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Item 7. Management’s Discussion and Analysis

2026-03-09 compared with 2025-03-20 · 157 added, 215 removed, 139 unchanged (73% of the section changed)

Management’s Discussion and Analysis o f Financial Condition and Results of Operations.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis together with our financial statements and related notes included in “ Item 8.

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Risk Factors.

We are a biopharmaceutical company focused on the commercialization and development of neffy (previously referred to as ARS-1 and, in the case of the 2 mg form, currently identified in the EU by the tradename EURneffy ) for the needle-free intranasal delivery of epinephrine for the emergency treatment of Type I allergic reactions, including anaphylaxis.

neffy is the first and only FDA and EC-approved needle-free epinephrine product, and the first new delivery method for epinephrine in more than 35 years.

We are a biopharmaceutical company focused on the commercialization and development of neffy (currently identified in the European Union (“EU”) and United Kingdom (“U.K.”) by the trade name EURneffy and in China by the trade name 优敏速 ) for needle-free intranasal delivery of epinephrine for emergency treatment of Type I allergic reactions, including anaphylaxis.

neffy is the first and only U.S.

Food and Drug Administration (“FDA”) and European Commission-approved needle-free epinephrine product, also has approvals in the U.K., Japan, Australia, and China.

It is the first new delivery method for epinephrine in more than 35 years.

neffy is a proprietary composition of epinephrine with an innovative absorption enhancer called Intravail, which allows neffy to safely provide intranasal delivery of epinephrine at a low dose within the exposures of approved injectable products across a range of dosing conditions (including repeat dosing and allergen challenge).

We believe neffy ’s “no needle, no injection” approach addresses a significant unmet need in the use of epinephrine, which, except for neffy , is currently approved only in injectable formulations for the emergency treatment of Type I allergic reactions.

There are approximately 40 million people in the United States who experience Type I allergic reactions.

Of this group, approximately 20 million people have been diagnosed and experienced severe Type I allergic reactions that may lead to anaphylaxis, and approximately 6.5 million were prescribed an epinephrine autoinjector.

However (in 2023, for example), only 3.2 million filled their active epinephrine autoinjector prescription, and of those, only half consistently carry their prescribed autoinjector with them due to the many drawbacks of these devices.

In aggregate, we estimate that up to 90% of patients prescribed an epinephrine device are not achieving an optimal treatment outcome today.

We believe the market opportunity for neffy in the United States alone is significant.

At the current list price for a two-pack of neffy and our target total gross-to-net yield, the estimated 6.5 million patients currently prescribed an epinephrine autoinjector in the United States represents an initial addressable market opportunity of approximately $3 billion in annual net sales, while the remaining 13.5 million diagnosed patients that have not been prescribed an epinephrine product represent an additional addressable market opportunity of approximately $7 billion in annual net sales.

These drawbacks include the use of needles, which can result in patient and caregiver injury as well as hesitation and delays in administration due principally to apprehension and pain of needles, allowing the allergic reaction to progress in severity leading to symptoms that seriously impact patient quality of life, to potential need for emergency services and/or hospitalizations, and to life-threatening symptoms or events.

In particular, intra-muscular injections are subject to dosing errors and risk of accidental blood vessel injections, which can cause a significant spike in the intravascular delivery of epinephrine potentially leading to serious cardiovascular complications or events.

We believe neffy’s and our intranasal epinephrine technology product candidates’ design, particularly the compact size and “no needle, no injection” delivery, eliminates needle-related apprehension and pain, improves portability and ease of use, is highly reliable, and will increase prescriptions for epinephrine, making it more likely that patients and caregivers will administer epinephrine sooner, achieve more rapid symptom relief, and prevent the allergic reaction from progressing to a level of severity that could lead to hospitalization or even death.

Data from our studies of neffy and our intranasal epinephrine technology product candidates demonstrated nasally delivered epinephrine reached blood levels comparable to those of already approved epinephrine injectable products across single dosing, repeat dosing, self-administration or allergen challenge conditions, and produced statistically significant responses compared to injection on pharmacodynamic surrogates for efficacy even one minute after dosing with neffy and our intranasal epinephrine technology product candidates.

On August 9, 2024, the FDA approved neffy 2 mg for the emergency treatment of Type I allergic reactions, including anaphylaxis, in adults and children who weigh 30 kg or greater.

As a result, we initiated commercial launch of neffy 2 mg in the United States, with product becoming available for shipment on September 23, 2024.

This commercialization effort currently includes a direct sales force of 118 individuals targeting high-volume epinephrine prescribers that is supported by branded direct-to-consumer marketing, disease awareness campaigns with advocacy groups and non-personal promotion such as non-personal promotion including continuing medical education programs in collaboration with allergist societies, speaker bureaus, peer-to-peer programs and participation in regional and national medical conferences.

On March 5, 2025, the FDA approved neffy 1 mg for the emergency treatment of Type I allergic reactions, including anaphylaxis, in patients who are four years of age and older and weigh 15 kg to less than 30 kg.

Commercial Launch Initiated in September 2024

Our launch strategy for neffy in the United States involves an initial direct sales force outreach to high-volume prescribers of epinephrine accounting for 40% to 45% of prescriptions in the last year through an efficient sales force comprised of 118 individuals serving as sales reps, virtual reps and areas sales managers that began field operations in early October 2024;

active participation since November 2024 of approximately 2,500 healthcare professionals in our neffy experience program that allows healthcare professionals to use neffy firsthand as rescue therapy for anaphylaxis during in-clinic allergen challenge;

extensive non-personal promotion including continuing medical education programs in collaboration with allergist societies, speaker bureaus, peer-to-peer programs and participation in regional and national medical conferences;

engagement and contracting with payers to obtain timely coverage with favorable gross-to-net discounting;

We believe the market opportunity for neffy in the United States is significant.

At the current list price for neffy and our target total gross-to-net yield, the estimated 6.5 million patients currently prescribed an epinephrine autoinjector in the United States represents an initial addressable market opportunity of approximately $3.5 billion in annual net sales, while the remaining 13.5 million diagnosed patients that have not been prescribed an epinephrine product represent an additional addressable market opportunity of approximately $7.0 billion in annual net sales.

We believe neffy ’s “no needle, no injection” approach addresses a significant unmet need in the use of epinephrine.

There are approximately 40 million people in the U.S.

who experience Type I allergic reactions.

Of this group, approximately 20 million people are reported to have been diagnosed and experienced severe Type I allergic reactions that may lead to anaphylaxis, and approximately 6.5 million of those were prescribed an epinephrine autoinjector.

However, in recent years, only an estimated one-half of those consistently carry their prescribed autoinjector with them.

We believe the market opportunity for neffy in the U.S.

is significant.

Those estimated 3.2 million patients who currently fill their active epinephrine autoinjector prescription would represent approximately $1.8 billion in annual U.S.

net sales at neffy ’s target estimated gross-to-net yield based on epinephrine device unit volume in 2025.

In August 2024, the FDA approved neffy 2 mg for the emergency treatment of Type I allergic reactions, including anaphylaxis, in adults and children who weigh 30 kg or greater, with neffy 1 mg subsequently approved in March 2025 for patients who are four years of age and older and weigh 15 kg to less than 30 kg.

Our launch strategy for neffy in the United States involves direct outreach to high-volume prescribers of epinephrine accounting for approximately 55% of prescriptions in the last year through an efficient sales force.

As of December 31, 2025, our sales force is comprised of approximately 106 ARS Pharma employees, who serve as sales reps, key account managers, area sales managers, and national sales directors, as well as 10 virtual sales reps, and approximately 70 sales reps via our co-promotion partner, ALK U.S., who began field operations in June 2025 and will target up to 9,000 specified pediatricians and other prescribers in the U.S.

We plan to expand our internal sales force to approximately 150 individuals beginning in the second quarter of 2026.

For more information regarding our partners and collaboration agreements, see “ Business—Our Collaboration and Licensing Agreements.

Our launch strategy is also supported by:

active participation since November 2024 of approximately 2,800 healthcare professionals in our neffy experience program that allows healthcare professionals to use neffy firsthand as rescue therapy for anaphylaxis during in-clinic allergen challenge as well as for the ongoing collection of real-world evidence that supports neffy’s clinical equivalence to injection;

extensive non-personal promotion including medical education programs in collaboration with allergist societies, speaker bureaus, peer-to-peer programs and participation in regional and national medical conferences;

engagement and contracting with payors to obtain timely coverage with favorable gross-to-net discounting;

our neffyconnect program that provides support to physicians and patients including our $25 co-pay savings card, $199 cash price and patient assistance programs;

a telemedicine service to conveniently obtain a prescription online;

partnerships with patient advocacy organizations including disease awareness campaigns in 2025;

and branded direct to consumer advertising including a celebrity that is expected to commence in the second quarter of 2025.

On August 22, 2024, the EC granted marketing authorization in the EU for EURneffy (the trade name for neffy 2 mg in the EU), for the emergency treatment of allergic reactions (anaphylaxis), in adults and children who weigh 30 kg or greater.

Through our collaboration with ALK (discussed below), we anticipate that EURneffy will be made available to patients in certain EU member states in 2025.

Regulatory review of neffy is ongoing in Canada, the United Kingdom, China, Japan, and Australia with filings submitted by the partners, or by ARS Pharma on behalf of our partners, during the fourth quarter of 2024.

our neffy inSchools programs, where more than 9,000 schools to date have opted into receiving two cartons of neffy at no cost with accompanying school nurse education about neffy ;

partnerships with patient advocacy organizations including disease awareness campaigns;

and multi-channel branded direct to consumer advertising including connected television, point of care, endemic and programmatic display, social media, and paid search that initiated in May 2025, as well as linear television advertising that started in June 2025.

To reduce the time burden of an in-person healthcare provider visit, we also launched a new commercial initiative in November 2025 called “Get neffy on Us” that offers patients a free visit with a virtual prescriber, along with a $0 co-pay for eligible patients with commercial insurance.

We also initiated a U.S.

post-marketing registry-based study for neffy for the treatment of anaphylaxis in oral food challenge or allergen immunotherapy clinics in the second quarter of 2025, which is ongoing.

The EC has granted marketing authorization in the EU for EURneffy 2 mg (the trade name for neffy 2 mg in the EU and U.K.), for the emergency treatment of Type I allergic reactions, including anaphylaxis, in adults and children who weigh 30 kg or greater and on January 29, 2026, the Committee for Medicinal Products for Human Use of the EMA adopted a positive opinion, recommending marketing authorization in the EU for EURneffy 1 mg for children who are four years of age and older and weigh 15 kg to less than 30 kg.

Through our collaboration with ALK, EURneffy 2 mg was launched in Europe, beginning with Germany in June 2025, followed by the U.K.

in October 2025.

We received approval of neffy 2 mg and 1 mg in Japan in September 2025, which is expected to launch in the first quarter of 2026 by our collaboration partner, Alfresa.

We also received approval of neffy 2 mg and 1 mg doses in Australia in December 2025, with commercial launch by our collaboration partner, Seqirus, initiated in February 2026.

In December 2025, we received approval in China of 优敏速 (the trade name for neffy 2 mg in China), with commercial launch by our collaboration partner, Pediatrix, expected to start in the first half of 2026.

neffy 2 mg is under review by Health Canada, with a regulatory decision expected in the second quarter of 2026 and if approved, with commercial launch by our collaboration partner, ALK, expected to start later in 2026.

neffy has already been approved or is under regulatory review in countries representing approximately 98% of the current global epinephrine autoinjector sales.

Regulatory decisions are anticipated by mid-2025 in the U.K., the second-half of 2025 in Japan, year-end 2025 in Canada, and in the first-half of 2026 in China and Australia.

We reported positive topline results demonstrating statistically significant and clinically meaningful improvements in treatment-refractory chronic urticaria patients at the American Academy of Allergy and Immunology medical conference in February 2024, and anticipate initiating a Phase 2b randomized, placebo controlled outpatient clinical trial in chronic spontaneous urticaria patients on a chronic antihistamine treatment regimen who still experience flares or exacerbations.

This Phase 2b study is anticipated to initiate in the second quarter of 2025, with topline data anticipated in early 2026, followed by the potential initiation of a single pivotal efficacy study in 2026.

Real-world data supports that neffy delivers similar response rates as injections for the emergency treatment of Type I allergic reactions.

In September 2025, we reported survey results of anaphylaxis treatment outcomes in the neffy experience program, which provides 1 mg and 2 mg doses of neffy to allergists for in-office use if patients experience an anaphylactic event during oral food challenges or allergen immunotherapy.

These results showed that approximately 90% of patients experiencing anaphylaxis symptoms were effectively treated with a single dose of neffy , which is consistent with that historically reported for epinephrine injection.

The results were presented as an oral presentation at the American College of Allergy, Asthma and Immunology (“ACAAI”) meeting in early November 2025 and was also published in the Annals of Allergy, Asthma and Immunology, the official peer-reviewed journal of the ACAAI, in December 2025.

In the second quarter of 2025, we initiated a Phase 2b randomized, placebo-controlled outpatient clinical trial involving chronic spontaneous urticaria patients, on chronic treatment regimens, who still experience flares or exacerbations.

Interim data from this clinical trial is anticipated in the second half of 2026, followed by the potential initiation of a single pivotal efficacy study in mid-2027.

Since our inception in 2015 as ARS Pharmaceuticals, Inc., we have devoted substantially all of our efforts to developing intellectual property, conducting product development and clinical trials, organizing and staffing, business planning, raising capital, building infrastructure, pre-commercial and commercial activities, and providing general and administrative support for these operations.

We began commercial operations in September 2024 and therefore have had limited net product sales.

We have funded our operations primarily with proceeds from the Merger (see Note 1 - Nature of Business to the notes to the consolidated financial statements included in this report), private placement of convertible preferred stock, licensing, supply and distribution arrangements with our commercialization partners, bank debt, and limited net product sales.

From inception to December 31, 2024, we have raised $262.3 million in cash, cash equivalents and short-term investments, net of transaction costs, from the Merger;

net proceeds of $76.3 million from the issuance of convertible preferred and common stock;

$181.0 million from our collaboration, licensing, supply and distribution arrangements;

$10.0 million from bank debt, $7.3 million from net product sales and $0.4 million in revenue under supply agreements.

We have funded our operations primarily with proceeds from the merger with Silverback Therapeutics, Inc.

(“Silverback”) in November 2022, private placement of convertible preferred stock, issuance of common stock, licensing, supply and distribution arrangements with our commercialization partners, debt, and net product sales.

As of December 31, 2025, we had cash, cash equivalents, and short-term investments of $245.0 million.

We have incurred net losses from operations in most years since our inception.

Our net income was $8.0 million for the year ended December 31, 2024 and our net loss was $54.4 million for the year ended December 31, 2023.

We have incurred net losses in most years since our inception.

Net loss for the year ended December 31, 2025 was $171.3 million, and net income for the year ended December 31, 2024 was $8.0 million.

As of December 31, 2025, we had an accumulated deficit of $294.6 million.

Until we consistently generate positive net income, if ever, our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, our expenditures on other development activities, the cost for regulatory filings, expenses for commercial activities to establish, maintain and enhance sales, marketing and distribution capabilities for neffy , the timing and volume of our product sales, and our ability to earn potential regulatory and commercial milestones under our license and collaboration arrangements.

Until we consistently generate positive net income, if ever, our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, our expenditures on other development activities, the cost for regulatory filings, expenses for commercial activities to establish, maintain and enhance sales, marketing and distribution capabilities for neffy , the timing and volume of our product sales, and our ability to earn potential royalties and regulatory and commercial milestones under our license and collaboration arrangements.

Until such time, if ever, that we can generate substantial product revenue, we may finance our operations through our existing cash, cash equivalents, short-term investments, equity offerings, debt financings and other capital sources which may include collaborations, strategic alliances, marketing, distribution or licensing arrangements or other arrangements with third parties.

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In addition, any future debt agreements may limit our ability to enter into certain debt financings without the consent of the lenders thereunder.

On September 29, 2025 we entered into a Credit Agreement (the “Credit Agreement”) with RA Capital Agency Services, LLC (as the “Administrative Agent”) and affiliates of OMERS Administration Corporation and RA Capital Management, L.P.

as lenders (the “Lenders”), which provides for an aggregate principal amount of up to $250.0 million of term loans from the Lenders to us (the “Credit Facility”).

Subject to limited exceptions, we are prohibited from incurring additional indebtedness and entering into certain strategic and licensing transactions without the prior written consent of the Lenders pursuant to the Credit Agreement.

Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and may require us to delay or reduce our marketing and sales efforts, or delay, reduce or terminate our research and development programs or other operations, or grant rights to develop and market products or product candidates that we would otherwise prefer to develop and market ourselves.

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Our third-party manufacturers are required to manufacture our product under cGMP requirements and other applicable laws and regulations.

ALK Agreement

In November 2024, the Company entered into a collaboration, license and distribution agreement (the “ALK Agreement”) with ALK-Abelló A/S (“ALK”).

Pursuant to the ALK Agreement, the Company granted to ALK a worldwide (other than the United States, Japan, mainland China, Hong Kong, Taiwan, Macau, Australia and New Zealand) (“ALK Territory”), exclusive license under certain of the Company’s patents and know-how to develop, manufacture and commercialize products containing epinephrine administered intranasally, including EURneffy (the tradename for neffy 2 mg in the European Union) (“Products”), for all human uses, including the immediate or emergency treatment of allergic reactions (including Type I) and anaphylaxis and urticaria, and other future indications as agreed by the parties.

If the Company develops any new intranasally administered product that contains epinephrine and files a new drug application in the United States for such product (“New Product”), upon ALK’s request such New Product will be included as a Product under the ALK Agreement, subject to ALK bearing the costs of development of such New Product for its licensed territory.

Under the ALK Agreement, we are obligated to transfer to ALK the existing marketing authorizations for the Products in ALK’s territory.

We are also required to conduct certain development and regulatory activities for Products in support of obtaining further regulatory approval of Products in ALK’s territory, and will transfer such regulatory approvals to ALK.

ALK is obligated to use commercially reasonable efforts to obtain and maintain regulatory approval for Products through the European Commission and within specified countries within ALK’s territory.

Following such approval for a Product in each indication within specified countries within ALK’s territory, ALK is obligated to use commercially reasonable efforts to commercialize such Product in such indication in such countries and to achieve first commercial sale of a Product in certain countries in accordance with a timeline specified in the ALK Agreement.

Under the ALK Agreement, ALK made an upfront payment to us of $145.0 million in November 2024.

We are eligible to receive regulatory and commercialization milestones of up to $20.0 million and sales-based milestones of up to $300.0 million, provided that $55.0 million of such sales-based milestones are contingent upon us obtaining regulatory approval for the Product in Canada by a specified time.

We are entitled to receive tiered royalty payments on net sales in the mid- to high-teens, subject to certain standard reductions and offsets.

Royalties will be payable, on a Product-by-Product and country-by-country basis, until the latest of the expiration of the licensed patents covering such Product in such country, 15 years from first commercial sale of such Product in such country, or expiration of regulatory exclusivity for such Product in such country.

The contract will expire upon the expiration of the last to expire royalty term for all Products in the ALK Territory, unless terminated earlier.

Either we or ALK may terminate the ALK Agreement in the case of the other party’s insolvency or in the event of an uncured material breach of the other party, except that we may not terminate the ALK Agreement for ALK’s material breach of its commercial diligence obligations.

ALK may terminate the ALK Agreement for convenience upon 12 months’ prior written notice or for a safety or regulatory concern.

We may terminate the ALK Agreement in the event ALK makes certain challenges to certain of our patents.

Prior to a change of control and outside of a set period of time after which we commence change of control negotiations, we may terminate the ALK Agreement with respect to all countries in the European Economic Area (“EEA”) upon prior written notice to ALK and payment of a termination fee that is the higher of an agreed mid-nine digit amount and the fair market value of the Products business in the EEA at the time of such termination.

We may also terminate the ALK Agreement if ALK commercializes a non-injectable epinephrine product or manufactures such a product in the United States.

ALK Supply Agreement

In November 2024, in connection with the ALK Collaboration Agreement, ARS and ALK also entered into a commercial supply agreement (the “Supply Agreement”), under which ARS will supply ALK’s requirements (and ALK will purchase from ARS its requirements) of Products for five years for a specified supply price, after which ALK may elect to transition to itself or its contract manufacturer the manufacture and supply of Products.

Either the Company or ALK may terminate the Supply Agreement in the event of an uncured material breach of the other party.

Financial Overview

We have recognized limited net product sales in the United States since the commercial launch of neffy in September 2024.

We have recognized net product sales in the United States since the commercial launch of neffy in September 2024.

We have signed collaboration and license agreements for neffy for all geographies outside of the United States.

The terms of these agreements may include payment to us of one or more of the following:

non-refundable, up-front license fees;

non-refundable, upfront license fees;

clinical, regulatory, and/or commercial milestone payments;

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Cost of Goods Sold

Cost of goods sold consists primarily of direct and indirect costs related to the manufacture of neffy for commercial sale, including third-party manufacturing costs, raw material and component costs, packaging services, freight, storage costs, distribution fees, amortization of capitalized in-licensed costs, and royalties on product sales.

Prior to the FDA approval of neffy in August 2024, costs incurred for the manufacture of neffy were recorded as research and development expenses, which resulted in zero-cost inventory.

As a result, the cost of goods sold related to neffy will initially reflect a lower average per unit cost of materials, as previously expensed zero-cost inventory is utilized for commercial production and sold to customers.

We expect the cost of goods sold for neffy to increase in relation to product revenues as we deplete these inventories.

As of December 31, 2024, we had $11.7 million in zero-cost inventory remaining and based on our current forecast, we expect zero-cost inventory to be depleted by mid-2026.

The Company periodically evaluates zero-cost inventory for obsolescence.

This evaluation considers the shelf life of raw materials, work in process, and finished goods as well as estimated sales trends.

As of December 31, 2024, no zero-cost inventory was determined to be obsolete.

Cost of goods sold consists primarily of direct and indirect costs to manufacture neffy for commercial sale, including third-party manufacturing costs, raw material and component costs, excess or obsolete inventory adjustment charges, inventory write offs, packaging services, freight, storage costs, distribution fees, amortization of capitalized in-licensed costs, royalties on product sales, salaries and related expenses for personnel, and stock-based compensation.

Prior to the FDA approval of neffy in August 2024, certain inventory components were purchased to manufacture neffy and recorded as research and development expenses, resulting in zero-cost inventory components.

As a result, the cost of goods sold related to neffy will initially reflect a lower average per unit cost of materials, as previously expensed inventory components are consumed in commercial production and sold to customers.

As of December 31, 2025, we had $6.7 million in zero-cost inventory components remaining, and no zero-cost inventory components were determined to be obsolete.

Based on our current forecast, we expect zero-cost inventory components to be substantially consumed in commercial production by mid-2026.

The time over which the zero-cost inventory components are included in cost of goods sold will depend on several factors, but primarily the timing of future neffy sales.

Research and Development Expenses

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Research and development expenses include:

salaries, payroll taxes, benefits and stock-based compensation charges for personnel engaged in research and development efforts;

external research and development expenses incurred under agreements with contract research organizations, or CROs, investigative sites and consultants and other third-party organizations to conduct our clinical studies and development activities;

costs related to manufacturing neffy and our intranasal epinephrine technology product candidates for clinical trials and process validation studies, including fees paid to third-party manufacturers;

• external research and development expenses incurred under agreements with contract research organizations (“CROs”), investigative sites and consultants and other third-party organizations to conduct our clinical studies and development activities;

• costs related to manufacturing neffy and our intranasal epinephrine technology product candidates for clinical trials and process validation studies, including fees paid to contract manufacturing organizations (“CMOs”) and other third-party manufacturers;

• costs related to compliance with regulatory requirements and regulatory filings;

• indirect expenses including insurance and facility-related expenses;

• salaries, payroll taxes, benefits and stock-based compensation charges for personnel engaged in research and development efforts.

Our external research and development expenses for neffy and our intranasal epinephrine technology product candidates consist primarily of fees, materials and other costs paid to CROs, CMOs, consultant and contractors.

Our clinical, regulatory, manufacturing, and non-clinical development costs for the periods presented below reflect an allocation of expenses associated with personnel costs, equity-based compensation expense, and indirect costs incurred in support of overall research and development, such as facilities-related costs.

We expect our research and development expenses to increase moderately in 2025 based on our planned clinical development and manufacturing activities.

Our clinical, regulatory, manufacturing, and non-clinical development costs for the periods presented below reflect an allocation of expenses associated with personnel costs, stock-based compensation expense, and indirect costs incurred in support of overall research and development, such as facilities-related costs.

We cannot determine with certainty the timing of initiation, the duration or the completion costs of current or future clinical trials and the manufacturing costs of neffy and our intranasal epinephrine technology product candidates due to the inherently unpredictable nature of clinical development and manufacturing activities.

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• the countries in which the trials are conducted;

• tariffs and international trade relations;

• the length of time required to enroll eligible patients;

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Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of salaries, benefits, equity-based compensation for personnel in executive, finance, business development, sales and marketing and other corporate administrative functions.

Selling, general and administrative expenses also include pre-commercial launch activities prior to product launch, the initiation of commercialization activities in September 2024, legal fees incurred relating to corporate and patent matters, professional fees incurred for accounting, auditing, tax and administrative consulting services, market research costs, and insurance costs.

We expect our selling, general and administrative expenses to increase substantially in 2025.

The increase in expenses is due to our sales force which was established in the third quarter of 2024, the development and commencement of our marketing campaigns and initiatives, the hiring of additional sales and marketing personnel to support full commercialization activities, and the addition of infrastructure and programs to support commercialization activities.

Selling, general and administrative expenses consist primarily of salaries, benefits, stock-based compensation for personnel in executive, finance, business development, sales and marketing and other corporate administrative functions.

Selling, general and administrative expenses have increased since the third quarter of 2024 due to the establishment of our sales force, the development and commencement of our marketing campaigns and initiatives, the ALK Co-Promotion Agreement, the hiring of additional sales and marketing personnel to support full commercialization activities, and the addition of infrastructure and programs to support commercialization activities.

We expect to continue to incur audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, board of director fees, investor relations costs associated with operating as a public company, patent costs and defense, and general and administrative personnel.

Other Income, net

Other income, net consists primarily of interest income from our cash, cash equivalents, and short-term investments, and net amortization and accretion associated with our short-term investments.

Other income, net consists primarily of interest income from our cash, cash equivalents, and short-term investments, interest expense on our outstanding debt, and net amortization and accretion associated with our short-term investments.

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

The following table summarizes our results of operations for years ended December 31, 2024 and 2023 (in thousands, except percentages):

Year Ended December 31,

The following table summarizes our results of operations for the years ended December 31, 2025 and 2024 (in thousands, except percentages):

Years Ended December 31,

Product revenue, net

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Loss from operations

Other income, net

Income (loss) before income taxes

Income tax provision

Net income (loss)

Change in unrealized gains and losses on available-for-sale securities

Comprehensive income (loss)

Other income (expense), net:

Interest income

Interest expense

Total other income, net

(Loss) income before income tax (benefit) expense

Income tax (benefit) expense

Net (loss) income

_____________

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(1) Includes stock-based compensation expense as follows (in thousands):

Year Ended December 31,

Years Ended December 31,

Research and development

Selling, general and administrative

Revenues were $89.1 million and less than $0.1 million for the years ended December 31, 2024 and 2023.

The revenues for the year ended December 31, 2024 includes $81.5 million in revenues under collaboration agreements, $7.3 million in net product revenues for sales of neffy, and $0.4 million in revenue under supply agreements .

The revenues under collaboration agreements consists of $73.1 million under the ALK agreement for the delivery of a license to develop, manufacture and commercialize products containing epinephrine administered intranasally in the ALK territory excluding the EEA, $0.4 million under the ALK agreement for revenue recognized under the regulatory services performance obligations, $6.0 million from a regulatory milestone under the Alfresa agreement, $1.5 million for the first event milestone under the Seqirus Agreement, and $0.5 million for the delivery of the license for neffy in the Seqirus Territory in combination with the transfer of know-how under the Seqirus Agreement.

The revenues for the year ended December 31, 2023 includes the recognition of revenue for the portion of upfront and clinical and regulatory milestone payments under our collaboration agreement with Alfresa that have been allocated to research and development services provided for during that period.

Revenue for the year ended December 31, 2025 was $84.3 million, as compared to $89.1 million for the year ended December 31, 2024.

Revenue for the year ended December 31, 2025 includes $72.2 million in net product revenues for sales of neffy in the United States, $9.7 million in revenue under collaboration agreements, and $2.4 million in revenue under supply agreements.

Revenue under collaboration agreements consists of achievement of regulatory and commercial milestones under the Pediatrix Agreement of $4.0 million, ALK Collaboration Agreement of $2.6 million, Alfresa Agreement of $2.0 million, and Seqirus Agreement of $0.6 million, as well as the performance of development and regulatory services, and royalties attributable to the ALK Territory, excluding the EEA, under the ALK Collaboration Agreement of $0.3 million and $0.2 million, respectively.

Revenue for the year ended December 31, 2024 includes $81.5 million in revenues under collaboration agreements, $7.3 million in net product revenues for sales of neffy in the United States, and $0.4 million in revenue under supply agreements .

Revenue under collaboration agreements consists of $73.1 million under the ALK Collaboration Agreement for the delivery of a license to develop, manufacture and commercialize products containing epinephrine administered intranasally in the ALK Territory excluding the EEA, $0.4 million under the ALK Collaboration Agreement for revenue recognized under the regulatory services performance obligations, $6.0 million from a regulatory milestone under the Alfresa Agreement, $1.5 million for the first event milestone under the Seqirus Agreement, and $0.5 million for the delivery of the license for neffy in the Seqirus Territory in combination with the transfer of know-how under the Seqirus Agreement.

Cost of Goods Sold .

Cost of goods sold were $1.0 million and $0.0 million for the years ended December 31, 2024 and 2023, respectively.

Since prior to August 2024, costs incurred for the manufacture of neffy were recorded as research and development expenses, the cost of goods sold for the year ended December 31, 2024 utilized zero-cost inventory and therefore consisted primarily of distribution fees, royalties, and intangible assets amortization.

Cost of goods sold for the year ended December 31, 2025 was $20.4 million, as compared to $1.0 million for the year ended December 31, 2024.

Prior to August 2024, costs incurred to manufacture neffy were recorded as research and development expenses, and product sales subsequent to August 2024 partially utilized zero-cost inventory components.

Cost of goods sold consisted primarily of product costs and royalties, and during the year ended December 31, 2025, the establishment of an inventory reserve.

Research and Development Expenses .

Research and development expenses were $19.6 million and $20.3 million for the years ended December 31, 2024 and 2023, respectively.

The decrease of $0.7 million was primarily due to a $1.3 million decrease in product development expenses, a $1.2 million decrease in consulting fees, a $0.8 million decrease in clinical trial costs associated with neffy, a $0.4 million decrease in payroll-related expenses, and a $0.6 million decrease in other operating expenses.

These aggregated decreases were partially offset by a $2.1 million increase in expense related to an EMA regulatory milestone under the Recordati Termination Agreement, a $0.8 million increase in outside services, and a $0.7 million increase in stock-based compensation,

Research and development expenses for the year ended December 31, 2025 were $13.2 million, as compared to $19.6 million for the year ended December 31, 2024.

The decrease of $6.4 million was primarily due to decreases in IPR&D expense of $2.1 million from the achievement of the EMA regulatory milestone under the Recordati Termination Agreement during the year ended December 31, 2024, product-development related expense of $1.8 million, clinical trial costs of $0.8 million, personnel-related expenses of $0.8 million, and other research and development expenses of $0.9 million.

The following table summarizes our research and development expenses for the years ended December 31, 2025 and 2024 (in thousands):

Year Ended December 31,

Years Ended December 31,

Clinical and regulatory

Manufacturing and non-clinical development

Total research and development expenses

Selling, General and Administrative Expenses.

Selling, general and administrative expenses were $71.7 million and $47.3 million for the years ended December 31, 2024 and 2023, respectively.

The increase of $24.4 million was primarily due to a $11.8 million increase in marketing-related expenses, a $10.6 million increase in payroll-related expenses, a $4.6 million increase in stock-based compensation, a $2.3 million increase in outside services, a $1.6 million increase in legal fees, a $1.4 million increase in meals and travel-related expenses predominantly incurred by the sales team, a $0.4 million increase in professional fees for accounting, auditing and tax, and a $0.3 million increase in conference and seminar expenses.

These aggregated increases were partially offset by a $6.6 million decrease in pre-commercial launch activities related to neffy , a $1.8 million decrease in consulting fees, and a $0.2 million decrease in other operating expenses.

Other Income, Net.

Other income, net was $11.4 million and $13.2 million for the years ended December 31, 2024 and 2023, respectively.

The decrease of $1.8 million was primarily due to a $2.1 million decrease in interest income from our cash, cash equivalents, and short-term investments, a $0.3 million decrease from the sale of in-process research and development obtained in the Merger, which occurred in the year ended December 31, 2023, and a $0.3 million decrease in other items.

These aggregated decreases were partially offset by a $0.9 million increase in net amortization and accretion associated with our short-term investments.

Selling, general and administrative expenses for the year ended December 31, 2025 was $230.1 million, as compared to $71.7 million for the year ended December 31, 2024.

The increase of $158.4 million was primarily due to increases in marketing-related expenses of $111.4 million, personnel-related expenses of $24.2 million, stock-based compensation expense of $7.9 million, outside services of $4.2 million, travel and meals expense of $3.6 million incurred mainly by our sales personnel, conference and seminar expense of $2.5 million, audit, tax and valuation fees of $1.5 million, legal fees of $0.6 million, and other general operating costs of $2.5 million.

Other Income (Expense), Net.

Other income (expense), net for the year ended December 31, 2025 was $8.1 million, as compared to $11.4 million for the year ended December 31, 2024.

The decrease of $3.3 million was primarily due to interest expense related to the term loan of $2.6 million and a decrease in net accretion of discounts on short-term investments of $2.1 million, partially offset by an increase in interest income from our cash, cash equivalents, and short-term investments of $1.4 million.

Liquidity and Capital Resources

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Since our inception, we have incurred significant operating losses and negative cash flows from our operations.

We have recognized limited net product sales since the commercial launch of neffy in September 2024.

We have funded our operations to date primarily with proceeds from the Merger, the sale of preferred and common stock, revenue earned under collaboration, licensing, supply and distribution agreements with our commercialization partners, bank debt, and limited net product sales.

From inception to December 31, 2024, we have raised $262.3 million in cash, cash equivalents and short-term investments, net of transaction costs, from the Merger, net proceeds of $76.3 million from the issuance of convertible preferred and common stock, $181.0 million from our collaboration, licensing, supply and distribution arrangements, $10.0 million bank debt, and $7.3 million from net product sales, and $0.4 million in revenue under supply agreements.

We have funded our operations to date primarily with proceeds from the merger with Silverback, private placement of convertible preferred stock, issuance of common stock, licensing, supply and distribution arrangements with our commercialization partners, debt, and net product sales.

As of December 31, 2025, we had cash, cash equivalents, and short-term investments of $245.0 million.

The following table summarizes our cash flows for the years ended December 31, 2025 and 2024 (in thousands):

Year Ended December 31,

Net cash and cash equivalents provided by (used in) operating activities

Net cash and cash equivalents used in investing activities

Years Ended December 31,

Net cash and cash equivalents (used in) provided by operating activities

Net cash and cash equivalents provided by (used in) investing activities

Net cash and cash equivalents provided by financing activities

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Operating Activities

During the year ended December 31, 2025, net cash used in operating activities was $170.9 million.

This consisted primarily of a net loss of $171.3 million, an increase in our operating assets and operating liabilities of $38.5 million and $18.5 million, respectively, and non-cash charges of $20.4 million.

The increase in our operating assets was due to increases in inventories of $22.0 million and accounts receivable of $17.2 million, partially offset by a decrease in prepaid expenses and other assets of $0.7 million.

The increase in our operating liabilities was primarily attributable to an increase in accounts payable and accrued expenses of $18.9 million, partially offset by a decrease in contract liability of $0.4 million.

The non-cash charges consisted primarily of non-cash stock-based compensation of $22.1 million, establishment of an inventory reserve of $2.2 million, depreciation and amortization expense of $1.4 million, and other non-cash items of $0.3 million, partially offset by net accretion of discounts on short-term investments of $5.5 million.

During the year ended December 31, 2024, net cash provided by operating activities was $13.5 million.

This consisted primarily of net income of $8.0 million, an increase in our operating liabilities of $18.5 million, an increase in our operating assets of $20.3 million, and non-cash charges of $7.4 million.

This consisted primarily of net income of $8.0 million, an increase in our operating assets of $20.3 million, an increase in our operating liabilities of $18.5 million, and non-cash charges of $7.4 million.

The increase in our operating assets was primarily due to an increase in accounts receivable of $8.2 million, an increase in prepaid and other assets of $6.2 million, and an increase in inventories of $5.9 million.

The increase in our operating liabilities was due to an increase in accounts payable and accrued liabilities of $16.4 million and an increase in contract liability of $2.1 million.

The non-cash charges consisted primarily of non-cash stock-based compensation of $14.5 million, partially offset by $7.3 million in net amortization of discounts on short-term investments.

During the year ended December 31, 2023, net cash used in operating activities was $59.3 million.

This consisted primarily of a net loss of $54.4 million, a decrease in our operating liabilities of $5.9 million, an increase in our operating assets of $1.4 million, and non-cash charges of $2.4 million.

The decrease in our operating liabilities was primarily due to a decrease in contract liability of $3.1 million and a decrease in accounts payable and accrued liabilities of $2.8 million.

The increase in our operating assets was primarily due to an increase in prepaid and other assets of $1.4 million.

The non-cash charges consisted of non-cash stock-based compensation of $9.2 million, partially offset by $6.9 million in net amortization of discounts on short-term investments.

The non-cash charges consisted primarily of non-cash stock-based compensation of $14.5 million, partially offset by net accretion of discounts on short-term investments of $7.3 million.

Investing Activities

During the year ended December 31, 2024, the cash and cash equivalents used in investing activities was $106.1 million.

This consisted primarily of purchases of short-term investments of $356.0 million, maturities of short-term investments of $258.0 million, payments of milestone obligations under license agreements of $7.5 million, and purchases of property and equipment of $0.6 million.

During the year ended December 31, 2025, the cash and cash equivalents provided by investing activities was $56.8 million.

This consisted of maturities of short-term investments of $307.0 million, partially offset by purchases of short-term investments of $242.0 million, payments of milestone obligations under license agreements of $7.9 million, and purchases of property and equipment of $0.3 million.

During the year ended December 31, 2024, the cash and cash equivalents used in investing activities was $106.1 million.

This consisted primarily of purchases of short-term investments of $272.0 million, maturities of short-term investments of $185.0 million, and purchases of property and equipment of $0.2 million.

This consisted primarily of purchases of short-term investments of $356.0 million, payments of milestone obligations under license agreements of $7.5 million, and purchases of property and equipment of $0.6 million, partially offset by maturities of short-term investments of $258.0 million.

Financing Activities

During the year ended December 31, 2025, the $104.6 million of cash and cash equivalents provided by financing activities was attributable to net proceeds from the term loan under the Credit Agreement of $96.3 million, proceeds from stock option exercises and issuance of common stock under the employee stock purchase plan of $5.7 million, and proceeds from milestone obligations met under license agreements of $2.7 million.

During the year ended December 31, 2024, the cash and cash equivalents provided by financing activities was $72.4 million.

This consisted of $69.4 million from the upfront payment from ALK that was allocated to the EEA License and $3.0 million from stock option exercises and the employee stock purchase plan.

During the year ended December 31, 2023, the cash and cash equivalents provided by financing activities was $6.9 million, which consisted of proceeds from stock option exercises and the employee stock purchase plan.

This consisted of $69.4 million from the upfront payment from ALK that was allocated to the EEA License and $3.0 million from stock option exercises and issuance of common stock under the employee stock purchase plan.

On September 29, 2025 (the “Closing Date”), we entered into the Credit Agreement with the Administrative Agent and the Lenders, which provides for an aggregate principal amount up to $250.0 million of term loans from the Lenders to us, including an initial tranche of $100.0 million under Term A Loan funded on the Closing Date, $25.0 million under Term B Loan that will be made available during the period commencing on the six-month anniversary of the Closing Date and ending no later than the one-year anniversary of the Closing Date, up to $25.0 million under Term C Loan will be made available at our election during the period

commencing on and including the Closing Date and ending no later than the two-year anniversary of the Closing Date, subject to the satisfaction of a certain revenue requirement, and up to $100.0 million under Term D Loan, subject to the consent of the Lenders.

The Term Loans will mature on the five-year anniversary of the Closing Date.

The Credit Facility enhances our liquidity position and provides additional financial flexibility, subject to the satisfaction of certain customary conditions for future tranches and revenue-based requirements for the third tranche.

Future Funding Requirements

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Our future funding requirements will depend on many factors, including:

• revenue received from commercial sales of neffy ;

• the timing and amount of any milestone and royalty payments under the ALK Collaboration Agreement, ALK Co-Promotion Agreement, Pediatrix Agreement, Aegis Agreement, Alfresa Agreement, Recordati Termination Agreement, and the Seqirus Agreement;

• the scope, progress, results and costs of researching and developing our intranasal epinephrine technology for additional indications;

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• the costs of commercialization activities for neffy and our intranasal epinephrine technology product candidates, to the extent such costs are not the responsibility of any collaborators, including the costs and timing of building and maintaining product sales, marketing, distribution and manufacturing capabilities;

revenue received from commercial sales of neffy ;

the timing and amount of any milestone and royalty payments under the ALK Agreement, Pediatrix Agreement, Aegis Agreement, Alfresa Agreement, Recordati Termination Agreement, and the Seqirus Agreement;

• the extent to which we in-license or acquire rights to other products, product candidates, or technologies;

• our headcount growth and associated costs as we expand our employee headcount and building and maintaining a commercial infrastructure;

• our ability to service our current credit facility under the Credit Agreement and access, if and when needed, additional amounts of principal provided for under the Credit Agreement;

• the costs of preparing, filing, and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property related claims;

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In addition, our current or future debt agreements may limit our ability to incur additional debt.

If we raise funds through additional collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, development programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and disruptions to and volatility in the credit and financial markets in the United States, including due to bank failures, and worldwide resulting from macroeconomic factors.

Our ability to raise additional funds may be adversely impacted by macroeconomic factors that may result in worsening global economic conditions and disruptions to and volatility in the global credit and financial markets, including due to tariffs, trade wars, inflation, high interest rates, recessionary concerns, recessions, bank failures, geopolitical conflicts, and general economic uncertainty.

Because of the numerous risks and uncertainties associated with product development and commercialization, we cannot predict the timing or amount of increased expenses and cannot assure you that we will generate profits or positive cash flows from operating activities in the future.

Material Cash Requirements

The total amount of unconditional purchase obligations related to the supply of raw materials is $64.9 million as of December 31, 2024.

Payment obligations by year are as follows:

2025 ($8.2 million), 2026 ($10.5 million), 2027 ($11.8 million), 2028 ($13.8 million), and $2.9 million per year thereafter through 2035.

The total amount of unconditional purchase obligations related to hosted software license subscription fees is $3.3 million as of December 31, 2024.

Payment obligations by year are as follows:

2025 ($1.4 million), 2026 ($1.5 million), and 2027 ($0.4 million).

In August 2024, we entered into a corporate sponsorship agreement with Food Allergy Research and Education, Inc.

pursuant to which we have payment obligations of $9.0 million over a 28-month period.

F uture Contractual Cash Obligations

The total remaining unconditional purchase obligations related to the supply of raw materials is $55.3 million as of December 31, 2025.

Our remaining payment obligations by year are as follows:

2026 ($9.1 million), 2027 ($11.8 million), 2028 ($13.8 million), and $2.9 million per year thereafter through 2035.

Under the ALK Co-Promotion Agreement, the total remaining payment obligations under this agreement are $20.2 million as of December 31, 2025.

Our remaining obligations by year are as follows:

2026 ($8.3 million), 2027 ($5.2 million), 2028 ($4.7 million), and 2029 ($2.0 million).

In addition to the base fee, ALK U.S will be eligible to receive performance-based payments from us.

Future performance-based payment amounts are indeterminate since they depend on future revenues, which are uncertain.

In August 2024, we entered into a corporate sponsorship agreement with Food Allergy Research and Education, Inc., which was subsequently amended in May 2025.

Our remaining payment obligations as of December 31, 2025 are $6.0 million.

Estimated payments by year are as follows:

Our remaining payment obligations by year are as follows:

2026 ($5.0 million), and 2027 ($1.0 million).

In June 2018, we entered into a License Agreement (the “Aegis Agreement”) with Aegis Therapeutics, LLC (“Aegis”).

In November 2024, OrbiMed Advisors LLC (“OrbiMed”) entered into an agreement with Aegis, to purchase the rights, royalty interests, and related sales milestone payments on net product sales of neffy .

Our remaining payment obligations to OrbiMed under the Aegis Agreement are contingent upon our achievement of certain commercial milestones and have been reduced to $11.0 million as of December 31, 2024.

Under the Aegis Agreement, we are also required to make royalty payments to OrbiMed based on a mid-single-digit percentage of net product sales.

Under the Credit Agreement, the outstanding principal of $100.0 million as of December 31, 2025 is due upon maturity on September 29, 2030.

Estimated interest payments are calculated based on the outstanding principal, the applicable interest rate and expected timing of scheduled payments as of December 31, 2025.

As of December 31, 2025, based on the interest rate in effect at such date, total estimated remaining interest payments are $45.7 million, and our estimated remaining interest payments by year are as follows:

2026 ($9.6 million), 2027 ($9.6 million), 2028 ($9.6 million), 2029 ($9.6 million), and 2030 ($7.2 million).

Under the Aegis Agreement, remaining payment obligations to OrbiMed are contingent upon our achievement of certain commercial milestones and have been reduced to $9.0 million as of December 31, 2025.

We are also required to make royalty payments to OrbiMed based on a mid-single-digit percentage of net product sales.

Future royalty payment amounts are indeterminate since they depend on future revenues, which are uncertain.

On February 22, 2023, we entered into a termination agreement (the “Recordati Termination Agreement”) with Recordati Ireland, Ltd.

In February 2023, we entered into a termination agreement (the “Recordati Termination Agreement”) with Recordati Ireland, Ltd.

(“Recordati”) to reacquire the rights to neffy in Europe and certain European Free Trade Association, Russia/the Commonwealth of Independent States, Middle East and African countries (the “Recordati Territory”).

Pursuant to which, we are obligated to make milestone payments to Recordati that are contingent upon our achievement of certain regulatory and commercial milestones.

Our remaining milestone payment obligations to Recordati have been reduced to €5.0 million (approximately $5.2 million in U.S.

dollars) as of December 31, 2024.

Under the Recordati Termination Agreement, we are also required to make royalty payments to Recordati of up to €5.0 million (approximately $5.2 million in U.S.

dollars) in the aggregate from sales of Recordati Licensed Product(s) in the Recordati Territory.

Under the Recordati Termination Agreement, we are required to make royalty payments to Recordati of up to €5.0 million in the aggregate from sales of neffy in the Recordati Territory, of which up to €4.6 million (approximately $5.4 million in U.S.

dollars) remain as of December 31, 2025.

Future royalty payment amounts are indeterminate since they depend on future revenues, which are uncertain.

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These contracts generally provide for termination after a notice period.

As of December 31, 2024, we have not recognized any reserves related to uncertain tax positions.

As of December 31, 2024, we had no accrued interest or penalties related to uncertain tax positions.

Critical Accounting Policies and Significant Judgments and Estimates

As of December 31, 2025, we have not recognized any reserves related to uncertain tax positions and had no accrued interest or penalties related to uncertain tax positions.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S.

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While our significant accounting policies and estimates are described in more detail in Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements, we believe the following accounting policies and estimates to be most critical to the preparation of our consolidated financial statements.

Net Product Revenue

Our revenues generally consist of product sales of neffy and licenses and milestone revenue generated from license and collaboration agreements.

We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers.

The provisions of ASC 606 require the following steps to determine revenue recognition:

(i) identification of the promised goods or services in the contract;

(ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract;

(iii) measurement of the transaction price, including the constraint on variable consideration;

(iv) allocation of the transaction price to the performance obligations based on estimated selling prices;

and (v) recognition of revenue when (or as) we satisfy each performance obligation.

At contract inception, we assess the goods or services promised within each contract, determine whether each promised good or service is distinct and identify those that are performance obligations.

We recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Product revenue is recorded with each sale at wholesale acquisition cost , net of reserves for variable components, including but not limited to distribution service fees, prompt pay discounts, product returns, chargebacks, rebates, and co-payment assistance, which are collectively referred to as “Gross-to-Net Adjustments.” In accordance with ASC 606, the Company must make significant judgments to determine the estimates for certain Gross-to-Net Adjustments.

Estimates for Gross-to-Net Adjustments are reassessed each reporting period, and adjustments are recorded on a cumulative catch-up basis, which would affect product revenue and net income in the period of adjustment.

The Company utilizes the expected value method when estimating the amount of variable consideration to include in the transaction price with respect to each of the foregoing variable components.

Variable consideration is included in the transaction price only to the extent it is probable that a significant revenue reversal will not occur when the uncertainty associated with the variable consideration is resolved.

Collaboration and License Agreements

The Company has entered into collaboration and licensing agreements, including supply and distribution, to license certain rights to neffy to third parties.

The terms of these arrangements typically include payment to the Company of one or more of the following:

non-refundable, up-front license fees;

clinical, regulatory, and/or commercial milestone payments;

payment for clinical and commercial supply and royalties or a transfer price on the net sales of licensed products.

Licenses of Intellectual Property .

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, revenue is recognized from non-refundable, up-front payments allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license.

If the license is subject to repurchase by the Company, at its option, control of the license is not considered transferred to the customer, and in such case, the Company would account for the proceeds allocated to such license as either a financing obligation or a lease in accordance with ASC 606.

Future amounts received related to the license which is subject to our repurchase would be accounted for as additional financing proceeds and would increase the financing obligation on our consolidated balance sheet.

The Company would record such financing obligation as revenue when the right to repurchase has lapsed or was exercised.

If the license is not a distinct performance obligation, the Company evaluates the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees.

The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone Payments.

At the inception of each arrangement that includes clinical, regulatory or commercial milestone payments, the Company evaluates whether achieving the milestones is considered probable and estimates the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant revenue reversal would not occur, the value of the associated milestone is included in the transaction price.

Milestone payments that are not within the Company’s control, such as approvals from regulators or where attainment of the specified event is dependent on the development activities of a third party, are not considered probable of being achieved until those approvals are received or the specified event occurs.

Revenue is recognized when the underlying performance obligation has been met.

Transaction Price Allocation.

At the inception of each arrangement, the Company identifies the distinct performance obligations included in the arrangement, and allocates the transaction price to the performance obligations based upon their relative standalone selling prices.

Standalone selling price is the price at which an entity would sell a promised good or service separately to a customer.

The best evidence of standalone selling price is an observable price of a good or service when sold separately by an entity in similar circumstances to similar customers.

Since the Company typically does not have such evidence, the Company estimates standalone selling price so that the amount that is allocated to each performance obligation equals the amount that the Company expects to receive for transferring the promised goods or services.

The methods that the Company uses to make such estimates include (1) the adjusted market assessment approach, under which the Company forecasts product sales in the appropriate market, considers probability of commercialization success, and estimates discount rates;

and (2) the expected cost of satisfying the performance obligations inclusive of a reasonable margin, or the expected cost plus margin approach.

Research and Development Revenues .

For arrangements that contain research and development commitments, any arrangement consideration allocated to the research and development work is recognized as the underlying services are performed over the research and development term, if the criteria for over-time recognition are met.

If the over-time recognition criteria are not met, research and development performance obligations are recognized at a point in time, when the research and development work is completed.

Clinical and Commercial Supply .

Arrangements that include a promise for the future supply of drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered customer options.

The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations.

Royalty/Transfer Price Revenues .

For arrangements that include sales-based royalties or transfer price, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

The Company has not received any royalty or transfer price revenues as of December 31, 2024.

Revenue Recognition

Product revenue, net

Product revenue is recorded net of estimates for variable consideration, including distribution service fees, prompt pay discounts, product returns, chargebacks, rebates, co-payment assistance, and other incentives for certain indirect customers.

Reserves for these estimates are recorded in the same period of the related sale and reflect amounts earned or expected to be claimed on those sales.

Estimates of variable consideration require significant judgment and are based on factors such as contractual and statutory requirements, known market events, industry trends and data, forecasted customer buying and payment patterns, and historical experience.

Variable consideration is included in net product revenue only to the extent it is probable that a significant reversal will not occur in a future period.

Estimates are reassessed each reporting period, and actual amounts may differ from those estimates.

Any adjustments are recorded in the period differences become known on a cumulative catch-up basis and may affect product revenue and net (loss) income in that period.

Revenue under collaboration agreements

Revenue from licenses to our intellectual property is recorded when the license is transferred and the licensee can use and benefit from it, provided the license is distinct from other obligations.

For licenses bundled with other obligations, management evaluates whether performance obligations are satisfied over time or at a point in time and, if over time, determines the appropriate method to measure progress.

Milestone payments are included in the transaction price only when it is probable that a significant revenue reversal will not occur, and are reassessed each reporting period.

Sales-based royalties or commercial milestones based on product sales where a license is the predominant item are recorded at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Adjustments to estimates are recorded on a cumulative catch-up basis and may affect revenue under collaboration agreements and net (loss) income in that period.

Recent Accounting Pronouncements

See Note 2 – Summary of Significant Accounting Policies to our consolidated financial statements for information about recent accounting pronouncements, the timing of their adoption, and our assessment, if any, of their potential impact on our financial condition and results of operations.

Emerging Growth Company and Smaller Reporting Company Status

We are an emerging growth company, as defined in the JOBS Act.

For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved.

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.

We have elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

As a result, our financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

We will remain an emerging growth company until the earlier of:

(i) the date on which we have issued more than $1.0 billion in nonconvertible debt securities during the prior three-year period;

and (ii) December 31, 2025.

We are also a “smaller reporting company” as defined in the Exchange Act.

We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year for which audited financial statements are available as of the date of determination and the market value of our stock held by non-affiliates is less than $700 million measured on the last business day of our most recently completed second fiscal quarter.

If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation and other matters.

Quantitative and Qualitative Disclosures About Market Risk.

1 unchanged sentence

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-K

Item 7. Management’s Discussion and Analysis