Vanda Pharmaceuticals Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)) as of December 31, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of December 31, 2025, the end of the period covered by this annual report on Form 10-K (Annual Report), to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Security and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as defined in the Exchange Act Rule 13a-15(f). Management conducted an assessment of our internal control over financial reporting based on the original framework established in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated Framework. Based on the assessment, management concluded that, as of December 31, 2025, our internal control over financial reporting was effective. The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report included in this Annual Report. Changes in Internal Control over Financial Reporting There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION During the fiscal quarter ended December 31, 2025, none of our directors or officers informed us of the adoption , modification or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408. Furthermore, during the fiscal quarter ended December 31, 2025, we did not adopt or 82 Table of Contents terminate a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information required under this item will be contained in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2025 and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION Information required under this item will be contained in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2025 and is incorporated herein by reference, except that information required by Item 407(e)(5) of Regulation S-K will be deemed furnished in this Form 10-K and will not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that we specifically incorporate it by reference into such filing. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information required under this item will be contained in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2025 and is incorporated herein by reference. Securities Authorized for Issuance under Equity Incentive Plans Information regarding securities authorized for issuance under equity incentive plans will be contained in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2025 and is incorporated herein by reference pursuant to General Instruction G(3) to Form 10-K. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Information required under this item will be contained in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2025 and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Information required under this item will be contained in our Proxy Statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2025 and is incorporated herein by reference. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES The consolidated financial statements filed as part of this annual report on Form 10-K are listed in the Index to Consolidated Financial Statements. Certain schedules are omitted because they are not applicable, or not required, or because the required information is included in the consolidated financial statements or notes thereto. The Exhibits are listed in the Exhibit Index. 83 Table of Contents ITEM 16. Form 10-K Summary None. 84 Table of Contents Signatures Pursuant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this annual report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. Vanda Pharmaceuticals Inc. February 12, 2026 By: /s/ Mihael H. Polymeropoulos, M.D. Mihael H. Polymeropoulos, M.D. President, Chief Executive Officer and Chairman of the Board of Directors Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Title Date /s/ Mihael H. Polymeropoulos, M.D. President, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) February 12, 2026 Mihael H. Polymeropoulos, M.D. /s/ Kevin Moran Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) February 12, 2026 Kevin Moran /s/ Richard W. Dugan Lead Independent Director February 12, 2026 Richard W. Dugan /s/ Anne Sempowski Ward Director February 12, 2026 Anne Sempowski Ward /s/ Phaedra Chrousos Director February 12, 2026 Phaedra Chrousos /s/ Stephen Ray Mitchell Director February 12, 2026 Stephen Ray Mitchell /s/ Tage Honoré Director February 12, 2026 Tage Honoré 85 Table of Contents Vanda Pharmaceuticals Inc. Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm ( PCAOB ID 238 ) 87 Consolidated Balance Sheets at December 31, 2025 and 2024 89 Consolidated Statements of Operations for the years ended December 31, 2025 , 2024 and 2023 90 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025 , 2024 and 2023 91 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025 , 2024 and 2023 92 Consolidated Statements of Cash Flows for the years ended December 31, 2025 , 2024 and 2023 93 Notes to Consolidated Financial Statements 94 86 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Vanda Pharmaceuticals Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Vanda Pharmaceuticals Inc. and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income (loss), of changes in stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 87 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Allowances for the Medicaid Drug Rebate Program As described in Note 2 to the consolidated financial statements, the allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program as well as contracted rebate programs with other payors. Rebate amounts owed after the final dispensing of the product to a benefit plan participant are based upon contractual agreements or legal requirements with public sector benefit providers, such as Medicaid and Medicare. Allowances for rebates are based upon the insurance benefits of the end customer, which are estimated using historical activity. The allowance for rebates is based on statutory or contracted discount rates and estimated patient utilization. The Company has recorded product revenue allowances of $76.9 million as of December 31, 2025, of which a significant portion relates to allowances for Medicaid drug rebates. The principal considerations for our determination that performing procedures relating to the allowances for the Medicaid Drug Rebate Program is a critical audit matter are (i) the significant judgment by management due to the significant measurement uncertainty when developing the estimate of the allowances and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating assumptions related to historical activity, statutory or contracted discount rates, and estimated patient utilization. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the allowances for the Medicaid Drug Rebate Program. These procedures also included, among others, (i) developing an independent estimate of the allowances for Medicaid drug rebates by utilizing third-party information related to patient utilization and historical activity; (ii) comparing the independent estimate to management’s estimate to evaluate the reasonableness of management’s estimate; and (iii) testing, on a sample basis, transactional data underlying management’s estimate including but not limited to channel inventory and rebate claims processed by the Company, including evaluating those claims for consistency with the statutory or contractual terms of the Medicaid Drug Rebate Program. /s/ PricewaterhouseCoopers LLP Washington, District of Columbia February 12, 2026 We have served as the Company’s auditor since 2003. 88 Table of Contents VANDA PHARMACEUTICALS INC. CONSOLIDATED BALANCE SHEETS (in thousands, except for share and per share amounts) December 31, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 84,851 $ 102,316 Marketable securities 178,996 272,327 Accounts receivable, net 54,578 47,101 Inventory 1,852 1,726 Prepaid expenses and other current assets 26,985 15,420 Total current assets 347,262 438,890 Property and equipment, net 2,248 2,132 Operating lease right-of-use assets 3,923 5,602 Finance lease right-of-use assets 7,343 4,943 Intangible assets, net 117,089 114,096 Deferred tax assets — 81,440 Non-current inventory and other 11,083 9,101 Total assets $ 488,948 $ 656,204 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 68,297 $ 39,086 Product revenue allowances 76,865 60,895 Total current liabilities 145,162 99,981 Operating lease non-current liabilities 2,991 4,944 Finance lease non-current liabilities 4,076 3,146 Other non-current liabilities 9,533 9,587 Total liabilities 161,762 117,658 Commitments and contingencies (Notes 11 and 18) Stockholders’ equity: Preferred stock, $ 0.001 par value; 20,000,000 shares authorized, and no shares issued or outstanding at December 31, 2025 and 2024, respectively — — Common stock, $ 0.001 par value; 150,000,000 shares authorized; 59,101,630 and 58,310,644 shares issued and outstanding at December 31, 2025 and 2024, respectively 59 58 Additional paid-in capital 721,264 712,706 Accumulated other comprehensive income 629 74 Accumulated deficit ( 394,766 ) ( 174,292 ) Total stockholders’ equity 327,186 538,546 Total liabilities and stockholders’ equity $ 488,948 $ 656,204 The accompanying notes are an integral part of these consolidated financial statements. 89 Table of Contents VANDA PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31, (in thousands, except for share and per share amounts) 2025 2024 2023 Revenues: Net product sales $ 216,105 $ 198,772 $ 192,640 Total revenues 216,105 198,772 192,640 Operating expenses: Cost of goods sold excluding amortization 13,044 11,314 14,796 Research and development 109,271 74,431 76,823 Selling, general and administrative 237,951 146,414 112,883 Intangible asset amortization 7,007 7,273 2,090 Total operating expenses 367,273 239,432 206,592 Loss from operations ( 151,168 ) ( 40,660 ) ( 13,952 ) Other income, net 12,521 17,739 20,291 Income (loss) before income taxes ( 138,647 ) ( 22,921 ) 6,339 Provision (benefit) for income taxes 81,827 ( 4,021 ) 3,830 Net income (loss) $ ( 220,474 ) $ ( 18,900 ) $ 2,509 Net income (loss) per share: Basic $ ( 3.74 ) $ ( 0.33 ) $ 0.04 Diluted $ ( 3.74 ) $ ( 0.33 ) $ 0.04 Weighted average shares outstanding: Basic 58,930,157 58,149,087 57,380,975 Diluted 58,930,157 58,149,087 57,557,911 The accompanying notes are an integral part of these consolidated financial statements. 90 Table of Contents VANDA PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31, (in thousands) 2025 2024 2023 Net income (loss) $ ( 220,474 ) $ ( 18,900 ) $ 2,509 Other comprehensive income (loss): Net foreign currency translation gain (loss) 81 ( 34 ) 28 Change in net unrealized gain (loss) on marketable securities 473 178 1,461 Tax benefit (provision) on other comprehensive income (loss) 1 ( 40 ) ( 326 ) Other comprehensive income, net of tax 555 104 1,163 Comprehensive income (loss) $ ( 219,919 ) $ ( 18,796 ) $ 3,672 The accompanying notes are an integral part of these consolidated financial statements. 91 Table of Contents VANDA PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total (in thousands, except for share amounts) Shares Par Value Balances at December 31, 2022 56,783,764 $ 57 $ 686,235 $ ( 1,193 ) $ ( 157,901 ) $ 527,198 Issuance of common stock from the exercise of stock options and settlement of restricted stock units 750,735 1 ( 1 ) — — — Stock-based compensation expense — — 14,040 — — 14,040 Net income — — — — 2,509 2,509 Other comprehensive income, net of tax — — — 1,163 — 1,163 Balances at December 31, 2023 57,534,499 58 700,274 ( 30 ) ( 155,392 ) 544,910 Issuance of common stock from the exercise of stock options and settlement of restricted stock units 776,145 — — — — — Stock-based compensation expense — — 12,432 — — 12,432 Net loss — — — — ( 18,900 ) ( 18,900 ) Other comprehensive income, net of tax — — — 104 — 104 Balances at December 31, 2024 58,310,644 58 712,706 74 ( 174,292 ) 538,546 Issuance of common stock from the exercise of stock options and settlement of restricted stock units, net of shares withheld for taxes 790,986 1 ( 916 ) — — ( 915 ) Stock-based compensation expense — — 9,474 — — 9,474 Net loss — — — — ( 220,474 ) ( 220,474 ) Other comprehensive income, net of tax — — — 555 — 555 Balances at December 31, 2025 59,101,630 $ 59 $ 721,264 $ 629 $ ( 394,766 ) $ 327,186 The accompanying notes are an integral part of these consolidated financial statements. 92 Table of Contents VANDA PHARMACEUTICALS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, (in thousands) 2025 2024 2023 Cash flows from operating activities Net income (loss) $ ( 220,474 ) $ ( 18,900 ) $ 2,509 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation of property and equipment 1,103 859 920 Stock-based compensation 9,474 12,432 14,040 Amortization of premiums and accretion of discounts on marketable securities ( 2,053 ) ( 6,994 ) ( 8,799 ) Loss on sales of marketable securities — — 655 Intangible asset amortization 7,007 7,273 2,090 Right-of-use asset amortization 3,807 1,667 1,324 Deferred income taxes 81,443 ( 6,482 ) ( 1,286 ) Other non-cash adjustments, net 1,943 946 2,095 Changes in operating assets and liabilities: Accounts receivable ( 7,463 ) ( 13,012 ) ( 707 ) Prepaid expenses and other assets ( 12,067 ) ( 6,816 ) 8,523 Inventory ( 3,466 ) ( 29 ) ( 771 ) Accounts payable and other liabilities 15,820 1,708 ( 10,984 ) Product revenue allowances 15,484 11,591 3,192 Net cash provided by (used in) operating activities ( 109,442 ) ( 15,757 ) 12,801 Cash flows from investing activities Asset acquisition — ( 4,229 ) ( 100,665 ) Purchases of property and equipment ( 998 ) ( 490 ) ( 383 ) Purchases of marketable securities ( 112,379 ) ( 364,773 ) ( 512,606 ) Sales and maturities of marketable securities 208,237 352,062 601,598 Net cash provided by (used in) investing activities 94,860 ( 17,430 ) ( 12,056 ) Cash flows from financing activities Principal payments on finance leases ( 1,991 ) ( 155 ) — Tax obligations paid in connection with settlement of restricted stock units ( 915 ) — — Net cash provided by (used in) financing activities ( 2,906 ) ( 155 ) — Effect of exchange rate changes on cash, cash equivalents and restricted cash 23 ( 163 ) 47 Net change in cash, cash equivalents and restricted cash ( 17,465 ) ( 33,505 ) 792 Cash, cash equivalents and restricted cash Beginning of year 102,785 136,290 135,498 End of year $ 85,320 $ 102,785 $ 136,290 The accompanying notes are an integral part of these consolidated financial statements. 93 Table of Contents VANDA PHARMACEUTICALS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Business Organization and Presentation Business Organization Vanda Pharmaceuticals Inc. (the Company or Vanda) is a global biopharmaceutical company focused on the development and commercialization of innovative therapies to address high unmet medical needs and improve the lives of patients. The Company commenced its operations in 2003. The Company’s commercial portfolio is currently comprised of four products: Fanapt ® for the acute treatment of manic or mixed episodes associated with bipolar I disorder and the treatment of schizophrenia, HETLIOZ ® for the treatment of Non-24-Hour Sleep-Wake Disorder (Non-24) and for the treatment of nighttime sleep disturbances in Smith-Magenis syndrome (SMS), PONVORY ® for the treatment of relapsing forms of multiple sclerosis (RMS) including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease and NEREUS TM for the prevention of vomiting induced by motion (collectively, our commercial products). HETLIOZ ® is the first product approved by the United States Food and Drug Administration (FDA) for patients with Non-24 and for patients with SMS. In addition, the Company has a number of drugs and/or additional indications for current products in development, including: • Fanapt ® (iloperidone) long acting injectable (LAI) formulation for the treatment of schizophrenia and hypertension; • Bysanti TM (milsaperidone), the active metabolite of Fanapt ® , for the acute treatment of manic or mixed episodes associated with bipolar I disorder and for the treatment of schizophrenia and major depressive disorder (MDD); • HETLIOZ ® (tasimelteon) for the treatment of jet lag disorder, insomnia, pediatric insomnia, delayed sleep phase disorder (DSPD) and pediatric Non-24; • PONVORY ® (ponesimod) for the treatment of psoriasis and ulcerative colitis; • NEREUS TM (tradipitant) for the prevention of vomiting induced by GLP-1 receptor agonists, the treatment of gastroparesis and the treatment of atopic dermatitis; • Imsidolimab, an IL-36R antagonist, for the treatment of generalized pustular psoriasis (GPP); • VTR-297, a small molecule histone deacetylase (HDAC) inhibitor for the treatment of hematologic malignancies and onychomycosis and with potential use as a treatment for several oncology indications; • Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors, including VSJ-110 for the treatment of dry eye and ocular inflammation and VPO-227 for the treatment of secretory diarrhea disorders, including cholera; • VQW-765, a small molecule alpha-7 nicotinic acetylcholine receptor partial agonist, for the treatment of social/performance anxiety and psychiatric disorders; and • Antisense oligonucleotide (ASO) molecules, including VCA-894A for the treatment of Charcot-Marie-Tooth Disease, Type 2S (CMT2S), caused by cryptic slice site variants within the IGHMBP2 gene and VGT-1849A for the treatment of polycythemia vera (PV), a form of a rare hematologic malignancy. Basis of Presentation The accompanying consolidated financial statements include the accounts of Vanda Pharmaceuticals Inc. and its wholly owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). All intercompany accounts and transactions have been eliminated in consolidation. 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reported periods. Management continually re- 94 Table of Contents evaluates its estimates, judgments and assumptions, and management’s evaluation could change. Actual results could differ from those estimates under different assumptions or conditions. Cash, Cash Equivalents and Restricted Cash For purposes of the Consolidated Balance Sheets and Consolidated Statements of Cash Flows, cash equivalents represent highly-liquid investments with a maturity date of three months or less at the date of purchase. Cash and cash equivalents include investments in money market funds with commercial banks and financial institutions, and commercial paper of high-quality corporate issuers. Restricted cash relates primarily to amounts held as collateral for letters of credit for office space leases at the Company’s Washington, D.C. headquarters. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total end of period cash, cash equivalents and restricted cash reported within the Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024: December 31, (in thousands) 2025 2024 Cash and cash equivalents $ 84,851 $ 102,316 Restricted cash included in: Prepaid expenses and other current assets 103 — Non-current inventory and other 366 469 Total cash, cash equivalents and restricted cash $ 85,320 $ 102,785 Marketable Securities The Company classifies all of its marketable securities as available-for-sale securities. The Company’s investment policy requires the selection of high-quality issuers. Available-for-sale securities are carried at fair market value, with unrealized gains and losses reported as a component of stockholders’ equity in accumulated other comprehensive income (loss). At each balance sheet date, the Company assesses available-for-sale securities in an unrealized loss position to determine whether it intends to sell or if it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value. The Company also reviews its available-for-sale securities in an unrealized loss position to determine whether the unrealized loss is the result of a change in creditworthiness or other factors. If declines in the value of available for-sale securities are determined to be credit-related, a loss is recorded in earnings in the current period. Interest and dividend income is recorded when earned and included in other income. Premiums and discounts on marketable securities are amortized and accreted, respectively, to earliest call date and maturity, respectively, and included in other income. The Company uses the specific identification method in computing realized gains and losses on the sale of investments, which would be included in the Consolidated Statements of Operations when generated. All available-for-sale marketable securities are available for use in current operations and are classified as current. Inventory Inventory, which is recorded at the lower of cost or net realizable value, includes the cost of third-party manufacturing and other direct and indirect costs and is valued using the first-in, first-out method. The Company evaluates the risk of excess inventory and product expiry by evaluating current and future product demand relative to product shelf life, taking into account all possible alternative uses for the inventory available in the ordinary course of business. The Company builds demand forecasts by considering factors such as, but not limited to, overall market potential, market share, market acceptance, patient usage and generic competition. The Company capitalizes inventory costs associated with its products when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. Inventory levels are evaluated for the amount of inventory that would be sold within one year. At certain times, the level of inventory can exceed the forecasted level of cost of goods sold for the next 12 months. The Company classifies the estimate of such inventory as non-current. 95 Table of Contents Asset Acquisitions The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If determined to be an asset acquisition, the Company accounts for the transaction under Accounting Standards Codification (ASC) 805-50, which requires the recognition of assets acquired and liabilities assumed on a relative fair value basis based on the acquisition cost, which includes transaction costs in addition to consideration given. Any excess consideration transferred over the fair value of the net assets acquired is allocated to the identifiable assets based on relative fair values. See Note 3, PONVORY ® Acquisition , for further discussion of the Company’s acquisition of the United States (U.S.) and Canadian rights to PONVORY ® from Actelion Pharmaceuticals Ltd. (Janssen), a Johnson & Johnson Company, and Note 11, Commitments and Contingencies , for further discussion of the Company’s exclusive global license agreement with AnaptysBio, Inc. (Anaptys) under which it acquired the worldwide rights to develop, manufacture, and commercialize imsidolimab, both of which the Company accounted for as asset acquisitions under ASC 805-50. Intangible Assets Costs incurred for products not yet approved by the FDA and for which no alternative future use exists are recorded as research and development expense, unless, based on management judgment, future commercialization is considered probable. Obligations for milestone payments to other pharmaceutical companies that may result in a capitalized intangible asset are recognized when it is deemed probable that the milestone event will occur. In the event a product has been approved by the FDA or an alternative future use exists for a product, patent and license costs are capitalized and amortized on a straight-line basis over the estimated useful economic life of the related product patents. For intangible assets related to HETLIOZ ® and NEREUS TM , the estimated useful life is through the estimated economic useful life of the related product patents. Useful lives for acquired intangible assets accounted for under ASC 805 are generally estimated based on the market participant methodology. For intangible assets related to PONVORY ® , the estimated useful life is through the estimated economic useful life of the related acquired product patents. Intangible assets related to Fanapt ® have been fully amortized on a straight-line basis to 2016. The Fanapt ® transaction represented reacquired rights, and therefore did not reflect the impact of additional Fanapt ® patents solely owned by the Company with varying expiration dates, the latest of which is December 2031. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation of most property and equipment is provided on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized using a straight-line basis over the lesser of the estimated useful lives of the assets or the terms of the related leases. The costs of additions and improvements are capitalized, and repairs and maintenance costs are charged to operations in the period incurred. Upon retirement or disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in the Consolidated Statement of Operations for that period. Leases The Company determines if an arrangement contains a lease at inception. Determination of whether a lease is a finance or operating lease is made at lease commencement. Right-of-use (ROU) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from that lease. For leases with a term greater than 12 months, ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The lease term includes the option to extend the lease when it is reasonably certain the Company will exercise that option. When available, the Company uses the rate implicit in the lease to discount lease payments to present value. When the implicit rate is not available, the Company uses its incremental borrowing rate based on information available at the lease commencement date, including publicly available data for instruments with similar characteristics, to determine the present value of lease payments. The Company does not combine lease and non-lease elements for office or vehicle leases. 96 Table of Contents Impairment of Long-Lived Assets The Company evaluates if events and circumstances have occurred that indicate the remaining estimated useful life of its long-lived assets may warrant revision or that the remaining balance of these assets may not be recoverable. In evaluating for recoverability, the Company estimates the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. In the event that the balance of any asset exceeds the future undiscounted or discounted cash flow estimate, impairment is recognized based on the excess of the carrying amounts of the asset above its estimated fair value. No impairment was recognized for the years ended December 31, 2025, 2024 and 2023. Accounts Payable and Accrued Liabilities The Company’s management is required to estimate accrued liabilities as part of the process of preparing financial statements. The estimation of accrued liabilities involves identifying services that have been performed on the Company’s behalf, and then estimating the level of service performed and the associated cost incurred for such services as of each balance sheet date in the financial statements. Accrued liabilities include research and development expenses, such as accrued costs under contracts with clinical monitors, data management organizations and investigators in conjunction with clinical trials, fees to contract manufacturers in conjunction with the production of clinical materials, consulting and professional fees, such as lawyers and fees for marketing and other commercialization activities, accrued compensation and employee benefits, such as accrued bonus, royalties payable under licensing agreements, and other accrued fees. Pursuant to management’s assessment of the services that have been performed on clinical trials and other contracts, the Company recognizes these expenses as the services are provided. Revenue from Net Product Sales The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. The Company recognizes revenue when control of the product is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for those product sales, which is typically once the product physically arrives at the customer. Sales taxes, value-added taxes, and usage-based taxes are excluded from revenues. The Company’s net product sales consist of sales of Fanapt ® , HETLIOZ ® and PONVORY ® . Net sales by product for the years ended December 31, 2025, 2024 and 2023 were as follows: Year Ended December 31, ( in thousands ) 2025 2024 2023 Fanapt ® net product sales $ 117,302 $ 94,297 $ 90,873 HETLIOZ ® net product sales 71,431 76,675 100,167 PONVORY ® net product sales 27,372 27,800 1,600 Total net product sales $ 216,105 $ 198,772 $ 192,640 Since the entrance of generic competition in the first quarter of 2023, inventory levels at our specialty pharmacy customers have been elevated relative to inventory levels prior to the entrance of generic competition. The elevated levels of inventory have resulted in longer periods to resolve uncertainties related to variable consideration. HETLIOZ ® net product sales have been and may continue to be variable depending on when specialty pharmacy customers purchase again. Further, HETLIOZ ® net product sales may decline in future periods, potentially significantly, related to continued generic competition in the U.S. An amount of variable consideration related to Fanapt ® net product sales is subject to dispute, of which approximately $ 3.0 million was recognized for the three months ended December 31, 2025. An amount of variable consideration related to PONVORY ® net product sales is subject to dispute, of which approximately $ 3.0 million was recognized for the three months ended December 31, 2024. The Company recognized $ 5.5 million and $ 3.2 million of net product sales during the years ended December 31, 2025 and 2024, respectively, for changes in estimates on variable consideration for performance obligations satisfied in previous periods across all the Company’s commercial products. The amount of net product sales recognized as a result of changes in estimates on variable consideration during the year ended December 31, 2023 was not material. Fanapt ® is available in the U.S. for distribution through a limited number of wholesalers and is available in retail pharmacies. HETLIOZ ® is available in the U.S. for distribution through a limited number of specialty pharmacies and is not available in retail pharmacies. PONVORY ® is available in the U.S. for distribution primarily through a limited number of specialty distributors and specialty pharmacies. The Company invoices and records revenue when its customers, wholesalers, specialty pharmacies and specialty distributors, receive product from the third-party logistics warehouse, which is the point at 97 Table of Contents which control is transferred to the customer. Revenues and accounts receivable are concentrated with these customers. Outside the U.S., the Company has a distribution agreement for the commercialization of Fanapt ® in Israel and sells HETLIOZ ® in Germany. Receivables are carried at transaction price paid by the wholesalers, specialty pharmacies and specialty distributors, net of estimated prompt pay discounts and allowance for credit losses. Payment terms differ by customer, but are based on customary commercial terms and typically range between thirty and sixty days. Allowance for credit losses is measured using historical loss rates based on the aging of receivables and incorporating current conditions and forward-looking estimates. The following table presents each major customer that represented more than 10% of total revenues for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, Percent of Net Product Sales 2025 2024 2023 Customer A 25 % 17 % 14 % Customer B 19 % 16 % 15 % Customer C 17 % 15 % 16 % Customer D 15 % 21 % 15 % Customer E * * 20 % Total net product sales from major customers 76 % 69 % 80 % *Represents less than 10% of respective balance. The following table presents each major customer that represented more than 10% of accounts receivable, net, as of December 31, 2025 and 2024: December 31, Percent of Accounts Receivable, Net 2025 2024 Customer A 24 % 27 % Customer B 18 % 18 % Customer C 19 % * Customer D 14 % 21 % Customer E * 18 % Total accounts receivable, net from major customers 75 % 84 % *Represents less than 10% of respective balance. 98 Table of Contents The transaction price is determined based upon the consideration to which the Company will be entitled in exchange for transferring product to the customer. The Company’s product sales are recorded net of applicable product revenue allowances for which reserves are established and include discounts, rebates, chargebacks, service fees, co-pay assistance and product returns that are applicable for various government and commercial payors. Where appropriate, the Company’s estimates of variable consideration included in the transaction price consider a range of possible outcomes. Allowances for rebates, chargebacks and co-pay assistance are based upon the insurance benefits of the end customer, which are estimated using historical activity and, where available, actual and pending prescriptions for which the Company has validated the insurance benefits. Variable consideration may be constrained and is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the respective underlying contracts. If actual results in the future vary from the Company’s estimates, it adjusts its estimates in the period identified, which would affect net product sales in the period such variances become known. Reserves for variable consideration are classified as product revenue allowances on the Consolidated Balance Sheets, with the exception of prompt-pay discounts which are classified as reductions of accounts receivable. The reserve for product returns for which the product may not be returned for a period of greater than one year from the balance sheet date is included as a component of other non-current liabilities in the Consolidated Balance Sheets. Uncertainties related to variable consideration are generally resolved in the quarter subsequent to period end, with the exception of Medicaid rebates, which are dependent upon the timing of when states submit reimbursement claims, Medicare inflationary rebates, which are billed on an annual basis beginning in 2025, and product returns that are resolved during the product expiry period specified in the customer contract. Furthermore, inventory stocking of HETLIOZ ® at specialty pharmacy customers since the entrance of generic competition in early 2023 has resulted in longer periods to resolve these uncertainties related to variable consideration. The Company currently records sales allowances for the following: • Prompt-pay: Wholesalers, specialty pharmacies and specialty distributors, the Company’s direct customers, are generally offered discounts for prompt payment. The Company expects that these direct customers will earn prompt payment discounts and, therefore, deducts the full amount of these discounts from total product sales when revenues are recognized. • Rebates: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program as well as contracted rebate programs with other payors, including the Medicare Part D inflationary rebate. Rebate amounts owed after the final dispensing of the product to a benefit plan participant are based upon contractual agreements or legal requirements with public sector benefit providers, such as Medicaid and Medicare. The allowances for rebates are based on statutory or contracted discount rates and estimated patient utilization. • Chargebacks: Chargebacks are discounts that occur when contracted indirect customers purchase directly from wholesalers, specialty pharmacies and specialty distributors. Contracted indirect customers, which currently consist primarily of Public Health Service institutions and federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The wholesaler, specialty pharmacy or specialty distributor, in turn, charges back the difference between the price initially paid by the wholesaler, specialty pharmacy or specialty distributor and the discounted price paid to the wholesaler, specialty pharmacy or specialty distributor by the contracted customer. • Medicare Part D Rebates: Prior to January 1, 2025, the Medicare Part D prescription drug benefit required manufacturers to fund approximately 70 % of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients for applicable drugs. The Company accounted for the Medicare Part D coverage gap using a point of sale model. Beginning January 1, 2025, the Medicare Part D coverage gap discount program was replaced with a new discounting program under the Inflation Reduction Act of 2022. The Medicare Part D benefit redesign has resulted in overall higher discounts for our Medicare payor segment relative to the previous Medicare Part D prescription drug coverage gap discount program. Under the redesigned Medicare Part D program, applicable drugs dispensed to applicable beneficiaries are subject to manufacturer discounts of 10% during the initial coverage phase and 20% during the catastrophic coverage phase. Under the Medicare Part D benefit redesign, the Company is a specified manufacturer whose applicable drugs for applicable beneficiaries who are Low Income Subsidy eligible under section 1860D-14(a) of the Social Security Act are subject to lower applicable discounts during the phase-in period. Estimates for expected Medicare Part D rebates are based, in part, on historical activity and, where available, actual and pending prescriptions when the Company has validated the insurance benefits. • Service Fees: The Company receives sales order management, data and distribution services from certain customers, for which it is assessed fees. These fees are based on contracted terms and are known amounts. The Company accrues service fees at the time of revenue recognition, resulting in a reduction of product sales and the 99 Table of Contents recognition of an accrued liability, unless it is a payment for a distinct good or service from the customer in which case the fair value of those distinct goods or services are recorded as selling, general and administrative expense. • Co-pay Assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-pay assistance. Co-pay assistance utilization is based on information provided by the Company’s third-party administrator. • Product Returns : The Company generally offers direct customers a limited right to return, as contractually defined with its customers. The Company considers several factors in the estimation process, including expiration dates of product shipped to customers, inventory levels within the distribution channel, product shelf life, historical return activity, including activity for product sold for which the return period has past, prescription trends and other relevant factors. The Company does not expect returned products to be resalable. There was no right of return asset as of December 31, 2025 or 2024. The following table summarizes activity for product returns as of and for the years ended December 31, 2025, 2024 and 2023, all of which relates to sales of Fanapt ® and PONVORY ® : (in thousands) Reserve for Product Returns Balances at December 31, 2022 $ 5,144 Additions 3,001 Credits/payments ( 2,934 ) Balances at December 31, 2023 5,211 Additions 2,780 Credits/payments ( 3,060 ) Balances at December 31, 2024 4,931 Additions 3,889 Credits/payments ( 2,451 ) Balances at December 31, 2025 $ 6,369 The Company’s balance of rebates and chargebacks was $ 63.4 million and $ 49.9 million as of December 31, 2025 and 2024, respectively. The Company’s balance of discounts, returns and other product allowances was $ 14.7 million and $ 12.4 million as of December 31, 2025 and 2024, respectively. Cost of Goods Sold Cost of goods sold includes royalties payable, the cost of inventory sold, costs to write down inventory to net realizable value, manufacturing and supply chain costs and product shipping and handling costs related to sales of its commercial products to the Company’s distribution partners. Research and Development Expenses Research and development expenses consist primarily of fees for services provided by third parties in connection with the clinical trials, costs of contract manufacturing services for clinical trial use, milestone payments made under licensing agreements prior to regulatory approval, costs of materials used in clinical trials and research and development, costs for regulatory consultants and filings, depreciation of capital resources used to develop products, related facilities costs, and salaries, other employee-related costs and stock-based compensation for research and development personnel. The Company generally expenses research and development costs as they are incurred for products in the development stage, including manufacturing costs and milestone payments made under license agreements prior to FDA approval. Upon and subsequent to FDA approval or if, based on management judgment, future commercialization is considered probable, manufacturing and milestone payments made under license agreements are capitalized. Milestone payments are accrued when it is deemed probable that the milestone event will be achieved. Costs related to the acquisition of intellectual property are expensed as incurred if the underlying technology is developed in connection with the Company’s research and development efforts and has no alternative future use. Selling, General and Administrative Expenses Selling, general and administrative expenses consist of salaries, other employee-related costs and stock-based compensation, and facilities and third-party expenses. Selling, general and administrative expenses are associated with the activities of the corporate, finance, accounting, information technology, business development, commercial support, trade and 100 Table of Contents distribution, sales, marketing, legal, medical affairs and human resource functions. Additionally, selling, general and administrative expenses include an estimate for the annual Affordable Care Act fee. Stock-Based Compensation Compensation costs for all stock-based awards to employees and directors are measured based on the grant date fair value of those awards and recognized over the period during which the employee or director is required to perform service in exchange for the award. The Company recognizes the expense over the award’s vesting period. The grant date fair value of stock options granted and restricted stock units (RSUs) awarded are amortized using the straight-line method. As stock-based compensation expense recognized in the Consolidated Statements of Operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Advertising Expense The Company expenses the costs of advertising, including branded product promotional expenses, as incurred. Branded product advertising expenses, recorded in selling, general and administrative expenses, were $ 28.6 million, $ 1.9 million and $ 0.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. Foreign Currency The reporting currency of the Company is the U.S. dollar. The functional currency of the Company’s international subsidiaries is the local currency. Assets and liabilities denominated in foreign currencies, including intercompany balances for which settlement is anticipated in the foreseeable future, are translated at exchange rates in effect at the balance sheet date. Foreign currency equity balances are translated at historical rates. Revenues and expenses denominated in foreign currencies are translated at average exchange rates for the respective periods. Foreign currency translation adjustments are recorded in accumulated other comprehensive income (loss). Transactions denominated in currencies other than functional currency are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in the Consolidated Balance Sheets related to these items will result in unrealized foreign currency transaction gains and losses based upon period-end exchange rates. The Company also records realized foreign currency transaction gains and losses upon settlement of the transactions. Foreign currency transaction gains and losses are included in other income and were not material for the years ended December 31, 2025, 2024 and 2023, respectively. Income Taxes The Company accounts for income taxes using the asset and liability method. Under the asset and liability method, current income tax expense or benefit is the amount of income taxes expected to be payable or refundable for the current year. A deferred income tax asset or liability is recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized. Tax rate changes are reflected in income during the period such changes are enacted. Changes in ownership may limit the amount of net operating loss (NOL) carryforwards and tax credits that can be utilized in the future to offset taxable income. Tax benefits are recognized from an uncertain tax position only if it is more likely than not that the position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. Interest and penalties related to income taxes are recognized as a component of income tax expense in the Consolidated Statements of Operations, and cumulative accrued interest and penalties are recognized within the related liability line items in the Consolidated Balance Sheets. Certain Risks and Uncertainties The Company’s products under development require approval from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance the products will receive the necessary approval. If the Company is denied approval or approval is delayed, it may have a material adverse impact on the Company. 101 Table of Contents The Company’s products are concentrated in rapidly changing, highly competitive markets, which are characterized by rapid technological advances, increasing generic competition, changes in customer requirements and evolving regulatory requirements and industry standards. Any failure by the Company to anticipate or to respond adequately to technological developments in its industry, challenges from new generic market entrants, changes in customer or regulatory requirements or changes in industry standards, or any significant delays in the development or introduction of products or services could have a material adverse effect on the Company’s business, operating results and future cash flows. The Company depends on single source suppliers for critical raw materials for manufacturing, as well as other components required for the administration of its products. The loss of these suppliers could delay the clinical trials or prevent or delay commercialization of the products. Concentrations of Credit Risk Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash, cash equivalents and marketable securities. The Company places its cash, cash equivalents and marketable securities with highly rated financial institutions. At December 31, 2025, the Company maintained all of its cash, cash equivalents and marketable securities in two financial institutions. Deposits held with these institutions may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand, and the Company believes there is minimal risk of losses on such balances. Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to provide enhancements to annual income tax disclosures. The standard requires more detailed information in the rate reconciliation table and for income taxes paid, among other enhancements. The standard is effective for years beginning after December 15, 2024 and early adoption is permitted. The Company adopted this standard on a retrospective basis as of January 1, 2025 and included the additional required disclosures, including additional detail in the rate reconciliation table, in Note 15, Income Taxes . In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Topic 220-40), which addresses the disaggregation of income statement expenses. This standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is evaluating this standard to determine if adoption will have a material impact on the Company’s consolidated financial statements. 3. PONVORY ® Acquisition On December 7, 2023, the Company entered into an Asset Purchase Agreement (the Purchase Agreement) to acquire the U.S. and Canadian rights to PONVORY ® from Actelion Pharmaceuticals Ltd. (Janssen), a Johnson & Johnson Company, and the closing of the transaction took place simultaneously with signing. PONVORY ® is a once-daily oral selective sphingosine-1-phosphate receptor 1 modulator, indicated to treat adults with relapsing forms of multiple sclerosis, including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease. The total consideration for the acquisition was $ 104.9 million consisting of cash paid to Janssen and acquisition-related transaction costs. The Purchase Agreement includes customary representations, warranties and covenants, as well as standard mutual indemnities covering losses arising from any material breach of the Purchase Agreement or inaccuracy of representations and warranties. Janssen has agreed to indemnify the Company against losses arising from its activities prior to the closing, and the Company has agreed to indemnify Janssen against losses arising from the Company’s activities pertaining to PONVORY ® after the closing. Simultaneously and in connection with the Purchase Agreement, the parties also entered into certain supporting agreements, including a customary transition agreement, pursuant to which, during a transition period, Janssen continued PONVORY ® operations. In May 2024, ownership of the U.S. New Drug Application (NDA) and Investigational New Drug applications for PONVORY ® were transferred to Vanda from a Johnson & Johnson Company, fully allowing the Company to commercialize PONVORY ® in the U.S. The acquisition of PONVORY ® has been accounted for as an asset acquisition in accordance with ASC 805-50 because substantially all of the fair value of the assets acquired is concentrated in a single asset, the PONVORY ® product rights. The PONVORY ® product rights consist of certain patents and trademarks, regulatory approvals, marketing assets, and other records, and are considered a single asset as they are inextricably linked. The total consideration of $ 104.9 million was 102 Table of Contents fully allocated to the acquired intangible asset for the U.S. and Canadian rights to PONVORY ® . The straight-line method is used to amortize the intangible asset, as disclosed in Note 9, Intangible Assets . 4. Marketable Securities The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2025, which all have contractual maturities of less than two years: (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value U.S. Treasury and government agencies $ 153,212 $ 523 $ — $ 153,735 Corporate debt 25,210 51 — 25,261 Total marketable securities $ 178,422 $ 574 $ — $ 178,996 The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2024, which all have contractual maturities of less than two years: (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Market Value U.S. Treasury and government agencies $ 227,720 $ 371 $ ( 261 ) $ 227,830 Corporate debt 44,506 9 ( 18 ) 44,497 Total marketable securities $ 272,226 $ 380 $ ( 279 ) $ 272,327 5. Fair Value Measurements Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: • Level 1 — defined as observable inputs such as quoted prices in active markets • Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable • Level 3 — defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions The Company’s assets classified in Level 1 and Level 2 as of December 31, 2025 and 2024 consist of cash equivalents and available-for-sale marketable securities. The valuation of Level 1 instruments is determined using a market approach and is based upon unadjusted quoted prices for identical assets in active markets. The valuation of Level 2 instruments is also determined using a market approach based upon quoted prices for similar assets in active markets, or other inputs that are observable for substantially the full term of the financial instrument. Level 2 securities include certificates of deposit, commercial paper and corporate notes that use as their basis readily observable market parameters. The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2025, as follows: Fair Value Measurement as of December 31, 2025 Using (in thousands) Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) U.S. Treasury and government agencies $ 153,735 $ 153,735 $ — $ — Corporate debt 25,261 — 25,261 — Total assets measured at fair value $ 178,996 $ 153,735 $ 25,261 $ — 103 Table of Contents The Company held certain assets that are required to be measured at fair value on a recurring basis as of December 31, 2024, as follows: Fair Value Measurement as of December 31, 2024 Using (in thousands) Total Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) U.S. Treasury and government agencies $ 227,830 $ 227,830 $ — $ — Corporate debt 44,497 — 44,497 — Total assets measured at fair value $ 272,327 $ 227,830 $ 44,497 $ — Total assets measured at fair value as of December 31, 2025 and 2024 include no cash equivalents. The Company also has financial assets and liabilities, not required to be measured at fair value on a recurring basis, which primarily consist of cash, accounts receivable, restricted cash, accounts payable and accrued liabilities, milestone obligations under licensing agreements and product revenue allowances, the carrying values of which materially approximate their fair values. 6. Inventory Inventory consisted of the following as of December 31, 2025 and 2024: (in thousands) December 31, 2025 December 31, 2024 Current assets Finished goods 1,852 1,726 Total inventory, current $ 1,852 $ 1,726 Non-Current assets Raw materials $ 934 $ 934 Work-in-process 5,996 6,236 Finished goods 2,238 617 Total inventory, non-current 9,168 7,787 Total inventory $ 11,020 $ 9,513 The Company’s inventory balance consisted of $ 2.1 million of Fanapt ® product, $ 7.8 million of HETLIOZ ® product and $ 0.3 million of PONVORY ® product as of December 31, 2025. The Company’s inventory balance consisted of $ 2.0 million of Fanapt ® product, $ 7.3 million of HETLIOZ ® product and $ 0.2 million of PONVORY ® product as of December 31, 2024. 7. Property and Equipment The following is a summary of the Company’s property and equipment, at cost, as of December 31, 2025 and 2024: (in thousands) Estimated Useful Life (Years) December 31, 2025 December 31, 2024 Computer and other equipment 3 $ 7,841 $ 6,734 Furniture and fixtures 5 - 7 1,525 1,497 Leasehold improvements 5 - 11 5,498 5,468 Total property and equipment, gross 14,864 13,699 Accumulated depreciation and amortization ( 12,616 ) ( 11,567 ) Total property and equipment, net $ 2,248 $ 2,132 Depreciation expense was $ 1.1 million, $ 0.9 million and $ 0.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. 8. Leases The Company’s long-term leases primarily include operating leases and subleases for office space in Washington, D.C. and London, England and vehicle finance leases for its fleet program. The Company recognized ROU assets and lease 104 Table of Contents liabilities related to fixed payments for these long-term leases in its Consolidated Balance Sheets as of December 31, 2025 and 2024. The Company also has short-term leases, including office space in Berlin, Germany. In June 2011, the Company entered into an operating lease agreement under which it leases 33,534 square feet of office space for its headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. Subject to the prior rights of other tenants, the Company has the right to renew the lease for five years following its expiration in July 2028. As of December 31, 2025, the renewal period has not been included in the lease term. The Company has the right to sublease or assign all or a portion of the premises, subject to standard conditions. The lease may be terminated early by the Company or the landlord under certain circumstances. In June 2016, the Company entered into a sublease agreement under which it subleases an additional 9,928 square feet of office space for its headquarters at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. The sublease term began in January 2017 and ends in July 2026 but may be terminated earlier by either party under certain circumstances. The Company has the right to sublease or assign all or a portion of the premises, subject to standard conditions. Following the expiration of the sublease in July 2026, the Company will lease this space under a separate lease arrangement with a different counterparty, which was signed in June 2025. This lease term will commence in August 2026 upon expiration of the sublease for that space for a period of two years . The lease may be terminated early by the Company or the landlord under certain circumstances. In May 2016, the Company entered into an operating lease agreement under which it leases 2,880 square feet of office space in London, England, which will end in 2026. In August 2024, the Company entered into a master lease agreement for vehicles to be utilized by the Company’s sales force. The individual car leases commence upon delivery of the vehicles, which began in the fourth quarter of 2024, and were determined to be finance leases upon lease commencement. The contractual period of each lease is three years . The Company continued to lease additional cars under the master lease agreement during 2025. Total fixed payments for the vehicle leases that had not yet commenced as of December 31, 2025 are estimated to be $ 1.5 million, payable over initial term of three years, and subject to change upon finalization of each vehicle lease contract. The following is a summary of the Company’s ROU assets and lease liabilities as of December 31, 2025 and 2024: (in thousands) Classification on the Balance Sheet December 31, 2025 December 31, 2024 Assets Operating lease assets Operating lease right-of-use assets $ 3,923 $ 5,602 Finance lease assets Finance lease right-of-use assets 7,343 4,943 Total lease assets $ 11,266 $ 10,545 Liabilities Operating lease current liabilities Accounts payable and accrued liabilities $ 2,152 $ 2,456 Finance lease current liabilities Accounts payable and accrued liabilities 3,403 1,814 Operating lease non-current liabilities Operating lease non-current liabilities 2,991 4,944 Finance lease non-current liabilities Finance lease non-current liabilities 4,076 3,146 Total lease liabilities $ 12,622 $ 12,360 Weighted average remaining lease term, operating leases 2.5 3.3 Weighted average discount rate, operating leases 8.2 % 8.2 % Weighted average remaining lease term, finance leases 2.4 2.9 Weighted average discount rate, finance leases 6.2 % 6.4 % 105 Table of Contents The components of lease expense for the years ended December 31, 2025, 2024 and 2023 was as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Operating lease cost: Fixed lease cost $ 2,231 $ 2,223 $ 2,216 Short-term lease cost 451 426 396 Finance lease cost: Amortization 2,110 171 — Interest 343 32 — Total lease costs $ 5,135 $ 2,852 $ 2,612 Supplemental cash flow information related to leases for the years ended December 31, 2025, 2024 and 2023 was as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 2,809 $ 2,723 $ 2,659 Operating cash flows from finance leases 343 32 — Financing cash flows from finance leases 1,991 155 — Right-of-use assets obtained in exchange for lease obligations: Finance leases 4,510 5,114 — The table below reconciles the Company’s future cash obligations to lease liabilities recorded on the balance sheet as of December 31, 2025: (in thousands) Operating Leases Finance Leases 2026 $ 2,412 $ 3,518 2027 2,159 3,344 2028 1,099 1,218 Total minimum lease payments 5,670 8,080 Less: amount of lease payments representing interest ( 527 ) ( 601 ) Present value of future minimum lease payments 5,143 7,479 Less: current obligations under leases ( 2,152 ) ( 3,403 ) Lease non-current liabilities $ 2,991 $ 4,076 9. Intangible Assets HETLIOZ ® . In January 2014, the Company announced that the FDA had approved the NDA for HETLIOZ ® . As a result of this approval, the Company met a milestone under its license agreement with Bristol-Myers Squibb (BMS) that required the Company to make a license payment of $ 8.0 million to BMS. In April 2018, the Company met its final milestone under its license agreement with BMS when cumulative worldwide sales of HETLIOZ ® reached $ 250.0 million. As a result of the achievement of this milestone, the Company made a payment to BMS of $ 25.0 million in 2018. These milestone payments were determined to be additional consideration for the acquisition of HETLIOZ ® and capitalized as an intangible asset and are being amortized on a straight-line basis over the estimated economic useful life of the related product patents. PONVORY ® . In December 2023, the Company acquired the U.S. and Canadian rights to PONVORY ® from Janssen. The total purchase price of $ 104.9 million, $ 100.7 million of which was paid in 2023 and the remaining $ 4.2 million in 2024, was allocated to the acquired intangible asset for the U.S. and Canadian rights to PONVORY ® . See Note 3, PONVORY ® Acquisition , for additional details. The PONVORY ® intangible asset is being amortized on a straight-line basis over the estimated economic useful life of the related product rights. During the first quarter of 2024, the estimated useful life for the 106 Table of Contents PONVORY ® intangible asset was changed from 2035 to 2042 based on a change in the estimated economic useful life of the related product rights. NEREUS TM . In December 2025, the Company announced that the FDA had approved the NDA for NEREUS TM . As a result of this approval, the Company met a milestone under its license agreement with Eli Lilly and Company (Lilly) that required the Company to make a license payment of $ 10.0 million to Lilly, which was accrued in the Company’s Consolidated Balance Sheets as of December 31, 2025 and represented a non-cash investing activity for the year ended December 31, 2025. This milestone obligation was determined to be additional consideration for the acquisition of NEREUS TM and capitalized as an intangible asset and is being amortized on a straight-line basis over the estimated economic useful life of the related product patents. The following is a summary of the Company’s amortizing intangible assets as of December 31, 2025: December 31, 2025 (in thousands) Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount HETLIOZ ® 2035 $ 33,000 $ 18,863 $ 14,137 PONVORY ® 2042 104,894 11,942 92,952 NEREUS TM 2036 10,000 — 10,000 Total amortizing intangible assets $ 147,894 $ 30,805 $ 117,089 The following is a summary of the Company’s amortizing intangible assets as of December 31, 2024: December 31, 2024 (in thousands) Estimated Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount HETLIOZ ® 2035 $ 33,000 $ 17,400 $ 15,600 PONVORY ® 2042 104,894 6,398 98,496 Total amortizing intangible assets $ 137,894 $ 23,798 $ 114,096 As of December 31, 2025 and 2024, the Company also had $ 27.9 million of fully amortized intangible assets related to Fanapt ® . Intangible assets are amortized over their estimated useful economic life using the straight-line method. Amortization expense for the years ended December 31, 2025, 2024 and 2023 was as follows: Year Ended December 31, (in thousands) 2025 2024 2023 HETLIOZ ® $ 1,463 $ 1,463 $ 1,502 PONVORY ® 5,544 5,810 588 NEREUS TM — — — Total amortization expense $ 7,007 $ 7,273 $ 2,090 The following is a summary of the future intangible asset amortization schedule as of December 31, 2025: (in thousands) Total 2026 2027 2028 2029 2030 Thereafter HETLIOZ ® $ 14,137 $ 1,463 $ 1,463 $ 1,463 $ 1,463 $ 1,463 $ 6,822 PONVORY ® 92,952 5,544 5,544 5,544 5,544 5,544 65,232 NEREUS TM 10,000 941 941 941 941 941 5,295 Total amortization expense $ 117,089 $ 7,948 $ 7,948 $ 7,948 $ 7,948 $ 7,948 $ 77,349 107 Table of Contents 10. Accounts Payable and Accrued Liabilities The following is a summary of the Company’s accounts payable and accrued liabilities as of December 31, 2025 and 2024: (in thousands) December 31, 2025 December 31, 2024 Research and development expenses $ 18,917 $ 11,962 Consulting and other professional fees 16,506 9,226 Compensation and employee benefits 10,322 8,465 Milestone obligations under license agreements 10,000 — Finance lease liabilities 3,403 1,814 Operating lease liabilities 2,152 2,456 Royalties payable 2,057 1,665 Accounts payable and other accrued liabilities 4,940 3,498 Total accounts payable and accrued liabilities $ 68,297 $ 39,086 11. Commitments and Contingencies Guarantees and Indemnifications The Company has entered into a number of standard intellectual property indemnification agreements in the ordinary course of its business. Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with any U.S. patent or any copyright or other intellectual property infringement claim by any third party with respect to the Company’s products. The term of these indemnification agreements is generally perpetual from the date of execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. Since inception, the Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. The Company also indemnifies its officers and directors for certain events or occurrences, subject to certain conditions. License Agreements The Company’s rights to develop and commercialize its products are subject to the terms and conditions of licenses granted to the Company by other pharmaceutical companies. Fanapt ® . Pursuant to the terms of a settlement agreement with Novartis Pharma AG (Novartis), Novartis transferred all U.S. and Canadian rights in the Fanapt ® franchise to the Company on December 31, 2014. The Company paid directly to Sanofi S.A. (Sanofi) a fixed royalty of 3 % of net sales through December 2019 related to manufacturing know-how. The Company is also obligated to pay Sanofi a fixed royalty on Fanapt ® net sales equal to 6 % on Sanofi know-how not related to manufacturing under certain conditions for a period of up to 10 years in markets where the new chemical entity patent has expired or was not issued. The Company is obligated to pay this 6 % royalty on net sales in the U.S. through November 2026. HETLIOZ ® . In February 2004, the Company entered into a license agreement with BMS under which it received an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize HETLIOZ ® . As of December 31, 2025, the Company has paid BMS $ 37.5 million in upfront fees and milestone obligations, including $ 33.0 million of regulatory approval and commercial milestones capitalized as intangible assets (see Note 9, Intangible Assets ). The Company has no remaining milestone obligations to BMS. Additionally, the Company is obligated to make royalty payments on HETLIOZ ® net sales to BMS. The royalty period in each territory where the Company commercializes HETLIOZ ® is 10 years following the first commercial sale in the territory. In territories outside the U.S., the royalty is 5 % on net sales. In the U.S., the royalty on net sales decreased from 10 % to 5 % in December 2022. This U.S. royalty ended in April 2024. The Company is also obligated under the license agreement to pay BMS a percentage of any sublicense fees, upfront payments and milestone and other payments (excluding royalties) that it receives from a third party in connection with any sublicensing arrangement, at a rate which is in the mid-twenties . The Company is obligated to use its commercially reasonable efforts to develop and commercialize HETLIOZ ® . NEREUS TM . In April 2012, the Company entered into a license agreement with Lilly pursuant to which the Company acquired an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize NEREUS TM for all human indications. Lilly is eligible to receive future payments based 108 Table of Contents upon achievement of specified development, regulatory approval and commercialization milestones as well as tiered-royalties on net sales at percentage rates up to the low double digits . As of December 31, 2025, the Company has paid Lilly $ 5.0 million in upfront fees and development milestones, including a $ 2.0 million milestone paid to Lilly during the year ended December 31, 2023 for the filing of the first application for marketing authorization for NEREUS TM in either the U.S. or European Union (E.U.). In the fourth quarter of 2025, as a result of the FDA approving the Company’s NDA for the prevention of vomiting induced by motion, the Company accrued $ 10.0 million as a current liability on the Consolidated Balance Sheets as of December 31, 2025. As of December 31, 2025, remaining milestone obligations include a $ 5.0 million milestone for the first approval of an application for marketing authorization for NEREUS TM in the E.U. and up to $ 80.0 million for sales milestones. The Company is obligated to use its commercially reasonable efforts to develop and commercialize NEREUS TM . Imsidolimab. In January 2025, the Company entered into an exclusive global license agreement with Anaptys under which it acquired the worldwide rights to develop, manufacture, and commercialize imsidolimab. Under the terms of the agreement, which was accounted for as an asset acquisition, the Company made an upfront payment of $ 10.0 million to Anaptys and an additional $ 5.0 million payment for drug supply, $ 14.4 million of which is included in research and development expense on the Consolidated Statements of Operations for the year ended December 31, 2025. Anaptys is eligible to receive future payments based upon achievement of specified regulatory approval and commercialization milestones as well as a 10 % royalty on global net sales. As of December 31, 2025, remaining milestone obligations include up to $ 35.0 million for future regulatory approval and sales milestones, including $ 5.0 million each for the first approval of an application for marketing authorization for imsidolimab in the U.S. and E.U. and $ 25.0 million for a sales milestone. The Company is obligated to use its commercially reasonable efforts to develop and commercialize imsidolimab. Portfolio of CFTR activators and inhibitors . In March 2017, the Company entered into a license agreement with the University of California San Francisco (UCSF), under which the Company acquired an exclusive worldwide license to develop and commercialize a portfolio of CFTR activators and inhibitors. Pursuant to the license agreement, the Company will develop and commercialize the CFTR activators and inhibitors and is responsible for all development costs, including current pre-investigational new drug development work. UCSF is eligible to receive future payments based upon achievement of specified development and commercialization milestones as well as single-digit royalties on net sales. As of December 31, 2025, the Company has paid UCSF $ 1.8 million in upfront fees and development milestones. As of December 31, 2025, remaining milestone obligations include $ 11.9 million for development milestones and $ 33.0 million for future regulatory approval and sales milestones. Included in the $ 11.9 million of development milestones are $ 1.1 million of milestone obligations due upon the conclusion of clinical studies for each licensed product, not to exceed $ 3.2 million in total for the CFTR portfolio. VQW-765. In connection with a settlement agreement with Novartis relating to Fanapt ® , the Company received an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize VQW-765. Pursuant to the license agreement, the Company is obligated to use its commercially reasonable efforts to develop and commercialize VQW-765 and is responsible for all development costs. The Company has no milestone obligations, but Novartis is eligible to receive tiered-royalties on net sales at percentage rates up to the mid-teens . Other Agreements Olipass. In September 2022, the Company entered into an agreement with OliPass Corporation (OliPass) to jointly develop a set of ASO molecules based on OliPass’ proprietary modified peptide nucleic acids. As consideration for entering into the arrangement, the Company paid OliPass an upfront fee of $ 3.0 million, which was recorded as research and development expense in 2022. The Company is funding the research and development activities and has the option to license jointly developed intellectual property upon successful development. Clinical Trial Agreement. In December 2024, the Company entered into an agreement with a third party to jointly design and complete a pediatric study for PONVORY ® required by the FDA and the European Medicines Agency. Pursuant to the agreement, the Company will bear the primary responsibility for completing the clinical trial, and the third party will bear primary responsibility for manufacturing the clinical study product. All costs associated with the pediatric study will be shared equally by the Company and the third party. As the Company and the third party are both active participants in the research activities and both parties are exposed to significant risks and rewards, the agreement is being accounted for under ASC 808. Furthermore, no parts of the agreement are within the scope of ASC 606, because the Company determined that performing research and development activities on behalf of other parties is not part of the ordinary activities of its business. Therefore, reimbursements from the third party for research and development costs are recorded as reductions to research and development expense as incurred. Expenses recognized by the Company related to activities under the collaborative arrangement, which commenced during the first quarter of 2025, were $ 4.0 million for the year ended December 31, 2025, which were reduced by amounts reimbursable from the third party of $ 1.3 million. 109 Table of Contents Purchase Commitments In the normal course of its business, the Company regularly enters into agreements with third-party vendors under fee service arrangements, which generally may be terminated on 90 days’ notice without incurring additional charges, other than charges for work completed or materials procured but not paid for through the effective date of termination and other costs incurred by the Company’s contractors in closing out work in progress as of the effective date of termination. The Company’s non-cancellable purchase commitments for agreements with a remaining non-cancellable term longer than one year from December 31, 2025 primarily relate to commitments for data services and marketing activities, of which $ 13.5 million, $ 11.0 million, $ 6.4 million, and $ 2.6 million are expected to be paid in 2026, 2027, 2028 and 2029, respectively. Various other long-term agreements entered into for services with other third-party vendors, such as inventory purchase commitments, are cancellable in nature or contain variable commitment terms within the agreement that are within our control. 12. Accumulated Other Comprehensive Income The accumulated balances related to each component of other comprehensive income (loss), net of taxes, were as follows for the years ended December 31, 2025 and 2024: (in thousands) December 31, 2025 December 31, 2024 Foreign currency translation $ 68 $ ( 13 ) Unrealized gain on marketable securities 561 87 Accumulated other comprehensive income $ 629 $ 74 13. Stock-Based Compensation As of December 31, 2025, there were 7,966,833 shares subject to outstanding options and RSUs under the 2006 Equity Incentive Plan (2006 Plan) and the Amended and Restated 2016 Equity Incentive Plan (2016 Plan, and together with the 2006 Plan, Plans). The 2006 Plan expired by its terms in April 2016, and the Company adopted the 2016 Plan. Outstanding options under the 2006 Plan remain in effect and the terms of the 2006 Plan continue to apply, but no additional awards can be granted under the 2006 Plan. In June 2016, the Company’s stockholders approved the 2016 Plan. The 2016 Plan has been amended a number of times since to increase the number of shares reserved for issuance, among other administrative changes, including, but not limited to, an amendment to eliminate its term. Each of the amendments to the 2016 Plan was approved by the Company’s stockholders. There is a total of 18,190,000 shares of common stock authorized for issuance under the 2016 Plan, 5,416,104 shares of which remained available for future grant as of December 31, 2025. Stock Options The Company has granted option awards under the Plans with service conditions (service option awards) that are subject to terms and conditions established by the compensation committee of the board of directors. Service option awards have 10 -year contractual terms. Service option awards granted to employees and new directors upon their election vest and become exercisable over four years , with the first 25 % of the shares subject to service option awards vesting on the first anniversary of the grant date and the remaining 75 % of the shares subject to the service option awards in 36 equal monthly installments thereafter. Subsequent annual service option awards granted to directors vest and become exercisable in full on the first anniversary of the grant date. Service option awards granted to executive officers and certain other employees provide for partial acceleration of vesting if the executive officer or employee is subject to an involuntary termination, and full acceleration of vesting if the executive officer or employee is subject to an involuntary termination within 24 months after a change in control of the Company. Service option awards granted to directors provide for accelerated vesting if there is a change in control of the Company or if the director’s service terminates as a result of the director’s death or total and permanent disability. As of December 31, 2025, $ 0.9 million of unrecognized compensation costs related to unvested service option awards are expected to be recognized over a weighted average period of 0.5 years. No option awards are classified as a liability as of December 31, 2025. 110 Table of Contents A summary of option activity under the Plans for the year ended December 31, 2025 is as follows: (in thousands, except for share and per share amounts) Number of Shares Weighted Average Exercise Price at Grant Date Weighted Average Remaining Term (Years) Aggregate Intrinsic Value Outstanding at December 31, 2024 4,603,581 $ 12.71 5.60 $ — Expired ( 113,257 ) 11.24 Outstanding at December 31, 2025 4,490,324 12.75 4.74 2,698 Exercisable at December 31, 2025 4,236,275 13.07 4.60 2,285 Vested and expected to vest at December 31, 2025 4,485,793 12.75 4.73 2,690 There were no options granted for the year ended December 31, 2025. The weighted average grant-date fair value of options granted was $ 2.95 and $ 3.53 per share for the years ended December 31, 2024 and 2023, respectively. There were no options exercised for the year ended December 31, 2025, 2024 and 2023. Restricted Stock Units An RSU is a stock award that entitles the holder to receive shares of the Company’s common stock as the award vests. The fair value of each RSU is based on the closing price of the Company’s stock on the date of grant. The Company has granted RSUs under the Plans with service conditions (service RSUs) that are subject to terms and conditions established by the compensation committee of the board of directors. Service RSUs granted to employees and new directors upon their election vest in four equal annual installments. Subsequent annual service RSUs granted to directors vest on the first anniversary of the date of grant. Service RSUs granted to executive officers and certain other employees provide for accelerated vesting if the executive officer or employee is subject to an involuntary termination within 24 months after a change in control. Service RSUs granted to directors provide for accelerated vesting if there is a change in control of the Company. As of December 31, 2025, $ 11.7 million of unrecognized compensation costs related to unvested service RSUs are expected to be recognized over a weighted average period of 1.6 years. No RSUs are classified as a liability as of December 31, 2025. A summary of RSU activity for the Plans for the year ended December 31, 2025 is as follows: Number of Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2024 2,650,006 $ 6.82 Granted 1,980,625 4.46 Forfeited ( 170,794 ) 6.12 Vested ( 983,328 ) 8.65 Unvested at December 31, 2025 3,476,509 4.99 The weighted average grant date fair value of RSUs granted was $ 4.46 , $ 4.48 and $ 6.96 per share for the years ended December 31, 2025, 2024 and 2023, respectively. The total fair value of the RSUs that vested during the years ended December 31, 2025, 2024 and 2023 was $ 8.5 million, $ 9.0 million, and $ 11.3 million, respectively. Stock-Based Compensation Expense Stock-based compensation expense recognized for the years ended December 31, 2025, 2024 and 2023 was comprised of the following: Year Ended December 31, (in thousands) 2025 2024 2023 Research and development $ 2,367 $ 2,960 $ 3,323 Selling, general and administrative 7,107 9,472 10,717 Total stock-based compensation expense $ 9,474 $ 12,432 $ 14,040 The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model. Expected volatility rates are based on the historical volatility of the Company’s publicly traded common stock and other factors. The expected terms are determined based on a combination of historical exercise data and hypothetical exercise data for 111 Table of Contents unexercised stock options. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has never paid cash dividends to its stockholders and does not plan to pay dividends in the foreseeable future. There were no options granted during the year ended December 31, 2025. Assumptions used in the Black-Scholes-Merton option pricing model for employee and director stock options granted during the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 Expected dividend yield — % — % Weighted average expected volatility 50 % 47 % Weighted average expected term (years) 6.27 6.16 Weighted average risk-free rate 4.52 % 3.89 % 14. Employee Benefit Plan The Company has a defined contribution plan under Internal Revenue Code of 1986, as amended, Section 401(k). This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Currently, the Company matches fifty percent up to the first six percent of employee contributions. All matching contributions have been paid by the Company. The Company match vests over a 4 -year period and amounted to $ 1.6 million, $ 1.0 million and $ 1.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. 15. Income Taxes The following is a summary of the domestic and foreign components of income (loss) before income taxes for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, (in thousands) 2025 2024 2023 Domestic $ ( 138,908 ) $ ( 23,042 ) $ 6,184 Foreign 261 121 155 Total income (loss) before income taxes $ ( 138,647 ) $ ( 22,921 ) $ 6,339 The following is a summary of the provision (benefit) for income taxes for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, (in thousands) 2025 2024 2023 Current Federal $ 55 $ 1,654 $ 2,577 State 185 749 2,447 Foreign 143 58 91 Deferred Federal 78,684 ( 4,760 ) ( 2,240 ) State 2,722 ( 1,719 ) 970 Foreign 38 ( 3 ) ( 15 ) Provision (benefit) for income taxes $ 81,827 $ ( 4,021 ) $ 3,830 112 Table of Contents The Company assesses the need for a valuation allowance against its deferred tax assets each quarter through the review of all available positive and negative evidence. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The analysis is highly dependent upon historical and projected pretax income. Projected pretax income includes significant assumptions related to revenue, which could be affected by the success of the commercial launches of Fanapt ® in bipolar I disorder, PONVORY ® in RMS and NEREUS TM in the prevention of vomiting induced by motion, which was approved on December 30, 2025, and HETLIOZ ® generic competition, as well as commercial and research and development activities, including spend on our commercial launches and late-stage clinical activities, and our ability to obtain regulatory approval from the FDA for products or new indications in development, among other factors. In the fourth quarter of 2025, after considering all available positive and negative evidence, including but not limited to historical, current and future projected results and significant risks and uncertainties related to forecasts, the Company concluded that it is not more likely than not that substantially all of its deferred tax assets are realizable in future periods and recorded a valuation allowance against all net deferred tax assets, resulting in a non-cash income tax expense of $ 113.7 million for the year ended December 31, 2025. If the Company has cumulative pretax income in future periods and/or if the Company’s projections indicate pretax income in future periods or if there are meaningful changes to the Company’s business operations, the conclusion about the appropriateness of the valuation allowance could change in a future period. A future reduction of the valuation allowance, in whole or in part, would result in a non-cash income tax benefit during the period of reduction. The potential timing and amount of any future valuation allowance release has yet to be determined and requires an analysis that is highly dependent upon historical and future projected earnings, among other factors. Any such adjustment could have a material impact on the Company’s financial position and results of operations. The following is a reconciliation between the federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, 2025 2024 2023 (in thousands, except percentages) Amount Percent Amount Percent Amount Percent U.S. federal tax at statutory rate $ ( 29,116 ) 21.0 % $ ( 4,813 ) 21.0 % $ 1,331 21.0 % State and local taxes, net of federal tax effect* 2,414 ( 1.7 ) % ( 2,017 ) 8.8 % 1,178 18.6 % Foreign tax effects 126 ( 0.1 ) % 29 ( 0.1 ) % 43 0.7 % Effects of changes in tax laws or rates enacted in the current period — — % — — % — — % Effect of cross-border tax laws ( 4 ) — % 3 — % 1 — % Tax credits Research and development credits ( 2,493 ) 1.8 % ( 1,672 ) 7.3 % ( 4,391 ) ( 69.3 ) % Orphan drug credits ( 775 ) 0.6 % ( 237 ) 1.0 % ( 288 ) ( 4.5 ) % Change in valuation allowance 107,490 ( 77.5 ) % — — % — — % Nontaxable or nondeductible items Section 162(m) limitation 791 ( 0.6 ) % 1,043 ( 4.5 ) % 1,088 17.2 % Stock-based compensation 968 ( 0.7 ) % 1,623 ( 7.1 ) % 1,916 30.2 % Nondeductible meals & entertainment expense 1,243 ( 0.9 ) % 479 ( 2.1 ) % 295 4.6 % Other 121 ( 0.1 ) % 178 ( 0.8 ) % 57 0.9 % Changes in unrecognized tax benefits 1,062 ( 0.8 ) % 1,363 ( 5.9 ) % 2,600 41.0 % Effective tax rate $ 81,827 ( 59.0 ) % $ ( 4,021 ) 17.6 % $ 3,830 60.4 % *The states that contribute to the majority (greater than 50%) of the tax effect in this category include California, New Jersey, and Florida for the year ended December 31, 2025, California and Florida for the year ended December 31, 2024, and Pennsylvania for the year ended December 31, 2023. The following is a summary of the components of the Company’s net deferred tax assets and the related tax valuation allowance as of December 31, 2025 and 2024. 113 Table of Contents (in thousands) December 31, 2025 December 31, 2024 Deferred tax assets Net operating loss carryforwards $ 22,000 $ 5,962 Stock-based compensation 3,306 3,606 Accrued expenses 2,427 2,113 Allowance for returns and credit losses 2,099 1,716 Research and development and orphan drug credit carryforwards 39,289 36,214 Capitalized research and development expenses 50,432 38,393 Intangible assets 1,500 — Other 6,201 4,537 Total deferred tax assets 127,254 92,541 Deferred tax liabilities Intangible assets — ( 961 ) Other ( 2,853 ) ( 1,253 ) Total deferred tax liabilities ( 2,853 ) ( 2,214 ) Deferred tax assets, net 124,401 90,327 Less: Valuation allowance 124,401 8,887 Net deferred tax assets $ — $ 81,440 The following is a summary of changes in the Company’s tax valuation allowance for the years ended December 31, 2025, 2024 and 2023: (in thousands) Balance at Beginning of Year Additions Reductions Balance at End of Year Year Ended December 31, 2025 $ 8,887 $ 115,514 $ — $ 124,401 December 31, 2024 8,547 340 — 8,887 December 31, 2023 7,136 1,411 — 8,547 The Company has NOL and other tax credit carryforwards in several jurisdictions. As of December 31, 2025, the Company has $ 13.8 million of deferred tax assets relating to U.S. federal NOL carryforwards. As of December 31, 2025 the Company has deferred tax assets of $ 20.6 million and $ 18.6 million related to U.S. federal and state research and development credits and orphan drug credits, respectively. Both of these tax attributes will begin to expire in 2031 . In addition, the Company has $ 8.2 million of deferred tax assets relating to other U.S. NOL carryforwards, which primarily relate to the District of Columbia. NOLs for the District of Columbia will begin to expire in 2032 and state NOLs will begin to expire in 2034 . A valuation allowance is recorded against these U.S. federal and state deferred tax assets. 114 Table of Contents The following is a summary of cash paid for income taxes, net of refunds received, for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, (in thousands) 2025 2024 2023 Federal $ 140 $ 2,010 $ 2,525 State Pennsylvania * * 680 Other states ( 294 ) 334 341 Foreign 64 103 17 Total cash paid for income taxes, net of refunds received $ ( 90 ) $ 2,447 $ 3,563 * Income taxes paid, net of refunds received, did not rise to the level of separate disclosure (5%) during tax year. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows: Year Ended December 31, (in thousands) 2025 2024 2023 Unrecognized tax benefits at the beginning of the year $ 18,796 $ 18,312 $ 15,485 Increases (decreases) related to prior year tax positions 87 ( 159 ) 919 Increases related to current year tax positions 796 742 2,003 Settlements — — — Statute lapses $ ( 104 ) $ ( 99 ) $ ( 95 ) Unrecognized tax benefits at the end of the year $ 19,575 $ 18,796 $ 18,312 The amount of uncertain tax benefits that, if recognized, would impact the effective tax rate is $ 19.6 million. Generally, the tax years 2022 through 2024 remain open to examination by the major taxing jurisdiction to which the Company is subject. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, or state or foreign tax authorities, to the extent utilized in a future period. Certain tax attributes of the Company, including NOLs and credit carryforwards, would be subject to limitation under Section 382 and 383 should an ownership change as defined under Section 382 of the Internal Revenue Code of 1986, as amended (IRC) occur. The limitation resulting from a change in ownership could affect the Company’s ability to utilize its NOLs and credit carryforwards (tax attributes) to offset future taxable income. An ownership change occurred in the year ended December 31, 2014. The Company believes that the ownership change in 2014 will not impact its ability to utilize NOL and credit carryforwards; however, future ownership changes may cause the Company’s existing tax attributes to have additional limitations. In July 2025, the One Big Beautiful Bill Act (OBBBA), which contains a broad range of tax reforms affecting businesses, was signed into law in the U.S. The OBBBA includes numerous changes to existing tax law including extending or making permanent certain business and international tax measures initially established under the 2017 Tax Cuts and Jobs Act, which were set to expire. Additionally, the OBBBA permanently eliminates the requirement to capitalize and amortize U.S.-based research and development expenditures over five years and provides the option to make these expenditures fully deductible in the period incurred. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. 16. Earnings per Share Basic earnings per share (EPS) is calculated by dividing the net income (loss) by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding, plus potential outstanding common stock for the period. Potential outstanding common stock includes stock options and shares underlying RSUs, but only to the extent that their inclusion is dilutive, as calculated using the treasury stock method. 115 Table of Contents The following table presents the calculation of basic and diluted net income (loss) per share of common stock for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, (in thousands, except for share and per share amounts) 2025 2024 2023 Numerator: Net income (loss) $ ( 220,474 ) $ ( 18,900 ) $ 2,509 Denominator: Weighted average shares outstanding, basic 58,930,157 58,149,087 57,380,975 Effect of dilutive securities — — 176,936 Weighted average shares outstanding, diluted 58,930,157 58,149,087 57,557,911 Net income (loss) per share, basic and diluted: Basic $ ( 3.74 ) $ ( 0.33 ) $ 0.04 Diluted $ ( 3.74 ) $ ( 0.33 ) $ 0.04 Antidilutive securities excluded from calculations of diluted net income (loss) per share 6,078,795 6,493,140 6,464,057 The Company incurred a net loss for the years ended December 31, 2025 and 2024 causing inclusion of any potentially dilutive securities to have an anti-dilutive effect, resulting in dilutive loss per share and basic loss per share attributable to common stockholders being equivalent. 17. Segments The Company operates in one reportable segment, which includes all activities related to the development and commercialization of innovative therapies to address high unmet medical needs and improve the lives of patients. The determination of a single reportable segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (CODM), which is its president, chief executive officer and chairman of the board, who reviews and evaluates consolidated net income (loss) for purposes of assessing performance, making operating decisions, allocating resources and planning and forecasting for future periods. The measure of segment assets is reported on the balance sheet as total assets. The following table presents the segment revenue and significant expense categories included within the product segment’s measure of profit or loss for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, (in thousands) 2025 2024 2023 Revenue $ 216,105 $ 198,772 $ 192,640 Less: Cost of goods sold, excluding amortization 13,044 11,314 14,796 Research and development 109,271 74,431 76,823 Selling, general and administrative 237,951 146,414 112,883 Intangible asset amortization 7,007 7,273 2,090 Other income ( 12,521 ) ( 17,739 ) ( 20,291 ) Provision (benefit) for income taxes 81,827 ( 4,021 ) 3,830 Net income (loss) $ ( 220,474 ) $ ( 18,900 ) $ 2,509 Foreign sales were not material for each of the years ended December 31, 2025, 2024 and 2023. 18. Legal Matters HETLIOZ ® . In December 2022, the Company filed patent infringement lawsuits, including Hatch-Waxman Act claims, against each of Teva Pharmaceuticals USA, Inc. (Teva) and Apotex Inc. and Apotex Corp. (Apotex) in the U.S. District Court for the District of New Jersey (NJ District Court) asserting that U.S. Patent No. 11,285,129 (‘129 Patent), will be infringed by Teva’s and Apotex’ generic versions of HETLIOZ ® , each of which was approved by the FDA. The Company asked the NJ District Court to, among other things, order that the effective date of the FDA’s approval of Teva’s and Apotex’ generic 116 Table of Contents versions of HETLIOZ ® be a date that is no earlier than the expiration of the ‘129 Patent, or such later date that the NJ District Court may determine, and enjoin each of Teva and Apotex from the commercial manufacture, use, import, offer for sale and/or sale of their generic versions of HETLIOZ ® until the expiration of the ‘129 Patent, or such later date that the NJ District Court may determine. In February 2023, the case was transferred to the U.S. District Court for the District of Delaware (Delaware District Court). In April 2023, Teva and Apotex moved for judgment on the pleadings. In June 2024, the Delaware District Court denied those motions, allowing the Company’s lawsuit to proceed. In March 2025, the Delaware District Court held a claim construction hearing, which resolved two claim term disputes in the Company’s favor and deferred ruling on a third dispute between the parties. In May 2025, the Delaware District Court consolidated this action with the Company’s action relating to the ‘556 Patent (as defined below). The Company’s lawsuit remains pending, and a trial is scheduled to begin on August 3, 2026. In January 2023, the Company filed a lawsuit in the NJ District Court against Teva challenging Teva’s advertising and marketing practices related to its at risk launch of its generic version of HETLIOZ ® for the single indication of Non-24. The Company believes that Teva’s advertising and marketing practices related to its generic version of HETLIOZ ® promote its product for uses beyond the limited labeling that Teva sought, and the FDA approved. The Company seeks to, among other things, enjoin Teva from engaging in false and misleading advertising and recover monetary damages. In December 2023, the case was transferred to the Delaware District Court following Teva’s motion to transfer and dismiss the case earlier that year. In February 2025, the Delaware District Court denied Teva’s motion to dismiss, allowing the Company’s lawsuit to proceed. In March 2025, Teva filed its answer and asserted counterclaims against the Company for alleged violations of the Lanham Act, antitrust and state trade laws. In the same month, the Delaware District Court declined to consolidate this action with the Company’s cases alleging infringement of the ‘129 Patent and the ‘556 Patent (as defined below). In January 2026, the parties filed a stipulation to dismiss the case. In January 2023, the Company filed a lawsuit in the U.S. District Court for the District of Columbia (DC District Court) against the FDA challenging the FDA’s approval of Teva’s Abbreviated New Drug Application (ANDA) for its generic version of HETLIOZ ® capsules under the Administrative Procedure Act (APA), the Food, Drug, and Cosmetic Act (FDCA), and FDA regulations. Under the FDCA, every ANDA must contain information to show that the labeling proposed for the generic drug is the same as the labeling approved for the listed drug. The labeling and packaging for HETLIOZ ® includes Braille, but Teva’s generic version does not. On this basis, the Company believes that Teva’s approved labeling does not comply with applicable requirements. The Company has asked the DC District Court to, among other things, vacate the FDA’s approval of Teva’s ANDA, declare that the approval of the ANDA was unlawful, arbitrary, and capricious and compel the FDA to order Teva to recall its generic HETLIOZ ® product. In February 2023, Teva intervened in the lawsuit as a defendant. In September 2023, the Company amended its lawsuit to request that the DC District Court set aside the FDA’s July 2023 denial of the Company’s citizen petition, originally filed with the FDA in January 2023. In April 2024, the Company filed a motion for summary judgment. In February 2025, the DC District Court denied the Company’s motion and granted the FDA and Teva’s cross motions for summary judgment. In February 2025, the Company appealed to the U.S. Court of Appeals for the District of Columbia Circuit (DC Circuit). In October 2025, the DC Circuit granted the FDA’s motion for a stay of the briefing schedule that it filed in October 2025 due to the government shutdown, and the stay was lifted in November 2025. The Company’s appeal remains pending, and oral argument is scheduled for March 12, 2026. In September 2023, the Company filed a lawsuit in the DC District Court against the FDA challenging the FDA’s approval of an ANDA filed by MSN Pharmaceuticals Inc. and MSN Laboratories Private Limited (MSN) for its generic version of HETLIOZ ® capsules under the APA, the FDCA, FDA regulations and the Appointments Clause of the U.S. Constitution. The Company believes that MSN’s underlying approval data, particularly its bioequivalence studies, are faulty. On this basis, the Company asked the DC District Court to, among other things, vacate the FDA’s approval of MSN’s ANDA, declare that the approval of the ANDA was unlawful, arbitrary, and capricious, is unconstitutional under the Appointments Clause, and compel the FDA to order MSN to recall its generic HETLIOZ ® product. In December 2023, the Company filed a motion for summary judgment. In January 2024, the FDA opposed the Company’s motion and moved to waive the administrative record, following which the court held an oral argument on the cross-motions. The DC District Court issued an order compelling the FDA to serve the administrative record and set deadlines for further proceedings. In April 2024, the Company filed a motion for summary judgment. In July 2024, the DC District Court held an oral argument on the motion to dismiss that the FDA filed in January 2024, which the Company opposed in February 2024. In September 2024, the DC District Court granted in part the FDA’s motion to dismiss as to the Company’s APA claims and denied the FDA’s motion to dismiss as to the Company’s claims under the Appointments Clause. In August 2025, the Company filed a motion for summary judgment based on its Appointments Clause claims, to which the FDA filed an opposition and cross-motion for summary judgment in September 2025. In January 2026, the DC District Court denied the cross-motions for summary judgment without prejudice and stayed the case pending resolution of an agency appeal. The Company’s lawsuit remains pending. 117 Table of Contents In April 2024, the Company filed a lawsuit in the Delaware District Court against MSN and its commercial partner Amneal Pharmaceuticals, Inc. (Amneal), and Impax Laboratories LLC (Impax) alleging claims for false advertising in violation of the Lanham Act and unfair competition under several state laws as well as claims for breach of express representation and fraudulent inducement of a license agreement. In July 2024, the defendants filed a motion to dismiss and in September 2024, the Company opposed the motion, to which the defendants replied in October 2024. In July 2025, the Delaware District Court issued its report and recommendation to deny the defendants’ motion to dismiss as to standing but granted their motion to dismiss the Lanham Act claims, to which the Company objected in August 2025. In September 2025, the Delaware District Court overruled the Company’s objections. In October 2025, the Company appealed the Delaware District Court’s decision. The Company’s lawsuit remains pending. In December 2024, the Company filed a lawsuit in the Delaware District Court against each of Teva and Apotex asserting U.S. Patent No. 11,918,556 (‘556 Patent), a method of administration patent that was not litigated in the prior Delaware District Court cases, will be infringed by Teva’s and Apotex’s generic versions of HETLIOZ ® , each of which was approved by the FDA. The Company has asked the Delaware District Court to, among other things, order that the effective date of the FDA’s approval of Teva’s and Apotex’ generic versions of HETLIOZ ® be a date that is no earlier than the expiration of the ‘556 Patent, or such later date that the Delaware District Court may determine, and enjoin each of Teva and Apotex from the commercial manufacture, use, import, offer for sale and/or sale of their generic versions of HETLIOZ ® until the expiration of the ‘556 Patent, or such later date that the Delaware District Court may determine. In March 2025, Teva filed its answer and asserted counterclaims against the Company, including, among other things, for alleged violation of the antitrust laws and inequitable conduct, which the Company opposed in May 2025. The Delaware District Court declined to consolidate this action with the Company’s case alleging Lanham Act violations against Teva but consolidated this action with the Company’s action relating to the ‘129 Patent. The Company’s lawsuit remains pending, and a trial is scheduled to begin on August 3, 2026. HETLIOZ LQ ® . In July 2024, the Company filed a Hatch-Waxman lawsuit against MSN in the Delaware District Court asserting that U.S. Patent Nos. 10,179,119, 11,266,622, 11,285,129, 11,850,229, 10,610,510, 10,980,770, and 11,759,446 will be infringed by MSN’s generic version of HETLIOZ LQ ® for which MSN is seeking FDA approval. In June 2025, the Company filed an amended complaint against MSN, further alleging that U.S. Patent Nos. 10,071,977, 11,566,011 and 11,918,556 (all asserted HETLIOZ LQ ® patents together, the Asserted Patents) will also be infringed by MSN’s generic version of HETLIOZ LQ ® . The Company has asked the Delaware District Court to, among other things, enter judgment that MSN has infringed at least one claim of each of the Asserted Patents by submitting or causing to be submitted its ANDA to obtain FDA approval for the commercial manufacture, use, import, offer for sale and/or sale in the U.S. of its generic version of HETLIOZ LQ ® before the expiration of each of the Asserted Patents, enter judgment that the use of MSN’s generic version of HETLIOZ LQ ® in the U.S. before the expiration of each of the Asserted Patents will directly infringe at least one claim of each of the Asserted Patents, order that the effective date of any approval by the FDA of MSN’s generic version of HETLIOZ LQ ® be a date that is no earlier than the expiration of the last expiring Asserted Patent(s), or such later date as the Court may determine, enjoin MSN from the commercial manufacture, use, import, offer for sale and/or sale of its generic version of HETLIOZ LQ ® until the expiration of each of the Asserted Patents or such later date as the Court may determine, and award monetary damages, to the extent applicable. The Company’s lawsuit remains pending, and a trial is scheduled to begin on September 14, 2026. Other Matters . From April 2022 to July 2024, the Company filed eighteen lawsuits in the DC District Court against the FDA to compel the FDA to produce records under the Freedom of Information Act (FOIA) regarding, among other matters: the FDA’s denial of the Company’s supplemental New Drug Application (sNDA) for HETLIOZ ® in the treatment of jet lag disorder; cases in which the FDA waived its putative requirement of a 9-month non-rodent toxicity study before drugs can be tested on human patients for extended durations; communications external to and within the FDA relating to NEREUS TM , HETLIOZ ® and Fanapt ® ; a warning letter that the FDA sent to the Company concerning its webpages for HETLIOZ ® and Fanapt ® ; the FDA’s removal of a clinical trials design presentation from its website; discipline reviews relating to the FDA’s evaluations of the Company’s sNDA for HETLIOZ ® and a third-party sNDA for jet lag; internal standard operating procedures or guidance relating to the FDA’s processing of incoming FOIA requests; and bioequivalence and other study reports submitted relating to the FDA’s consideration of tasimelteon ANDAs. Nine of these lawsuits have since been resolved in the Company’s favor and the other nine remain outstanding. The FDA has failed to respond and provide the requested documents within the statutory timeframe with respect to each of these nine outstanding cases. The Company has asked the DC District Court to, among other things, compel the FDA to comply with its obligations and declare that its lack of compliance violates FOIA. In May 2022, the Company filed a lawsuit in the DC District Court against the FDA challenging the FDA’s denial of Fast Track designation for NEREUS TM . In October 2021, the Company submitted to the FDA a request for Fast Track designation for NEREUS TM under the Food and Drug Administration Modernization Act of 1997 (FDAMA). The FDAMA provides for expedited development and review of drugs that receive Fast Track designation from the FDA. Under the FDAMA, the FDA must designate a drug as a Fast Track product if it both (1) is intended to treat a serious or life-threatening disease or condition and (2) demonstrates the potential to address unmet medical needs for such disease or condition. Although 118 Table of Contents Fast Track designation is non-discretionary when the criteria are satisfied, the FDA denied the Company’s request for Fast Track designation. The Company does not believe that the FDA based its decision on the relevant criteria. Therefore, among other reasons, the Company maintains that the FDA’s denial is unlawful. The Company has asked the DC District Court to, among other things, set aside and vacate the FDA’s denial. An oral argument was held in January 2023. In August 2023, the DC District Court ruled against the Company. In September 2023, the Company appealed the ruling to the U.S. Court of Appeals for the District of Columbia Circuit and in September 2024, the Court of Appeals held an oral argument. In December 2024, the Court of Appeals affirmed the DC District Court’s ruling. In May 2025, the Company filed a petition for a writ of certiorari with the U.S. Supreme Court to review the Court of Appeals’ decision, to which the FDA filed an opposition in October 2025. In November 2025, the U.S. Supreme Court denied the Company’s petition for certiorari. In September 2022, the Company filed a lawsuit in the DC District Court against the FDA to compel the FDA to comply with two separate non-discretionary obligations under the FDCA and its implementing regulations: an obligation to publish a notice of an opportunity for a hearing on the Company’s sNDA for HETLIOZ ® in the treatment of jet lag disorder in the Federal Register within 180 days of the filing of the sNDA, and a separate obligation to publish the same notice within 60 days of the request for a hearing. The FDA published the notice of an opportunity for a hearing on October 11, 2022. The Company has asked the DC District Court to, among other things, compel the FDA to comply with its obligations and declare that its lack of compliance violates the FDCA and the FDA regulations. In January 2024, the DC District Court held an oral argument on dispositive cross-motions, following which the DC District Court granted in part the Company’s motion for summary judgment. The DC District Court ruled that the FDA violated the statute and ordered the FDA to either finally resolve the Company’s application or commence a hearing on or before March 5, 2024. In March 2024, the Company and the FDA filed a consent motion for entry of final judgment in the Company’s favor on its APA claim for the FDA’s unreasonable delay in resolving the hearing request, following which the FDA refused to hold a hearing or approve the Company’s sNDA for HETLIOZ ® in the treatment of jet lag disorder. The Company subsequently filed a petition for review in the DC Circuit. Under the FDCA, the FDA has an obligation to either approve an sNDA or to hold a hearing on the application’s approvability. The Company’s petition asks the DC Circuit to set aside the FDA’s order refusing to hold a hearing and refusing approval. In January 2025, the DC Circuit held an oral argument. In August 2025, the DC Circuit issued a decision in favor of the Company against the FDA, setting aside the FDA’s refusal to hold a hearing on the Company’s sNDA for HETLIOZ ® in the treatment of jet lag disorder and remanding the case back to the FDA. In October 2025, the Company announced that it had entered into a collaborative framework with the FDA for the resolution of certain of its disputes regarding HETLIOZ ® and NEREUS TM (the FDA Agreement), pursuant to which, the FDA agreed to conduct an expedited re-review of the sNDA and the Company sought a temporary abeyance in these proceedings. In January 2026, the FDA notified the Company that, following its re-review of the sNDA, it has determined that the sNDA cannot be approved in its current form. In January 2026, the Company requested that the FDA Commissioner resume hearing proceedings. In May 2023, the Company filed a lawsuit in the U.S. Court of Federal Claims (Federal Claims Court) against the federal government for the uncompensated taking and misuse of the Company’s trade secrets and confidential information. The Company believes that the FDA violated the Fifth Amendment’s due process clause by improperly providing confidential details from the Company’s drug master files for HETLIOZ ® and Fanapt ® to generic drug manufacturers during the FDA’s review of the manufacturers’ ANDAs. The Company has asked the Federal Claims Court to, among other things, declare that the FDA’s disclosure of the Company’s confidential commercial information constitutes a taking for purposes of the Fifth Amendment and award just compensation. The federal government filed a motion to dismiss the complaint, which the Company opposed. In January 2024, the Federal Claims Court held an oral argument on the motion to dismiss, following which the Federal Claims Court issued a decision denying in part the government’s motion, allowing the Company’s takings claim to proceed. In April 2024, the government filed a judgment on the pleadings, to which the Company opposed in July 2024 and the government replied in August 2024. In December 2024, the Federal Claims Court held an oral argument on the motion for judgment on the pleadings and in January 2025, the Federal Claims Court ruled against the Company. In February 2025, the Company appealed the ruling to the U.S. Court of Appeals for the Federal Circuit. The Company’s appeal remains pending. In February 2024, the Company filed a lawsuit in the DC District Court against the FDA to compel the FDA to comply with its statutory obligations under the FDCA and its implementing regulations, and to challenge the FDA’s complete response letter and 60-day filing regulations, which the Company believes do not absolve the FDA of its statutory responsibilities. Under the FDCA, the FDA has an obligation to either approve the Company’s sNDA for HETLIOZ ® in the treatment of insomnia characterized by difficulties with sleep initiation within 180 days of the filing of the sNDA or give the Company a notice of an opportunity for a hearing. The Company submitted the sNDA on May 4, 2023. The Company has asked the DC District Court to, among other things, compel the FDA to comply with its obligations, declare that its lack of compliance violates the FDCA and the FDA regulations and declare the FDA’s complete response letter and 60-day filing regulations unlawful. In June 2024, the Company filed a motion for summary judgment and the FDA published a notice of opportunity for a hearing. In July 2024, the FDA opposed the Company’s motion for summary judgment. In September 2024, the DC District Court held an oral argument on the dispositive cross motions. In March and April 2025, the parties provided supplemental briefing. In May 2025, 119 Table of Contents the DC District Court held a further hearing on the supplemental briefings. In September 2025, the Company filed a motion to stay proceedings in the case until January 2026 pursuant to the FDA Agreement. In January 2026, the Company and the FDA asked the DC District Court to lift the abeyance. The Company’s lawsuit remains pending. In August 2024, the Company filed a lawsuit against the FDA in the DC District Court challenging FDA decisionmakers’ authority under the Appointments Clause of the U.S. Constitution to render a decision on the Company’s new drug application for NEREUS TM to treat symptoms of gastroparesis. In September 2024, the Company filed a motion for a preliminary injunction to enjoin the FDA from subjecting the Company’s NDA for NEREUS TM for the treatment of symptoms of gastroparesis to a final decision prior to the PDUFA target date of September 18, 2024. In September 2024, the DC District Court denied the motion. The Company filed a motion for summary judgment in December 2024, and in January 2025, the FDA opposed the motion and cross-moved to dismiss and for summary judgment. In February 2025, the Company filed its reply and opposition, to which the FDA replied in March 2025. The Company’s lawsuit remains pending. In January 2025, the Company and a co-plaintiff filed a lawsuit against the FDA in the U.S. District Court for the Middle District of Florida (Florida District Court) challenging the FDA’s partial clinical hold preventing the Company from studying the effects of NEREUS TM for the prevention of motion sickness for more than 90 total doses per patient over a period of two years. The FDA based its partial clinical hold on the Company’s refusal to perform a repeat-dose toxicity study in a non-rodent species of at least a 6-month duration. However, under the FDA Modernization Act 2.0, nonclinical studies may include non-animal alternatives. The Company believes that the FDA’s basis for the partial clinical hold is contrary to law and in excess of the FDA’s statutory authority. The Company and co-plaintiff have asked the Florida District Court to, among other things, set aside the FDA’s partial clinical hold and declare the FDA’s partial clinical hold as unlawful. In March 2025, the FDA moved to dismiss the lawsuit and subsequently moved to stay summary judgment briefing in April 2025. The Company subsequently opposed the FDA’s motion to stay, following which the Florida District Court granted the FDA’s motion. In October 2025, the Company dismissed the case pursuant to the FDA Agreement. In February 2025, the Company filed a lawsuit in the DC District Court against the FDA to compel the FDA to comply with its statutory obligations under the FDCA and its implementing regulations and to challenge the FDA’s reliance on PDUFA deadlines and its complete response letter and 60-day filing regulations, which the Company believes do not absolve the FDA of its statutory responsibilities. Under the FDCA, the FDA has an obligation to either approve the Company’s NDA for NEREUS TM to prevent vomiting induced by motion within 180 days of the filing of the NDA or give the Company a notice of an opportunity for a hearing. The Company submitted the NDA on December 30, 2024. The Company has asked the DC District Court to, among other things, compel the FDA to comply with its obligations, declare that its lack of compliance violates the FDCA and the FDA regulations and declare the FDA’s complete response letter and 60-day filing regulations and adherence to PDUFA deadlines unlawful. Separately, under the FDCA, the FDA has an obligation to commence a hearing on the Company’s NDA for NEREUS TM in gastroparesis within 120 days of a timely accepted notice of opportunity for a hearing, which the FDA issued on January 7, 2025. In April 2025, the Company filed a motion for summary judgment regarding its motion sickness NDA and requested to file summary judgment regarding its gastroparesis NDA. In May 2025, the DC District Court held a hearing on the motion regarding the motion sickness NDA, and the FDA approved the motion sickness NDA in December 2025. The Center for Drug Evaluation and Research issued a proposed order denying a hearing on the gastroparesis NDA in July 2025. In September 2025, the Company filed a motion to stay proceedings in the DC District Court regarding the gastroparesis NDA until January 2026 pursuant to the FDA Agreement. In January 2026, the Company and the FDA asked the DC District Court to lift the abeyance. The Company’s lawsuit remains pending. In April 2025, the Company filed a petition for review in the U.S. Court of Appeals for the DC Circuit seeking review of the FDA’s final order refusing to hold a hearing or to approve the Company’s sNDA for HETLIOZ ® in the treatment of insomnia associated with difficulties with sleep initiation. Under the FDCA, the FDA has an obligation to either approve an sNDA or to hold a hearing on the application’s approvability. The Company’s petition asks the DC Circuit to set aside the FDA’s order refusing to hold a hearing and refusing approval. The Company’s petition for review remains pending. In April 2025, the Company and two co-plaintiffs filed a lawsuit against the FDA in the U.S. District Court for the Southern District of Texas (Texas District Court) challenging the FDA’s prohibition of the Company’s proposal to disclose truthful, non-misleading information to prescribers and patients, including the co-plaintiffs, about the off-label use of HETLIOZ ® to treat jet lag disorder. The Company believes that the FDA’s prohibition of truthful, non-misleading speech promoting off-label uses of drugs is content-based speech regulation and unconstitutional under the First Amendment. The Company has asked the Texas District Court to, among other things, declare that the Company has a right under the First Amendment to engage in truthful, non-misleading speech regarding the potential use of HETLIOZ ® as a treatment for jet lag disorder and enjoin the FDA from taking adverse action against the Company relating to such communications. In July 2025, the FDA moved to stay case deadlines pending resolution of a forthcoming motion that it will file to dismiss or transfer the case. In October 2025, the Company dismissed the case pursuant to the FDA Agreement. 120 Table of Contents 121 Table of Contents VANDA PHARMACEUTICALS INC. EXHIBIT INDEX Exhibit Number Description 3.1 Form of Amended and Restated Certificate of Incorporation of the registrant (filed as Exhibit 3.8 to Amendment No. 2 to the registrant’s registration statement on Form S-1 (File No. 333-130759) on March 17, 2006 and incorporated herein by reference). 3.2 Amended and Restated Bylaws of the registrant, as amended and restated on October 2, 2024 (filed as Exhibit 3.1 to the registrant’s current report on Form 8-K (File No. 001-34186) on October 3, 2024 and incorporated herein by reference). 3.3 Amended and Restated Certificate of Designation of Rights, Preferences and Privileges of Series A Junior Participating Preferred Stock of Vanda Pharmaceuticals Inc. (filed as Exhibit 3.1 to the registrant’s current report on Form 8-K (File No. 001-34186) on April 17, 2024, and incorporated herein by reference). 4.1 Specimen certificate representing the common stock of the registrant (filed as Exhibit 4.4 to Amendment No. 2 to the registrant’s registration statement on Form S-1 (File No. 333-130759) on March 17, 2006, and incorporated herein by reference). 4.2 Description of Securities of the registrant (filed as Exhibit 4.2 to the registrant’s Annual Report on Form 10-K (File No. 001-34186) on February 24, 2022 and incorporated herein by reference). 10.1 Amended and Restated License, Development and Commercialization Agreement, dated July 24, 2005, by and between Bristol-Myers Squibb Company and the registrant (relating to HETLIOZ®) (filed as Exhibit 10.3 to Amendment No. 1 to the registrant’s registration Statement on Form S-1 (File No. 333-130759) on February 16, 2006 and incorporated herein by reference). 10.2† Form of Indemnification Agreement entered into by directors and executive officers (filed as Exhibit 10.11 to the registrant’s registration statement on Form S-1 (File No. 333-130759) on December 29, 2005 and incorporated herein by reference). 10.3† 2006 Equity Incentive Plan, as amended (filed as Exhibit 10.17 to Amendment No. 2 to the registrant’s Registration Statement on Form S-1 (File No. 333-130759), as filed on March 17, 2006, and incorporated herein by reference). 10.4† Amended and Restated Employment Agreement, dated December 16, 2008, by and between Mihael H. Polymeropoulos and the registrant (filed as Exhibit 10.34 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on August 10, 2009 and incorporated herein by reference). 10.5† Amendment to Amended and Restated Employment Agreement, dated December 16, 2010, by and between Mihael H. Polymeropoulos and the registrant (filed as Exhibit 10.39 to the registrant’s annual report on Form 10-K (File No. 001-34186) on March 10, 2011 and incorporated herein by reference). 10.6† Amended and Restated Tax Indemnity Agreement, dated December 16, 2010, by and between Mihael H. Polymeropoulos and the registrant (filed as Exhibit 10.41 to the registrant’s annual report on Form 10-K (File No. 001-34186) on March 10, 2011 and incorporated herein by reference). 10.7 Lease, effective as of July 25, 2011, by and between Square 54 Office Owner LLC and the registrant (filed as Exhibit 10.42 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on November 7, 2011 and incorporated herein by reference). 10.8 Amendment to Amended and Restated License, Development and Commercialization Agreement, dated as of April 15, 2010, by and between Bristol-Myers Squibb Company and the registrant (filed as Exhibit 10.38 to the registrant’s current report on Form 8-K (File No. 001-34186) on April 19, 2010 and incorporated herein by reference). 10.9 Ninth Amendment to Amended and Restated License, Development and Commercialization Agreement, dated as of May 24, 2012, by and between Bristol-Myers Squibb Company and the registrant (filed as Exhibit 10.46 to the registrant’s current report on Form 8-K (File No. 001-34186) on May 30, 2012 and incorporated herein by reference). 10.10 License, Development and Commercialization Agreement, dated as of April 12, 2012, by and between Eli Lilly and Company and the registrant (filed as Exhibit 10.48 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on August 3, 2012 and incorporated herein by reference). 122 Table of Contents Exhibit Number Description 10.11 Tenth Amendment to Amended and Restated License, Development and Commercialization Agreement, dated as of April 25, 2013, by and between Bristol-Myers Squibb Company and the registrant (filed as Exhibit 10.50 to the registrant’s current report on Form 8-K (File No. 001-34186) on April 29, 2013 and incorporated herein by reference). 10.12 ‡ Manufacturing Agreement, dated January 24, 2014, by and between Patheon Pharmaceuticals Inc. and the registrant (relating to HETLIOZ®) (filed as Exhibit 10.12 to the registrant’s annual report on Form 10-K (File No. 001-34186) on February 24, 2022 and incorporated herein by reference). 10.13 First Amendment to Lease Agreement, dated March 18, 2014, by and between Square 54 Office Owner LLC and the registrant (filed as Exhibit 10.54 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on May 8, 2014 and incorporated herein by reference). 10.14 Settlement Agreement and Mutual General Release, dated December 22, 2014, by and among Novartis Pharma AG and the registrant (filed as Exhibit 10.55 to the registrant’s annual report on Form 10-K (File No. 001-34186) on March 13, 2015 and incorporated herein by reference). 10.15 Asset Transfer Agreement, dated December 22, 2014, by and among Novartis Pharma AG, Novartis AG and the registrant (relating to Fanapt®) (filed as Exhibit 10.56 to the registrant’s annual report on Form 10-K/A (File No. 001-34186) on June 10, 2015 and incorporated herein by reference). 10.16 Sublicense Agreement, dated November 20, 1997, by and between Titan Pharmaceuticals, Inc. and Novartis Pharma AG (filed as Exhibit 10.30 to Titan Pharmaceutical Inc.’s registration statement on Form S-3 (File No. 333-42367) on December 16, 1997 and incorporated herein by reference). 10.17 Amendment No. 1 to Sublicense Agreement by and between Titan Pharmaceuticals, Inc. and Novartis Pharma AG, dated November 30, 1998 (filed as Exhibit 10.58 to the registrant’s annual report on Form 10-K (File No. 001-34186) on March 13, 2015 and incorporated herein by reference). 10.18 Amendment No. 2 to Sublicense Agreement, dated April 10, 2001, by and between Titan Pharmaceuticals, Inc. and Novartis Pharma AG (filed as Exhibit 10.59 to the registrant’s annual report on Form 10-K/A (File No. 001-34186) on June 10, 2015 and incorporated herein by reference). 10.19 Amendment No. 3 to Sublicense Agreement, dated June 4, 2004, by and between Titan Pharmaceuticals, Inc. and Novartis Pharma AG (filed as Exhibit 10.60 to the registrant’s annual report on Form 10-K (File No. 001-34186) on March 13, 2015 and incorporated herein by reference). 10.20 Stock Purchase Agreement, dated December 22, 2014, by and between Novartis AG and the registrant (filed as Exhibit 10.61 to the registrant’s annual report on Form 10-K (File No. 001-34186) on March 13, 2015 and incorporated herein by reference). 10.21 License Agreement, dated December 22, 2014, by and between Novartis Pharma AG and the registrant (relating to AQW051) (filed as Exhibit 10.62 to the registrant’s annual report on Form 10-K (File No. 001-34186) on March 13, 2015 and incorporated herein by reference). 10.22 Agreement, dated February 2, 2016, by and among Titan Pharmaceuticals, Inc., Aventisub LLC, the successor-in-interest to Aventisub II Inc. Sanofi-Aventis and the registrant (filed as Exhibit 10.1 to the registrant’s current report on Form 8-K (File No. 001-34186) on February 4, 2016 and incorporated herein by reference). 10.23† Vanda Pharmaceuticals Inc. Amended and Restated 2016 Equity Incentive Plan, as amended effective as of June 5, 2025 (filed as Exhibit 10.1 to the registrant’s registration statement on Form S-8 (File No. 333-287808) on June 5, 2025 and incorporated herein by reference). 10.24† UK Sub Plan under the Amended and Restated 2016 Equity Incentive Plan (filed as Exhibit 10.4 to the registrant’s registration statement on Form S-8 (File No. 333-218774) on June 15, 2017 and incorporated herein by reference). 10.25 ‡ Manufacturing Agreement, dated May 6, 2016, by and between Patheon Pharmaceuticals Inc. and the registrant (relating to Fanapt®) (filed as Exhibit 10.29 to the registrant’s annual report on Form 10-K (File No. 001-34186) on February 24, 2022 and incorporated herein by reference). 10.26 Second Amendment to Lease Agreement, dated June 20, 2016, by and between Square 54 Office Owner LLC and the registrant (filed as Exhibit 10.43 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on July 28, 2016 and incorporated herein by reference). 10.27 Sublease Agreement, dated June 22, 2016, by and between Hunton & Williams LLP and the registrant (filed as Exhibit 10.44 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on July 28, 2016 and incorporated herein by reference). 123 Table of Contents Exhibit Number Description 10.28 License Agreement, dated October 24, 2016, by and among Taro Pharmaceuticals USA, Inc., Taro Pharmaceuticals Industries Ltd. and the registrant (filed as Exhibit 10.45 to the registrant’s annual report on Form 10-K (File No. 001-34186) on February 17, 2017 and incorporated herein by reference). 10.29 License Agreement, dated December 7, 2016, by and between Apotex, Inc. and the registrant (filed as Exhibit 10.46 to the registrant’s annual report on Form 10-K (File No. 001-34186) on February 17, 2017 and incorporated herein by reference). 10.30 Third Amendment to Lease Agreement, dated March 28, 2018, by and between Square 54 Office Owner LLC and the registrant (filed as Exhibit 10.38 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on May 2, 2018 and incorporated herein by reference). 10.31 Fourth Amendment to Lease Agreement, dated March 29, 2018, by and between Square 54 Office Owner LLC and the registrant (filed as Exhibit 10.39 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on May 2, 2018 and incorporated herein by reference). 10.32† Amended and Restated Employment Agreement, dated April 30, 2018, by and between Gunther Birznieks and the registrant (filed as Exhibit 10.40 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on May 2, 2018 and incorporated herein by reference). 10.33† Employment Agreement, dated August 13, 2018, by and between Timothy Williams and the registrant (filed as Exhibit 10.41 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on November 7, 2018 and incorporated herein by reference). 10.34† Employment Agreement, dated August 5, 2019, by and between Joakim Wijkstrom and the registrant (filed as Exhibit 10.41 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on November 7, 2019 and incorporated herein by reference). 10.35† Amended and Restated Employment Agreement, dated July 27, 2020, by and between Kevin Moran and the registrant (filed as Exhibit 10.1 to the registrant’s current report on Form 8-K (File No. 001-34186) on July 29, 2020 and incorporated herein by reference). 10.36 Fifth Amendment to Lease Agreement, dated April 11, 2019, by and between Square 54 Office Owner LLC and the registrant (filed as Exhibit 10.40 to the registrant’s annual report on Form 10-K (File No. 001-34186) on February 10, 2021 and incorporated herein by reference). 10.37 Sixth Amendment to Lease Agreement, dated May 7, 2020, by and between Square 54 Office Owner LLC and the registrant (filed as Exhibit 10.41 to the registrant’s annual report on Form 10-K (File No. 001-34186) on February 10, 2021 and incorporated herein by reference). 10.38 License Agreement, dated January 13, 2022, by and among MSN Pharmaceuticals Inc., MSN Laboratories Private Limited, Impax Laboratories LLC and the registrant (filed as Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on May 6, 2022 and incorporated herein by reference). 10.39† Form of Restricted Stock Unit Award Agreement for U.S. Employees under the Amended and Restated 2016 Equity Incentive Plan (filed as Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on November 9, 2023 and incorporated herein by reference). 10.40† Form of Restricted Stock Unit Award Agreement for Senior Management under the Amended and Restated 2016 Equity Incentive Plan (filed as Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on May 8, 2025 and incorporated herein by reference). 10.41† Form of Restricted Stock Unit Award Agreement for Outside Directors under Amended and Restated 2016 Equity Incentive Plan, as amended (filed as Exhibit 10.3 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on November 9, 2023 and incorporated herein by reference). 10.42† Form of Restricted Stock Unit Award Agreement for UK Employees under the UK Sub Plan under Amended and Restated 2016 Equity Incentive Plan, as amended (filed as Exhibit 10.4 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on November 9, 2023 and incorporated herein by reference). 10.43† Form of Notice of Stock Option Grant and Stock Option Agreement for U.S. Employees under Amended and Restated 2016 Equity Incentive Plan, as amended (filed as Exhibit 10.5 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on November 9, 2023 and incorporated herein by reference). 10.44† Form of Notice of Stock Option Grant and Stock Option Agreement for Senior Management under Amended and Restated 2016 Equity Incentive Plan, as amended (filed as Exhibit 10.6 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on November 9, 2023 and incorporated herein by reference). 124 Table of Contents Exhibit Number Description 10.45† Form of Notice of Stock Option Grant and Stock Option Agreement for Outside Directors under Amended and Restated 2016 Equity Incentive Plan, as amended (filed as Exhibit 10.7 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on November 9, 2023 and incorporated herein by reference). 10.46† Form of Notice of Stock Option Grant and Stock Option Agreement for UK Employees under the UK Sub Plan under Amended and Restated 2016 Equity Incentive Plan, as amended (filed as Exhibit 10.8 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on November 9, 2023 and incorporated herein by reference). 10.47‡ Asset Purchase Agreement, dated December 7, 2023, by and between Actelion Pharmaceuticals Ltd. and the registrant (filed as Exhibit 10.47 to the registrant’s annual report on Form 10-K (File No. 001-34186) on February 8, 2024 and incorporated herein by reference). 10.48 Seventh Amendment to Lease Agreement, dated June 24, 2025, by and between Square 54 Office Owner LLC and the registrant (filed as Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q (File No. 001-34186) on July 31, 2025 and incorporated herein by reference). 19.1* Securities Trading Policy 21.1 List of Subsidiaries (filed as Exhibit 21.1 to the registrant’s annual report on Form 10-K (File No. 001-34186) on February 10, 2021 and incorporated herein by reference). 23.1* Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm. 31.1* Certification of the Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of the Chief Financial Officer as required by Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of the Chief Executive Officer and Chief Financial Officer as required by Section 906 of the Sarbanes-Oxley Act of 2002. 97 Policy Relating to Recovery of Erroneously Awarded Compensation (filed as Exhibit 97 to the registrant’s annual report on Form 10-K (File No. 001-34186) on February 8, 2024 and incorporated herein by reference). 101* The following financial information from this annual report on Form 10-K for the fiscal year ended December 31, 2025, formatted in Inline Extensible Business Reporting Language (iXBRL) and furnished electronically herewith: (i) Consolidated Balance Sheets as of December 31, 2025 and 2024; (ii) Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023; (iii) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025, 2024 and 2023; (iv) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023; and (vi) Notes to Consolidated Financial Statements. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). † Indicates management contract or compensatory plan or arrangement. ‡ Portions of this exhibit have been omitted under rules of the Securities and Exchange Commission permitting the confidential treatment of select information. * Filed herewith. ** Furnished herewith. 125