What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-02-25 compared with 2024-02-27 · 153 added, 156 removed, 268 unchanged (54% of the section changed)

13 unchanged sentences

We are a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases.

Our diverse neuroscience portfolio includes approved treatments for epilepsy, migraine, attention-deficit hyperactivity disorder (ADHD), hypomobility in Parkinson’s Disease (PD), cervical dystonia, chronic sialorrhea, dyskinesia in PD patients receiving levodopa-based therapy, and drug-induced extrapyramidal reactions in adult patients.

The Company is developing a broad range of novel CNS product candidates including new potential treatments for hypomobility in PD, epilepsy, depression, and other CNS disorders.

Our diverse neuroscience portfolio includes approved treatments for attention-deficit hyperactivity disorder (ADHD), dyskinesia in Parkinson's Disease (PD) patients receiving levodopa-based therapy, hypomobility in PD, epilepsy, migraine, cervical dystonia, and chronic sialorrhea.

We are developing a broad range of novel CNS product candidates including new potential treatments for epilepsy, depression, and other CNS disorders.

We have a portfolio of commercial products and product candidates.

Commercial Products

2 unchanged sentences

The Company launched Qelbree for pediatric patients in May 2021 and for adult patients in May 2022 in the United States (U.S.).

In January 2025, the FDA approved an expanded label update for Qelbree to include new data on the pharmacodynamics and use in breastfeeding mothers.

• 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 with PD experiencing "OFF" episodes.

1 unchanged sentence

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

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

• Trokendi XR ® (topiramate) is the first once-daily extended-release topiramate product indicated for the treatment of epilepsy in patients 6 years of age and older in the U.S.

It is also indicated for the prophylaxis of migraine headache in adults and adolescents 12 years and older.

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

• XADAGO ® (safinamide) is a once-daily product indicated as adjunctive treatment to levodopa/carbidopa in patients with PD experiencing "OFF" episodes.

1 unchanged sentence

It is the only botulinum toxin type B available on the market.

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

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.

• ONAPGO TM (apomorphine hydrochloride) injection is the first and only subcutaneous apomorphine infusion device for the treatment of motor fluctuations in adults with advanced PD.

ONAPGO was approved by the FDA in February 2025 and received an Orphan Drug Designation.

ONAPGO will be launched in the second quarter of 2025.

Research and Development

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

SPN-830 (apomorphine infusion device)

SPN-830 is a late-stage drug/device combination product candidate for the continuous treatment of motor fluctuations ("off" episodes) in PD patients that are not adequately controlled with oral levodopa and one or more adjunct PD medications.

If approved, it would be the only continuous infusion of apomorphine available in the U.S.

and an important step for PD patients that would have otherwise been candidates for potentially invasive surgical procedures, such as deep brain stimulation.

Continuous slow infusion may also limit some of the side effects of a bolus injection of apomorphine.

In December 2021, we resubmitted the (New Drug Application) NDA to the FDA.

In February 2022, we received a notice from the FDA that the resubmission of the NDA for SPN-830 was considered as a Standard Review and was assigned a PDUFA target action date in early October 2022.

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 April 2023, the Company met with the FDA to discuss the CRL.

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

Refer to discussion under the Operational Highlights section below for further regulatory update.

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 – Novel first-in-class molecule that increases mTORC1 mediated synaptic function for depression

SPN-817 (huperzine A)

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

SPN-817 is a novel synthetic form of huperzine A, whose MOA includes potent acetylcholinesterase inhibition, with pharmacological activities in CNS conditions such as epilepsy.

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 several epilepsy indications from the FDA.

SPN-820 (NV-5138)

SPN-820 is a first-in-class, orally active small molecule that increases the brain mechanistic target of rapamycin complex 1 (mTORC1) mediated synaptic function intracellularly.

1 unchanged sentence

In addition, unlike leucine, it is not incorporated into proteins during protein synthesis, and therefore, it is more available at the target site in the brain than leucine.

SPN-817 – Novel first-in-class highly selective AChE inhibitor for epilepsy

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

SPN-817 is a novel synthetic form of

huperzine A, a first in class, highly selective acetylcholinesterase (AChE) inhibitor, with pharmacological activities in CNS conditions such as focal epilepsy.

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 epilepsy.

SPN-817 is in clinical development and has received Orphan Drug designation for several epilepsy indications from the FDA.

Operational Highlights

Qelbree - Novel non-stimulant for ADHD Update

• Total IQVIA prescriptions were 617,192 for full year 2023, an increase of 91% compared to full year 2022.

• The Company initiated a Phase IV open-label study to assess the efficacy of Qelbree over the course of 14 weeks of treatment in approximately 500 adults with ADHD and mood symptoms.

The primary outcome measure is change from baseline in the Adult ADHD Investigator Symptom Rating Scale (AISRS).

SPN-830 (apomorphine infusion device) - Continuous treatment of motor fluctuations (“off” episodes) in Parkinson's Disease (PD)

• As previously disclosed, the FDA accepted the resubmission of the New Drug Application for SPN-830 for continuous treatment of motor fluctuations ("off" episodes) in Parkinson's disease (PD) and set a user fee goal date (PDUFA date) of April 5, 2024.

• Assuming FDA approval, the Company expects to launch SPN-830 in the second half of 2024.

SPN-820 - Novel first-in-class activator of mTORC1 for the treatment of depression

• The Phase IIb multi-center randomized double-blind placebo-controlled parallel design study of SPN-820 in adults with treatment-resistant depression is ongoing.

The study will examine the efficacy and safety of SPN-820 over a course of five weeks of treatment in approximately 268 patients in up to 50 clinical sites.

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

Approximately 118 patients have been enrolled in the trials, to date.

Topline data from the Phase IIb trial is expected in the first half of 2025.

• The Company has initiated a Phase II open-label study in approximately 40 subjects with major depressive disorder (MDD).

The primary objective of the study is to assess efficacy in MDD, as well as onset of efficacy.

SPN-817 – Novel first-in-class selective acetylcholinesterase (AChE) inhibitor for the treatment of epilepsy

• An open-label Phase IIa clinical study of SPN-817 for treatment-resistant seizures is ongoing.

The study is examining the safety and tolerability of SPN-817 as adjunctive therapy in adult patients with treatment-resistant seizures, as well as assessing efficacy.

The Company expects to report interim results from approximately half of the target randomized patients in May 2024, and topline results from the Phase IIa study in the second half of 2024.

• The Company now expects to initiate a Phase IIb randomized, double-blind, placebo-controlled study in approximately 436 patients with treatment-resistant focal seizures in the second half of 2024.

The primary endpoint is change from baseline in focal seizure frequency per 28 days.

Topline results from the Phase IIb study are expected in 2026.

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

• The Company plans to initiate a Phase I single dose study in healthy adults in 2024 following submission of an Investigational New Drug (IND) application.

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

The Company completed a Phase 1 single dose study in healthy adults in 2024 following submission of an Investigational New Drug Application.

The study was a first in human, pilot pharmacokinetic study of two oral formulations of SPN-443 in healthy adults.

The primary objective of the study was to assess 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.

Both formulations of SPN-443 showed adequate bioavailability and were well tolerated.

Qelbree Highlights

• The FDA has approved an update for the label for Qelbree to include new pharmacodynamic data.

The updated label highlights Qelbree’s partial agonist activity at the serotonin 5-HT2C receptor and inhibition of the norepinephrine transporter, reinforcing its multimodal pharmacodynamic profile.

Additionally, the updated label now includes new

lactation data for breastfeeding women with attention-deficit/hyperactivity disorder (ADHD), showing that the transfer of Qelbree into breastmilk is low.

• The Company recently presented interim results from an open-label Phase IV trial with Qelbree in 161 adults with ADHD and mood symptoms at the 30th Annual National Psychopharmacology Update™ conference.

The improvements in clinician and patient-rated measures of ADHD, depression and anxiety symptoms in the interim data analysis, analyzed for the first 95 patients who completed the trial, are encouraging and suggest that Qelbree's effects may extend to adults with complex ADHD.

Efficacy and safety outcomes were consistent with the double-blind, pivotal trial of Qelbree in adult ADHD.

Topline results from the full Phase IV trial (all 161 adults) are consistent with the interim results and will be presented at the American Psychiatric Association Annual Meeting in May 2025.

• Total IQVIA prescriptions for Qelbree were 767,791 for full year 2024, an increase of 25% compared to full year 2023.

• The Company received a two-plus year patent term extension from the US Patent and Trademark Office for US Patent number 9,662,338 that covers Qelbree.

This extends the original expiration date of the patent to the year 2035.

Product Pipeline Update

ONAPGO (formerly SPN-830) (apomorphine infusion device) for treatment of Parkinson's disease (PD)

• The Company announced in early February 2025 that the FDA approved ONAPGO (apomorphine hydrochloride), formerly known as SPN-830, as the first and only subcutaneous apomorphine infusion device for the treatment of motor fluctuations in adults with advanced PD.

ONAPGO will be launched in the second quarter of 2025 with a support team of experts, including a robust nurse education program, and access support.

SPN-817 – Novel first-in-class highly selective AChE inhibitor for epilepsy

• In November 2024, the Company reported topline results from an open label Phase 2a study in patients with treatment-resistant seizures.

The study suggested a differentiated profile, with strong efficacy in focal seizures at the 3mg to 4mg twice daily doses.

SPN-817 was safe and had acceptable tolerability with two subjects discontinuing because of treatment related adverse events out of the 26 subjects who entered the maintenance period.

• The Company has initiated a Phase 2b randomized, double-blind, placebo-controlled study of 3mg and 4mg twice daily doses with a targeted enrollment of approximately 258 adult patients with treatment resistant focal seizures.

SPN-820 – Novel first-in-class molecule that increases mTORC1 mediated synaptic function for depression

• In February 2025, the Company reported topline results from a randomized double-blind placebo-controlled Phase 2b study of SPN-820 in adults with treatment-resistant depression (TRD).

The study did not demonstrate a statistically significant improvement on the primary and secondary endpoints.

The safety profile of SPN-820 was consistent with previous clinical trials, showing few adverse events.

The Company will continue to analyze the data and decide on the future of the program.

SPN-443 – Novel stimulant for ADHD/CNS

• The Company completed a Phase 1 pharmacokinetic study of two oral formulations in healthy adults.

Both formulations of SPN-443 showed adequate bioavailability and were well tolerated.

Critical Accounting Policies and the Use of Estimates

The significant accounting policies and basis of presentation for our consolidated financial statements are described in Part II, Item 8 — Financial Statements and Supplementary Data , Note 2, Summary of Significant Accounting Policies, in the Notes to the Consolidated Financial Statements.

Our consolidated financial statements are prepared in accordance with the U.S.

Our consolidated financial statements are prepared in accordance with U.S.

generally accepted accounting principles (U.S.

35 unchanged sentences

Estimates associated with our provision for product returns are particularly susceptible to adjustment given the extensive time lag.

In regards to Trokendi 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.

The Company launched Qelbree in May 2021.

The Company is actively monitoring returns activity in light of the timeline

from the date of sale and the time at which we issue credit for expired products.

We had favorable actual returns in 2024 for

Qelbree and as a result, the Company changed its estimated provision for Qelbree product returns based on the most recent

The Company has entered into settlement and license agreements with third parties, permitting the sale of a generic version of Trokendi XR beginning in January 2023.

In addition, the Company entered into settlement and license agreements with third parties, permitting the sale of a generic version of Oxtellar XR beginning in September 2024.

The Company is actively monitoring returns activity in light of the loss of exclusivity and actual and possible further future sales decline based on timing of generic entry.

The recent entry of a generic competitor may cause our future Trokendi XR product return rates to change from historical trends, and this change could have a material effect on the future provision for product returns.

The entry of a generic competitor may cause our future Trokendi XR and Oxtellar XR product return rates to change from historical trends, and this change could have a material effect on the future provision for product returns.

Historically, we have experienced changes in estimates in return reserve calculations, but those adjustments have not been material to net earnings.

However, given the extensive number of inputs and assumptions, described above, future changes in our return reserves could be material.

The Company has also entered into settlement and license agreements with third parties, permitting sale of a generic version of Oxtellar XR beginning in September 2024, or sooner under certain conditions.

Similarly, the Company is actively monitoring returns activity in light of the upcoming loss of exclusivity of Oxtellar XR.

Rebates are discounts which we pay under either public sector or private sector health care programs.

31 unchanged sentences

Any adverse action by the FDA can potentially impact our estimated fair value of the IPR&D intangible asset.

In October 2022, the FDA issued a CRL regarding the NDA for SPN-830.

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.

We consider the positive results of clinical trials, industry benchmarks, available market data, and recent communications with the FDA regarding SPN-830 in determining the probability of technical and regulatory success input and assumption.

As of December 31, 2024, we considered the positive results of clinical trials, industry benchmarks, available market data, and recent communications with the FDA regarding SPN-830 in determining the probability of technical and regulatory success input and assumption.

The carrying amount of the indefinite-lived intangible asset was $124.0 million as of December 31, 2024.

Although we believe the assumptions, judgments, and estimates we have used in our assessments are reasonable and appropriate, a material change in any of our assumptions or external factors could lead to impairment charges.

If the IPR&D project is abandoned or regulatory approvals are not obtained, we may have a full or partial impairment charge related to the IPR&D, calculated as the excess carrying value of the IPR&D assets over the estimated fair value.

Although we believe the assumptions, judgments, and estimates we have used in our assessm ents are reasonable and appropriate, a material change in any of our assumptions or external factors could have lead to impairment charges.

In February 2025, ONAPGO (apomorphine hydrochloride) injection, formerly known as SPN-830, was approved by the FDA as the first and only subcutaneous apomorphine infusion device for the treatment of motor fluctuations in adults with advanced PD.

Impairment of Definite-Lived Intangible Assets

5 unchanged sentences

The primary inputs and assumptions used in the model included timing and projections of estimated future revenues and cash flows, loss of exclusivity, and discount rate.

If the carrying amount of the asset exceeds its fair value, the Company writes down the asset to its estimated fair value, and an impairment loss equal to the difference between the assets fair value and carrying value is recognized in the consolidated statement of earnings in the period at which such determination is made.

The use of different assumptions could

increase or decrease the estimated fair value of assets and could therefore affect any impairment measurement.

If the carrying amount of the asset exceeds its fair value, the Company writes down the asset to its estimated

fair value, and an impairment loss equal to the difference between the assets fair value and carrying value is recognized in the consolidated statement of earnings in the period at which such determination is made.

The use of different assumptions could increase or decrease the estimated fair value of assets and could therefore affect any impairment measurement.

The Company recognized impairment charges of $20.2 million in 2023 mainly due to the partial write-off of the carrying value of some of its acquired intangible assets, primarily XADAGO.

5 unchanged sentences

In this section, we discuss the results of our operations for the year ended December 31, 2024, compared to the year ended December 31, 2023.

Our Annual Report on Form 10-K for the year ended December 31, 2022, includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2021, in Part II,

Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations .

Our Annual Report on Form 10-K for the year ended December 31, 2023, includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2022, in Part II, Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations .

Revenues consist primarily of net product sales of our commercial products in the U.S., supplemented by royalty and licensing revenues from our collaborative licensing arrangements.

The following table provides information regarding our revenues during the years ended December 31, 2024 and 2023 (dollars in thousands):

Years Ended December 31, Change

Year Ended December 31, Change

2024 2023 Amount Percent

3 unchanged sentences

Oxtellar XR 99,464 113,404 (13,940) (12) %

Trokendi XR 94,336 261,221 (166,885) (64) %

APOKYN 73,926 75,083 (1,157) (2) %

Trokendi XR 63,201 94,336 (31,135) (33) %

29,008 31,281 (2,273) (7) %

Total net product sales $ 637,696 $ 573,933 $ 63,763 11 %

Royalty and licensing revenues

33,588 17,806 15,782 89 %

Royalty, licensing and other revenues 24,121 33,588 (9,467) (28) %

Total revenues $ 661,817 $ 607,521 $ 54,296 9 %

2 unchanged sentences

Net Product Sales

Net product sales decreased by $75.5 million from $649.4 million in 2022 to $573.9 million in 2023.

The decrease in net product sales was primarily due to the decline in net product sales of Trokendi XR which was partially offset by the increase in net product sales from Qelbree and GOCOVRI.

Qelbree net product sales increased from $61.3 million in 2022 to $140.2 million in 2023 primarily due to favorable unit prescription volume growth, the price increase taken during the year, and improvements in gross-to-net.

The Company launched Qelbree for pediatric patients in May 2021 and for adult patients in May 2022 in the U.S.

Trokendi XR net product sales decreased from $261.2 million in 2022 to $94.3 million in 2023 due to the loss of exclusivity with generics entering the market in January 2023.

Net product sales increased by $63.8 million from $573.9 million in 2023 to $637.7 million in 2024.

The increase was primarily due to increases in net product sales from Qelbree and GOCOVRI partially offset by the decline in net product sales of Trokendi XR and Oxtellar XR due to generic erosion.

Sales Deductions and Related Accruals

5 unchanged sentences

Returns Product

Rebates Allowance for

Sales Discounts Total

Sales Discounts

Balance at December 31, 2023 $ 57,290 $ 96,984 $ 10,719 $ 164,993

Provision for sales in current year 22,928 406,329 65,896 495,153

Provision for current year sales 17,677 389,842 69,589 477,108

Adjustments relating to prior year sales (11,943) (2,049) (42) (14,034)

3 unchanged sentences

Balance at December 31, 2022 $ 45,008 $ 106,657 $ 12,995 $ 164,660

Adamas Acquisition liabilities assumed

Provision for sales in current year 22,129 437,323 76,079 535,531

Provision for current year sales 22,928 406,329 65,896 495,153

Adjustments relating to prior year sales (213) 1,672 31 1,490

3 unchanged sentences

Accrued Product Returns and Rebates

The accrued product returns balance increased from $45.0 million as of December 31, 2022 to $57.3 million as of December 31, 2023 due to timing of related return activity, and an increase in provision for product returns primarily for Qelbree.

The accrued product rebates balance decreased from $106.7 million as of December 31, 2022 to $97.0 million as of December 31, 2023 due to lower gross sales primarily related to the loss of exclusivity on Trokendi XR, and timing of payments.

Provision for returns and rebates

The provision for product returns increased from $18.3 million in 2022 to $22.7 million in 2023.

The increase was primarily attributable to an increase in volume of products sold with the launch of Qelbree for adults in 2022, partially offset by lower sales of Trokendi XR.

The accrued product returns balance decreased from $57.3 million as of December 31, 2023 to $53.4 million as of December 31, 2024.

This decrease was primarily due to $11.9 million of adjustments in the estimated provision for product returns related to prior year sales offset by higher net product sales and timing of related return activity.

The majority of the adjustment is attributable to Qelbree, reflecting favorable actual returns experienced in 2024.

As a result, the Company changed its estimated provision for product returns based on the most recent experience.

The accrued product rebates balance increased from $97.0 million as of December 31, 2023 to $115.3 million as of December 31, 2024 due to timing of payments associated with government programs.

Provision for Product Returns and Rebates

The provision for product returns decreased from $22.7 million in 2023 to $5.7 million in 2024.

The decrease was primarily due to the aforementioned $11.9 million of adjustments in the estimated provision for product returns related to prior year sales.

The provision for product rebates decreased from $408.0 million in 2023 to $387.8 million in 2024.

The decrease was primarily attributable to lower Trokendi XR sales partially offset by higher Qelbree sales.

Allowance for sales discounts

The provision for sales discounts decreased from $76.1 million in 2022 to $65.9 million in 2023 primarily attributable to lower Trokendi XR sales.

The decrease was primarily attributable to lower Trokendi XR sales and favorability in commercial programs, partially offset by higher Qelbree gross sales.

Sales Discounts

The provision for sales discounts increased from $65.9 million in 2023 to $69.5 million in 2024 primarily attributable to higher net product sales in 2024 compared to 2023.

Adjustments related to prior year sales

Adjustments related to prior year sales in 2024 of $14.0 million was less than 3% of both net product sales and total provision for the year ended December 31, 2024.

As aforementioned, the majority of this adjustment is attributable to Qelbree, reflecting favorable actual returns experienced in 2024 for Qelbree.

Adjustments related to prior year sales in 2023 of $1.5 million was less than 1% of both net product sales and total provision for the year ended December 31, 2023.

Royalty and Licensing Revenues

Royalty and licensing revenues increased by approximately $15.8 million, or 89% in 2023 compared to 2022, primarily due to royalties on generic Trokendi XR.

The Company entered into settlement agreements on Trokendi XR that allowed third party generics to enter the market beginning January 1, 2023 and required them to pay royalties to the Company.

Noncash royalty

revenue decreased from $9.8 million in 2022 to $4.0 million in 2023 due to full ownership of the royalty rights from its royalty agreement with United Therapeutics reverting back to the Company in the second quarter of 2023.

Royalty, Licensing and Other Revenues

Royalty, licensing and other revenues decreased by $9.5 million from $33.6 million in 2023 to $24.1 million in 2024, primarily due to lower royalties on generic Trokendi XR due to the increased number of generic entrants.

Cost of Goods Sold

The following table provides information regarding our cost of goods sold for the years indicated (dollars in thousands):

Year Ended December 31,

2024 2023 Amount Percent

4 unchanged sentences

Cost of goods sold decreased from $83.8 million in 2023 to $77.9 million in 2024.

The decrease was primarily due to lower Trokendi XR costs in 2023 due to loss of patent exclusivity for Trokendi XR in January 2023 and a higher GOCOVRI inventory reserve in 2022 offset by Qelbree costs in 2023.

The decrease was primarily driven by manufacturing efficiencies of Qelbree and the decline in net product sales of Trokendi XR and Oxtellar XR due to generic erosion.

Research and Development Expense

The following table provides information regarding our research and development (R&D) expenses for the years indicated (dollars in thousands):

Year Ended December 31,

2024 2023 Amount Percent

Research and development expense $ 91,593 $ 74,552 $ 17,041 23%

Research and development $ 108,796 $ 91,593 $ 17,203 19%

R&D expenses increased from $91.6 million in 2023 to $108.8 million in 2024.

The increase was primarily due to increased clinical program costs on SPN-817 and SPN-820 and increased manufacturing costs of our product candidates.

The increase was primarily due to increased clinical program costs on SPN-817, SPN-820, the open-label study of Qelbree, and increased manufacturing costs of our product candidates.

Selling, General, and Administrative Expense

The table below provides information regarding our selling, general, and administrative (SG&A) expenses for the years indicated (dollars in thousands):

Year Ended December 31,

2024 2023 Amount Percent

2 unchanged sentences

Total $ 321,582 $ 336,361 $ (14,779) (4)%

Selling and Marketing Expense

Selling and marketing expenses decreased from $267.8 million in 2022 to $229.2 million in 2023.

The decrease was primarily attributable to activities to support the launch of Qelbree to the adult population in 2022.

General and Administrative Expense

General and administrative expenses decreased from $109.4 million in 2022 to $107.2 million in 2023.

The decrease was primarily due to higher professional and consulting costs in 2022, mainly to support finance and information technology operations, which was partially offset by higher legal costs and share-based compensation expense in 2023.

Selling, general, and administrative expenses decreased from $336.4 million in 2023 to $321.6 million in 2024.

During the year ended December 31, 2024, the Company recorded approximately $14.2 million of insurance recoveries for certain legal costs.

Legal costs were recorded under general and administrative expense as incurred.

Correspondingly, the insurance recoveries were recorded as a reduction to general and administrative expenses.

There were no insurance recoveries recorded in 2023.

Amortization of Intangible Assets

The following table provides information regarding the amortization expense for intangible assets during the periods indicated (dollars in thousands):

Year Ended December 31,

2024 2023 Amount Percent

Amortization of intangible assets $ 77,977 $ 82,385 $ (4,408) (5)%

Amortization of intangible assets was materially consistent year-over-year.

Amortization of intangible decreased from $82.4 million in 2023 to $78.0 million in 2024.

The decrease is primarily due to impairment charges on certain acquired intangible assets in the fourth quarter of 2023 which reduced amortization expense in fiscal year 2024, as well as on Oxtellar XR, which was fully amortized as of September 2024 and therefore, no further amortization expense was recognized in the fourth quarter of 2024.

Intangible Asset Impairment Charges

The following table provides information regarding the intangible asset impairment charges during the periods indicated (dollars in thousands):

Year Ended December 31,

2024 2023 Amount Percent

3 unchanged sentences

(1) the performance of the commercial products;

(2) forthcoming loss of exclusivity of XADAGO in December 2027, or earlier under certain circumstances, due to settlement agreements in the fourth quarter of 2023 with third party generic companies;

(2) forthcoming loss of exclusivity of XADAGO;

and (3) the change in the Company's future outlook of the brands.

No impairment of intangible assets was recognized during the year ended December 31, 2024.

Contingent Consideration Gain

The following table provides information regarding the contingent consideration expense during the periods indicated (dollars in thousands):

The following table provides information regarding the contingent consideration gain during the periods indicated (dollars in thousands):

Year Ended December 31,

2024 2023 Amount Percent

Contingent consideration gain

Contingent consideration gain recorded for the years ended December 31, 2023 and December 31, 2022 of $1.5 million and $0.5 million, respectively.

The change of $1.0 million was primarily driven by the gain recognized due to the passage of time related to the Adamas contingent consideration, offset by the expense recognized from the accretion to the payout amount related to the USWM contingent consideration milestone achieved in the first quarter of 2022.

$ (6,110) $ (1,517) $ (4,593) 303%

Contingent consideration was a gain for the years ended December 31, 2024 and December 31, 2023 of $6.1 million and $1.5 million, respectively.

The change of $4.6 million was primarily driven by the non achievement of the 2024 sales-based milestone associated with the Adamas Acquisition.

Other Income (Expense)

The following table provides the components of other income (expense) during the years indicated (dollars in thousands):

Year Ended December 31,

2024 2023 Amount Percent

4 unchanged sentences

Total $ 16,204 $ 8,038 $ 8,166 102%

Interest and other income, net includes primarily interest earned from cash, cash equivalents, and marketable securities holdings.

Interest and other income, net decreased from $21.7 million in 2022 to $10.5 million in 2023.

The decrease in interest and other income, net was primarily due to $12.9 million recorded in 2022 in connection with the gain associated with the Navitor investment.

The decrease in interest expense and noncash interest expense on debt of $2.8 million was due to the 2023 Notes being fully repaid on April 1, 2023.

The decrease in noncash interest expense of $1.9 million was due to the nonrecourse royalty liability related to the HC Royalty agreement being fully amortized as of June 30, 2023.

Other income (expense) was an income of $16.2 million in 2024 compared to an income of $8.0 million in 2023.

The increase was due to higher interest income on marketable securities largely driven by an overall higher investment balance in 2024 and no debt outstanding in 2024.

The interest expense recognized in 2023 was related to the 2023 Notes which were paid off in April 2023.

Income Tax Expense

The following table provides information regarding our income tax expense during the periods indicated (dollars in thousands):

2023 vs 2022 Change

Year Ended December 31, Change

2024 2023 Dollar Percent

3 unchanged sentences

** Indicates calculation result is equal to or greater than 100%

Income tax expense was $1.5 million and $32.0 thousand for the years ended December 31, 2023 and December 31, 2022, respectively.

The income tax expense and effective tax rate in 2023 was primarily driven by near break-even pre-tax book income.

The income tax expense and effective tax rate in 2022 was primarily driven by tax benefits associated with the Adamas legal entities reorganization in the first quarter of 2022.

Income tax expense was $24.0 million and $1.5 million for the years ended December 31, 2024 and December 31, 2023, respectively.

The 2024 income tax expense is primarily driven by an increase in pre-tax book income as compared to prior year.

The effective tax rate is impacted by benefits from research and development credits and capital losses that were mostly offset by an increase in the deferred tax asset valuation allowance for net operating losses and investments during the year.

The 2023 income tax expense and effective tax rate was primarily driven by near break even pre-tax book income.

The following table provides information regarding our net earnings during the periods indicated (dollars in thousands):

Year Ended December 31,

2024 2023 Amount Percent

Net earnings $ 73,865 $ 1,316 $ 72,549 5,513%

The decrease in net earnings was primarily due to the lower revenues in 2023 with the loss of exclusivity of Trokendi XR and the intangible asset impairment charges in the fourth quarter of 2023, partially offset by lower operating expenses.

The increase in net earnings was primarily due to the higher revenues in 2024 from Qelbree and GOCOVRI and lower total costs and expenses in 2024, as well as no intangible asset impairment charge in fiscal year 2024.

Financial Condition, Liquidity and Capital Resources

Summary of Cash Flows

The following table summarizes the major sources and uses of cash for the periods set forth below (dollars in thousands):

December 31, Change

Year Ended December 31,

2024 2023 Amount

5 unchanged sentences

Operating Activities

Net cash provided by operating activities is comprised of two components:

cash provided by operating earnings;

and cash provided by (used in) changes in working capital.

The net cash provided by operating activities was $111.1 million in 2023 compared to $116.8 million in 2022.

The year over year change was primarily driven by a decrease in working capital which reflects the timing impacts of cash collections on receivables and settlement of payables, lower inventory purchases in 2023 compared to 2022, and a decrease in operating earnings offset by an increase in non-cash items.

Net cash provided by operating activities was $172.0 million in 2024 compared to $111.1 million in 2023.

The increase in cash flows provided by operating activities was primarily due to higher net income for the year ended December 31, 2024 compared to the same period in prior year, and changes in working capital which reflects the timing impacts of cash collections on receivables and settlement of payables.

Investing Activities

Net cash provided by investing activities was $268.7 million in 2023 compared to $216.7 million used in 2022.

The year over year change is primarily due to the proceeds from the maturities of investments in marketable securities which were used to pay off the 2023 Notes.

Net cash used in investing activities was $189.9 million in 2024 compared to $268.7 million provided by investing activities in 2023.

The change was primarily due to an increase in cash outflows from purchases of marketable securities, partially offset by higher cash inflows from the maturities of marketable securities.

In 2023, proceeds from the maturities of investments in marketable securities were used to pay off the 2023 Notes.

Financing Activities

Net cash used in financing activities was $397.9 million in 2023 compared to $10.5 million used in the same period in 2022.

The increase in cash flows used by financing activities is primarily due to the payment of the total principal amount and accrued interest due on the 2023 Notes.

On March 30, 2023, the Company transferred funds totaling $403.8 million to the Trustee (Wilmington Trust) related to the repayment of the 2023 Notes which was reported as restricted cash in the first quarter of 2023.

On April 1, 2023, the Company paid the total principal amount of $402.5 million under the 2023 Notes and the remaining

outstanding interest due of $1.3 million with the restricted cash.

This increase was slightly offset by the payment of $22.9 million for a contingent consideration milestone associated with the USWM Acquisition during the same period in 2022.

Liquidity and Capital Resources

Cash and cash equivalents, marketable securities, and long term marketable securities presented below are as follows (dollars in thousands):

December 31, 2023

Net cash provided by financing activities was $12.2 million in 2024 compared to $397.9 million used in the same period in 2023.

The change was primarily due to the payment of the total principal amounts and remaining outstanding interest due on

the 0.625% Convertible Senior Notes in April 2023, partially offset by an increase in proceeds from issuance of common stock in 2024.

Cash, Cash Equivalents and Marketable Securities

Cash and cash equivalents, and marketable securities are as follows (dollars in thousands):

December 31, 2024 December 31, 2023

Cash and cash equivalents $ 69,331 $ 75,054

5 unchanged sentences

While we expect continued profitability in future years, we anticipate there may be significant variability from year to year in the level of our profits particularly due to continued market and payor pressures for our commercial products;

the unfavorable impact of the loss of patent exclusivity for Trokendi XR in January 2023;

the potential unfavorable impact of the forthcoming loss of exclusivity of Oxtellar XR and XADAGO;

the unfavorable impact of the loss of patent exclusivity for Trokendi XR in January 2023 and Oxtellar XR in September 2024;

the potential unfavorable impact of the forthcoming loss of exclusivity of XADAGO;

funding for research and development of our product candidates;

and the additional funding to launch SPN-830, if approved by the FDA.

The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, which totaled $271.5 million as of December 31, 2023, along with cash generated from ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements over the next 12 months and beyond.

and the additional funding to launch ONAPGO (apomorphine hydrochloride) injection, formerly known as SPN-830, which was approved by the FDA in February 2025.

ONAPGO will be launched in the second quarter of 2025.

The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, which totaled $453.6 million as of December 31, 2024, along with cash generated from ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements over the next twelve months and beyond.

We may, from time to time, consider raising additional capital through:

6 unchanged sentences

There can be no assurance that any such financing opportunities will be available on acceptable terms, if at all.

Material Cash Requirements

Our material cash requirements include the following contractual and other obligations.

Our operating lease commitments include leases of fleet vehicles, leases of certain facilities, including the lease of the current headquarters office and laboratory space.

As of December 31, 2023, we have fixed lease payment obligations of $48.6 million, with $9.9 million payable within 12 months.

As of December 31, 2024, we have fixed lease payment obligations of $40.0 million, with $8.2 million payable within twelve months.

Refer to Note 12, Leases in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this report.

4 unchanged sentences

The Company has contingent consideration milestones payable related to the Adamas Acquisition.

The possible outcomes for the contingent consideration range, on an undiscounted basis, from $0 to $50.9 million.

One Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $150 million during any consecutive 12-month period ending on or before December 31, 2024 (Milestone 2024).

Another Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the achievement of aggregate worldwide net sales of GOCOVRI in excess of $225 million during any consecutive 12-month period

ending on or before December 31, 2025 (Milestone 2025 and, together with Milestone 2024, the Milestones).

Each Milestone may only be achieved once.

As of December 31, 2024, the remaining Milestone Payment is payable (subject to certain terms and conditions) upon the first occurrence of the

achievement of aggregate worldwide net sales of GOCOVRI in excess of $225 million during any consecutive twelve-month period ending on or before December 31, 2025 (Milestone 2025) and may only be achieved once.

As of December 31, 2024, the possible outcomes for the contingent consideration range, on an undiscounted basis, related to remaining 2025 Milestone is from $0 to $25 million.

We also have contingent consideration milestones payable related to the USWM Acquisition.

2 unchanged sentences

the first is a $25 million milestone due upon the FDA's regulatory approval and $30 million upon commercial launch of SPN-830.

If SPN-830 is approved by the FDA and commercially launched, we expect these milestones to become due and be paid in 2024.

In February 2025, the FDA approved ONAPGO (apomorphine hydrochloride) injection, formerly known as SPN-830, as the first and only subcutaneous apomorphine infusion device for the treatment of motor fluctuations in adults with advanced PD.

ONAPGO will be launched in the second quarter of 2025.

As such, the Company paid the milestone related to the FDA's approval of the SPN-830 NDA in February 2025.

We expect the remaining regulatory and developmental milestones to become due and be paid in 2025.

Navitor Development Agreement

We have obligations from the Development Agreement with Navitor we entered into in April 2020.

We have obligations from the Development Agreement with Navitor Inc.

we entered into in April 2020.

The Company can terminate the Development Agreement upon 30 days' notice.

Under the terms of the Development Agreement, the Company and Navitor will jointly conduct a Phase II clinical program for NV-5138 (SPN-820) for treatment-resistant depression.

The Company will bear all of Phase I and Phase II development costs incurred by either party, up to a maximum of $50 million.

Under the terms of the Development Agreement, the Company and Navitor Inc.

will jointly conduct a Phase 2 clinical program for NV-5138 (SPN-820) for treatment-resistant depression.

The Company will bear all of Phase 1 and Phase 2 development costs incurred by either party, up to a maximum of $50 million.

There are certain additional payments which could be incurred by the Company that are contingent upon Navitor Inc.

2 unchanged sentences

The Company has an option to acquire or license NV-5138 (SPN-820), for which additional payments would be required.

In the second quarter of 2024, the Company consented to payment of additional Phase II development costs for NV-5138 (SPN-820) as they are incurred, but reserves the right to terminate payment of future development costs at its discretion.

Royalty Payments

12 unchanged sentences

Recently Issued Accounting Pronouncements

For a discussion of new accounting pronouncements, see Note 2 in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report.

For a discussion of new accounting pronouncements, see Note 2, Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis