What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-02-27 compared with 2023-03-09 · 740 added, 176 removed, 675 unchanged (58% of the section changed)

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in 2005, as Supernus Pharmaceuticals.

Table of Conte n t s

Adamas Acquisition and Reorganization

On October 10, 2021, the Company entered into an Agreement and Plan of Merger by and among the Company, Adamas Pharmaceuticals, Inc.

(Adamas) and Supernus Reef, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (Purchaser) (Adamas Agreement).

On November 24, 2021 (the Closing Date), the Company completed its purchase of all of the outstanding equity of Adamas, pursuant to the Adamas Agreement dated October 10, 2021, and the Purchaser was merged with and into Adamas (the Merger), with Adamas continuing as the surviving corporation in the Merger as a wholly-owned subsidiary of the Company (Adamas Acquisition).

On the Closing Date, Adamas owned two marketed products:

GOCOVRI (amantadine) extended-release capsules, the first and only FDA approved medicine indicated for the treatment of both "off" episodes and dyskinesia in patients with PD receiving levodopa-based therapy and as an adjunctive treatment to levodopa/carbidopa in patients with PD experiencing "off" episodes;

and Osmolex ER (amantadine) extended-release tablets, approved for the treatment of PD and drug-induced extrapyramidal reactions in adult patients.

Adamas also owns the right to receive royalties from Allergan plc for sales of Namzaric (memantine hydrochloride extended-release and donepezil hydrochloride) in the United States.

In the first quarter of 2022 and subsequent to the Adamas Acquisition, the Company completed a reorganization of the Adamas legal entities in an effort to obtain operational, legal and other benefits that also resulted in certain state tax efficiencies.

The reorganization had no effect on the consolidated financial statements other than certain state tax efficiencies.

Refer to Note 12, Income Tax (Benefit) Expense in Part II, Item 8 — Financial Statements of this report.

Our mission is to improve the lives of patients suffering from CNS diseases.

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The Company launched Qelbree for adult patients in May 2022.

GOCOVRI (amantadine) extended-release capsules is the first and only FDA-approved medicine indicated for the treatment of dyskinesia in patients with PD receiving levodopa-based therapy, with or without concomitant dopaminergic medications, and as an adjunctive treatment to levodopa/carbidopa in patients with PD experiencing "off" episodes.

GOCOVRI was approved by the FDA in August 2017 for treatment of dyskinesia and in February 2021 as an adjunctive treatment for "off" episodes.

The February 2021 update to the label indication makes GOCOVRI the only medicine clinically proven and approved to reduce both "off" episodes and dyskinesia in PD patients taking a levodopa-based medication, resulting in a clinically meaningful increase in good "on" time without the need for a "trade-off' when managing these motor complications.

GOCOVRI has been granted orphan drug exclusivity until August 24, 2024 for the treatment of dyskinesia in patients with PD receiving levodopa-based therapy with or without concomitant dopaminergic medications.

Oxtellar XR ®

Oxtellar XR is indicated for treatment of partial-onset seizure in adults and children 6 years of age and older.

Oxtellar XR is the first once-daily extended-release oxcarbazepine product indicated for the treatment of epilepsy in the U.S.

In 2013, we launched Oxtellar XR for adjunctive therapy in the treatment of partial-onset seizures in adults and children 6 to 17 years of age.

In January 2019, we launched Oxtellar XR for monotherapy treatment of partial onset epilepsy seizures in adults and children 6 to 17 years of age.

The Company has entered into settlement and license agreements with third parties permitting the sale of a generic version of Oxtellar XR beginning in September 2024, or sooner under certain conditions, and entitling the Company to receive royalties on those sales.

For more information, refer to Part I, Item I—Business — Intellectual Property and Exclusivity in this annual Report on Form 10-K.

Trokendi XR ®

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Trokendi XR is the first once-daily extended-release topiramate product indicated for the treatment of epilepsy and the prophylaxis of migraine headaches in adults and adolescents in the U.S.

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The Company entered into settlement agreements with third parties permitting the sale of a generic version of Trokendi XR on or after January 1, 2023.

The Company entered into settlement agreements with third parties permitting the sale of a generic version of Trokendi XR beginning in January 2023 and entitling the Company to receive royalties on those sales.

For more information, refer to Part I, Item I—Business — Intellectual Property and Exclusivity in this annual Report on Form 10-K.

Oxtellar XR ®

Oxtellar XR is indicated for treatment of partial-onset seizure in adults and children 6 years of age and older.

Oxtellar XR is the first once-daily extended release oxcarbazepine product indicated for the treatment of epilepsy in the U.S.

In 2013, we launched Oxtellar XR for adjunctive therapy in the treatment of partial-onset seizures in adults and children 6 to 17 years of age.

In January 2019, we launched Oxtellar XR for monotherapy treatment of partial onset epilepsy seizures in adults and children 6 to 17 years of age.

GOCOVRI (amantadine) extended release capsules is the first and only FDA-approved medicine indicated for the treatment of dyskinesia in patients with PD receiving levodopa-based therapy, with or without concomitant dopaminergic medications, and as an adjunctive treatment to levodopa/carbidopa in patients with PD experiencing "off" episodes.

GOCOVRI was approved by the FDA in August 2017 for treatment of dyskinesia and in February 2021 as an adjunctive treatment for "off" episodes.

APOKYN (apomorphine hydrochloride injection) is a product indicated for the acute, intermittent treatment of hypomobility or "off" episodes ("end-of-dose wearing off" and unpredictable "on-off" episodes) in patients with advanced PD.

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XADAGO was approved by the FDA in March 2017.

Osmolex ER (amantadine) extended release tablets is for the treatment of PD and drug-induced extrapyramidal reactions in adult patients.

Osmolex ER was approved by the FDA in February 2018.

MYOBLOC (rimabotulinumtoxinB) is a product indicated for the treatment of cervical dystonia to reduce the severity of abnormal head position and neck pain associated with cervical dystonia in adults and treatment sialorrhea in adults.

The Company has entered into settlement agreements with third parties permitting the sale of a generic version of XADAGO beginning in December 2027, or sooner under certain conditions.

For more information, refer to Part I, Item I—Business — Intellectual Property and Exclusivity in this annual Report on Form 10-K.

MYOBLOC is the only Type B toxin available on the market.

MYOBLOC injections must be administered by a physician.

MYOBLOC was approved by the FDA in December 2000 for the treatment of adults with cervical dystonia.

In August 2019, the FDA approved a supplemental Biologics License Application (sBLA) for MYOBLOC for the treatment of chronic sialorrhea in adults.

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MYOBLOC was approved by the FDA in August 2019 for the treatment of chronic sialorrhea in adults and in December 2000 for the treatment of adults with cervical dystonia.

Osmolex ER (amantadine) extended-release tablets is for the treatment of PD and drug-induced extrapyramidal reactions in adult patients.

Osmolex ER was approved by the FDA in February 2018.

In December 2023, the Company submitted to the FDA a notification of discontinuance to withdraw Osmolex ER from distribution, stating that manufacturing has been discontinued and distribution of the product will cease by April 1, 2024.

Research and Development

We are committed to the development of innovative product candidates in neurology and psychiatry, including the following:

Product Candidate Indication Development NDA

SPN-830 Continuous treatment of motor fluctuations ("off" episodes) in PD patients

Complete Response Letter (CRL) received from FDA in October 2022

SPN-820 Treatment-resistant depression Phase II

SPN-817 Focal seizures Phase I

We also engage in a variety of additional research and development effort including developing a pipeline of novel CNS product candidates for the treatment of various CNS conditions.

We also engage in a variety of additional research and development efforts including development of a pipeline of novel CNS product candidates for the treatment of various CNS conditions.

We have devoted and continue to devote significant resources to research and development activities.

We expect to incur significant expenses as we continue developing each of our product candidates through FDA approval or until the program terminates;

and expanding product indications for approved products and intellectual property portfolio.

Our expectations regarding our research and development programs are subject to the risks described under Item 1A—Risk Factors—Risks Related to Our Industry and Business , which includes the following risks among others — (1) The Company's financial condition and results of operations for fiscal year 2023 and beyond may be materially and adversely affected by the ongoing COVID-19 pandemic;

and (2) Delays and failures in the completion of clinical development of our product candidates would increase our costs, delay, or limit our ability to generate revenues.

and expanding product indications for approved products and our intellectual property portfolio.

Our expectations regarding our research and development programs are subject to the risks described under Item 1A—Risk Factors—Risks Related to Our Industry and Business , which includes the risk that the Company's financial condition and results of operations for fiscal year 2023 and beyond may be materially and adversely affected by delays and failures in the completion of clinical development of our product candidates, which could increase our costs or delay or limit our ability to generate revenues.

SPN-830 (apomorphine infusion device)

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In October 2022, the FDA issued a Complete Response Letter (CRL) regarding the NDA for SPN-830.

The CRL requires additional information and analysis related to the infusion device and drug product across several areas of the NDA including, but not limited to, labeling, product quality and manufacturing, device performance and risk analysis.

In addition, the FDA mentions that approval of the NDA requires inspections that could not be completed in a timely manner due to COVID-19 travel restrictions.

The CRL does not request additional efficacy and safety clinical studies.

The FDA has made an initial determination that the amendment to the Company’s application in response to the CRL will be subject to a Class 2, or six-month, review timeline.

In February 2023, the FDA granted the Company a Type C meeting request to discuss the CRL with the meeting scheduled in April 2023.

In October 2023, we resubmitted the NDA for SPN-830.

In November 2023, the FDA accepted the resubmission of the NDA for SPN-830.

The resubmission is now considered filed, with a user fee goal date (PDUFA date) of April 5, 2024.

SPN-820 (NV-5138)

SPN-820 is a first-in-class, orally active small molecule that activates brain mTORC1 (mechanistic target of rapamycin complex 1), a gatekeeper of cellular metabolism and renewal.

SPN-820 is a first-in-class, orally active small molecule that activates the brain mechanistic target of rapamycin complex 1 (mTORC1), a gatekeeper of cellular metabolism and renewal.

SPN-820 binds to and modulates sestrin, which senses amino acid availability in the brain, a potent natural activator of mTORC1.

Complex 1 of the mechanistic target of rapamycin (mTORC1) activity governs the pace and ability of the cell to synthesize protein and other cellular components.

The mTORC1 activity governs the pace and ability of the cell to synthesize protein and other cellular components.

This complex may be suppressed in people suffering from depression.

In other disease states such as severe depression, inadequate mTORC1 activity contributes to disease pathology by limiting energy utilization and protein synthesis, leading to impaired function.

Multiple preclinical studies have shown that mTORC1 activation is required for the efficacy of many rapid-acting antidepressant compounds, including but not limited to modulators of the N-methyl-D-aspartic-acid (NMDA)-mediated signaling pathway like ketamine.

pathway like ketamine.

A Phase I trial demonstrated early proof of concept in which a single dose of SPN-820 showed a rapid and sustained improvement in core symptoms, with favorable safety and tolerability in patients with treatment resistant depression.

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the novel MOA in depression may improve symptoms of depression in patients who have failed other agents.

We believe the novel mechanism of action (MOA) in depression may improve symptoms of depression in patients who have failed other agents.

An Investigational New Drug (IND) application was submitted to the FDA in September 2021.

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The primary outcome measure is the change from baseline to end of treatment period on the Montgomery-Asberg Depression Rating Scale (MADRS) Total Score, a standard depression rating scale.

Additionally, we initiated a Phase II multi-center open label study in 40 subjects with Major Depressive Disorder (MDD) in the fourth quarter of 2023.

The study will evaluate the efficacy of SPN-820 in MDD, with the change from baseline in the Hamilton Depression Rating scale-6 (HAM-D6) total score as the primary efficacy assessment.

SPN-817 (huperzine A)

SPN-817 represents a novel mechanism of action (MOA) for an anticonvulsant.

SPN-817 represents a novel MOA for an anticonvulsant.

SPN-817 is a novel synthetic form of

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The development will initially focus on the drug's anticonvulsant activity, which has been shown in preclinical models to be effective for the treatment of partial seizures and Dravet Syndrome.

SPN-817 is in clinical development and has received Orphan Drug designation for both Dravet Syndrome and Lennox-Gastaut Syndrome from the FDA.

A Phase I, proof-of-concept trial is currently underway outside of the U.S.

in adult patients with refractory complex partial seizures.

We are studying the safety and pharmacokinetic profile of a new extended release formulation of non-synthetic SPN-817 (huperzine A).

SPN-817 has received Orphan Drug designation for both Dravet Syndrome and Lennox-Gastaut Syndrome from the FDA.

We are focused on completing and optimizing the synthesis process of the synthetic drug as well as developing a novel dosage form.

Given the potency of SPN-817 (huperzine A), a novel extended-release oral dosage form is critical to the success of this program because initial studies with the immediate-release formulations of non-synthetic SPN-817 (huperzine A) have shown serious dose-limiting, side effects.

The Company has commenced an open-label Phase II clinical study of SPN-817 in patients with treatment-resistant seizures.

We have commenced an open-label Phase IIa clinical study of SPN-817 in patients with treatment-resistant seizures.

SPN-443 – Novel stimulant for the treatment of ADHD/CNS

We plan to initiate a Phase 1 single dose study in healthy adults in 2024 following submission of an Investigational New Drug Application.

The primary objective of the study is to assess the safety and tolerability.

This molecule, along with its major metabolites, is an inhibitor of norepinephrine, dopamine and serotonin, also known as a triple reuptake inhibitor.

Sales and Marketing

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With the launches of Qelbree for both pediatric and adult patients, we expanded our sales efforts to market the commercial product to the relevant physician audience of psychiatrists, pediatricians, primary care physicians and allied health professionals.

Our sales representatives who previously supported Trokendi XR and Oxtellar XR now devote their full efforts to the launch of Qelbree.

Our sales representatives who previously supported Trokendi XR and Oxtellar XR now devote their full efforts to the promotion of Qelbree.

The majority of our product sales are to pharmaceutical wholesalers, specialty pharmacies, and distributors who, in turn, sell our products to pharmacies, hospitals, and other customers, including federal and state entities.

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In addition, MYOBLOC is available for direct purchase by physicians and hospitals.

The majority of sales of APOKYN and GOCOVRI are made to specialty pharmacies.

Each of our three major customers, AmerisourceBergen Drug Corporation, Cardinal Health, Inc., and McKesson Corporation, individually accounted for more than 25% of our total product revenue in 2022 and collectively accounted for more than 80% of our total product revenue in 2022.

The majority of sales of APOKYN, GOCOVRI, and Osmolex ER are made to specialty pharmacies.

Each of our three major customers, Cencora, Inc., Cardinal Health, Inc., and McKesson Corporation, individually accounted for more than 20% of our total product revenue in 2023 and collectively accounted for more than 75% of our total product revenue in 2023.

Market and Competition

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Many large pharmaceutical and biotechnology companies, academic institutions, governmental agencies, and other public and private research organizations are commercializing or pursuing the development of products for the same molecule, compound, or diseases that we are currently pursuing or may target in the future.

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ADHD is a CNS disorder characterized by developmentally inappropriate levels of inattention, hyperactivity, and impul sivity.

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Although many patients may be inattentive, hyperactive, or impulsive, the level of severity and degree of functional impairment, and considerations as to what may be behind the underlying symptoms determine which patients meet the diagnosis and therefore should be treated for ADHD.

Qelbree is a novel nonstimulant taken once-daily for full-day exposure.

Efficacy and symptom improvement was observed early in treatment in clinical studies.

Also, it has a proven safety and tolerability profile, with no evidence of abuse potential in clinical studies.

Qelbree is the first nonstimulant treatment for ADHD approved by the FDA in over a decade.

Competition in the U.S.

ADHD market has increased with the commercial launch of several branded products in recent years, as well as the launch of generic versions of branded drugs, such as Adderall XR, Intuniv, Kapvay and Strattera.

ADHD market has increased with the commercial launch of several branded products in recent years, as well as the launch of generic versions of branded drugs, such as Adderall XR, Concerta, Vyvanse, Intuniv, Kapvay and Strattera.

Treatment options for ADHD in the U.S.

market can be broadly classified as either stimulant or as non-stimulant products.

Our product, Qelbree is a novel nonstimulant taken once-daily for full-day exposure.

Efficacy and symptom improvement was observed early in treatment in clinical studies.

Also, it has a proven safety and tolerability profile, with no evidence of abuse potential in clinical studies.

Qelbree is the first nonstimulant treatment for ADHD approved by the FDA in over a decade.

Epilepsy is a c omplex neurological disorder characterized by the spontaneous recurrence of unprovoked seizures, which are sudden surges of electrical activity in the brain that impair a person's mental and/or physical abilities.

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Extended-release products may help patients improve adherence and, consequently, help patients enjoy a better quality of life.

Trokendi XR competes with all immediate release and extended release topiramate products, including Topamax, Qudexy XR, and their related generic products.

Trokendi XR competes with all immediate-release and extended-release topiramate products, including Topamax, Qudexy XR, and other generic topiramate products.

Oxtellar XR competes with all immediate-release oxcarbazepine products, including Trileptal and its related generic products.

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Trokendi XR also competes with other products used for the prevention of migraine headaches.

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notably, this includes anti-CGRPs (calcitonin gene related peptide), which is a class of products first introduced in 2018;

Most notably, this includes anti-CGRPs (calcitonin gene related peptide), which is a class of products first introduced in 2018;

beta-blockers;

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With the alternative of immobility and limited function, we believe the rapid and reliable reduction of "off" episode symptoms is of utmost importance to patients.

APOKYN competes with all apomorphine hydrochloride products, including KYNMOBI.

It also competes with other pro re nata (PRN) therapies such as Inbrija, and other adjunctive therapies, including NOURIANZ.

APOKYN competes with pro re nata therapies such as Inbrija, and other adjunctive therapies, including NOURIANZ.

APOKYN also competes with other products for the treatment of PD, both branded and generic, including levodopa products.

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The infusion may reduce the variability in motor symptoms of PD and offer improved tolerability versus the acute injection route.

The NDA for SPN-830 has been resubmitted and accepted for review by the FDA with a PDUFA date in April 2024.

For patients not ready to try parenteral therapy, oral MAO-B inhibitors, such as XADAGO, may provide a decrease in "off" time of up to one hour per day when combined with appropriate levodopa therapy.

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It is also the only medicine clinically proven to reduce both dyskinesia and “off” periods.

GOCOVRI, taken once daily at bedtime, provides an initial lag and a slow rise in amantadine concentration during the night, resulting in a high concentration from the morning and throughout the waking day.

GOCOVRI, taken once daily at bedtime, provides an

initial lag and a slow rise in amantadine concentration during the night, resulting in a high concentration from the morning and throughout the waking day.

Additionally, in the clinical trials, the adjunctive use of GOCOVRI did not require changes to dopaminergic therapies.

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Peak serum drug concentration conveniently occurs in the middle portion of a patient’s day when the drug is administered in the morning.

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According to their prescribing information, neither GOCOVRI nor Osmolex ER are interchangeable with other amantadine immediate- or extended-release products for their respective approved indications.

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This encompasses products for commercial use, as well as some products for preclinical and clinical research.

We do not own or operate manufacturing facilities for the production of any of our product candidates beyond that used in Phase II clinical trials, nor do we have plans to develop our own manufacturing operations in the foreseeable future to support Phase III clinical trials or support commercial production.

We currently employ internal resources to manage our manufacturing contractors.

We have agreements with CMOs headquartered North America, including:

We have agreements with CMOs headquartered in North America, including:

Patheon Pharmaceuticals, Inc.

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by Osmotica Pharmaceutical US LLC (Osmotica), which is the sole manufacturer of Osmolex ER and a subsidiary of Osmotica Pharmaceuticals plc.

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Refer to Part I, Item 1A — Risk Factors — If we fail to produce our products and product candidates in the volumes that we require on a timely basis or fail to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the development and commercialization of our products and product candidates or be required to withdraw our products from the market for risks associated with manufacturing and supply of our products and product candidates.

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Our commercial products, including those of our subsidiaries, covered by active patents include Trokendi XR, Oxtellar XR, Qelbree, GOCOVRI, Osmolex ER and XADAGO.

We, or our subsidiaries, own all of the issued patents for Trokendi XR, Oxtellar XR, Qelbree, GOCOVRI, Osmolex ER, as well as the pending U.S.

patent applications for Oxtellar XR, Qelbree, GOCOVRI, and Osmolex ER.

We, or our subsidiaries, own all the issued patents for Trokendi XR, Oxtellar XR, Qelbree, GOCOVRI, Osmolex ER, as well as the pending U.S.

patent applications for Oxtellar XR, Qelbree, and GOCOVRI.

We have a license from Zambon for the U.S.

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We also have patents issued in certain foreign countries.

We own all of the issued patents and the pending patent applications.

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We own all the issued patents and the pending patent applications.

We currently have 10 U.S.

patents that cover Trokendi XR.

We own all of the issued patents.

We own all the issued patents.

We also own additional foreign patents for extended-release topiramate.

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patents covering Trokendi XR will expire no earlier than 2027.

The Company has entered into settlement agreements with third parties, permitting the sale of a generic version of Trokendi XR on or after January 1, 2023.

The Company has entered into settlement agreements with third parties, permitting the sale of a generic version of Trokendi XR beginning in January 2023 and entitling the Company to receive royalties on those sales.

Our extended-release oxcarbazepine patent portfolio currently includes 14 U.S.

patents, ten of which cover Oxtellar XR.

The ten issued U.S.

patents, 11 of which cover Oxtellar XR.

The 11 issued U.S.

patents covering Oxtellar XR will expire no earlier than 2027.

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We also own additional foreign patents for extended-release oxcarbazepine.

As an NCE, XADAGO was under the 5-year FDA exclusivity period that expired on March 21, 2022.

The Company has entered into settlement and license agreements with a third parties permitting the sale of a generic version of Oxtellar XR beginning in September 2024, or sooner under certain conditions, and entitling the Company to receive royalties on those sales.

The patent portfolio covering XADAGO has three U.S.

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These patents will expire from 2027 to 2031.

The Company has entered into settlement agreements with third parties, permitting the sale of a generic version of XADAGO beginning in December 2027, or earlier under certain circumstances.

The patent portfolio covering GOCOVRI includes 18 U.S.

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These issued patents expire through 2038.

These patents and patent applications are wholly owned by Adamas Operations and, as of the first quarter of 2022 are licensed to Supernus Pharmaceuticals, Inc.

These patents are wholly owned by Adamas Operations and, as of the first quarter of 2022 are licensed to Supernus Pharmaceuticals, Inc.

Adamas Operations also owns additional foreign patents covering Osmolex ER.

Namzaric is covered by 19 U.S.

patents containing method and compositions claims relating to the pharmacokinetic profile and dosing of memantine.

These patents expire as late as 2029.

Namzaric is currently marketed by Allergan plc under an exclusive license agreement between Adamas Pharmaceuticals LLC (Adamas Pharmaceuticals) and Forest Laboratories Holdings Limited ("Forest"), an indirect, wholly-owned subsidiary of Allergan plc (collectively, "Allergan") in the United States.

Adamas Pharmaceuticals also owns additional foreign patents and patent applications covering Namzaric.

SPN-830 (apomorphine infusion device)

Our SPN-830 development program is potentially eligible to receive the Orphan Drug Designation in the U.S.

The Company plans to file for such designation with the FDA in 2024.

If such designation is granted by the FDA, SPN-830 would receive 7 years of U.S.

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SPN-817 (huperzine A)

We have two U.S.

patents licensed from Harvard University covering the method of treating seizures to potentially cover our SPN-817 development program.

We have one patent issued in the U.S.

and one in China relating to extended release formulations of huperzine.

We have one patent issued in the U.S., and in China and certain other countries relating to extended-release formulations of huperzine.

We additionally have pending patent applications in the U.S.

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SPN-817 has received Orphan Drug designation for both Dravet Syndrome and Lennox-Gastaut Syndrome from the FDA.

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SPN-820 (NV-5138)

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In the U.S., a patent's term may be lengthened via a patent term adjustment (PTA), which compensates a patentee for administrative delays by the USPTO in granting a patent.

Because of a recent court decision in which the USPTO erred in calculating the PTA by denying the patentee a portion of the patent term to which it was entitled, the USPTO is under greater scrutiny regarding its calculations of PTAs.

Alternatively, a patent's term may be shortened if a patent is terminally disclaimed over another patent.

The mechanism for doing this is the filing by the applicant of a terminal disclaimer in order to overcome an issue of obviousness type double patenting.

Obviousness-type double patenting is a bar to patentability that is present when a patent application is deemed to be an obvious variant of a separate patent also assigned to the applicant.

The filing of a terminal disclaimer overcomes the issue which may allow a patent application to issue or preserve the validity of a patent but disclaims any portion of the second patent that extends beyond the expiration of the first patent and prevents the assertion of either patent against a defendant unless the patents are co-owned.

Because the filing of a terminal disclaimer is within the control of a patent, patent applicants generally avoid filing them when doing so would have a material adverse impact on the applicant’s interests.

In evaluating the patentability of a claimed invention, the filing date of a non-provisional patent application is used by the USPTO to determine what information constitutes prior art.

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The length of the PTE is related to the length of time the drug is under FDA review.

However, the patent extension cannot extend the remaining term of a patent beyond a total of 14 years from

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the date of product approval.

However, the patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval.

Only one patent for an approved drug may be extended.

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Either party may terminate the agreement under certain circumstances, including a material breach of the agreement by the other.

In May 2004, we entered into an asset purchase agreement with Elan Pharmaceuticals (Elan agreement), now a subsidiary of Perrigo Company (Perrigo).

Under the Elan agreement, we own the worldwide rights to MYOBLOC and pay a low double digit royalty to Perrigo based on U.S.

In May 2004, we entered into an asset purchase agreement with a third party resulting in us owning the worldwide rights to MYOBLOC in exchange for us paying a low double digit royalty based on U.S.

annual net sales of MYOBLOC.

If MYOBLOC is approved in the U.S.

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use, Perrigo is eligible to receive a milestone payment and the royalty rate will become subject to certain reductions based on cosmetic use net sales.

Under a settlement agreement between Perrigo and Allergan, certain amounts of the royalty are owed to Allergan.

We also have the right under the Elan agreement to make use of, develop and offer for sale worldwide products containing Botulinum Toxin Type B.

The Elan agreement may not be terminated for convenience.

We also have an agreement with Elan and Eisai related to the marketing and distribution of NerBloc in Japan by Eisai.

We also have the right under the agreement to make use of, develop and offer for sale in Japan human pharmaceutical drugs containing Botulinum Toxin Type B.

This agreement will terminate upon certain conditions relating to Perrigo's patent rights and the commercial launch of products with respect to cervical dystonia and indications other than cervical dystonia.

We make royalty payments to Elan Pharmaceuticals, LLC, a subsidiary of Perrigo Pharma International DAC.

While we currently have no intention of seeking approval in the U.S.

for cosmetic use, if MYOBLOC is so approved, a milestone payment would be due and the royalty rate will become subject to certain reductions based on cosmetic use net sales.

We also have the right under the agreement to make use of, develop and offer for sale worldwide products containing Botulinum Toxin Type B.

The agreement may not be terminated for convenience.

In June 2023, we terminated the agreement with Elan and Eisai related to the marketing and distribution of NerBloc in Japan by Eisai.

We have a contract manufacturing agreement with Merz Pharma GmbH & Co.

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Our subsidiary Adamas Operations has the global rights to Osmolex ER.

Pursuant to the Asset Purchase Agreement with Osmotica Pharmaceutical US LLC and Vertical Pharmaceuticals LLC (Osmotica) entered into on December 1, 2020 (transaction closed on January 4, 2021) both parties gave each other mutual releases and agreed to dismiss their respective claims relating to certain patent litigation;

Adamas Operations acquired the global rights to Osmolex ER and existing inventory and the assumption of certain liabilities;

and Osmotica agreed not to engage in the development, manufacture, or sale of any product in the U.S.

Pursuant to the Asset Purchase Agreement with Osmotica Pharmaceutical US LLC and Vertical Pharmaceuticals LLC (Osmotica) entered into on December 1, 2020 (transaction closed on January 4, 2021).

Osmotica agreed not to engage in the development, manufacture, or sale of any product in the U.S.

that is a generic version of any dosage strength of Osmolex ER for a period of five years from the closing of the Asset Purchase Agreement.

SPN-817 (huperzine A)

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We paid Navitor a one time, nonrefundable, and non-creditable fee of $10 million for the option to acquire or license NV-5138 (SPN-820) and made a $15 million equity investment representing approximately 13% ownership in Navitor.

In December 2021, we received a $12.9 million cash distribution pursuant to our ownership position in Navitor LLC following the sale of one of its subsidiaries.

In December 2021, we received a $12.9 million cash distribution pursuant to our ownership position in Navitor LLC following the

sale of one of its subsidiaries.

There are certain additional payment amounts that could be incurred by the Company.

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We also will have the first right of refusal for any compound with a similar MOA to NV-5138 on mTORC1 in the central nervous system.

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See Part II, Item 8, Financial Statements and Supplementary Data , Note 4, Investments , in the Notes to the Consolidated Financial Statements.

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Adamas expects that it will not receive royalties on sales of NAMENDA XR because of the entry of multiple generic versions of NAMENDA XR.

United Therapeutics

We have a license agreement with United Therapeutics Corporation for it to use one of our proprietary technologies in an oral formulation of treprostinil diethanolamine, or treprostinil, for the treatment of pulmonary arterial hypertension, and other indications.

United Therapeutics Corporation launched Orenitram (treprostinil) in 2014, which triggered a $2.0 million milestone payment to the Company.

In the third quarter of 2014, we received a cash payment of $30.0 million from HealthCare Royalty Partners III, L.P.'s (HC Royalty), for the purchase of certain of our rights under our license agreement with United Therapeutics Corporation related to the commercialization of Orenitram.

This is a non-recourse liability for which we have no obligation to make any cash payments to HC Royalty, under any circumstances.

Ownership of the royalty rights will return to us if/when a certain cumulative threshold payment to HC Royalty is reached.

We are entitled to receive milestones and royalties for the use of this formulation in indications other than arterial hypertension.

Takeda Pharmaceuticals Company Ltd.

The Company has entered into a licensing agreement with Takeda Pharmaceuticals Company Ltd.

(Takeda) under which Takeda received the right to use the Company's intellectual property as a functional license.

Microtrol, one of our key proprietary technology platforms, was utilized to develop Mydayis.

The Company is eligible to receive royalties under this agreement based on net product sales of Takeda's product, Mydayis.

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The Company has entered into a collaboration agreement with Stendhal to commercialize both Oxtellar XR and Trokendi XR outside of the U.S.

Those agreements include the right to use the Company’s intellectual property as a functional license, and generally include an up-front license fee and ongoing milestone payments upon the achievement of certain specific events.

These agreements may also require minimum royalty payments, based on sales of products which use the applicable intellectual property.

Zydus Pharmaceuticals (USA), Inc.

The Company has settlement and licensing agreements dated in March 2017 and December 2022 with Zydus Pharmaceuticals (USA), Inc.

(Zydus) (collectively, the "Zydus Agreements") to settle patent litigation and to grant Zydus with a non-exclusive license to market a generic version of Trokendi XR in the U.S.

The Company is eligible to receive royalties under the Zydus Agreements based on net product sales and the number of generic equivalent products on the market in the U.S.

Zydus launched its generic version of Trokendi XR in the first quarter of 2023.

License Agreements with Other Third Parties

The Company has granted other companies, including United Therapeutics Corporation and Takeda Pharmaceuticals Company Ltd., rights to utilize certain of its proprietary technologies in the development of certain of their products.

These technologies were used by these companies to develop certain other products, including Orenitram (treprostinil) and Mydayis.

We receive royalties under these arrangements based on net product sales of certain products developed using the licensed technologies.

In some cases, we are also entitled to milestone payments.

With respect to Oxtellar XR, Trokendi XR, and Qelbree, we have entered into collaboration and licensing agreements with third parties to commercialize these products outside of the U.S.

Under certain licensing arrangements, we are eligible to receive royalties based on net product sales as defined in the agreements and in some cases, we are also entitled to milestone payments.

We currently receive royalties from third parties related to agreements for Trokendi XR.

The Company has also entered into settlement and licensing agreements with generic companies to settle patent litigation and to grant non-exclusive licenses to market generic versions of Trokendi XR and Oxtellar XR in the U.S.

Under certain licensing arrangements, the Company is eligible to receive royalties based on net product sales as defined in the and the number of generic equivalent products on the market in the U.S.

We currently receive royalties from third parties related to certain agreements for Trokendi XR.

Confidential Information and Inventions Assignment Agreements

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The research and development process generally begins with discovery research, which focuses on the identification of a molecule that has the desired effect against a given disease.

The FDA requires submission of an IND, which must become effective before human clinical trial testing may commence.

If clinical testing is to initiate in the United States, the FDA requires submission of an IND, which must become effective before human clinical trial testing may commence.

The results of pre-clinical testing, along with other information, including information abo ut product chemistry, product manufacturing and controls, and a proposed clinical trial protocol, are submitted to the FDA as part of the IND.

Until the IND is approved or becomes effective following a waiting period, we may not start the clinical trials.

Until the IND becomes effective following a waiting period, we may not start the clinical trials.

This is typically followed by additional preclinical laboratory and animal testing, and adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use.

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While these are generally conducted in three sequential phases, the phases may overlap or be combined.

• Phase I - Involves the first human tests of the drug, in a small number of healthy volunteers or in patients (15 to 30 individuals), to assess safety, tolerability, potential dosing, and if possible, early evidence on effectiveness.

• Phase II - Involves trials in a relatively small group of patients (fewer than 100) to determine the effectiveness of the drug for a particular indication(s);

• Phase I - Involves the first human tests of the drug, in a small number of healthy volunteers or in patients, to assess safety, tolerability, potential dosing, and if possible, early evidence on effectiveness.

• Phase II - Involves trials in a relatively small group of patients to determine the effectiveness of the drug for a particular indication(s);

dosage tolerance, and optimum dosage;

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Phase III trials include both a control group that receives the standard treatment and a study group that receives the new treatment that is being tested.

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Clinical trials must be conducted in compliance with applicable regulations and consistent with acceptable clinical practices, as well as protocols detailing the objectives of the trial, the parameters to be used in monitoring safety, and the parameters to determine effectiveness.

Clinical trials must be conducted in compliance with applicable regulations and consistent with acceptable clinical practices, as well as protocols detailing not only the objectives of the trial, but also the parameters to be used in monitoring safety of study participants, and/or the parameters to determine effectiveness.

Each protocol involving testing on patients, and subsequent protocol amendments, must be submitted to the FDA as part of the IND.

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Drug development is an inherently uncertain process with a high risk of failure at every stage of development.

After the completion of the required clinical testing, an NDA is prepared and submitted to the FDA.

After the completion of the required clinical testing, an NDA or Biological License Application (BLA) (hereinafter "NDA") is prepared and submitted to the FDA.

FDA approval of the NDA is required before marketing of the product may begin in the U.S.

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The NDA requests approval to market the product.

Each NDA is subject to a substantial user fee at the time of submission unless a waiver is granted by the FDA.

A holder of an approved NDA may also be subject to annual product and establishment user fees.

Most NDAs are subject to a substantial user fee at the time of submission;

rarely applications meet conditions or gain a waiver which negates the need for the user fee.

A holder of an approved NDA may also be subject to annual program and/or establishment fees.

These fees typically increase annually.

The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing, which is based on the agency's threshold determination that the NDA is sufficiently complete to permit substantive review.

Sponsors will be notified if the application's review will proceed.

Additional information may be requested, rather than accepting an application for filing.

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Review status could be either standard or priority.

The review period for standard review applications is typically ten months and, for priority review applications, it is typically six months post acceptance.

The review process may be extended by the FDA for three additional months to consider new information submitted during the review for clarification purposes.

A priority review designation means FDA’s goal is to take action on an application within six months, compared to 10 months under standard review.

The review process may be extended by the FDA for their initial review, and, if new information submitted during the review, the review period may be extended.

The FDA may also refer applications for novel drug products or drug products that present difficult questions of safety or efficacy to an advisory committee, which is typically a panel that includes clinicians and other experts.

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A complete response letter outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application.

If and when those deficiencies have been addressed, the FDA will re-initiate review.

If and when those deficiencies have been timely addressed, the FDA will re-initiate review.

If it is satisfied that the deficiencies have been addressed, the FDA will issue an approval letter.

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During the review period, the FDA will typically inspect one or more clinical sites to assure compliance with good clinical practice regulations.

The FDA will inspect the facility(ies) at which the drug is manufactured to ensure compliance with cGMP regulations.

The FDA may rely on a recent inspection of the facility, or they may decide to inspect the facility(ies) at which the drug is manufactured to ensure compliance with cGMP regulations.

The FDA may also undertake an audit of nonclinical and clinical sites.

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As a condition of NDA approval, the FDA may require a risk evaluation and mitigating strategy (REMS) to help ensure that the benefits of the drug outweigh the potential risks.

REMS can include medication guides, communication plans for health care professionals, and elements to assure safe use, such as restricted distribution methods, patient registries, and other risk minimization tools.

REMS can include medication guides, communication plans for health care professionals, and elements to assure safe use, such as restricted distribution methods, patient registries, and other risk

minimization tools.

Moreover, as a condition to product approval, the FDA may require substantial post-marketing testing and surveillance to monitor the drug's safety or efficacy in commercial use and may impose other conditions, including distribution and labeling restrictions, which can materially affect the potential addressable market and profitability of the drug.

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This could restrict the commercial value of the product.

Also, the FDA may require that certain contraindications, warnings, or precautions be included in the product labeling, as well as requiring Phase IV testing.

Also, the FDA may require that certain contraindications, warnings, or precautions be included in the product labeling, as well as requiring Phase IV testing or post approval marketing of commercial use.

New Drug Application

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or pediatric exclusivity, listed in the Orange Book for the referenced product.

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A section 505(b)(2) NDA applicant must send notice of the Paragraph IV certification to the owner of the referenced NDA for the previously approved product and relevant patent holders within 20 days after the Section 505(b)(2) NDA has been accepted for filing by the FDA.

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Notwithstanding the approval of many products by the FDA pursuant to Section 505(b)(2) over the last few years, some pharmace utical companies and others have objected to the FDA's interpretation of Section 505(b)(2).

If the FDA changes its interpretation of Section 505(b)(2), or if the FDA's interpretation is successfully challenged in court, this could delay or even prevent the FDA from approving any Section 505(b)(2) NDA that we submit.

If the FDA changes its

interpretation of Section 505(b)(2), or if the FDA's interpretation is successfully challenged in court, this could delay or even prevent the FDA from approving any Section 505(b)(2) NDA that we submit.

By its very nature, a Section 505(b)(1) NDA submission carries a higher degree of regulatory approval risk than a Section 505(b)(2) NDA submission.

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• All cGMP regulations applicable to each separate regulated component included in the combination product;

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• Either the drug cGMPs or the QSR, as well as with specified provisions from the other of these two sets of requirements (also called the "streamlined approach”).

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Under the Pediatric Research Equity Act of 2007 (PREA), NDAs or supplements to NDAs must contain data to assess the safety and effectiveness of the drug for the claimed indication(s) in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective.

The intent of the PREA is to compel sponsors whose drugs have pediatric applicability to study those drugs in pediatric populations, rather than ignoring pediatric indications for adult indications that could be more economically desirable.

The intent of the PREA is to compel sponsors whose drugs have pediatric applicability to study those drugs in pediatric populations, rather than ignoring pediatric

indications for adult indications that could be more economically desirable.

The FDA may grant deferrals for submission of data, full waivers, or partial waivers of the data requirements.

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record-keeping requirements;

reporting of AE’s with the product;

reporting of adverse events with the product;

providing the FDA with updated safety and efficacy information;

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and complying with FDA promotion and advertising requirements.

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Drugs may be promot ed only for the approved indication and in accordance with the provisions of the approved label.

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The USPTO, in consultation with the FDA, reviews and approves the application for any paten t term extension or restoration.

Market exclusivity provisions under the FDCA can also delay the submission or the approval of certain applications.

The Federal Food, Drug, and Cosmetic Act (FDCA) provide a five-year period of non-patent marketing exclusivity within the U.S.

Market exclusivity provisions under the Federal Food, Drug, and Cosmetic Act (FDCA) can also delay the submission or the approval of certain applications.

The FDCA provides a five-year period of non-patent marketing exclusivity within the U.S.

to the first applicant to gain the approval of an NDA for an NCE.

A drug is an NCE if the FDA has not previously approved any other new drug containing the same active pharmaceutical ingredient (API) or active moiety, which is the molecule or ion responsible for the therapeutic action of the drug substance.

During the exclusivity period, the FDA may not accept for review an abbreviated new drug application (ANDA) or a Section 505(b)(2) NDA submitted by another company for another version of such drug, where the applicant does not own or have a legal right of reference to all the data required for approval.

During the exclusivity period, the FDA may not accept for review an ANDA or a Section 505(b)(2) NDA submitted by another company for another version of such drug, where the applicant does not own or have a legal right of reference to all the data required for approval.

As an alternative to submission via 505(b)(2) approval, an applicant may choose to submit a full Section 505(b)(1) NDA, wherein the applicant would be required to conduct its own preclinical and adequate, well-controlled clinical trials to demonstrate safety and effectiveness.

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Pediatric exclusivity is a type of non-patent marketing exclusivity granted in the U.S.

If granted, pediatric exclusivity, provides an additional six months of exclusivity to be attached to any existing exclusivity (e.g., three or five year exclusivity) or

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to patent protection for a drug.

If granted, pediatric exclusivity, provides an additional six months of exclusivity to be attached to any existing exclusivity (e.g., three or five year exclusivity) or to patent protection for a drug.

This six month exclusivity, which runs from the end of other exclusivity protection or patent delay, may be granted based on the voluntary completion of a pediatric trial in accordance with an FDA-issued "Written Request" for such a trial.

Other Regulatory Requirements

In March 2019, MDD US Operations, LLC (formerly US WorldMeds, LLC) and its subsidiary, Solstice Neurosciences, LLC (US) (collectively, the MDD Subsidiaries), each of which are now subsidiaries of the Company, entered into a Corporate Integrity Agreement (CIA) with the Office of Inspector General of the U.S.

In March 2019, MDD US Operations, LLC (formerly US WorldMeds, LLC) and its subsidiary, Solstice Neurosciences, LLC (US) (collectively, the MDD Subsidiaries), which are subsidiaries of the Company, entered into a Corporate Integrity Agreement (CIA) with the Office of Inspector General of the U.S.

Department of Health and Human Services.

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As a consequence of the USWM Acquisition, and under the terms of the CIA, the Company has assumed the extensive obligations of the MDD Subsidiaries concerning the ongoing maintenance of an effective compliance and disclosure program to promote compliance with the statutes, regulations and written directives of Medicare, Medicaid and all other Federal health care programs and with the statutes, regulations and written directives of the FDA.

The CIA has a term of five years, with the final Reporting Period ending in April 2024, and imposes material burdens on the Company, its officers and directors to take actions designed to insure compliance with applicable healthcare laws, including requirements to maintain specific compliance positions within the Company, to report any non-compliance with the terms of the agreement, to submit annual reports to the Office of Inspector General of the U.S.

The CIA has a term of five years, with the final Reporting Period ending in April 2024, and imposes material burdens on the Company, its officers and directors to take actions designed to ensure compliance with applicable healthcare laws, including requirements to maintain specific compliance positions within the Company, to report any non-compliance with the terms of the agreement, to submit annual reports to the Office of Inspector General of the U.S.

Department of Health and Human Services and to have prepared an annual audit by an Independent Review Organization.

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Foreign Corrupt Practices Act (FCPA), to which we are also subject, prohibits corporations and individuals from engaging in certain activities to obtain or retain business or influence a person working in an official capacity.

Under FCPA, it is illegal to pay, offer to pay, or authorize the payment of anything of value to any foreign government official, government staff member, political party, or political candidate in an attempt to obtain or retain business or otherwise influence a person working in an official capacity.

Under the FCPA, it is illegal to pay, offer to pay, or authorize the payment of anything of value to any foreign government official, government staff member, political party, or political candidate in an attempt to obtain or retain business or otherwise influence a person working in an official capacity.

Historically, pharmaceutical companies have been the target of FCPA and other anti-corruption investigations and penalties.

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Numerous federal and state laws and regulations, including state security breach notification laws, state health information privacy laws and federal and state consumer protection laws, govern the collection, use, disclosure, and protection of personal information.

Failure to comply with such laws and regulations could result in government enforcement actions and create liability

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for us (including the imposition of significant penalties), private litigation and/or adverse publicity that negatively affects our business.

In addition, healthcare providers who prescribe our products and research institutions we collaborate with are subject to privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH).

Failure to comply with such laws and regulations could result in government enforcement actions and create liability for us (including the imposition of significant penalties), private litigation and/or adverse publicity that negatively affects our business.

by the Health Information Technology for Economic and Clinical Health Act (HITECH).

HIPAA and its implementing regulations impose certain requirements on covered entities, including certain healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates (including us) that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity and their subcontractors that use, disclose, access, or otherwise process individually identifiable protected health information, relating to the privacy, security and transmission of individually identifiable health information.

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Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

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The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively known as the Affordable Care Act (ACA), substantially changed the way healthcare is financed by both governmental and private insurers and significantly impacted the pharmaceutical industry.

and private insurers and significantly impacted the pharmaceutical industry.

Federal, state, and local governments in the U.S.

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Future legislation could limit payments for pharmaceuticals, such as the product candidates that we are developing.

The Inflation Reduction Act of 2022 (“IRA”) includes measures intended to lower the cost of prescription drugs and related healthcare reforms, such as limits on price increases and subjecting an escalating number of drugs to annual price negotiations with CMS.

Specifically, the IRA authorizes and directs HHS to set drug price caps for certain high-cost Medicare Part B and Part D qualified drugs, with the initial list of drugs announced on August 29, 2023.

The negotiated maximum fair prices for such drugs is scheduled to be announced by September 1, 2024, with the first year of maximum price applicability to begin in calendar year 2026.

The IRA also authorizes HHS to penalize pharmaceutical manufacturers that increase the price of certain Medicare Part B and Part D drugs faster than the rate of inflation.

The IRA also creates significant changes to the Medicare Part D benefit design by capping Part D beneficiaries' annual out-of-pocket spending.

The marketability of any drug candidates for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement.

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None of our employees are represented by a labor union.

We consider relations with our employees to be go od.

We consider relations with our employees to be good.

Talent Acquisition, Retention and Development

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To that end, we offer a comprehensive total rewards program aimed at health, home-life, and financial needs of our employees.

Our total rewards package includes market-competitive pay, broad-based stock grants, bonuses, healthcare benefits, retirement savings plans, paid time off and family leave, and an Employee Assistance Program, and mental health services.

Our total rewards package includes market-competitive pay, broad-based stock grants, bonuses, healthcare benefits, retirement savings plans, paid time off and family leave, an Employee Assistance Program, and mental health services.

We are committed to the safety, health, and security of our employees.

We believe a hazard-free environment is critical for the success of our business.

Throughout our operations, we strive to ensure that all our employees have access to safe workplaces that allow them to succeed in their jobs.

Throughout our operations, we strive to ensure that all our employees have access to safe

workplaces that allow them to succeed in their jobs.

Our experience and continuing focus on workplace safety has enabled us to preserve business continuity without sacrificing our commitment to keeping our colleagues and workplace visitors safe.

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This extends to the way we treat each other as team members.

We strive to create an environment where innovative ideas can flourish by demonstrating respect for each other and valuing the diverse opinions, backgrounds, and

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viewpoints of employees.

We strive to create an environment where innovative ideas can flourish by demonstrating respect for each other and valuing the diverse opinions, backgrounds, and viewpoints of employees.

We believe a diverse and inclusive workplace results in business growth and encourages increased innovation, retention of talent, and a more engaged workforce.

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Such information should not be considered a part of this report unless otherwise expressly incorporated by reference in this report.

RISK FACTORS.

Any investment in our business involves a high degree of risk.

Before making an investment decision, you should carefully consider the risks described below, with all of the other information we include in this report and the additional information in the other reports we file with the Securities and Exchange Commission (the "SEC" or the "Commission").

These risks may result in material harm to our business, our financial condition, and the results of our operations.

If a material, adverse event was to occur, the market price of our common stock may decline, and you could lose part or all of your investment.

RISK FACTORS SUMMARY

We are subject to a variety of risks and uncertainties, including risks related to our industry and business, risks related to our finances and capital requirements, risks related to securities markets and investment in our stock, and certain general risks, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The summary below is not exhaustive and is qualified by reference to the full set of risk factors set forth in this "Risk Factors” section.

Risks Related to Our Industry and Business

• We are dependent on the commercial success of our products in the U.S.

• If generics or other versions of our products including generics containing oxcarbazepine.

topiramate, apomorphine hydrochloride, amantadine, or viloxazine hydrochloride, are approved and successfully commercialized, our business could be materially harmed.

• We are subject to uncertainty relating to payment or managed care reimbursement policies, which, if not favorable for our products or product candidates, could hinder or prevent our commercial success.

• We depend on wholesalers, distributors, and specialty pharmacies for the distribution of our products.

If we lose any of our significant wholesaler, distributor, or specialty pharmacy accounts, our business could be harmed.

RISK FACTORS.

• Final marketing approval of any of our product candidates or approval of additional indications for existing products by the FDA or other regulatory authorities may be delayed, limited, or denied, any of which would adversely affect our ability to generate operating revenues.

• We rely on and will continue to rely on outsourcing arrangements for certain of our critical activities, including clinical research of our product candidates, manufacture of our compounds and product candidates, and the manufacture of our commercial products.

If we fail to produce our products and product candidates in the volumes that we require on a timely basis or fail to comply with stringent regulations applicable to pharmaceutical drug manufacturers, we may face delays in the development and commercialization of our products and product candidates or be required to withdraw our products from the market.

• If we do not obtain marketing exclusivity for our product candidates, our business may suffer.

• If our competitors develop or market alternatives for the treatment of our target indications, our commercial opportunities will be reduced or eliminated.

• We depend on collaborators to work with us to develop, manufacture and commercialize our products and product candidates.

We have in-licensed or acquired a portion of our intellectual property necessary to develop certain of our product candidates.

If we fail to comply with our obligations under any of these arrangements, we could lose the benefit of such collaborative relationships, including licenses or intellectual property rights.

• Our failure to successfully develop and market our product candidates would impair our ability to grow.

• Our clinical trials for our product candidates may fail to demonstrate acceptable levels of safety, efficacy, or other requirements, which could prevent or significantly delay regulatory approval.

• Delays or failures in the completion of clinical development of our product candidates would increase our costs, delay, or limit our ability to generate revenues.

• Healthcare reform measures could hinder or prevent the commercial success of our products or product candidates.

• Healthcare cost containment legislation and the failure of third-party payors to provide appropriate levels of coverage and reimbursement for the use of products and treatments facilitated by our products could harm our business and prospects.

• Any failure to comply with healthcare regulations, including implementation of any change in compliance with healthcare regulations and laws could cause us to incur significant compliance expenses and any failure to comply could subject us to substantial penalties and fines.

Our business, operations, and financial condition could be adversely affected.

• We could be involved in lawsuits to protect or enforce our patents, which could be expensive, time consuming, distracting, and ultimately unsuccessful.

• Limitations on our patent rights relating to our products and product candidates may limit our ability to prevent third parties from competing with us.

• We face potential litigation and product liability exposures.

If successful claims are brought against us, we may incur substantial liabilities.

• Cybersecurity incidents may adversely impact our financial condition, results of operations, and reputation.

Security breaches and other disruptions could compromise our information and expose us to liability which would cause our business and reputation to suffer.

• Compliance with the terms and conditions of our Corporate Integrity Agreement requires significant resources and management time and, if we fail to comply, we could be subject to penalties or, under certain circumstances, excluded from government healthcare programs, which would materially adversely affect our business.

Risks Related to Our Finances and Capital Requirements

• Our operating results may fluctuate significantly.

• Our ability to use our net operating loss carryforwards and other tax attributes may be limited or may expire prior to utilization.

• We have and may further expand our business through acquisitions of new product lines or businesses, which expose us to various risks, including difficulties in integrating acquisitions.

Our recent acquisitions pose certain incremental risks to the Company.

• Any impairment in the value of our intangible assets, including goodwill, would negatively affect our operating results and total capitalization.

• Our Credit Line is secured by a portfolio of marketable securities and we may be required to post additional collateral.

RISK FACTORS.

Risks Related to Securities Markets and Investment in Our Stock

• The issuance of additional shares of our common stock, or instruments convertible into or rights to acquire shares or our common stock, or market sales of our common stock, could affect the market price of our common stock.

• Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control, which could negatively impact the market price of our common stock.

General Risk Factors

• Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies.

Our patent protection could be reduced or eliminated for non-compliance with these requirements.

• Our insurance coverage may not be sufficient to cover our legal claims or other losses that we may incur in the future.

• Our operations rely on sophisticated information technology, systems, and infrastructure, a disruption of which could harm our operations.

Risks Related to Our Industry and Business

We are dependent on the commercial success of our products in the U.S.

Our financial performance, including our ability to replace revenue and income lost to generic products and other competitors as well as to grow our business, depends heavily on the commercial success of our products.

A substantial amount of our resources is focused on generating, maintaining and/or expanding the revenue generated by our approved products in the U.S.

Our major products Qelbree ® , GOCOVRI ® , Oxtellar XR ® , and APOKYN ® , represented approximately 24%, 21%, 20%, and 13% of our total net revenues for the year ended December 31, 2023, respectively.

If any of our major products, including were to become subject to problems, such as changes in prescription growth rates, unexpected side effects, loss of intellectual property protection, supply chain or product supply shortages, regulatory proceedings, changes in labeling, publicity adversely affecting doctor or patient confidence in our product, material product liability litigation, pressure from new or existing competitive products, or adverse changes in coverage under managed care programs, the adverse impact on our revenue and profit could be significant.

As noted in the "Business" section of this report, sales of a generic version of Trokendi XR ® began in January 2023 and those competitive products have significantly impacted the sales of Trokendi XR and have had an adverse impact on our revenue and profit.

In addition, our revenue and profit could be significantly impacted by the timing and rate of commercial acceptance of key new products.

Our ability to generate significant product revenue from sales of our products in the near term will depend on, among other things, our ability to:

• Defend our patents, intellectual property, and products from the competition, both branded and generic;

• Maintain commercial manufacturing arrangements with third-party manufacturers;

• Produce, through a validated process, sufficiently large quantities of our products to meet demand;

• Continue to maintain a wide variety of internal sales, distribution, and marketing capabilities, sufficient to sustain and grow revenue;

• Continue to maintain and grow widespread acceptance of our products from physicians, health care payors, patients, pharmacists, and the medical community;

• Properly price and obtain adequate reimbursement coverage of these products by governmental authorities, private health insurers, managed care organizations, and other third-party payors;

• Maintain compliance with ongoing FDA labeling, packaging, storage, advertising, promotion, recordkeeping, safety, and other post-market requirements;

• Obtain approval from the FDA to expand the labeling of our approved products for additional indications;

• Adequately protect against and effectively respond to any claims by holders of patents and other IP rights alleging that our products infringe their rights;

RISK FACTORS.

• Adequately protect against and effectively respond to any unanticipated adverse effects or unfavorable publicity that develops with respect to our products, as well as respond to the emergence of new or existing competitive products, which may be proven to be more clinically effective and cost-effective.

There are no guarantees that we will be successful in completing these tasks.

We will need to continue investing substantial financial and management resources to maintain our commercial sales and marketing infrastructure and recruit and train qualified marketing, sales, and other personnel.

Sales of our products may slow for a variety of reasons, including competing products or safety issues.

Any increase in sales of our products will be dependent on several factors, including our ability to educate physicians, to increase physician awareness, and physician acceptance of the benefits and cost-effectiveness of our products relative to competing products.

Our ability to increase market acceptance of any of our products or to gain market acceptance of approved product candidates among physicians, patients, health care payors, and the medical community will depend on a number of factors, including:

• Acceptable evidence of safety and efficacy;

• Relative convenience and ease of administration;

• Prevalence, nature, and severity of any adverse side effects;

• Availability of alternative treatments, including branded and generic products;

• Pricing and cost effectiveness.

Further, our products are subject to continual review by the FDA.

We cannot provide assurance that newly discovered or reported safety issues would not arise.

With the use of any marketed drug by a broader patient population, serious adverse events may occur from time to time that initially do not appear to be related to the drug itself.

Any safety issues could cause us to suspend or to cease marketing of our approved products;

cause us to modify how we market our approved products;

subject us to substantial liabilities;

and adversely affect our revenues and financial condition.

In the event of a withdrawal of any of our products from the market, our revenues would decline significantly, and our business would be seriously harmed and could fail.

In addition, we have expressed certain long term revenue expectations.

If we are not successful in broadening and/or maintaining the current commercial acceptance of our products, such that we cannot achieve those revenue expectations with respect to such products, this could result in a material adverse impact on our anticipated revenue, earnings, and liquidity.

If generics or other versions of our products including generics containing oxcarbazepine.

topiramate, apomorphine hydrochloride, amantadine, safinamide or viloxazine hydrochloride, are approved and successfully commercialized, our business could be materially harmed.

Third parties have, and in the future may, receive approval to manufacture and market their own versions of extended-release topiramate in the U.S.

For example, Upsher-Smith launched Qudexy XR (extended-release topiramate) and a branded generic version of Qudexy XR in 2014.

Upsher-Smith also entered into a settlement with two generic companies to launch a generic to Qudexy XR in 2020.

In February 2021, one of the generic companies, Glenmark, entered the U.S.

market with its own therapeutically equivalent generic products to Qudexy XR.

The Company has entered into settlement agreements with third parties permitting the sale of a generic version of Trokendi XR on January 1, 2023.

Sales of generic versions of Trokendi XR ® began in 2023.

The Company has also entered into settlement and license agreements with third parties permitting the sale of the first generic version of Oxtellar XR beginning in September 2024, or sooner under certain conditions, and entitling the Company to receive royalties on those sales.

The Company has also entered into settlement and license agreements with third parties permitting the sale of the first generic version of XADAGO beginning in December 2027, or sooner under certain conditions.

We have the right to defend our products against third parties who may infringe or are infringing our patents.

Other third parties in the future may receive approval to manufacture and market their own versions of extended-release oxcarbazepine or generics of Oxtellar XR in the U.S.

In addition, we are aware of companies who are marketing modified-release oxcarbazepine products outside of the U.S., such as Apydan, which was developed by Desitin Arzneimittel GmbH and which requires twice-daily administration.

If companies with modified-release oxcarbazepine products outside of the U.S.

pursue or obtain approval of their products within the U.S., such competing products may limit the potential success of Oxtellar XR in the U.S.

Our business and growth prospects could be materially impaired.

RISK FACTORS.

Accordingly, if any third party is successful in obtaining approval to manufacture and market a generic or its own version of extended-release oxcarbazepine or topiramate in the U.S., we may not be able to prospectively realize revenues from Oxtellar XR or Trokendi XR.

In addition, third parties have, and in the future may, receive approval to manufacture and market their own products, including generics containing apomorphine hydrochloride for the treatment of Parkinson’s Disease in the U.S.

For example, Acorda Therapeutics, Inc.

launched Inbrija, an inhalable form of levodopa in 2019 and Sunovion Pharmaceuticals, Inc.'s (Sunovion, a subsidiary of Sumitomo Dainippon Pharma Co.

Ltd) launched KYNMOBI, a sublingual film formulation of apomorphine hydrochloride, in 2020.

In February 2022, the FDA approved the first generic of APOKYN (apomorphine hydrochloride injection) to treat hypomobility "off" episodes ("end-of-dose wearing off" and unpredictable "on/off" episodes) associated with advanced Parkinson's Disease.

This approval is for an application of the drug cartridges only, which are compatible for use with the APOKYN pen, the brand-name pen injector.

Patients treated with generic apomorphine hydrochloride will need to separately obtain the APOKYN pen.

The success of these products and the entry of new products could adversely impact the sales of APOKYN.

If any third party is successful in obtaining approval to manufacture and market a generic or its own version of safinamide in the U.S., we may not be able to prospectively realize revenues from XADAGO.

Third parties in the future may receive approval to manufacture and market their own versions of viloxazine hydrochloride.

Accordingly, if any third party is successful in obtaining approval to manufacture and market its own version of viloxazine hydrochloride, such competing products may limit the potential success of Qelbree in the U.S.

Our business and growth prospects could be materially impaired.

We are subject to uncertainty relating to payment or managed care reimbursement policies, which, if not favorable for our products or product candidates, could hinder or prevent our commercial success.

Our business is operating in an ever more challenging environment, with significant economic pressures exerted by federal and state governments, insurers, and private payors on the pricing of our products, affecting our ability to obtain and/or maintain satisfactory rates of reimbursement for our products.

federal and state governments and private payors are under intense pressure to control healthcare spending even more tightly than in the past.

These pressures are further compounded by consolidation among distributors, retailers, private insurers, managed care organizations, and other private payors, resulting in an increase in their negotiating power, particularly with respect to our products.

In addition, these pressures are intensified by increased, adverse publicity about pricing for pharmaceuticals.

These prices are sometimes characterized as excessive, leading to government investigations and legal proceedings regarding pharmaceutical pricing practices.

Our ability, or our collaborators' ability, to successfully commercialize our products and product candidates, including Qelbree and SPN-830, will depend in part on the coverage and reimbursement levels set by governmental authorities, private health insurers, managed care organizations, and other third-party payors.

As a threshold for coverage and reimbursement, third-party payors require that drug products be approved for marketing by the FDA.

Third-party payors are increasingly challenging the effectiveness of and prices charged for medical products and services.

Government authorities and third-party payors have attempted to control costs, in some instances, by limiting coverage, by limiting the amount of reimbursement for particular medications, or by encouraging the use of lower-cost generic products.

We cannot be sure that reimbursement will be available for any of the products that we develop and, if reimbursement is available, the level of reimbursement.

Moreover, that level of reimbursement may change over time as a result of requests from payors for higher levels of fees.

Reduced or partial payment, or reduced reimbursement coverage, could make our products or product candidates less attractive to patients and prescribing physicians.

We also may be required to sell our products or product candidates at a significant discount, which would adversely affect our ability to realize an appropriate return on our investment in our products or product candidates or to maintain profitability.

Our business would also be adversely affected if private insurers, managed care organizations, the Medicare program, or other reimbursing bodies or payors limit the indications for which our products or product candidates will be reimbursed.

We expect that private insurers and managed care organizations will consider the efficacy, cost effectiveness, and safety of our products or product candidates in determining whether to approve reimbursement for such products or product candidates and to what extent they will provide reimbursement.

Moreover, they will consider the efficacy and cost effectiveness of comparable or competitive products, including generic products, in making reimbursement decisions for our products.

Because each third-party payor individually approves payment or reimbursement, obtaining these approvals can be a time consuming and expensive process, requiring us to provide scientific or clinical support for the use of each of our products or product candidates separately to each third-party payor.

In some cases, it could take months or years before a particular private insurer or managed

RISK FACTORS.

care organization reviews a particular product.

Prior to that time, reimbursement may be negligible.

We may ultimately be unsuccessful in obtaining coverage.

In addition, our competitors may have more extensive existing business relationships with third-party payors that could adversely impact the coverage for our products.

Our business would be materially and adversely affected if we do not receive reimbursement for our products or product candidates from private insurers in a timely fashion or on a satisfactory basis.

Our products and product candidates may not be considered cost-effective, and coverage and reimbursement may not be available or economically sufficient to allow us to sell our products or product candidates on a profitable basis.

In addition, many managed care organizations negotiate the reimbursement price of products through the use of formularies, which establish reimbursement levels.

Exclusion of a product from a formulary can lead to sharply reduced usage in the managed care organization's patient population because reimbursement is limited and/or negligible.

If our products are not included within an adequate number of managed care formularies or reimbursed at adequate levels, or if those policies increasingly favor generic products, our market share and gross margins could be negatively affected.

This would have a material adverse effect on our overall business and financial condition.

There has been increasing legislative and enforcement interest in the U.S.

with respect to specialty drug pricing practices.

Specifically, there have been several recent U.S.

Congressional inquiries and proposed federal and state legislative initiatives designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under the Medicare program, to review the relationship between pricing and manufacturer patient programs, and to reform government reimbursement methodologies for drugs.

For additional information, see "Healthcare cost containment legislation and the failure of third-party payors to provide appropriate levels of coverage and reimbursement for the use of products and treatments facilitated by our products could harm our business and prospects." We expect to experience pricing pressures in connection with the sale of any of our products and product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, additional cost containment initiatives, and additional legislative changes.

In some foreign jurisdictions, particularly Canada and Europe, the pricing of prescription pharmaceuticals is subject to strict governmental control.

In these countries, pricing negotiations with governmental authorities can take 6 to 12 months, or longer, after the receipt of regulatory approval and product launch.

To obtain favorable reimbursement for the indications sought, or to obtain pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our products or product candidates, if approved, to other available therapies.

If reimbursement for our products or product candidates is unavailable in any country in which reimbursement is sought or is limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materially harmed and unprofitable.

As evidenced by the passage of the American Rescue Plan Act of 2021 and IRA of 2022, discussed in greater detail below, we expect these challenges to continue and to potentially intensify in 2024 and following years, as political pressures mount, and healthcare payors, including government-controlled health authorities, insurance companies, and managed care organizations, step up initiatives to reduce the overall cost of healthcare, restrict access to higher-priced new medicines, increase the use of generic products and impose overall price cuts.

Such pressures could have a material adverse impact on our business, financial condition, and results of operations.

We depend on wholesalers, distributors, and specialty pharmacies for the distribution of our products.

If we lose any of our significant wholesaler, distributor, or specialty pharmacy accounts, our business could be harmed.

The majority of sales of Qelbree, Oxtellar XR, Trokendi XR, XADAGO, and MYOBLOC are made to wholesalers and distributors.

In addition, MYOBLOC is available for direct purchase by physicians and hospitals.

The majority of sales of APOKYN, GOCOVRI, and Osmolex ER are made to specialty pharmacies.

The loss of any of these wholesale pharmaceutical distributors or wholesale and specialty pharmacy accounts, or a material reduction in their purchases, could have a material adverse effect on our business, results of operations, financial condition, and prospects.

In addition, these wholesale customers comprise a significant part of the distribution network for pharmaceutical products in the U.S.

This distribution network has undergone and may continue to undergo significant consolidation marked by mergers and acquisitions.

As a result, a small number of large wholesale distributors control a significant share of the market.

RISK FACTORS.

Consolidation of drug wholesalers has increased.

This may result in increased competition and pricing pressures on pharmaceutical products.

We cannot assure you that we can manage these pricing pressures or that wholesaler purchases will not fluctuate unexpectedly from period to period.

Sales of our products can be greatly affected by the inventory levels that our respective wholesalers, specialty pharmacies, and distributors carry.

We monitor wholesalers, specialty pharmacies, and distributor inventory of our products using a combination of methods.

Pursuant to distribution service agreements with our three largest wholesale customers, we receive product inventory reports.

For other wholesalers where we do not receive inventory reports, our estimates of wholesaler inventories may differ significantly from actual inventory levels.

Significant differences between actual and estimated inventory levels may result in excessive stocking, resulting in our holding substantial quantities of unsold inventory, or, alternatively, inadequate supplies of product in the distribution channels.

This could result in our inability to support sales at the retail level.

These changes may cause our revenues to fluctuate significantly from quarter to quarter and, in some cases, may cause our operating results for a particular quarter to be below our expectations, the expectations of securities analysts, and/or the expectations of investors.

At times, wholesalers and distributors may increase inventory levels in response to anticipated price increases, resulting in both greater wholesaler purchases prior to the anticipated price increase and in reduced wholesaler purchases in later quarters.

Accordingly, this may cause substantial fluctuations in our results of operations from period to period.

If our financial results are below expectations for a particular period, the market price of our common stock may drop significantly.

We may not be able to effectively market and sell our product candidates, if approved, in the U.S.

We plan on expanding our sales and marketing capabilities in the U.S.

to commercialize new product candidates if approved.

This will require investing significant amounts of financial and management resources.

If we are unable to establish and maintain adequate sales and marketing capabilities for new product candidates or do so in a timely manner, we may not be able to generate sufficient product revenues from our product candidates to be profitable.

The cost of establishing and maintaining such marketing and sales capabilities may not be economically justifiable in light of the revenues generated by any of our product candidates.

With the approval of a new product candidate, we may re-prioritize our marketing and sales efforts, including reassigning our sales representatives who support existing products to devote their full efforts to the launch of the new product candidate.

This could have a detrimental impact on the future sales performance of existing products.

Final marketing approval of any of our product candidates or approval of additional indications for existing products by the FDA or other regulatory authorities may be delayed, limited, or denied, any of which would adversely affect our ability to generate operating revenues.

We are dependent on obtaining regulatory approval of our product candidates and approval for additional indications for existing products.

Our business depends on successful clinical development i.e., successful completion of clinical trials and completion of requisite manufacturing information.

We are not permitted to market any of our product candidates in the U.S.

until we receive approval of an NDA from the FDA or market in any foreign jurisdiction until we receive approval from the requisite authority.

Satisfaction of regulatory requirements typically takes many years, is dependent upon the type, complexity, and novelty of the product, and requires the expenditure of substantial resources.

We cannot predict whether or when we will obtain regulatory approval to commercialize our product candidates.

We cannot, therefore, predict the timing of any future revenues from these product candidates.

The FDA has substantial discretion in the drug approval process, including the ability to delay, limit or deny approval of a product candidate or deny a prior approval supplement for many reasons.

For example, the FDA

• Could reject or delay the marketing application for an NCE;

• Could determine that we cannot rely on Section 505(b)(2) for any approval of our product candidates;

• Could determine that the information provided by us was inadequate, contained clinical deficiencies, or otherwise failed to demonstrate the safety and effectiveness of any of our product candidates for a specific indication;

• May not find the data from bioequivalence studies and/or clinical trials sufficient to support the submission of an NDA or to obtain marketing approval in the U.S.;

• May find the clinical and other benefits of our product candidates do not outweigh their safety risks;

RISK FACTORS.

• May disagree with our trial design or our interpretation of data from preclinical studies, bioequivalence studies, and/or clinical trials, or may change the requirements for approval even after they have reviewed and commented on the design for our trials;

the outcome and measurement scale used in the trials;

or the clinical protocols whether with or without a special protocol assessment process;

• May determine that we have identified the wrong reference listed drug or drugs, or that approval of our Section 505(b)(2) application of our product candidate is blocked by patent or non-patent exclusivity of the reference listed drug or drugs;

• May identify deficiencies in the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for the supply of raw materials, including the active pharmaceutical ingredient (API) or formulated product used in our product candidates, wherein those deficiencies may result in a delay in obtaining FDA approval or in an interruption in the ability to supply product;

• Could reject or delay approval of a "prior approval supplement" required prior to distribution of the drug product made using changes that may impact product quality, identity strength, purity, or potency (i.e., major changes);

• May approve our product candidates for fewer or more limited indications than we request, or may grant approval contingent on the performance of costly post-approval clinical trials;

• May change their approval policies or adopt new regulations;

• May not approve the labeling claims that we believe are necessary or desirable for the successful commercialization of our product candidates or may approve them with warnings and precautions that could limit the acceptance of our product candidates and their commercial success;

• May not approve the addition of new indications to the label of our existing products.

Notwithstanding the approval of many products by the FDA pursuant to Sections 505(b)(1) and 505(b)(2), over the last few years, some pharmaceutical companies and others have objected to the FDA's interpretation of Section 505(b)(2).

Any failure to obtain regulatory approval of our product candidates would eliminate our ability to generate revenues for that candidate.

Any failure to obtain such approval for all of the indications and labeling claims we deem desirable could reduce our potential revenues.

The process of obtaining regulatory clearances or approvals to market a medical device can be costly and time consuming.

We may not be able to obtain these clearances or approvals on a timely basis, if at all.

The FDA exercises significant discretion over the regulation of combination products, including drug and device components in a combination product.

The FDA could in the future require additional regulation under the medical device provisions of the FDCA.

We must comply with the QSR, which sets forth the FDA's cGMP, requirements for medical devices, and other applicable government regulations and corresponding foreign standards for drug cGMPs.

If we fail to comply with these regulations, it could have a material adverse effect on our business and financial condition.

We intend to complete the development of an infusion-pump delivery system containing apomorphine (SPN-830).

We have previously submitted the NDA for SPN-830 to the FDA in September 2020 and received a refusal to file letter from the FDA.

We met with the FDA in March 2021 to clarify the steps required for the resubmission of the NDA for SPN-830.

We resubmitted the NDA for SPN-830 in December 2021 and we received FDA acceptance for review of NDA for SPN-830 during February 2022.

In October 2022, we received a Complete Response Letter ("CRL") from the FDA regarding the NDA for SPN-830 requesting additional information and analysis related to the infusion device and drug product across several areas of the NDA.

In October 2023, the Company resubmitted its NDA for SPN-830.

In November 2023, the FDA acknowledged it received the resubmitted NDA for SPN-830 and assigned PDUFA target action date in early April 2024.

We rely on and will continue to rely on outsourcing arrangements for certain of our critical activities, including clinical research of our product candidates, manufacture of our compounds and product candidates, and the manufacture of our commercial products.

RISK FACTORS.

We rely on outsourcing arrangements for some of our critical activities, including manufacturing, preclinical and clinical research, data collection and analysis, and electronic submission of regulatory filings.

We may have limited control over third parties, and we cannot guarantee that they will perform their obligations in an effective, competent, and timely manner.

Our reliance on third parties, including third-party Clinical Research Organizations (CROs) and CMOs, entails risks including, but not limited to:

• Non-compliance by third parties with regulatory and quality control standards;

• Sanctions imposed by regulatory authorities if materials supplied or manufactured by a third party supplier or manufacturer fail to comply with applicable regulatory standards;

• Possible breach of the agreements by the CROs or CMOs because of factors beyond our control, insolvency or other financial difficulties of any of these third parties;

labor unrest;

natural disasters;

or other factors adversely affecting their ability to conduct their business;

• Termination or non-renewal of an agreement by a third party at a time that is inconvenient for us and for reasons not entirely under our control.

We do not currently own or operate manufacturing facilities for the commercial production of any of our products or for production of clinical supplies of our product candidates, nor do we have plans to do so in the future.

We currently depend on third-party clinical manufacturing organizations (CMOs), who offer a comprehensive range of contract manufacturing and packaging services, in various countries for the supply of API for our products and product candidates, including raw materials and drug substances for our preclinical research and clinical trials.

For most of our products and product candidates, we rely on single source suppliers to produce and package final dosage forms for our products and raw materials, including API.

If any of these vendors are unable to perform their obligations to us, including due to violations of the FDA's requirements, our ability to meet regulatory requirements, projected timelines, and necessary quality standards for the development or commercialization of products would be adversely affected.

Further, if we were required to change vendors, it could result in substantial delays in our regulatory approval efforts, significantly increase our costs, and delay generation of revenues.

Accordingly, the loss of any of our current or future third-party manufacturers or suppliers could have a material adverse effect on our business, results of operations, financial condition, and business prospects.

There is a risk that supplies of our products or product candidates may be significantly delayed by or may become unavailable as a result of manufacturing, equipment, process, supply chain or business-related issues or geopolitical events affecting our suppliers.

At this time while we do not know of any geopolitical events impacting our supply chain, we cannot determine the impact of current or future geopolitical events which may ultimately have an impact on our supply chains or may create other unforeseen consequences affecting us or our suppliers.

Any future curtailment in the availability of raw materials or finished goods could result in production or other delays, with consequent adverse business effects.

In addition, because regulatory authorities must generally approve raw material sources for pharmaceutical products, changes in raw material suppliers may result in production delays or higher raw material costs.

We may also encounter similar risks with the other products and product candidates where raw materials or finished goods are purchased from suppliers outside the U.S., as is the case for example for SPN-830, Qelbree, APOKYN, XADAGO, and MYOBLOC where various suppliers are based in Europe.

The manufacture of pharmaceutical products requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls.

Pharmaceutical companies and their suppliers often encounter difficulties in manufacturing, particularly in scaling up the production of their products.

These problems can adversely affect production costs and yields, quality control, the stability of the product and quality assurance testing, as well as compliance with federal, state, and foreign regulations.

If we are unable to demonstrate stability in accordance with commercial requirements, or if our manufacturers were to encounter difficulties or otherwise fail to comply with their obligations to us, our ability to obtain or maintain FDA approval and to market our products and product candidates, respectively, would be jeopardized.

In addition, any delay or interruption in producing clinical trial supplies could delay or prohibit the completion of our clinical trials, increase the costs associated with conducting our clinical trials and, depending upon the period of delay, require us to commence new trials at the significant additional expense or to terminate a trial.

Manufacturers of pharmaceutical products need to comply with cGMP requirements and other requirements enforced by the FDA, including electronic tracking and submission.

These requirements include quality control, quality assurance, and the maintenance of records and documentation.

Manufacturers of our products and product candidates may be unable to comply with all cGMP requirements and other FDA and similar foreign regulatory requirements.

Failure to comply with these requirements may result in fines and civil penalties, suspension of production, suspension or delay in product approval, product seizure or recall, or withdrawal of product approval.

If the safety of any of our products or product candidates is compromised due to failure to adhere to applicable laws or for other reasons, we may not be able to obtain regulatory approval for such product candidates or

RISK FACTORS.

to successfully commercialize such products.

We may be held liable for any injuries sustained as a result.

Any of these factors could cause a delay in clinical development, regulatory submissions, approvals, or commercialization of our product candidates, entail higher costs, or result in our being unable to effectively commercialize our product candidates.

Furthermore, if we fail to obtain the required commercial quantities on a timely basis from our suppliers and at commercially reasonable prices, we may be unable to meet the demand for our approved products or may not be able to sell our products profitably.

If we do not obtain marketing exclusivity for our product candidates, our business may suffer.

Under the Hatch-Waxman Amendments, three years of marketing exclusivity may be granted for the approval of NDAs and sNDAs, including Section 505(b)(2) applications, for, among other things, new indications, dosage forms, routes of administration, strengths, or for a new use of an existing drug.

If the clinical investigations that were conducted or sponsored by the applicant are determined by the FDA to be essential to the approval of the application, the FDA may grant exclusivity for the product, sometimes referred to as clinical investigation exclusivity.

This prevents the FDA from approving an application under Section 505(b)(2) for the same conditions of use for new clinical investigations prior to the expiration of three years from the date of approval.

Such exclusivity, however, would not prevent the approval of another application if the applicant submits a full NDA and has conducted its own adequate, well-controlled clinical trials, demonstrating safety and efficacy.

It would not prevent approval of a generic product or Section 505(b)(2) product that did not incorporate the exclusivity-protected changes of the approved drug product.

Under the Hatch-Waxman Amendments, newly-approved drugs and indications may also benefit from a statutory period of non-patent marketing exclusivity.

The Hatch-Waxman Amendments provide five-year marketing exclusivity to the first applicant to gain the approval of an NDA for an NCE.

This would be the case if the FDA had not previously approved any other drug containing the same API or active moiety, which is the molecule responsible for the action of the drug substance.

Although protection under the Hatch-Waxman Amendments will not prevent the submission or approval of another full NDA, such an NDA applicant would be required to conduct its own preclinical and adequate, well-controlled clinical trials to demonstrate safety and effectiveness.

Currently, the Company has a five-year and seven-year marketing exclusivity period for Qelbree and GOCOVRI, respectively.

If we are unable to obtain marketing exclusivity for our subsequent product candidates, then our competitors may obtain approval for competing products more easily than if we had such marketing exclusivity.

In such an event, our future revenues could be reduced materially.

If the FDA or other applicable regulatory authorities approve generic products that compete with any of our products or product candidates, the sales of our products or the commercial success of our product candidates would be adversely affected.

Once an NDA, including a Section 505(b)(2) application, is approved, the product covered thereby becomes a listed drug, which can be cited by potential competitors in support of approval of an ANDA.

FDCA, FDA regulations and other applicable regulations and policies provide incentives to manufacturers to create modified, non-infringing versions of a drug to facilitate the approval of an ANDA or other application for generic substitutes.

These manufacturers might only be required to conduct a relatively inexpensive study to show that their product has the same active ingredient(s), dosage form, strength, route of administration, and conditions of use or labeling, as our product or product candidate and that the generic product is bioequivalent to our product.

Bioequivalence implies that a product is absorbed in the body at the same rate and to the same extent as our product or product candidate.

These generic equivalents, which must meet the same quality standards as branded pharmaceuticals, would be significantly less costly than ours to bring to market.

Companies that produce generic equivalents are generally able to offer their products at significantly lower prices.

Thus, regardless of the regulatory approval pathway, after the introduction of a generic competitor, a significant percentage of the sales of any branded product are typically lost to the generic product through both price and volume erosion.

Accordingly, competition from generic equivalents would adversely, materially, and permanently impact our revenues, profitability, and cash flows from those products.

In this eventuality, it would substantially limit our ability to obtain a return on the investments we have made in our products and product candidates.

If our competitors develop or market alternatives for the treatment of our target indications, our commercial opportunities will be reduced or eliminated.

The pharmaceutical industry is characterized by rapidly advancing technologies, intense product-driven competition, and a strong emphasis on proprietary therapeutics.

We face competition from a number of sources, some of which may target the same indications as to our products and product candidates.

These include large pharmaceutical companies, smaller pharmaceutical companies, biotechnology companies, academic institutions, government agencies, and private and public research institutions.

RISK FACTORS.

The availability of new products or the approval of new indications for existing products may limit the demand for and the price we are able to charge for any of our products.

We may be unable to differentiate our products from competitive offerings.

In addition to competition for our current commercial products, we anticipate that we will face intense competition when our pipeline product candidates are approved by regulatory authorities and begin their commercialization process.

In particular, we are aware of Serina Therapeutics and AbbVie developing product candidates that may compete with SPN-830.

New developments, including the development of other drug technologies, may render our products or product candidates obsolete or noncompetitive.

As a result, demand for our product may significantly decline or our products and product candidates may become obsolete before we recover expenses incurred in connection with their development or realize revenues from their commercialization.

Moreover, many competitors have substantially greater:

• Capital resources;

• Research and development resources and experience, including personnel and technology;

• Drug development, clinical trial and regulatory resources and experience, including personnel and technology;

• Sales and marketing resources and experience;

• Manufacturing and distribution resources and experience;

• Name recognition;

• Resources, experience and expertise in prosecution and enforcement of intellectual property rights.

As a result of these factors, our competitors may obtain regulatory approval of their products more rapidly than we are able to or may obtain patent protection or other intellectual property rights that limit or block us from developing or commercializing our product candidates.

Our competitors may also develop drugs that are more effective, have faster onset to action, better tolerated, subject to fewer or less severe side effects, more widely prescribed or accepted, or less costly than ours.

They may also be more successful than us in manufacturing and marketing their products.

If we are unable to compete effectively with the products of our competitors, or if such competitors are successful in developing products that compete with any of our approved product candidates, our business, results of operations, financial condition, and prospects may be materially and adversely affected.

Mergers and acquisitions in the pharmaceutical industry may result in an even higher level of resources being concentrated at competitors.

Competition may intensify as a result of advances made in the commercial applicability of technologies and as a result of greater availability of capital for investment.

Our products and our product candidates may be subject to restrictions or withdrawal from the market.

We may be subject to penalties if we fail to comply with regulatory requirements.

Even though U.S.

regulatory approval has been obtained for our products, the FDA may impose significant restrictions on their indicated uses, or may impose restrictions on marketing, or may impose requirements for costly post-approval studies.

For example, certain of our products, including Qelbree, Trokendi XR, Oxtellar XR and MYOBLOC, were approved on the basis of post-approval commitments.

We received approval for Qelbree from the FDA, based on certain post-marketing commitments, including the requirement to conduct a clinical efficacy and six month open label safety extension study for ADHD in pediatric patients 4 to 5 years of age, a lactation study and a descriptive study related to the use of Qelbree during pregnancy, and to assess the risks of adverse events and potential complications.

We are working toward meeting these post-marketing commitments for Qelbree in a timely manner.

We have post-marketing commitments for Trokendi XR, Oxtellar XR, and MYOBLOC.

Although we have initiated work on some of these post-marketing commitments, we have not been able to accomplish them.

If we do not meet our post-marketing commitments and are unable to show good cause for our inability to adhere to the timetables laid out in the approval letters, the FDA could take enforcement action against us, including withdrawal of approval.

Our products, product candidates, and our collaborators' approved products are subject to ongoing FDA requirements governing the labeling, packaging, storage, advertising, promotion, recordkeeping, and submission of safety and other information.

In addition, manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with current good manufacturing practice (cGMP) regulations.

If we, our collaborators, or a regulatory authority discover previously unknown problems with a product, including

RISK FACTORS.

side effects that are unanticipated in severity or frequency, or problems with the facility where the product is manufactured, a regulatory authority may impose restrictions on that product or on the manufacturer, including requiring withdrawal of the product from the market or suspension of manufacturing.

If we or our collaborators, or our products, product candidates, or our collaborators' products, or the manufacturing facilities for our products, product candidates or our collaborators' products fail to comply with applicable regulatory requirements, a regulatory authority may:

• Issue warning letters or untitled letters;

• Impose civil or criminal penalties;

• Suspend regulatory approval;

• Suspend any ongoing bioequivalence and/or clinical trials;

• Refuse to approve pending applications or supplements to applications filed by us;

• Impose restrictions on operations, including costly new manufacturing requirements, or suspend production for a sustained period of time;

• Seize or detain products or require us to initiate a product recall.

In addition, our product labeling, advertising, and promotion of our approved products are subject to regulatory requirements and continuing regulatory review.

The FDA strictly regulates the promotional claims that may be made about prescription products.

In particular, a product may not be promoted for uses that are not approved by the FDA, as reflected in the product's approved labeling.

Notwithstanding, physicians may nevertheless prescribe products to their patients in a manner that is inconsistent with the approved label, which is known as "off label use".

The FDA and other authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have promoted off-label use may be subject to significant sanctions.

The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined companies from engaging in off-label promotion.

If we are found to have promoted off-label use, we may be enjoined from such off-label promotion and become subject to significant liability.

This could have an adverse effect on our reputation, business, revenues, and profits.

Further, the FDA's policies may prospectively change.

Additional government regulations may be enacted that could affect our products or prevent, limit or delay regulatory approval of our product candidates.

If we are unable to adapt on a timely basis, or at all, to changes in existing requirements or to adopt new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we have obtained, adversely affecting our business, prospects, and ability to achieve or sustain profitability.

We depend on collaborators to work with us to develop, manufacture and commercialize their and our products and product candidates.

We have in-licensed or acquired a portion of our intellectual property necessary to develop certain of our product candidates.

If we fail to comply with our obligations under any of these arrangements, we could lose the benefit of such collaborative relationships, including licenses or intellectual property rights.

Under the Britannia Supply Agreement, we have been granted certain intellectual property and product rights in relation to APOKYN, including the right to use and market APOKYN in the United States.

Additionally, the Britannia Supply Agreement grants Britannia certain intellectual property and product rights in relation to APOKYN, including the right to use and market APOKYN in the rest of the world, excluding the United States.

Per the Agreement, Britannia has an obligation to supply us with APOKYN for our marketing and sale of the product.

Britannia may terminate its obligation to supply APOKYN for cause, or at any time, by giving at least twenty-four months' written notice.

The Britannia Supply Agreement does not provide technology transfer assistance from Britannia to any new suppliers we might engage following termination.

In addition, the Britannia Supply Agreement is silent in providing us with an explicit license grant to any intellectual property, or to access know-how necessary or useful for manufacturing APOKYN.

If we materially breach the Britannia Supply Agreement, or Britannia chooses to terminate the Britannia Supply Agreement for convenience, we could lose the right and resources necessary for the manufacture of APOKYN or could incur significant costs implementing technology transfer assistance.

We also have agreements with leading CMOs to manufacture other commercial products and the API for such products.

These CMOs offer a comprehensive range of contract manufacturing services.

RISK FACTORS.

We have a license agreement with United Therapeutics Corporation to use one of our proprietary technologies in an oral formulation of treprostinil diethanolamine, or treprostinil, for the treatment of pulmonary arterial hypertension and for other indications.

The Company is eligible to receive, and has received royalties under this agreement based on net product sales of United Therapeutics Corporation's product, Orenitram (treprostinil).

We are entitled to receive milestones and royalties for the use of this formulation in indications other than arterial hypertension.

Namzaric (memantine hydrochloride extended release and donepezil hydrochloride) capsules for the treatment of moderate to severe dementia of an Alzheimer's type is currently marketed by Allergan plc under an exclusive license agreement between Adamas Pharmaceuticals, LLC and Forest Laboratories Holdings Limited ("Forest"), an indirect, wholly-owned subsidiary of Allergan plc (collectively, "Allergan") in the United States.

Adamas Pharmaceuticals LLC receives royalties on net sales of Namzaric.

We rely on third-party collaborators and strategic partners to market and commercialize our products and product candidates outside the U.S.

We are party to and rely on several arrangements with third parties which provide us with rights to intellectual property that are necessary for the development of certain of our product candidates.

In addition, we may enter into similar arrangements in the future for other product candidates.

Our current arrangements impose various development, financial and other obligations on us.

If we materially breach these obligations, of if third parties fail to adequately perform their respective obligations, these arrangements could be terminated which could result in our inability to develop, manufacture, market and sell products that are covered by such intellectual properties.

We may not have sufficient resources to successfully establish future collaborations or license future arrangements on acceptable terms, if at all.

We also face competition in our search for collaborators and licensing partners.

By entering into strategic collaborations or similar arrangements, we rely on third parties to financially support their local operations, including support required for development, commercialization, sales, marketing, and regulatory activities, as well as expertise in each of those subject areas.

Refer to Part I, Item 1—Business — Collaborations and Licensing Agreements , of our Annual Report on Form 10-K for discussion on the different collaborations and licensing arrangements.

Our future collaboration agreements may limit the areas of research and development that we may pursue, either alone or in collaboration with third parties.

Much of the potential revenues from these future collaborations may consist of contingent payments, such as payments for achieving certain development milestones and royalties payable on product sales.

The milestones and royalty revenues that we may receive under these collaborations will depend upon our collaborators' ability to successfully develop, introduce, market and sell new products.

Future collaboration partners may fail to develop or effectively commercialize products, product candidates, or technologies because they, among other things, may:

• Change the focus of their development and commercialization efforts, or may have insufficient resources to effectively develop our product candidates;

• Pharmaceutical and biotechnology companies historically have re-evaluated their development and commercialization priorities following mergers and consolidations, which have been common in recent years.

The ability of some of our product candidates to reach their potential could be limited if our future collaborators fail to apply sufficient development or commercialization efforts related to those product candidates;

• Decide not to devote the necessary resources due to internal constraints, such as limited personnel with the requisite scientific expertise, limited cash resources, or in the belief that other internal drug development programs may have a higher likelihood of obtaining marketing approval, or may potentially generate a greater return on investment;

• Develop and commercialize, either alone or with others, drugs that are similar to or competitive with the product candidates that are the subject of their collaboration with us;

• Not have necessary and sufficient resources to develop the product candidate through clinical development, marketing approval, and commercialization;

• Fail to comply with applicable regulatory requirements;

• Are unable to obtain the necessary marketing approvals;

• Breach or terminate their arrangement with us.

RISK FACTORS.

If collaboration partners fail to develop or fail to effectively commercialize our products for any of these reasons, we may not be able to replace the collaboration partner with another partner to develop and commercialize the product under the terms of the collaboration, if at all.

Further, even if we are able to replace the collaboration partner, we may not be able to do so on commercially favorable terms.

As a result, the development and commercialization of the affected product or product candidate could be delayed, impaired, or terminated because we may not have sufficient financial resources or capabilities to continue the development and commercialization of the product candidate on our own.

Failure of our third-party collaborators to successfully market and commercialize our products or product candidates within and outside the U.S.

could materially diminish our revenues and harm our results of operations.

Even if our product candidates receive regulatory approval in the U.S., we or our collaborators may not receive approval to commercialize our product candidates outside of the U.S.

To market any product outside of the U.S., we must establish and comply with numerous and varying regulatory requirements of other regulatory jurisdictions regarding safety and efficacy.

Approval procedures vary among jurisdictions and can involve product testing and administrative review periods different from, and longer than, those in the U.S.

The time required to obtain approval in other jurisdictions might differ from that required to obtain FDA approval.

The regulatory approval process in other jurisdictions may include all of the risks detailed above regarding FDA approval in the U.S., as well as other risks.

For example, legislation analogous to Section 505(b)(2) of the FDCA in the U.S., which relates to the ability of an NDA applicant to use published data not developed by such applicant, may not exist in other countries.

In territories where data are not freely available, we may not have the ability to commercialize our products without first negotiating with third parties to obtain their permission to refer to their clinical data in our regulatory applications.

This process could require the expenditure of significant additional funds and time.

In addition, regulatory approval in one jurisdiction does not ensure regulatory approval in another.

A failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory processes in others.

Failure to obtain regulatory approval in other jurisdictions, or any delay or setback in obtaining such approvals, could have the same adverse effects as detailed above regarding FDA approval.

As described above, such effects include the risks that any of our product candidates may not be approved for all requested indications, which could limit the uses of our product candidates and could have an adverse effect on their commercial potential or could require costly post-marketing studies.

Our failure to successfully develop and market our product candidates would impair our ability to grow.

As part of our growth strategy, we intend to develop and market additional product candidates.

We may spend substantial resources and several years completing the development of a particular current or future internal product candidate, during which process we can experience failure at any stage, and for many reasons.

The product candidates to which we allocate our resources, even if approved, may not be commercially successful.

In addition, because our internal research capabilities are limited, we may be dependent upon pharmaceutical companies, academic scientists, and other researchers to sell or license products or technologies to us.

The success of this strategy depends partly upon our ability to identify, select, discover and acquire promising pharmaceutical product candidates and approved products, and to manage our spending as expenses related to undertaking clinical trials can be substantial.

In September 2020, we submitted the NDA for SPN-830 to the FDA.

In November 2020, we received a Refusal to File (RTF) letter from the FDA regarding the NDA in which the FDA determined that the NDA was not sufficiently complete to permit a substantive review.

In the letter, the FDA requested certain documents and reports to be submitted in support of the NDA.

In March 2021, we met with the FDA to discuss the path forward for resubmission of the SPN-830 NDA.

The FDA provided additional clarity related to the contents of the RTF letter and the requirements for resubmission and in December 2021, the Company resubmitted the SPN-830 NDA to the FDA.

In February 2022, the Company received notice from the FDA that the company’s New Drug Application (NDA) resubmission for its apomorphine infusion device (SPN-830) for the continuous treatment of motor fluctuations ("off" episodes) in Parkinson's Disease is considered a Standard Review thereby assigning a timeline of 10 months for review by the FDA and establishing a Prescription Drug User Fee Act (PDUFA) target action date in early October, 2022.

In October 2022 we received a CRL from the FDA regarding the NDA for SPN-830 requesting additional information and analysis related to the infusion device and drug product across several areas of the NDA.

In October 2023, the Company resubmitted its NDA for SPN-830.

In November 2023, the FDA acknowledged it received the resubmitted NDA for SPN-830 and assigned a PDUFA target action date in early April 2024.

We may be unable to acquire product candidates or products.

The process of proposing, negotiating, and implementing a license, or acquiring a product candidate or an approved product, is lengthy and complex.

Other companies, including some with substantially greater financial, marketing and sales resources, may compete with us for the license, the product candidate, or approved product.

We have limited resources, including

RISK FACTORS.

financial resources, to identify and execute the acquisition or in-licensing of third-party products, businesses, and technologies and integrate them into our current infrastructure.

Moreover, we may devote significant resources to potential acquisitions, or in-licensing opportunities wherein those transactions are never consummated, or we may fail to realize the anticipated benefits of such efforts.

We may not be able to acquire the rights to additional product candidates on terms that we find acceptable or at all.

In addition, future acquisitions may entail numerous operational and financial risks, including:

• Exposure to unknown liabilities;

• Disruption of our business, and diversion of our management's time and attention, to develop acquired products or technologies;

• Incur substantial debt, or dilutive issuances of securities, or depletion of cash to pay for acquisitions;

• Incur higher than expected acquisition, integration, and operating costs;

• Experience difficulty in combining the operations and personnel of any acquired businesses with our operations and personnel;

• Impair relationships with key suppliers or customers of any acquired businesses due to changes in management and ownership;

• Unable to retain and/or motivate key employees of any acquired businesses.

Our clinical trials for our product candidates may fail to demonstrate acceptable levels of safety, efficacy, or other requirements, which could prevent or significantly delay regulatory approval.

We may be unable to sufficiently demonstrate the safety and efficacy of our product candidates in obtaining regulatory approval.

We must demonstrate, with substantial evidence gathered in well-controlled studies and to the satisfaction of the relevant regulatory authorities, that each product candidate is safe and effective for use in the target indication.

We may be required to conduct additional studies or trials to adequately demonstrate safety and efficacy, which could prevent or significantly delay our receipt of regulatory approval, increase clinical costs, and ultimately delay or otherwise impair the commercialization of that product candidate.

Any product candidate that we in-license or acquire may require additional development prior to commercial sale, including formulation development, extensive clinical testing, and approval by the FDA or applicable foreign regulatory authorities.

All product candidates are prone to risks of failure typical to pharmaceutical product development, including the possibility that a product candidate will not be shown to be sufficiently safe and effective for approval by regulatory authorities.

In addition, the results from the trials that we have completed for our product candidates may not be replicated in future trials.

A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced development, even after promising results in earlier trials.

If our product candidates are not shown to be safe and effective, these clinical development programs might be terminated.

Delays or failures in the completion of clinical development of our product candidates would increase our costs, delay, or limit our ability to generate revenues.

Delays or failures in the completion of clinical trials for our product candidates could significantly raise our product development costs.

We do not know whether current or planned trials will be completed on schedule, if at all.

The commencement and completion of clinical development can be delayed or halted for a number of reasons, including:

• Difficulties in obtaining regulatory approval to commence a clinical trial or in complying with conditions imposed by a regulatory authority regarding the scope or term of a clinical trial;

• Difficulties obtaining IRB or ethics committee approval to conduct a trial at a prospective site;

• Delays in reaching or failure to reach agreement on acceptable terms with prospective trial sites and investigators, the contractual terms of which can be subject to extensive negotiation and may vary significantly from site to site;

• Insufficient or inadequate supply of or quantity of a product candidate for use in trials;

RISK FACTORS.

• Challenges recruiting and enrolling patients to participate in clinical trials, for any and all reasons, including competition from other programs for the treatment of similar conditions;

• Severe or unexpected drug-related side effects experienced by patients in a clinical trial;

• Difficulty retaining patients who have enrolled in a clinical trial but who may be prone to withdraw due to side effects from the therapy, lack of efficacy, or personal issues;

• Temporary cessation of clinical trials (clinical holds);

• Delays due to ambiguous or negative interim results in clinical trials.

Clinical trials may be suspended or terminated by us;

or at a trial site by the site's Data Safety Monitoring Board (DSMB) or ethics committee overseeing the clinical trial;

or by the FDA;

or by other regulatory authorities due to a number of factors, including:

• Failure to conduct the clinical trial in accordance with regulatory requirements or the trial protocols;

• Observations during an inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities which ultimately result in the imposition of a delay or clinical hold;

• Unforeseen safety issues;

• Lack of adequate funding to continue the trial.

Failure to conduct the clinical trial in accordance with regulatory requirements or the trial protocols may result in the inability to use the trial data to support product approval.

Changes in regulatory requirements and guidance may occur, and we may need to amend clinical trial protocols to reflect these changes.

Amendments may require us to resubmit our clinical trial protocols to IRBs or ethics committees for reexamination, which may adversely impact the cost, timing, and/or successful completion of a clinical trial.

In addition, many of the factors that cause or lead to a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

If we experience delays in completion, or if we terminate any of our clinical trials, our ability to obtain regulatory approval of our product candidates may be materially harmed, and our commercial prospects and ability to generate product revenues diminished.

Additionally, the current inflationary environment, unstable economic conditions and geopolitical events may delay our trials or significantly increase our product development costs.

Our products and product candidates may cause undesirable side effects or have other characteristics that limit their commercial potential, delay, or prevent their regulatory approval.

Undesirable side effects caused by any of our product candidates could cause us or regulatory authorities to interrupt, delay or halt development.

This could result in the denial of regulatory approval by the FDA or other regulatory authorities and result in potential product liability claims.

Undesirable side effects caused by any of our products could cause regulatory authorities to temporarily or permanently halt product sales, which could have a material adverse effect on our business.

As required by the FDA, the labels for our products include precautions and warnings about side effects, and in certain cases, the need for monitoring patients receiving the product.

If our products cause side effects, or if any of our product candidates receive marketing approval, and we or others later identify undesirable side effects caused by our products or product candidates, a number of potentially significant negative consequences could result, including, among others:

• regulatory authorities may withdraw approval of the product or otherwise require us to take the approved product off the market;

• regulatory authorities may require additional warnings or a narrowing of the indication on the product label;

• we may be required to create a medication guide outlining the proper use of the medication and the risks of side effects for distribution to patients;

RISK FACTORS.

• we may be required to modify the product in some way;

• regulatory authorities may require us to conduct additional clinical trials, or costly post-marketing testing and surveillance, to monitor the safety or efficacy of the product;

• sales of approved products may decrease significantly;

• we could be sued and be held liable for harm caused to patients;

• our reputation may suffer.

Any of these events could prevent us from achieving or maintaining the commercial success of our products and product candidates and could substantially increase commercialization costs.

We may not obtain or maintain the benefits associated with orphan drug designation, including market exclusivity.

Regulatory authorities in the United States may designate drugs for relatively small patient populations as orphan drugs.

The FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition that affects fewer than 200,000 individuals annually in the U.S.

Orphan drug designation entitles a party to financial incentives, such as opportunities for grant funding towards clinical trial costs, tax credits for certain research, and user fee waivers under certain circumstances.

In addition, if a drug receives its first FDA approval in an indication for which it has orphan drug designation, that drug is entitled to seven years of market exclusivity.

This implies that the FDA may not approve any other firm's application for the same drug for that same indication for a period of seven years.

Exceptions are limited, such as showing clinical superiority over the drug with orphan drug exclusivity.

GOCOVRI has been granted orphan drug exclusivity until August 24, 2024 for the treatment of dyskinesia in patients with Parkinson’s Disease receiving levodopa-based therapy with or without concomitant dopaminergic medications.

Although we have been granted FDA orphan drug designation for SPN-817 for the treatment of Dravet Syndrome and Lennox-Gaustaut Syndrome, and we intend to expand our designation for alternative uses where applicable, we may not receive the benefits associated with orphan drug designation.

This may result from a failure to maintain orphan drug status, or it may result from a competing product reaching the market with an orphan designation for the same disease indication.

rules for orphan drugs, if such a competing product reaches the market before ours does, the competing product could potentially obtain a scope of market exclusivity that limits or precludes our product from being sold in the U.S.

for seven years.

Even if we obtain exclusivity, the FDA could subsequently approve an alternative drug for the same condition if the FDA concludes that the second to reach the market is clinically superior in that it is safer, more effective, or makes a major contribution to patient care.

In addition, a competitor may receive approval of different products for the same indication for which our orphan product has exclusivity or may obtain approval for the same product but for a different indication for which the orphan product has exclusivity.

In August 2017, the FDA Reauthorization Act of 2017 (FDARA) was enacted.

FDARA, among other things, codified the FDA's pre-existing regulatory interpretation to require that a drug sponsor demonstrate clinical superiority of an orphan drug that is otherwise the same as a previously approved drug for the same rare disease in order to receive orphan drug exclusivity.

The new legislation reverses prior precedent holding that the Orphan Drug Act unambiguously requires that the FDA recognize the orphan exclusivity period, regardless of showing clinical superiority.

The FDA may further reevaluate the Orphan Drug Act, including the FDARA amendment, its regulations, and policies.

We do not know if, when, or how the FDA may change the orphan drug regulations and policies in the future.

It is uncertain how any changes might affect our business.

Depending on what changes the FDA may make to its orphan drug regulations and policies, our business could be adversely impacted.

Healthcare reform measures could hinder or prevent the commercial success of our products or product candidates.

and certain states have shown significant, increased interest in pursuing healthcare reform and changes to the healthcare delivery system.

Numerous major markets outside the US, including the EU, Japan, and China, have widespread governmental involvement in healthcare funding, including with regard to pricing and reimbursement of pharmaceuticals.

Government-adopted reform measures could adversely impact the pricing of healthcare products and services in the U.S.

or internationally, adversely impacting the level of reimbursement available from governmental agencies and/or commercial third-party payors.

The continuing efforts of third-party payors, including U.S.

federal and state agencies, foreign governments, insurance companies, managed care organizations, employers, and other payors of healthcare services to contain or reduce

RISK FACTORS.

healthcare costs may adversely affect the Company's ability to set prices at launch, increase prices after launch, generate revenues, achieve profitability, and/or maintain profitability.

In addition to healthcare reform initiatives in the U.S.

and in other countries, there are (i) new laws, regulations, and judicial or other governmental decisions affecting pricing, drug reimbursement, and access or marketing within or across jurisdictions;

(ii) changes in intellectual property laws;

(iii) changes in accounting standards;

(iv) new and increasing data privacy regulations and enforcement;

(v) legislative mandates or preferences for local manufacturing of pharmaceutical products;

and (vi) emerging and new global regulatory requirements for reporting payments and other value transfers to healthcare professionals.

The costs of compliance with such laws and regulations, or the negative results of non-compliance, could adversely affect the business, cash flow, results of operations, financial condition and prospects of the Company.

The Company believes that the healthcare industry will continue to be subject to increasing regulation as well as legal and political action, as future proposals to reform the healthcare system are considered by the U.S.

Executive branch, Congress, and state legislatures.

In March 2010, a comprehensive change to the U.S.

healthcare system, known as the Patient Protection and Affordable Care Act of 2010 (ACA) was enacted, as amended by the Health Care and Education Reconciliation Act of 2010.

These laws and their regulations (collectively "HealthCare Reform Law") have far reaching consequences for pharmaceutical companies like the Company.

Possible revisions to the HealthCare Reform Law are the subject of ongoing legislative debates and litigation.

The HealthCare Reform Law exerts downward pressure on pharmaceutical pricing, especially under the Medicare and Medicaid programs, and has increased the industry's regulatory burden and operating costs.

Among the provisions of the HealthCare Reform Law of importance to the Company's products and product candidates are the following:

• An annual, nondeductible fee payable to the U.S.

federal government by any entity that manufactures or imports specified branded prescription drugs or biologic agents.

This fee is based on each company's market share of prior year total sales of branded products to certain federal healthcare programs;

• An increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;

• Rebates owed by manufacturers under the Medicaid Drug Rebate Program for drugs that are inhaled, infused, instilled, implanted, or injected.

On December 21, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a Final Rule that makes significant modifications to the Medicaid Drug Rebate Program regulations in several areas, including with respect to the treatment of value-based purchasing arrangements, the definition of key terms, and the price reporting treatment of manufacturer-sponsored patient benefit programs;

• A Medicare Part D coverage gap discount program, in which manufacturers must agree to offer a substantial point-of-sale discount off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer's outpatient drugs to be covered under Medicare Part D;

• Extension of manufacturers' Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations;

• Expansion of the eligibility criteria for Medicaid programs in certain states;

• Expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;

• A requirement to annually report the number of drug samples that manufacturers and distributors provide to physicians;

• A Patient-Centered Outcomes Research Institute to oversee, identify priorities for, and conduct comparative clinical effectiveness research, and provide funding for such research.

In 2021 the American Rescue Plan Act (“ARPA”) was signed into law, which includes a provision eliminating the statutory cap on rebates that drug manufacturers pay to Medicaid beginning in January 2024.

These rebates function as a discount off the list price and eliminating the cap means that manufacturer discounts paid to Medicaid can increase.

Prior to this change, manufacturers have not been required to pay more than 100% of the Average Manufacturer Price (“AMP”) in rebates to state Medicaid programs for Medicaid-covered drugs.

As a result of this provision, beginning in 2024 it is possible that manufacturers may have to pay state Medicaid programs more in rebates than they receive on sales of particular products.

This change could present a risk to the Company in the future for drugs that have high Medicaid utilization and rebate exposure that is more than 100% of the AMP.

ARPA may push certain pharmaceutical manufacturers to reconsider pricing strategies and overall business in Medicaid and other federal programs.

RISK FACTORS.

In 2022 the IRA was enacted, which made significant changes to how drugs are covered and paid for under the Medicare program, including the creation of financial penalties for drugs whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits, and government price-setting for certain Medicare Part D drugs, starting in 2026, and Medicare Part B drugs starting in 2028.

Additional changes to the HealthCare Reform Law include The American Taxpayer Relief Act of 2012, which reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three years to five years.

In addition to those changes discussed above, in recent years there have also been several Congressional inquiries and proposed bills designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare;

review the relationship between pricing and manufacturer patient programs, and reform government programs reimbursement methodologies for drugs.

Executive orders have changed certain provisions of the HealthCare Reform Law, while other provisions have been subject to court challenges.

On June 17, 2021, the U.S.

Supreme Court dismissed the most recent judicial challenge to the HealthCare Reform Law, brought by several states, without specifically ruling on the constitutionality of the HealthCare Reform Law.

Prior to the U.S.

Supreme Court ruling, President Biden issued an executive order instructing certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including, among others, re-examining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create barriers to obtaining access to health insurance coverage through Medicaid or the HealthCare Reform Law.

Congress may consider other legislation to repeal or replace elements of the HealthCare Reform Law.

It is difficult to predict the extent to which any of these changes to the HealthCare Reform Law, or additional changes if made, may impact the Company's business or any financial condition.

The Company's activities, including research, preclinical testing, clinical trials, and the manufacturing and marketing of its products, are subject to extensive regulation by numerous federal, state and local governmental authorities in the U.S., including the FDA, and by foreign regulatory authorities.

In the U.S., the FDA administers requirements covering the testing, approval safety, effectiveness, manufacturing, labeling, and marketing of prescription pharmaceuticals and vaccines.

In some instances, the FDA requirements have increased the amount of time and resources necessary to develop new products and bring them to market in the U.S.

FDA statutes, regulations, and guidance often are revised or reinterpreted by the FDA in ways that may significantly affect the Company's business and products.

The FDA Reauthorization Act of 2017 (FDARA) amended the FDCA to revise and extend the user-fee programs for drugs, medical devices, generic drugs, and biosimilar biological products, and for other programs.

FDARA reauthorized the various user fees to facilitate the FDA's review and oversight relating to prescription drugs, generic drugs, medical devices, and biosimilars.

FDA's authority, including, among others, pediatric study requirements, orphan drug exclusivity, and the approval process for generic drugs.

The FDA also has enhanced its post-marketing authority, including the authority to require post-marketing studies and clinical trials, make labeling changes based on new safety information, or to require compliance with risk evaluation and mitigation strategies.

The 2012 Food and Drug Administration Safety and Innovation Act expanded drug supply chain reporting requirements and strengthened the FDA's response to drug shortages.

The FDA's exercise of its authority could result in delays or increase costs during product development and regulatory review.

It could also result in increased costs to assure compliance with post-approval regulatory requirements and potential restrictions on the sale and/or distribution of any approved product.

It is impossible to predict whether additional legislative changes will be enacted or whether FDA regulations, guidance, or interpretations will be changed, and what the impact of such changes, if any, may be.

Future regulatory changes could make it more difficult for the Company to maintain or attain approval to develop and commercialize its products and technologies.

Healthcare cost containment legislation and the failure of third-party payors to provide appropriate levels of coverage and reimbursement for the use of products and treatments facilitated by our products could harm our business and prospects.

The Company's products are dependent on the coverage decisions and reimbursement policies established by government healthcare programs and private health insurers.

These policies affect which products customers purchase and the prices customers are willing to pay.

Reimbursement varies by country and can significantly impact the acceptance of new products and technologies.

Even if the Company develops a promising new product, there may be limited demand for the product unless appropriate reimbursement approval is obtained from private and governmental third-party payors.

Additional legislative or administrative reforms to the reimbursement systems in the U.S.

and other countries that significantly reduce reimbursement for the Company's products, including price regulation, competitive bidding and tendering, coverage and payment policies,

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 1. Business