What changed in this filing

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Item 1. Financial Statements

2026-08-04 compared with 2026-05-05 · 110 added, 86 removed, 609 unchanged (24% of the section changed)

32 unchanged sentences

150,000 shares authorized;

115,000 and 132,500 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively.

Liquidation preference of $ 115,000 and $ 132,500 as of March 31, 2026, and December 31, 2025, respectively.

115,000 and 132,500 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively.

Liquidation preference of $ 116,457 and $ 132,500 as of June 30, 2026, and December 31, 2025, respectively.

114,318 130,957

2 unchanged sentences

9,850,000 shares authorized;

no shares issued and outstanding at March 31, 2026 and December 31, 2025

no shares issued and outstanding at June 30, 2026 and December 31, 2025

Common stock, $ 0.001 par value:

120,000,000 shares authorized;

68,445,084 and 67,205,321 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

68,816,868 and 67,205,321 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital 1,560,640 1,491,675

Accumulated other comprehensive income (loss) 444 ( 796 )

Accumulated other comprehensive loss ( 912 ) ( 796 )

Accumulated deficit ( 1,456,814 ) ( 1,351,877 )

5 unchanged sentences

(in thousands, except share and per share data)

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

Product revenue, net $ 71,255 $ 48,502 $ 131,367 $ 86,220

11 unchanged sentences

Interest income 3,220 3,242 6,774 6,881

Total other income (expense), net ( 2,733 ) ( 2,414 )

Total other expense, net ( 302 ) ( 999 ) ( 3,035 ) ( 3,413 )

Loss before income taxes ( 48,854 ) ( 46,295 ) ( 103,948 ) ( 95,713 )

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Balance at March 31, 2026 115,000 $ 114,710 68,445,084 $ 69 $ 1,529,909 $ 444 $ ( 1,407,516 ) $ 122,906

Stock compensation expense — — — — 26,056 — — 26,056

Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units — — 386,582 — 6,997 — — 6,997

Tax withholding on vesting of restricted stock ( 14,798 ) ( 1,257 ) ( 1,257 )

Accretion of preferred stock dividends — 1,065 — — ( 1,065 ) — — ( 1,065 )

Declaration of preferred stock dividends to be paid in cash — ( 1,457 ) — — — — — —

Foreign currency translation adjustment — — — — — ( 991 ) — ( 991 )

Net unrealized loss on marketable securities — — — — — ( 365 ) — ( 365 )

Net loss — — — — — — ( 49,298 ) ( 49,298 )

Balance at June 30, 2026 115,000 $ 114,318 68,816,868 $ 69 $ 1,560,640 $ ( 912 ) $ ( 1,456,814 ) $ 102,983

Balance at December 31, 2024 150,000 142,820 62,390,654 61 1,177,045 ( 39 ) ( 1,155,338 ) 21,729

2 unchanged sentences

Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units — — 494,853 1 2,225 — — 2,226

Accretion of preferred stock dividends — 1,322 — — ( 1,322 ) — — ( 1,322 )

Issuance of common stock upon completion of ATM equity offering, net of $ 0.7 million of offering costs

Issuance of common stock upon completion of ATM equity offering, net of $ 739 offering costs

— — 587,510 — 32,108 — — 32,108

Accretion of preferred stock dividends — 1,322 — — ( 1,322 ) — — ( 1,322 )

Foreign currency translation adjustment — — — — — ( 2 ) — ( 2 )

2 unchanged sentences

Balance at March 31, 2025 150,000 $ 144,142 63,494,892 $ 62 $ 1,223,772 $ ( 51 ) $ ( 1,204,836 ) $ 18,947

Stock-based compensation expense — — — — 15,880 — — 15,880

Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units — — 418,293 2 3,441 — — 3,443

Accretion of preferred stock dividends — 1,349 — — ( 1,349 ) — — ( 1,349 )

Foreign currency translation adjustment — — — — — ( 2,104 ) — ( 2,104 )

Unrealized loss on marketable securities — — — — — ( 93 ) — ( 93 )

Net loss — — — — — — ( 46,632 ) ( 46,632 )

Balance at June 30, 2025 150,000 $ 145,491 63,913,185 $ 64 $ 1,241,744 $ ( 2,248 ) $ ( 1,251,468 ) $ ( 11,908 )

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

2 unchanged sentences

(in thousands)

Three months ended March 31,

Six months ended June 30,

Operating activities

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The Company has incurred operating losses and experienced negative cash flows from operations since inception.

As of March 31, 2026, the Company had an accumulated deficit of $ 1.4 billion.

As of June 30, 2026, the Company had an accumulated deficit of $ 1.5 billion.

The Company has funded these losses primarily from the proceeds from the sales of common and preferred stock, product revenue, asset sales, royalty financing, out-license arrangements, as well as capital contributions received from the former parent company, Rhythm Holdings LLC.

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The future success of the Company is dependent on its ability to continue to develop its product candidates and ultimately upon its ability to attain profitable operations.

As of March 31, 2026, the Company had $ 340.6 million of cash and cash equivalents and short-term investments on hand.

As of June 30, 2026, the Company had $ 330.9 million of cash and cash equivalents and short-term investments on hand.

In the future, the Company will be dependent on obtaining funding from third parties, such as proceeds from the issuance of debt, sale of equity, proceeds from out license arrangements, product sales and funded research and development programs to maintain the Company's operations and meet the Company's obligations.

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As permitted under these rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted.

The accompanying condensed consolidated balance sheet as of March 31, 2026, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026 and 2025, the condensed consolidated statements of convertible preferred stock and stockholders’ equity for the three months ended March 31, 2026 and 2025 and the condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025 and the related footnote disclosures are unaudited.

The accompanying condensed consolidated balance sheet as of June 30, 2026, the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2026 and 2025, the condensed consolidated statements of convertible preferred stock and stockholders’ equity for the three and six months ended June 30, 2026 and 2025 and the condensed consolidated statements of cash flows for the six months ended June 30, 2026 and 2025 and the related footnote disclosures are unaudited.

In management's opinion, the unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements as of and for the year ended December 31, 2025 and include all adjustments, which are all normal recurring adjustments, necessary for the fair presentation of the interim financial statements.

The results for the three months ended March 31, 2026 are not necessarily indicative of the results expected for the full fiscal year, any other interim periods, or any future year or period.

The results for the three and six months ended June 30, 2026 are not necessarily indicative of the results expected for the full fiscal year, any other interim periods, or any future year or period.

The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the unaudited condensed consolidated financial statements.

As of March 31, 2026, there have been no material changes in the Company's significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

As of June 30, 2026, there have been no material changes in the Company's significant accounting policies from those that were disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Use of Estimates

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The Company does not require collateral to secure amounts due from its customers.

For the three months ended March 31, 2026, and 2025, approximately 61 % and 65 % of all the Company’s revenue was generated from a single customer in the United States.

Additionally, a single international customer also generated approximately 12 % of the Company's revenue during the three months ended March 31, 2026.

As of March 31, 2026, and December 31, 2025, approximately 56 % and 56 %, respectively, of the Company’s accounts receivable was outstanding from a single customer in the United States.

For the three months ended June 30, 2026, and 2025, approximately 72 % and 66 % of all the Company’s revenue was generated from a single customer in the United States.

As of June 30, 2026, and December 31, 2025, approximately 58 % and 56 %, respectively, of the Company’s accounts receivable was outstanding from a single customer in the United States.

The Company relies on third-party manufacturers and suppliers for the manufacture and supply of its product.

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When assessing the risk of credit loss, management considers factors such as the severity and the reason for the decline in value (i.e., any changes to the rating of the security by a rating agency or other adverse conditions specifically related to the security) and management's intended holding period and time horizon for selling.

During the three months ended March 31, 2026 and 2025, the Company did not recognize any credit losses related to its available-for-sale debt securities.

Further, as of March 31, 2026 and December 31, 2025, the Company did not record an allowance for credit losses related to its available-for-sale debt securities.

During the three and six months ended June 30, 2026 and 2025, the Company did not recognize any credit losses related to its available-for-sale debt securities.

Further, as of June 30, 2026 and December 31, 2025, the Company did not record an allowance for credit losses related to its available-for-sale debt securities.

Accounts Receivable, net

3 unchanged sentences

The Company's contracts with its customers have customary payment terms that generally require payment within 90 days.

The Company analyzes amounts that are past due for collectability, and periodically evaluates the creditworthiness of its

As of March 31, 2026 and December 31, 2025, the Company determined an allowance for credit losses was not required based upon our review of contractual payments and our customers’ circumstances.

The Company analyzes amounts that are past due for collectability, and periodically evaluates the creditworthiness of its customers.

As of June 30, 2026 and December 31, 2025, the Company determined an allowance for credit losses was not required based upon our review of contractual payments and our customers’ circumstances.

Revenue Recognition

26 unchanged sentences

Government rebates:

The Company is subject to discount obligations under government programs, including Medicaid programs, Medicare and Tricare in the United States as well as certain government rebates and pricing adjustments in certain international markets that we operate.

We estimate these rebates based upon a range of possible outcomes that are probability-weighted for the estimated payer mix.

These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability that is

included in accrued expenses and other current liabilities on our condensed consolidated balance sheets.

These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability that is included in accrued expenses and other current liabilities on our condensed consolidated balance sheets.

On a quarterly basis, we update our estimates and record any adjustments in the period that we identify the adjustments.

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We evaluate the measure of progress, as applicable, for each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded within deferred revenue.

Contract liabilities within deferred revenue are recognized as revenue after control of the goods or services is transferred to the customer and all revenue recognition criteria have been met.

24 unchanged sentences

The Company evaluates its long-lived assets, which consist primarily of property and equipment and finite lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets.

Factors that the Company considers in deciding when to perform an impairment review

include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets.

The Company measures recoverability of assets to be held and used by comparing the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset.

If such assets are considered to be impaired, the Company measures the impairment to be recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset, less the cost to sell.

No events or changes in circumstances existed to require an impairment assessment during the three months ended March 31, 2026 and 2025, respectively.

No events or changes in circumstances existed to require an impairment assessment during the six months ended June 30, 2026 and 2025, respectively.

Acquired IPR&D and Milestone Expenses

9 unchanged sentences

Changes resulting from foreign currency translation are included in accumulated other comprehensive income (loss) on the Company’s consolidated statement of stockholders’ equity.

Net foreign currency exchange transaction gains (losses), which are included in other income (expense), net on our consolidated statements of operations, were $ 1.4 million and $ 0.0 million for the three months ended March 31, 2026 and 2025, respectively.

Net foreign currency exchange transaction gains (losses), which are included in other income (expense), net on our consolidated statements of operations, were $ 0.3 million and $( 1.7 ) million for the six months ended June 30, 2026 and 2025, respectively.

Fair Value Measurements

6 unchanged sentences

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company’s cash equivalents and marketable securities and derivative asset as of March 31, 2026 and December 31, 2025 were carried at fair value, determined according to the fair value hierarchy.

The Company’s cash equivalents and marketable securities and derivative asset as of June 30, 2026 and December 31, 2025 were carried at fair value, determined according to the fair value hierarchy.

See Note 6, Fair Value of Financial Assets and Liabilities, for further discussion.

The carrying amounts reflected in the condensed consolidated balance sheets for accounts payable and accrued expenses and other current liabilities approximate their fair values due to their short-term maturities as of March 31, 2026 and December 31, 2025, respectively.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period, without consideration of potential dilutive securities.

Diluted net loss per common share is computed by adjusting the weighted average shares outstanding for the potential dilutive effects of common stock equivalents outstanding during the period calculated in accordance with the more dilutive of the if-converted or the treasury stock method.

Diluted net loss per common share is computed by adjusting the weighted average shares outstanding for the potential

dilutive effects of common stock equivalents outstanding during the period calculated in accordance with the more dilutive of the if-converted or the treasury stock method.

For purposes of the diluted net loss per share calculation, stock options, performance stock units and restricted stock units are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive for all periods presented.

1 unchanged sentence

The following table includes the potential common shares that were excluded from the computation of diluted net loss per share as their effect would have been anti-dilutive for the periods indicated:

Three Months Ended

Three and six months ended June 30,

Stock options 6,247,705 6,931,178

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In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270) Narrow-Scope Improvements.” The amendments in this update provide clarity on interim disclosure requirements and the applicability of Topic 270.

The amendments in this update also include a disclosure principle that requires entities to disclose events since

the end of the last annual reporting period that have a material impact on the entity.

The amendments in this update also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

The amendments in this ASU are required to be adopted for interim periods within annual reporting periods beginning after December 15, 2027.

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Fair Value of Financial Assets and Liabilities

As of March 31, 2026 and December 31, 2025, the carrying amount of cash and cash equivalents and short-term investments was $ 340.6 million and $ 388.9 million respectively, which approximates fair value.

As of June 30, 2026 and December 31, 2025, the carrying amount of cash and cash equivalents and short-term investments was $ 330.9 million and $ 388.9 million respectively, which approximates fair value.

Cash and cash equivalents and short-term investments includes investments in U.S.

5 unchanged sentences

Fair Value Measurements as of

March 31, 2026 using:

June 30, 2026 using:

Level 1 Level 2 Level 3 Total

Cash equivalents:

Commercial Paper $ — $ — $ — $ —

Money market funds $ 49,103 $ — $ — $ 49,103

15 unchanged sentences

The estimated fair value of the derivative asset related to our Royalty Interest Financing Agreement (RIFA) with HealthCare Royalty Partners was determined using Level 3 inputs.

The fair value measurement of the derivative asset is sensitive to changes in the unobservable inputs used to value the financial instrument.

The fair value measurement of the derivative asset is

sensitive to changes in the unobservable inputs used to value the financial instrument.

Changes in the inputs could result in changes to the fair value of each financial instrument.

9 unchanged sentences

The following tables set forth a summary of the changes in the estimated fair value of our embedded derivative liability (asset) (in thousands):

Three months ended

Six months ended

Beginning aggregate estimated fair value of Level 3 liability (asset) $ ( 1,180 ) $ ( 270 )

3 unchanged sentences

The following tables summarize the Company's marketable securities (in thousands):

March 31, 2026

June 30, 2026

Corporate debt securities and commercial paper (due within 1 year) $ 197,218 $ 7 $ ( 240 ) $ 196,985

6 unchanged sentences

Intangible Assets

As of March 31, 2026 As of December 31, 2025

As of June 30, 2026 As of December 31, 2025

Estimated life (years) Cost Accumulated

2 unchanged sentences

Capitalized Milestones 11 $ 9,000 $ ( 4,108 ) $ 4,892 $ 9,000 $ ( 3,681 ) $ 5,319

As of March 31, 2026, the Company’s finite-lived net intangible assets, which totaled $ 5.1 million, resulted from the capitalization of certain milestone payments made to Ipsen Pharma, S.A.S., or Ipsen, in accordance with the terms of the Company’s license agreement with Ipsen, in connection with the Company’s first commercial sale of IMCIVREE in the U.S.

As of June 30, 2026, the Company’s finite-lived net intangible assets, which totaled $ 4.9 million, resulted from the capitalization of certain milestone payments made to Ipsen Pharma, S.A.S., or Ipsen, in accordance with the terms of the Company’s license agreement with Ipsen, in connection with the Company’s first commercial sale of IMCIVREE in the U.S.

in March 2021 and in France in March 2022.

As of March 31, 2026, amortization expense for the next five years and beyond is summarized as follows (in thousands):

As of June 30, 2026, amortization expense for the next five years and beyond is summarized as follows (in thousands):

2026 (remainder) $ 427

1 unchanged sentence

Total $ 4,892

Amortization expense totaled $ 0.2 million for each of the three months ended March 31, 2026 and 2025, respectively.

Amortization expense totaled $ 0.2 million for each of the three months ended June 30, 2026 and 2025, respectively.

Amortization expense totaled $ 0.4 million for each of the six months ended June 30, 2026 and 2025, respectively.

Amortization expense is included in cost of sales in the condensed consolidated statements of operations and comprehensive loss.

The Company recorded an income tax provision of approximately $ 0.5 million and $ 0.1 million for the three months ended March 31, 2026, and 2025, respectively.

The Company recorded an income tax provision of approximately $ 0.4 million and $ 0.3 million for the three months ended June 30, 2026, and 2025, respectively.

The Company recorded an income tax provision of approximately $ 1.0 million and $ 0.4 million for the six months ended June 30, 2026, and 2025, respectively.

The income tax provision is a result of taxable income from the Company’s foreign jurisdictions.

4 unchanged sentences

Series A Convertible Preferred Stock

Preferred Stock, par value $ 0.001 per share, titled the “Series A Convertible Preferred Stock” (the “Convertible Preferred Stock”), for an aggregate purchase price of $ 147.8 million, net of $ 2.3 million of issuance costs, or $ 1,000 per share (the “Issuance”).

On April 1, 2024, the Company entered into an Investment Agreement (the “Investment Agreement”) with certain affiliates of Perceptive Advisors LLC (“Perceptive”) and certain other investors (each, an “Investor” and collectively, the “Investors”), relating to the issuance and sale of 150,000 shares of a new series of the Company’s Series A Convertible Preferred Stock, par value $ 0.001 per share, titled the “Series A Convertible Preferred Stock” (the “Convertible Preferred Stock”), for an aggregate purchase price of $ 147.8 million, net of $ 2.3 million of issuance costs, or $ 1,000 per share (the “Issuance”).

The Issuance closed on April 15, 2024.

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The Company classifies its Convertible Preferred Stock outside of stockholders’ equity as the redemption of such shares is outside the Company’s control.

The Company did not adjust the carrying values of the Convertible Preferred Stock to redemption value as the shares are not probable of becoming redeemable as of March 31, 2026 .

The Company did not adjust the carrying values of the Convertible Preferred Stock to redemption value as the shares are not probable of becoming redeemable as of June 30, 2026 .

On December 4, 2025, and in accordance with the terms described below, a holder of the Company's Series A Convertible Preferred Stock exercised their right to convert 17,500 shares of Series A Convertible Preferred Stock to common shares.

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Specifically, as long as the Convertible Preferred Stock are outstanding, each of the following events require at least a two thirds affirmative vote of the Convertible Preferred Stock holders:

modification, repeal or waiver of any provision of the Certificate of Incorporation or the Amended and Restated Certificate of Designations that adversely affects the rights, preferences, privileges or powers of the Convertible Preferred Stock, (c) increase or decrease the number of authorized shares of Convertible Preferred Stock or issue additional shares of Convertible Preferred Stock, (d) the Company’s consolidation or combination with, or merger with or into, another Person, or any binding or statutory share exchange or involving the Convertible Preferred Stock, in each case unless:

(a) any amendment or modification of the Certificate of Incorporation to authorize or create, or to increase the authorized number of shares of, any class or series of Dividend Parity Stock, Liquidation Parity Stock, Dividend Senior Stock or Liquidation Senior Stock, (b) any amendment, modification, repeal or waiver of any provision of the Certificate of Incorporation or the Amended and Restated Certificate of Designations that adversely affects the rights, preferences, privileges or powers of the Convertible Preferred Stock, (c) increase or decrease the number of authorized shares of Convertible Preferred Stock or issue additional shares of Convertible Preferred Stock, (d) the Company’s consolidation or combination with, or merger with or into, another Person, or any binding or statutory share exchange or involving the Convertible Preferred Stock, in each case unless:

(i) the Convertible Preferred Stock either (x) remains outstanding after such consolidation, combination, merger, share exchange or reclassification;

1 unchanged sentence

(ii) the Convertible Preferred Stock that remains outstanding or such preference securities, as applicable, have rights, preferences and voting powers that, taken as a whole, are not materially less favorable to the Holders or the holders thereof, as applicable, than the rights, preferences and voting powers, taken as a whole, of the Convertible Preferred Stock immediately before the consummation of such consolidation, combination, merger, share exchange or reclassification;

and (iii) the issuer of the Convertible Preferred Stock that remains outstanding or such preference securities, as applicable, is a corporation duly organized and existing under the laws of the United States of America, any State thereof or the District of Columbia that, if not the Company, will succeed to the Company under the Amended and Restated Certificate of Designations and the Convertible Preferred Stock.

of America, any State thereof or the District of Columbia that, if not the Company, will succeed to the Company under the Amended and Restated Certificate of Designations and the Convertible Preferred Stock.

The Company has the right to redeem all Convertible Preferred Stock after the Redemption Trigger Date, which is the fifth anniversary of the Initial Issue Date of April 15, 2024 .

1 unchanged sentence

If a change of control occurs, each holder shall have the right to require the Company to repurchase all, or any whole number of shares that is less than all, of the holder’s Convertible Preferred Stock at an amount equal to 1.75 multiplied by the sum of the Liquidation Preference (i.e., Initial Liquidation Preference of $ 1,000 per share plus PIK Dividends) plus any unpaid Regular Dividends (to the extent such accumulated and unpaid Regular Dividends are not included in such Liquidation Preference).

As of March 31, 2026 , the Company did not adjust the carrying value of the Convertible Preferred Stock to its redemption value, since a change of control was determined to be not probable.

As of June 30, 2026 , the Company did not adjust the carrying value of the Convertible Preferred Stock to its redemption value, since a change of control was determined to be not probable.

After the second anniversary, dividends on the Convertible Preferred Stock accrue quarterly, at a 6 % annual rate, and if not paid out in cash before the quarter end, will become PIK Dividends and added to the liquidation preference, or original issue price plus PIK Dividends.

1 unchanged sentence

Accordingly, the Company accretes the dividends, using the effective interest method, from Issuance to the first contractual call date, April 15, 2029.

The Company accrued dividends of $ 1.1 million and $ 1.3 million for the three months ended March 31, 2026 and March 31, 2025 , as a reduction to Additional Paid-In Capital and an increase to the carrying value of Convertible Preferred Stock.

The carrying value of Convertible Preferred Stock as of March 31, 2026 and December 31, 2025 is $ 114.7 million and $ 131.0 million, respectively.

The Company accrued dividends of $ 2.2 million and $ 2.7 million for the six months ended June 30, 2026 and June 30, 2025 , as a reduction to Additional Paid-In Capital and an increase to the carrying value of Convertible Preferred Stock.

On July 1, 2026, the Company paid cash dividends of approximately $ 1.5 million in the aggregate to the holders, as of the record date of June 30, 2026, of the Series A Convertible Preferred Stock, pursuant to the terms of the Amended and Restated Certificate of Designations of the Series A Convertible Preferred Stock, dated May 7, 2024.

As of June 30, 2026, these accrued dividends of $ 1.5 million were classified within other current liabilities in the Company's condensed consolidated balance sheet.

The carrying value of Convertible Preferred Stock as of June 30, 2026 and December 31, 2025 is $ 114.3 million and $ 131.0 million, respectively.

Holders of Convertible Preferred Stock have the option to convert any number of whole shares at any time.

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However, based on certain restrictions on the conversion of the Convertible Preferred Stock specified in the Amended and Restated Certificate of Designations, a holder of Convertible Preferred Stock is not entitled to effect a conversion of any portion of its shares of Convertible Preferred Stock, or to vote in its capacity as a holder of shares of Convertible Preferred Stock with respect to matters submitted to holders of the common stock if, after giving effect to such conversion, that holder would beneficially own in excess of 4.99 %, in the case of one holder, or 9.99 %, in the case of the other holder, of the number of shares of common stock outstanding immediately after giving effect to such exercise.

The Company has the right to force mandatory conversion of Convertible Preferred Stock should the closing sale price per share of Common Stock exceed 250 % of the Conversion Price for at least twenty ( 20 ) of thirty ( 30 ) consecutive trading days, subject to certain restrictions based the liquidity of the Common Stock.

On May 7, 2024, the Company filed an Amended and Restated Certificate of Designations in respect of the Convertible Preferred Stock containing certain technical amendments to the terms of the Convertible Preferred Stock.

The amendments contained in the Amended and Restated Certificate of Designations (x) limited the voting rights of the Convertible Preferred Stock to 24.9438 shares of the Company’s common stock per $ 1,000 liquidation preference of Convertible Preferred Stock and (y) eliminated a 1 % step up in the interest rate that otherwise would have applied in the unlikely event that the Company was required to obtain and failed to obtain stockholder approval for certain conversion shares underlying the Convertible Preferred Stock.

Convertible Preferred Stock and (y) eliminated a 1 % step up in the interest rate that otherwise would have applied in the unlikely event that the Company was required to obtain and failed to obtain stockholder approval for certain conversion shares underlying the Convertible Preferred Stock.

O n February 26, 2026, the Company filed with the Securities Exchange Commission (the “SEC”) a registration statement on Form S-3ASR containing a prospectus covering the resale from time to time by the Investors of up to an aggregate of 2,395,831 shares of common stock, to satisfy registration rights that the Company granted to such stockholders in connection with the Issuance.

The Company has 10,000,000 shares of Preferred Stock authorized, of which 115,000 shares are designated for the Series A Convertible Preferred Stock.

As of March 31, 2026 , an aggregate of 19,823,095 shares of common stock were reserved for issuance under the Company’s stock plans, which include stock options, restricted stock units, and performance stock units that have been granted covering 9,784,464 shares of common stock, as well as 6,386,116 of shares available under the Company’s 2017 Equity Incentive Plan (the “2017 Plan”) and 1,225,153 shares of common stock available for future grants under the Company’s Employee Stock Purchase Plan.

As of June 30, 2026 , an aggregate of 19,451,246 shares of common stock were reserved for issuance under the Company’s stock plans, which include stock options, restricted stock units, and performance stock units that have been granted covering 9,434,531 shares of common stock, as well as 6,364,265 of shares available under the Company’s 2017 Equity Incentive Plan (the “2017 Plan”) and 1,225,083 shares of common stock available for future grants under the Company’s Employee Stock Purchase Plan.

Additionally, this reserve includes 2,395,836 shares of common stock for issuance to satisfy the shares of common stock issuable upon conversion of the remaining 115,000 shares of Convertible Preferred Stock.

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On February 9, 2022, the Company’s board of directors adopted the Inducement Plan, without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Stock Market LLC listing rules or Rule 5635(c)(4).

In accordance with Rule 5635(c)(4), awards under the Inducement Plan may only be made to a newly hired employee who has not previously

been a member of the Company’s board of directors, or an employee who is being rehired following a bona fide period of non-employment by the Company or a subsidiary, as a material inducement to the employee’s entering into employment with the Company or its subsidiary.

In accordance with Rule 5635(c)(4), awards under the Inducement Plan may only be made to a newly hired employee who has not previously been a member of the Company’s board of directors, or an employee who is being rehired following a bona fide period of non-employment by the Company or a subsidiary, as a material inducement to the employee’s entering into employment with the Company or its subsidiary.

An aggregate of 1,000,000 shares of the Company’s common stock have been reserved for issuance under the Inducement Plan.

5 unchanged sentences

Stock options granted under the Inducement Plan expire no more than 10 years from the date of grant.

As of March 31, 2026, 530,695 stock option awards and 392,531 restricted stock unit awards have been granted under the Inducement Plan, net of forfeitures.

As of March 31, 2026, 77,116 shares of common stock are available for future grant under the Inducement Plan.

As of June 30, 2026, 529,088 stock option awards and 386,267 restricted stock unit awards have been granted under the Inducement Plan, net of forfeitures.

As of June 30, 2026, 92,519 shares of common stock are available for future grant under the Inducement Plan.

Related-Party Transactions

Expenses paid directly to related parties for the three months ended March 31, 2026 and 2025, were immaterial.

Outstanding payments due to related parties as of March 31, 2026 and December 31, 2025 were also immaterial.

Expenses paid directly to related parties for the three and six months ended June 30, 2026 and 2025, were immaterial.

Outstanding payments due to related parties as of June 30, 2026 and December 31, 2025 were also immaterial.

Significant Agreements

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Pursuant to the RIFA and subject to customary closing conditions, the Investors have agreed to pay the Company an aggregate investment amount of up to $ 100.0 million, or the Investment Amount.

Under the terms of the RIFA, we received $ 37.5 million on June 29, 2022 upon FDA approval of IMCIVREE in BBS, referred to as the Initial Investment Amount, and we received an additional $ 37.5 million on September 29, 2022 of the Investment Amount upon EMA approval for BBS.

On September 12, 2023, we received the remaining $ 24.4 million of the

Investment Amount, net of debt issuance costs, following the achievement of a specified amount of cumulative net sales of IMCIVREE between July 1, 2022 and March 31, 2024.

As consideration for the Investment Amount and pursuant to the RIFA, we agreed to pay the Investors a tiered royalty on our annual net revenues, or Revenue Interest, including worldwide net product sales and upfront payments and milestones.

Under the terms of the RIFA, we received $ 37.5 million on June 29, 2022 upon FDA approval of IMCIVREE in Bardet-Biedl syndrome (" BBS"), referred to as the Initial Investment Amount, and we received an additional $ 37.5 million on September 29, 2022 of the Investment Amount upon EMA approval for BBS.

On September 12, 2023, we received the remaining $ 24.4 million of the Investment Amount, net of debt issuance costs, following the achievement of a specified amount of cumulative net sales of IMCIVREE between July 1, 2022 and September 30, 2023.

The applicable tiered percentage will initially be 11.5 % on annual net revenues up to $ 125 million, 7.5 % on annual net revenues of between $ 125 million and $ 300 million and 2.5 % on annual net revenues exceeding $ 300 million.

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As the repayment of the funded amount is contingent upon worldwide net product sales and upfront payments, milestones, and royalties, the repayment term may be shortened or extended depending on actual worldwide net product sales and upfront payments, milestones, and royalties.

We made repayments of $ 4.3 million in the three months ended March 31, 2026.

As of March 31, 2026 we have made cumulative payments of $ 44.6 million.

We made repayments of $ 11.2 million in the six months ended June 30, 2026.

As of June 30, 2026 we have made cumulative payments of $ 51.5 million.

The Investors’ rights to receive the Revenue Interests will terminate on the date on which the Investors have received payments equal to a certain percentage of the funded portion of the Investment Amount including the aggregate of all payments made to the Investors as of such date, each percentage tier referred to as the Hard Cap, unless the RIFA is earlier terminated.

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We determined the fair value of the derivative using an option pricing Monte Carlo simulation model taking into account the probability of change of control occurring and potential repayment amounts and timing of such payments that would result under various scenarios, as further described in Note 2, Summary of Significant Accounting Policies , to our condensed consolidated financial statements.

The aggregate fair value of the embedded derivative asset (liability) was $ 0.9 million and $ 1.2 million as of March 31, 2026 and December 31, 2025, respectively.

The aggregate fair value of the embedded derivative asset (liability) was $ 0.6 million and $ 1.2 million as of June 30, 2026 and December 31, 2025, respectively.

We remeasure the embedded derivative to fair value each reporting period until the time the features lapse and/or termination of the deferred royalty obligation.

For the three months ended March 31, 2026 and 2025, we recognized other expense of $( 0.3 ) million and $( 0.1 ) million, respectively, due to the remeasurement of the embedded derivative asset.

The carrying value of the deferred royalty obligation as of March 31, 2026 was $ 108.5 million based on $ 100.0 million of proceeds, net of the fair value of the bifurcated embedded derivative liability upon execution of the RIFA, and debt issuance costs incurred.

The carrying value is classified as $ 10.1 million within current liabilities and $ 98.3 million within long-term liabilities on the consolidated balance sheet as of March 31, 2026.

The carrying value of the deferred

royalty obligation approximated fair value as of March 31, 2026 and December 31, 2025.

The effective interest rate as of March 31, 2026 was 17.16 %.

For the three months ended June 30, 2026 and 2025, we recognized other expense of $( 0.2 ) million and $ 0.5 million, respectively, due to the remeasurement of the embedded derivative asset.

For the six months ended June 30, 2026 and 2025, we recognized other expense of $( 0.6 ) million and $ 0.4 million, respectively, due to the remeasurement of the embedded derivative asset.

The carrying value of the deferred royalty obligation as of June 30, 2026 was $ 106.1 million based on $ 100.0 million of proceeds, net of the fair value of the bifurcated embedded derivative liability upon execution of the RIFA, and debt issuance costs incurred.

The carrying value is classified as $ 12.7 million within current liabilities and $ 93.4 million within long-term liabilities on the consolidated balance sheet as of June 30, 2026.

The carrying value of the deferred royalty obligation approximated fair value as of June 30, 2026 and December 31, 2025.

The effective interest rate as of June 30, 2026 was 17.16 %.

In connection with the deferred royalty obligation, we incurred debt issuance costs totaling $ 3.3 million.

Debt issuance costs have been netted against the debt and are being amortized over the estimated term of the debt using the effective interest method, adjusted on a prospective basis for changes in the underlying assumptions and inputs.

Debt issuance costs have been netted against the debt and are being amortized over the estimated term of the

debt using the effective interest method, adjusted on a prospective basis for changes in the underlying assumptions and inputs.

The assumptions used in determining the expected repayment term of the debt and amortization period of the issuance costs requires that we make estimates that could impact the short and long-term classification of these costs, as well as the period over which these costs will be amortized.

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The Company is not presently subject to any pending or threatened litigation that it believes, if determined adversely to the Company, individually, or taken together, would reasonably be expected to have a material adverse effect on its business or financial results.

The Company is party to various agreements, principally relating to licensed technology, that require future payments relating to milestones whose achievement may become probable in subsequent periods, or royalties on future sales of specified products.

Additionally, the Company is party to various contracts with CROs and CMOs that generally provide for termination on notice, with the exact amounts in the event of termination to be based on the timing of the termination and the terms of the agreement.

Based on the Company’s current development plans as of March 31, 2026, the Company does not deem it probable that we will make material milestone payments to third parties during the next 12 months from the filing of this Form 10-Q, in connection with our license agreements.

These milestones are generally recognized in the period in which the achievement of the underlying milestones becomes probable.

The Company is party to various agreements, principally relating to licensed technology;

milestones under these agreements are generally recognized in the period in which the achievement of the underlying milestones becomes probable.

When the achievement of these milestones or sales have not occurred, such contingencies are not recorded in the Company’s consolidated financial statements.

The Company also has various contracts with CROs and CMOs that generally provide for termination on notice, with the exact amounts in the event of termination to be based on the timing of the termination and the terms of the agreement.

As of June 30, 2026, the Company estimates that potential milestone payments of up to $ 18 million could become payable by the Company during the next 12 months depending on the achievement and timing of specified milestones.

No amounts related to these milestones have been accrued as the underlying triggering events had not occurred as of June 30, 2026 and are not probable.

Segment and Geographic Information

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and international segments for the development and commercialization of therapies for patients with rare diseases.

A single management team that reports to the Chief Executive Officer comprehensively manages the entire business.

The Company meets the aggregation criteria of ASC 280 and therefore has one reportable segment for the three months ended March 31, 2026 and March 31, 2025.

A single management team that reports to the Chief Executive Officer who comprehensively manages the entire business.

The Company meets the aggregation criteria of ASC 280 and therefore has one reportable segment for the six months ended June 30, 2026 and June 30, 2025.

The table below is a summary of the segment profit or loss, including significant segment expenses (in thousands):

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

Net product revenue - U.S.

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Total product revenue, net, by geographic area was as follows (in thousands):

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2026 2025 2026 2025

US $ 50,987 $ 31,982 $ 87,883 $ 56,352

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Total product revenue, net $ 71,255 $ 48,502 $ 131,367 $ 86,220

As of March 31, 2026 and December 31, 2025, long-lived assets at locations outside the United States were not material.

As of June 30, 2026 and December 31, 2025, long-lived assets at locations outside the United States were not material.

Subsequent Events

The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the financial statements to provide additional evidence for certain estimates or to identify matters that require additional disclosure.

As described in Note 9, Series A Convertible Preferred Stock , on July 1, 2026, the Company paid cash dividends of approximately $ 1.5 million in the aggregate to the holders of the Series A Convertible Preferred Stock.

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