common shares under the Original Sale Agreement, resulting in net proceeds of approximately $2.6 million (net of issuance costs of approximately $0.1 million). We issued 5,690,920 shares under the amended agreement resulting in net proceeds of $14.5 million, after deducting sales agent commissions payable by us of $0.4 million, during the year ended December 31, 2025.
We expect that our operating plan, existing cash and cash equivalents and short-term investments to be sufficient to fund our operations for at least the next 12 months from the date of issuance of this Annual Report on Form 10-K for the year ending December 31, 2025 and that there are no known events or conditions that may cast substantial doubt on our ability to continue as a going concern for at least the next 12 months from the date of this filing.
Royalty Purchase Agreement
Pursuant to the Royalty Purchase Agreement, RTW agreed to purchase, following FDA approval of etripamil (subject to certain conditions), in exchange for a purchase price of $75.0 million, the right to receive a tiered quarterly royalty payments, or “royalty interest,” on the annual net product sales of etripamil in the United States.
On January 12, 2026, we closed the sale of the royalty interest under the Royalty Purchase Agreement and received the $75.0 million purchase price from certain funds managed by RTW in exchange for the future royalty interest.
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Funding Requirements
We anticipate that we will use our cash and cash equivalents primarily to fund commercialization and research and development expenditures. We expect our expenses to increase as we continue the development of etripamil and invest in the infrastructure, personnel, and operational expenses required to commercialize CARDAMYST in the United States. We expect to incur increasing operating losses for the foreseeable future as we continue the clinical development of subsequent etripamil indications or any future product candidates. At this time, due to the inherently unpredictable nature of clinical development, we cannot reasonably estimate the costs we will incur and the timelines that will be required to complete development, obtain marketing approval, and commercialize subsequent etripamil indications or any future product candidates, if at all. For the same reasons, we are also unable to predict when, if ever, we may achieve profitability generated from product sales. Clinical and preclinical development timelines, the probability of success, and development costs can differ materially from expectations.
In addition, we have exclusive development and commercialization rights for etripamil for all indications that we may pursue, and as such, have the potential to license development and or commercialization rights for etripamil to a potential partner in regions outside of Greater China. We have established commercialization and marketing capabilities using a direct sales force to commercialize CARDAMYST in the United States. Outside of the United States, we are considering commercialization strategies that may include collaborations with other companies.
For other new product candidates, our efforts are focused on licensing development and/or commercialization rights from potential partners. In the case of either in-licensing or out-licensing, we cannot forecast when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development and commercialization plans and capital requirements.
The timing and amount of our operating expenditures will depend largely on:
• the timing, progress and results of our ongoing and planned clinical trials and other development activities of etripamil in AFib-RVR and in other cardiovascular indications;
• the scope, progress, results, and costs of preclinical development, laboratory testing, and clinical trials of etripamil for additional indications or any future product candidates that we may pursue;
• our ability to establish additional collaborations on favorable terms, if at all;
• the ability of vendors and third-party service providers to accurately forecast expenses and deliver on expectations;
• the costs, timing, and outcome of regulatory review of subsequent etripamil indications and any future product candidates;
• the costs and timing of CARDAMYST commercialization activities, including product manufacturing, marketing, sales, and distribution for CARDAMYST and any future product candidates for which we receive marketing approval;
• the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and
• the extent to which we acquire or in-license other product candidates and technologies.
Until such time, if ever, as we can generate substantial revenue from product sales, we expect to fund our operations and capital funding needs through equity and/or debt financing. We may also consider entering into collaboration arrangements or selectively partnering for clinical development and commercialization. The sale of additional equity would result in additional dilution to our shareholders. The incurrence of debt financing would result in debt service obligations and the
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instruments governing such debt could provide for operating and financing covenants that restrict our operations or our ability to incur additional indebtedness or pay dividends, among other items. If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible, and/or suspend or curtail planned programs. Any of these actions could materially and adversely affect our business, financial condition and results of operations.
Cash Flows
The following table summarizes our cash flows for the periods indicated:
Year ended December 31,
(in thousands)
2025
2024
$ Change
% Change
Net cash (used in) provided by:
Operating activities
$
(49,041)
$
(28,848)
$
(20,193)
70.0%
Investing activities
11,246
8,283
2,963
35.8%
Financing activities
85,527
32,119
53,408
166.3%
Net increase in cash and cash equivalents during the period
$
47,732
$
11,554
$
36,178
Operating Activities
Net cash used in operating activities during the year ended December 31, 2025, was $49.0 million, which consisted primarily of a net loss of $63.1 million. The net loss was partially offset by a net cash increase of $2.7 million related to the change in assets and liabilities, non-cash charges of $7.5 million related to share-based compensation and non-cash interest and debt charges of $3.8 million related to the 2029 Convertible Notes.
Net cash used in operating activities during the year ended December 31, 2024, was $28.8 million, which consisted primarily of a net loss of $41.5 million. The net loss was partially offset by a net cash increase of $3.7 million related to the change in assets and liabilities, non-cash charges of $5.8 million related to share-based compensation and non-cash interest charges of $3.2 million related to the 2029 Convertible Notes.
Investing Activities
During the year ended December 31, 2025, we redeemed $94.5 million of short-term investments, and we acquired $82.9 million of short-term investments. In addition, we acquired $0.3 million in property and equipment.
During the year ended December 31, 2024, we redeemed $121.9 million of short-term investments, and we acquired $113.6 million of short-term investments. In addition, we acquired $0.1 million in property and equipment.
Financing Activities
During the year ended December 31, 2025, our financing activities provided cash proceeds of $85.5 million. These proceeds were primarily a result of $48.6 million received, net of issuance costs, from the issuance of common shares, pre-funded warrants, and common warrants under the 2025 Offering, proceeds of $21.7 million, net of issuance costs, for the exercise of common warrants, and proceeds of $14.5 million, net of issuance costs, for shares sold under the ATM Program. We also had proceeds of $0.4 million and $0.3 million for the exercise of employee options and shares issued as part of the employee stock purchase plan, respectively.
During the year ended December 31, 2024, our financing activities provided cash proceeds of $32.1 million. These proceeds were primarily a result of the $31.9 million received from the issuance of common shares and pre-funded warrants, net of $2.6 million in issuance costs paid under the February 2024 Offering.
Contractual Obligations
We enter into contracts in the normal course of business with clinical research organizations, or “CROs,” contract
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manufacturing organizations, or “CMOs,” and other third parties for clinical trials, preclinical research studies, and testing and manufacturing services. These contracts are generally cancelable at our option with various notice requirements as defined in the contract. Payments due upon cancellation consist of payments for services provided or expenses incurred, including noncancelable obligations of our service providers, up to and through the date of cancellation. These payments are not included as the amount and timing of these payments are not known.
Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements as at December 31, 2025, which have been prepared in accordance with United States generally accepted accounting principles, or “U.S. GAAP,” and on a basis consistent with those accounting principles followed by us. The preparation of these consolidated financial statements requires our management to make judgments and estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant estimates and judgments include, but are not limited to:
• Estimates of the percentage of work completed of the total work over the life of the individual trial in accordance with agreements established with CROs, CMOs, and clinical trial sites which in turn impact the research & development expenses.
• Estimate of the grant date fair value share options granted to employees, consultants and directors, and the resulting share-based compensation expense, using the Black Scholes option pricing model.
Accordingly, actual results may differ from these judgments and estimates under different assumptions or conditions and any such differences may be material. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.
a) Research & Development Expenses — Accruals
Research and development costs are charged against income in the period of expenditure. Our research and development costs consist primarily of salaries and fees paid to CROs and to CMO for clinical trial expenses and manufacturing costs prior to FDA approval.
Clinical trial expenses include direct costs associated with CROs, direct CMO costs for the formulation and packaging of clinical trial material, as well as investigator and patient-related costs at sites at which our trials are being conducted. Direct costs associated with our CROs and CMOs are generally payable on a time-and-materials basis, or when milestones are achieved. The invoicing from clinical trial sites can lag several months. We record expenses for our clinical trial activities performed by third parties based upon estimates of the percentage of work completed of the total work over the life of the individual trial in accordance with agreements established with CROs and clinical trial sites. We determine the estimates through discussions with internal clinical personnel, CROs, and CMOs as to the progress or stage of completion of trials or services and the agreed-upon fee to be paid for such services based on facts and circumstances known to us as of each consolidated balance sheet date. The actual costs and timing of clinical trials are highly uncertain, subject to risks and may change depending upon a number of factors, including our clinical development plan. If the actual timing of the performance of services and of the level of effort varies from the estimate, we will adjust the accrual accordingly. Adjustments to prior period estimates have not been material. We recognize the benefit of Canadian research and development tax credits as a reduction of research and development costs for fully refundable investment tax credits and as a reduction of income taxes for investment tax credits that can only be claimed against income taxes payable when there is reasonable assurance that the claim will be recovered.
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b) Share-Based Compensation
We recognize compensation costs related to share options granted to employees, consultants, and directors based on the estimated fair value of the awards on the date of grant. We estimate the grant date fair value, and the resulting share-based compensation expense, using the Black Scholes option pricing model. This Black Scholes option pricing model uses various inputs to measure fair value, including estimated fair value of our underlying common shares at the grant date, expected term, estimated volatility, risk-free interest rate, and expected dividend yields of our common shares. The estimated volatility creates a critical estimate because we have not been a public company long enough to demonstrate our own historical volatility. The grant date fair value of the share-based awards is recognized on a straight-line basis over the requisite service periods, which are generally the vesting period of the respective awards. Forfeitures are accounted for as they occur.
The following table summarizes, by grant date, the number of underlying common shares and the associated per-share exercise price, which was the fair value per share as determined by our board of directors on the applicable grant date, for share options granted during the years ended December 31, 2025 and 2024:
Estimated
Number of
Fair Value
Estimated
Common Shares
Exercise
per Common
Per-Share
Subject to
Price Per
Share at
Fair Value
Options Granted
Common Share
Grant Date
of Options
March 19, 2024
45,000
$
1.45
$
1.45
$
1.12
May 6, 2024
924,000
$
1.74
$
1.74
$
1.38
July 1, 2024
8,000
$
1.34
$
1.34
$
1.03
July 15, 2024
160,000
$
1.59
$
1.59
$
1.18
July 17, 2024
22,000
$
1.55
$
1.55
$
1.19
August 28, 2024
320,000
$
1.45
$
1.45
$
1.07
September 3, 2024
80,000
$
1.39
$
1.39
$
1.02
October 1, 2024
8,000
$
1.50
$
1.50
$
1.19
October 4, 2024
10,000
$
1.50
$
1.50
$
1.14
November 1, 2024
75,000
$
1.44
$
1.44
$
1.15
January 2, 2025
113,000
$
2.17
$
2.17
$
1.76
January 26, 2025
1,151,400
$
2.02
$
2.02
$
1.64
January 31, 2025
40,000
$
1.97
$
1.97
$
1.65
March 3, 2025
94,000
$
1.65
$
1.65
$
1.33
March 17, 2025
37,000
$
2.41
$
2.41
$
1.95
June 10, 2025
320,000
$
1.75
$
1.75
$
1.54
August 29, 2025
3,000
$
1.84
$
1.84
$
1.64
October 1, 2025
65,000
$
2.05
$
2.05
$
1.83
October 20, 2025
4,000
$
1.99
$
1.99
$
1.78
November 24, 2025
15,000
$
2.37
$
2.37
$
2.11
December 1, 2025
15,000
$
2.69
$
2.69
$
2.40
December 15, 2025
8,500
$
2.35
$
2.35
$
2.10
Recent Accounting Pronouncements
Refer to Note 2, “Summary of Significant Accounting Policies,” in the accompanying notes to our consolidated financial statements for a discussion of recent accounting pronouncements.
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