HRMY 10-K & 10-Q changes, risk factors and insider trading

Historically, our business has been substantially dependent on WAKIX and our financial results have been significantly influenced by sales of WAKIX, which was approved for the treatment of EDS in adult patients with narcolepsy in August 2019 and for the treatment of cataplexy in adult patients with narcolepsy in October 2020. In June 2024, the FDA approved WAKIX for the treatment of excessive daytime sleepiness in pediatric patients,patients six years and older,older with narcolepsy. In February 2026, the FDA approved WAKIX for the treatment of cataplexy in pediatric patients six years and older with narcolepsy. In addition to the risks discussed elsewhere in this section, our ability to generate revenue from sales of WAKIX depends on a number of factors, including, but not limited to:

In our efforts to market WAKIX for the treatment of EDS in adult patients with narcolepsy and/or cataplexy in adult patients with narcolepsy,adults and forpediatric EDS in childrenpatients six years and older with narcolepsy, our revenue is dependent, in part, on the size of the markets in the United States, or in other territories where we may seek and obtain regulatory approval, the number of competitors in such markets, the acceptance of the price of WAKIX in those markets and the ability to obtain reimbursement at any price. If the number of our addressable patients is not as large as we estimate or the reasonably accepted population for treatment is narrowed by competition, physician choice or treatment guidelines, we may not generate significant revenue from sales of WAKIX. If we are not able to generate substantial revenue from the sale of WAKIX, we may not remain profitable.

Even with the requisite approvals from the FDA and other regulatory authorities, the continued commercial success of WAKIX for the treatment of EDS in adult patients with narcolepsy and/or cataplexy in adultadults and pediatric patients six years and older with narcolepsy, and any other indications and product candidates we may develop, will depend on the degree of their acceptance by physicians, patients, third-party payors and others in the medical community. If WAKIX or any other product candidates we develop do not achieve an adequate level of market acceptance, we may not generate significant product revenue or any profits from operations. The degree of market acceptance of WAKIX or any other product candidates we develop, if approved for commercial sale, will depend on a number of factors, some of which are beyond our control, including:

We may not be successful in our efforts to identify,identify in-licenseother indications for pitolisant beyond EDS and/or cataplexy in adults and pediatric patients six years and older or, in-license, acquire, discover, develop or commercialize additional product candidates,candidates or identifyon-market other indications for pitolisant beyond EDS or cataplexy in adult patients with narcolepsy.products.

Although a substantial amount of our effort is focused on the commercialization of WAKIX for the treatment of EDS in adult patients with narcolepsy and/or cataplexy in adultadults and pediatric patients six years and older with narcolepsy, we also may seek to identify, in-license or acquire, discover, develop and commercialize additional product candidates in the rare neurological disorders field, such as our recent Epygenix acquisition, and to identify other indications for pitolisant beyond the treatment of EDS in adult patients with narcolepsy and/or cataplexy in adultadults and pediatric patients six years and older with narcolepsy. We cannot assure you that our efforts to do so will be successful. Even if we are successful at in-licensing or acquiring additional product candidates, their requisite development activities may require substantial resources, and we cannot assure you that these development activities will result in regulatory approvals. We also cannot assure you that our efforts to develop and commercialize pitolisant for other indications beyond the treatment of EDS in adult patients with narcolepsy and cataplexy in adult patients with narcolepsy will be successful.

We do not currently have, nor do we plan to acquire, the infrastructure or capability to manufacture or distribute commercial quantities of WAKIX or our product candidates. Our ability to commercially supply WAKIX and our ability to obtain adequate supplies of our product candidates for clinical studies depends, in part, on the ability of third-party manufacturers to supply and manufacture the raw materials, API and other important components related to the manufacture of WAKIX and our product candidates. We also rely on third parties to package the finished product. These third-party manufacturers have limited experience manufacturing the raw materials and API for WAKIX and our product candidates to be supplied to patients in the United States. Prior to the approval of WAKIX, we experienced minor issues related to product specifications and other minor delays in supply related to our third-party suppliers and manufacturers. We cannot guarantee that even minor changes in the process will result in products that are safe and, where applicable, effective. If we fail to develop and maintain supply relationships with these third parties, we may be unable to continue to successfully commercialize WAKIX and any product candidates that may receive approval.

In the event of any of the foregoing, if we do not have an alternative supplier or manufacturer in place, we would be required to expend substantial management time and expense to identify, qualify and transfer technical processes to alternative suppliers or manufacturers. Transferring technology to other sites may require additional processes, technologies and validation studies, which are costly, may take considerable amounts of time, may not be successful and, in most cases, require prior review and approval by the FDA. Any need to find and qualify new suppliers or manufacturers could significantly delay production of WAKIX, adversely impact our ability to market WAKIX, adversely impact the conduct of our clinical trials and adversely affect our business. There can be no assurance that replacements would be available to us on a timely basis, on acceptable terms or at all. While we currently maintain a robust supply of raw material inventory and ana 1812 month supply of finished goods inventory to ensure product availability, any interruption in the supply of a drug substance or other material or in the manufacture of WAKIX or our product candidates could have a material adverse effect on our business, financial condition, operating results and prospects.

We have conducted clinical studies in the Czech Republic, Romania, and Poland in the past, and currently conduct studies in China, Ireland, Australia, Canada, Hungary and the United Kingdom.Kingdom, among others. We may conduct future clinical studies in other countries as well. Doing business internationally involves a number of risks, including but not limited to:

Certain institutional investors, investor advocacy groups, investment funds, creditors and other influential financial market participants, as well as governments, regulators, customers, patients, employees and other stakeholders, have become increasingly focused on companies’ ESG practices, including the impact of business on the environment and diversity, equity and inclusion matters. Certain organizations also provide ESG ratings, scores and benchmarking studies that assess companies’ ESG practices. Although there are no universal standards for such ratings, scores or benchmarking studies, they are used by some investors to inform their investment and voting decisions. It is possible that our future stockholders or organizations that report on, rate or score ESG practices will not be satisfied with our ESG strategy or performance. Unfavorable press about or ratings or assessments of our ESG strategies or practices, regardless of whether or not we comply with applicable legal requirements, may lead to negative investor sentiment toward us, which may hinder the Company’sour access to capital.

New tax laws or regulations could be enacted at any time, and existing tax laws or regulations could be interpreted, modified or applied in a manner that is adverse to us or our customers, each of which could adversely affect our results of operations, business and financial condition. Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures for tax purposes in the year incurred and instead requires taxpayers to capitalize and subsequently amortize such expenditures over five years for research activities conducted in the United States and over 15 years for research activities conducted outside the United States. ThisIn taxJuly law2025, changethe willOne continueBig Beautiful Bill Act (the “OBBBA”) was enacted into law. In addition to haveseveral another adversechanges effectto oncorporate ourtaxation, incomethe taxOBBBA liability,removed whichthe couldrequirement beto material.capitalize and amortize research and development expenditures and allowed the immediate expensing of domestic research and development expenses. In addition, the IRA, among other things, imposesimposed a new 15% alternative minimum tax on the adjusted financial statement income of certain large corporations for tax years beginning after December 31, 2022. Changes in tax laws or regulations could materially increase our tax provision, cash tax liabilities, and effective tax rate, which may adversely affect our results of operations, business and financial condition.

Although the commercialization of WAKIX is our primary focus, as part of our longer-term growth strategy, we plan to evaluate pitolisant in other indications and develop other product candidates. The research, testing, manufacturing, labeling, approval, selling, import, export, pricing and reimbursement marketing and distribution of drug products are subject to extensive regulation by the FDA and other regulatory agencies in the United States. Although we have obtained regulatory approval for WAKIX in the United States for the treatment of EDS and/or cataplexy in adultadults and pediatric patients six years and older with narcolepsy, it is possible that we may not obtain regulatory approval for pitolisant for other indications, or for any other product candidates we may seek to develop in the future.

Obtaining coverage and reimbursement approval for a product from a government or other third- party payor can be an expensive and time-consuming process that could require us to provide supporting scientific, clinical and cost effectiveness data for the use of our products to the payor. The industry competition to be included in third-party payors’ drug formularies, or lists of medications for which third- party payors provide coverage and reimbursement, often leads to downward pricing pressures on pharmaceutical products. In addition, third-party payors may refuse to include a particular branded drug in their formularies or otherwise restrict patient access through formulary controls or otherwise to a branded drug when a less costly generic equivalent or other alternative is available. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors, and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. In addition, many pharmaceutical manufacturers must calculate and report certain price reporting metrics to the government, such as average manufacture price and best price. Penalties may apply in some cases when such metrics are not submitted accurately and timely. We cannot be sure that reimbursement will be available for any product candidate that we commercialize and, if reimbursement is available, the level of reimbursement.

WAKIX has been approved by the FDA for the treatment of EDS and/or cataplexy in adult patients with narcolepsy,adults and forpediatric the treatment of EDS in childrenpatients six years andor older with narcolepsy. Regulatory approval is limited by the FDA to the specific indication for which approval has been granted and, unless we seek regulatory approval for additional indications, we will be prohibited from marketing pitolisant for other indications. We may be subject to fines, penalties or injunctions if we are determined to have promoted or be promoting the use of pitolisant for unapproved or “off-label” uses, resulting in damage to our reputation and business.

While we received approval for the indications of the treatment of EDS and/or cataplexy in adult patients with narcolepsyadults and forpediatric EDS in childrenpatients six years and older with narcolepsy, WAKIX is not indicated to treat any other conditions. We are prohibited from promoting WAKIX for any other indication unless we are granted FDA approval for such indication. The FDA strictly regulates the promotional claims that may be made about prescription products, and WAKIX may not be promoted for uses that are not approved by the FDA as reflected in its approved labeling. If we are not able to obtain FDA approval for any desired future indications for our products and product candidates, our ability to effectively market and sell our products may be reduced and our business may be adversely affected.

Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply. If we or third-party CMOs,CDMOs, CROs or other contractors or consultants fail to comply with applicable federal, state or local regulatory requirements, we could be subject to a range of regulatory actions that could affect our or our contractors’ ability to develop and commercialize our product candidates and could harm or prevent sales of any affected products that we are able to commercialize, or could substantially increase the costs and expenses of developing, commercializing and marketing our products. Any threatened or actual government enforcement action could also generate adverse publicity and require that we devote substantial resources that could otherwise be used in other aspects of our business. Increasing use of social media could give rise to liability, breaches of data security or reputational damage.

In the United States, the European Union and other some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities, and affect our ability to profitably sell any products for which we obtain marketing approval. In particular, there have been and continue to be a number of initiatives at the U.S. federal and state levels that seek to reduce healthcare costs and improve the quality of healthcare. For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively the ACA, was enacted to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for health care and health insurance industries, impose new taxes and fees on the healthcare industry, and impose additional healthcare policy reforms. The law has continued the downward pressure on pharmaceutical pricing, especially under the Medicare program, and increased the industry’s regulatory burdens and operating costs. Among the provisions of the ACA of importance to the pharmaceutical industry and our potential product candidates are the following:

Since its enactment, there have been numerous judicial, executive and legislative challenges to certain aspects of the ACA. On June 17, 2021 the U.S. Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA. Thus, the ACA will remain in effect in its current form. Further, prior to the U.S. Supreme Court ruling, President Biden issued an executive order to initiate a special enrollment period from February 15, 2021 through August 15, 2021 for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

Other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, in August 2011, the Budget Control Act of 2011, among other things, led to aggregate reductions to Medicare payments to providers, which went into effect in April 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2032, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022, unless additional Congressional action is taken. Additionally, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which,2012, among other things, reduced Medicare payments to several types of providers, including hospitals and cancer treatment centers, and increased the statute of limitations period in which the government may recover overpayments to providers from three to five years. The InflationAmerican ReductionRescue Plan Act of 2022,20021 or IRA, which was signed into law on August 16, 2022, included several provisions to reduce drug spending byeliminated the federal government and reduce out-of-pocket costs for patients on Medicare. This legislation requires that the federal government negotiate prices for some drugs covered under Medicare Part B and Part D with the highest total spending, beginning in 2026. It also requires manufacturers to pay rebates back to the federal government if the price of their medications for Medicare beneficiaries rises faster than inflation. The legislation also placed astatutory cap on out-of-pocketmanufacturers’ costs for Medicare Part D enrollees and shifted the cost of supplying these medications to manufacturers and plans. Eligibility for the Medicare Part D Low-Income Subsidy Program was also expanded under the legislation, and it further delayed the implementation of the Trump Administration’sMedicaid drug rebate ruleliability, tobeginning 2027.January CMS1, has2024. publishedThe therebate negotiatedwas pricespreviously forcapped theat initial ten drugs, which will first be effective in 2026, and the list100% of thea subsequentdrug’s 15average drugsmanufacturer that will be subject to negotiation, although the drug price negotiation program is currently subject to legal challenges. For that and other reasons, it is currently unclear how the IRA will be effectuated, or the impact of the IRA on our business.price.

Individual states in the United States have also become increasingly passedactive legislationin and implementedimplementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access andaccess, marketing cost disclosure, drug price reporting and other transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.measures. Some states have enacted legislation creating so-called prescription drug affordability boards, which ultimately may attempt to impose price limits on certain drugs in these states.states, and at least one state board is imposing an upper payment limit. States are also seeking to implement general, across the board price caps for pharmaceuticals, or are seeking to regulate drug distribution. Some measures are designed to encourage importation from other countries and bulk purchasing. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine which drugs and suppliers will be included in their healthcare programs. Legally mandated price controls on payment amounts by third- party payors or other restrictions could harm our business, results of operations, financial condition and prospects. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. Furthermore, there has been increased interest by third-party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. These reforms could reduce the ultimate demand for our commercial products and product candidates, once approved, or put pressure on our product pricing.

Federal law requires that any company that participates in the Medicaid Drug Rebate ProgramMDRP also participate in the Public Health Service’s 340B drug pricing program in order for federal funds to be available for the manufacturer’s drugs under Medicaid andand, if applicable, Medicare Part B. TheWe participate in the 340B programprogram, which is administered by the Health Resources and Services Administration (“HRSA”), and requires participating manufacturers to agreeus to charge statutorily defined covered entities no more than the 340B “ceiling price” for the manufacturer’sour covered outpatient drugs. These 340B covered entities include a variety of community health clinics and other entities that receive health services grants from the Public Health Service, as well as hospitals that serve a disproportionate share of low-income patients. The ACA expanded the list of covered entities to include certain free-standing cancer hospitals, critical access hospitals, rural referral centers and sole community hospitals, but exempts “orphan drugsdrugs,” such as WAKIX, from the ceiling price requirements for these covered entities. The 340B ceiling price is calculated using a statutory formula based on the average manufacturer priceAMP and rebate amount for the covered outpatient drug as calculated under the Medicaid Drug Rebate Program,MDRP, and in general, products subject to Medicaid price reporting and rebate liability are also subject to the 340B ceiling price calculation and discount requirement. We must report 340B ceiling prices to HRSA on a quarterly basis, and HRSA publishes those prices to 340B covered entities. In addition, HRSA has finalized regulations regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities for 340B-eligible drugs. HRSA has also finalized a revised regulation implementing an administrative dispute resolution process through which 340B covered entities may pursue claims against participating manufacturers for overcharges, and through which manufacturers may pursue claims against 340B covered entities for engaging in unlawful diversion or duplicate discounting of 340B drugs. Our failure to comply 340B program requirements could negatively impact our financial results. Any additional future changes to the definition of average manufacturer price and the Medicaid rebate amount under the ACA or other legislation or regulation could affect our 340B ceiling price calculations and also negatively impact our resultsfinancial of operations commercializing pitolisant. In addition, legislation may be introduced that, if passed, would further expand the 340B program to additional covered entities or would require participating manufacturers to agree to provide 340B discounted pricing on drugs used in an inpatient setting.results.

ToIn beorder eligiblefor WAKIX or any product candidates, if approved, to have our products that we successfully commercializebe paid for with federal funds under the Medicaid programand Medicare Part B programs and purchased by certain federal agencies and grantees, we have toalso participate in the U.S. Department of Veterans AffairsAffairs, (“VA”),or VA, Federal Supply ScheduleSchedule, (“FSS”)or FSS, pricing program. As part of this program, we are obligatedrequired to make our products available for procurement on an FSS contract under which we must comply with standard government terms and conditions and charge a price that is no higher than the statutory Federal Ceiling PricePrice, (“FCP”)or FCP, to four federal agencies (VA, U.S. Department of DefenseDefense, (“DOD”),or DOD, Public Health Service, and U.S. Coast Guard). The FCP is based on the Non-Federal Average Manufacturer Price, or Non-FAMP, which we must calculate and report to the VA on a quarterly and annual basis. Pursuant to applicable law, knowing provision of false information in connection with a Non-FAMP filing can subject a manufacturer to significant civil monetary penalties for each item of false information. The FSS pricing and contracting obligations also contain extensive disclosure and certification requirements.

We have obtained a rare pediatric disease designation for EPX100 for the treatment of Dravet Syndrome and Lennox-Gastaut Syndrome, however, there is no guarantee that FDA approval of will result in issuance of a priority review voucher.

Moreover, Congress included a sunset provision in the statute authorizing the rare pediatric disease priority review voucher program. Under the current statutory sunset provisions, after December 20, 2024, FDA maycould only award a voucher for an approved rare pediatric disease product application if the sponsor has rare pediatric disease designation for the product candidate, and that designation was granted by December 20, 2024. After September 30, 2026, FDA maywould notno longer be authorized to award any rare pediatric disease priority review vouchers, regardless of any rare pediatric disease designation. In February 2026, the Consolidated Appropriations Act of 2026 was passed by Congress and signed into law. Under the provisions of the Consolidated Appropriations Act of 2026, this program was restored and authorizes the FDA to award priority review vouchers through September 30, 2029.

Publications of discoveries in scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our owned or licensed patents or pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our future patent applications may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection.

The validity, scope and enforceability of any patents listed in the Orange Book that cover our current and future product candidates canhave been challenged by third parties and may be challenged by third parties.parties in the future.

One or more third parties have challenged, and additional third parties in the future may challenge the current patents, or future patents within our portfolio, which could result in the invalidation of, or render unenforceable, some or all of the relevant patent claims or a finding of non-infringement. For example, if a third party files an ANDA for a generic drug containing pitolisant, and relies in whole or in part on studies conducted by or for us, the third party will be required to certify to the FDA that either: (1) there is no patent information listed in the FDA’s Orange Book with respect to our NDA for the applicable approved product candidate; (2) the patents listed in the Orange Book have expired; (3) the listed patents have not expired, but will expire on a particular date and approval is sought after patent expiration; or (4) the listed patents are invalid or will not be infringed by the manufacture, use or sale of the third party’s generic drug. A certification that the new drug will not infringe the Orange Book-listed patents for the applicable approved product candidate, or that such patents are invalid, is called a paragraph IV certification. If the third party submits a paragraph IV certification to the FDA, a notice of the paragraph IV certification must also be sent to us once the third party’s ANDA is accepted for filing by the FDA. We may then initiate a lawsuit to defend the patents identified in the notice. The filing of a patent infringement lawsuit within 45 days of receipt of the notice automatically prevents the FDA from approving the third party’s ANDA until the earliest of 30 months or the date on which the patent expires, the lawsuit is settled, or the court reaches a decision in the infringement lawsuit in favor of the third party. If we do not file a patent infringement lawsuit within the required 45-day period, the third party’s ANDA will not be subject to the 30-month stay of FDA approval.

Moreover, a third partyparties have challenged, and additional third parties in the future may challenge the current patents, or future patents within our portfolio, which could result in the invalidation of some or all of the patents that might otherwise be eligible for listing in the Orange Book for one of our products. If a third party successfully challenges all of the patents that might otherwise be eligible for listing in the Orange Book for one of our products, we will not be entitled to the 30-month stay of FDA approval upon the filing of an ANDA for a generic drug containing, for example, pitolisant, that relies in whole or in part on studies conducted by or for us. See Note 13 to our consolidated financial statements included herein under “Part II-Item 8. Financial Statements and Supplementary Data” for more information.

At Harmony, we are cultivating a differentiated neuroscience company, rooted in innovation and driven by a commitment to addressing the unmet needs of patients living with neurological diseases. To date, we have focused on rare neurological diseases with a growing portfolio now spanning sleep/wake, neurobehavioral, and rare epilepsy, and we are harnessing scientific insights and pioneering approaches to advance meaningful treatments that help patients thrive. Our operations are conducted by our wholly owned subsidiaries, Harmony Biosciences, LLC and Harmony Biosciences Management, Inc.

We are focusing our development efforts on other rare neurological disorders in which EDS is a prominent symptom, including Prader-Willi Syndrome (“PWS”) and myotonic dystrophy type 1, otherwise known as dystrophia myotonica (“DM1”). Based on the positive signals from the data from our Phase 2 proof-of-concept signal detection clinical trial to evaluate pitolisant for the treatment of EDS and other key behavioral symptoms in patients with PWS, an End-of-Phase 2 meeting with the FDA was held in June 2023. We aligned with the FDA on the proposed Phase 3 registration study design to support further investigation of pitolisant as a potential treatment to address the unmet medical need for children, adolescents and adults with PWS experiencing EDS, for which there is currently no approved treatment. In October 2023, we received FDA alignment regarding the study design for the Phase 3 TEMPO study in patients with PWS, which has the potential to serve as a the registrational trial and support our efforts to seek pediatric exclusivity for pitolisant. In February 2024, the FDA granted Orphan Drug designation to pitolisant for the treatment of PWS. The Phase 3 registrational trial, the TEMPO study, was initiated in the first quarter of 2024. In June 2021, we initiated a Phase 2 proof-of-concept signal detection clinical trial to evaluate pitolisant for the treatment of EDS, fatigue and cognitive dysfunction in adult patients with DM1 and announced topline results from this trial in the fourth quarter of 2023, in which clinically meaningful improvements were demonstrated in EDS and fatigue, the two most prominent non-muscular symptoms in patients with DM1. The safety and tolerability profile of pitolisant in adult patients with DM1 was consistent with the established safety profile of pitolisant with no new safety signals detected and no serious adverse events reported.

Our partner, Bioprojet completed a Phase 3 trial in pediatric patients with narcolepsy and submitted the trial data to the European Medicines Agency (the “EMA”) seeking approval for a pediatric narcolepsy indication. In January 2023, Bioprojet received a positive opinion from the EMA’s Committee for Medicinal Products for Human Use (“CHMP”) and in March 2023, the EMA granted approval for the marketing authorization of WAKIX for the treatment of narcolepsy with or without cataplexy in children six and older. Based on the data from the positive Phase 3 trial conducted by Bioprojet, we submitted an sNDA for pediatric narcolepsy in December 2023. In June 2024, we announced that the FDA approved our sNDA for WAKIX for the treatment of EDS in pediatric patients six years of age and older with narcolepsy. In addition, in June 2024, the FDA did not approve our sNDA seeking to expand the WAKIX label for the treatment of pediatric patients with cataplexy. In October 2024, we held a Type A meeting with the FDA to discuss the pediatric cataplexy indication and reached alignment on a path to sNDA resubmission, which iswas plannedsubmitted forin the secondthird quarter of 2025. In February 2026, the FDA approved WAKIX for the treatment of cataplexy in pediatric patients six years and older with narcolepsy.

We arehave expandingexpanded our pipeline through the acquisition of additional assets that focus on addressing the unmet needs of patients living with rare neurological diseases as well as patients living with other neurological diseases who have unmet medical needs. We are targeting assets that will allow us to further leverage the expertise and infrastructure that we have successfully built at Harmony so we can optimize the benefit of internal synergies. Consistent with this objective, in July 2022, we entered into a License and Commercialization Agreement (the “2022 LCA”) with Bioprojet whereby we obtained exclusive rights to manufacture, develop and commercialize one or more new products based on pitolisant in the United States and Latin America, with the potential to add additional indications and formulations upon the agreement of both parties. We have made progress in the development of two new formulations of pitolisant: pitolisant GR and pitolisant HD. Both formulations entered clinical studies in the fourth quarter of 2023. We received data from the pitolisant GR pilot bioequivalence study, which supports further development of pitolisantPitolisant GR. In addition, we completed a dosing optimization study that supports initiating Pitolisant GR at the therapeutic dose of 17.8mg without titration. We areinitiated on-track to initiate athe pivotal bioequivalence study in the first quarter of 2025,2025 withand anannounced anticipatedpositive topline data readout in the thirdfourth quarter of 2025. OurWe anticipatedanticipate a PDUFA date for pitolisantPitolisant GR is in 2026.the first quarter of 2027. We received data from the pitolisant HD pilot pharmacokinetics study in June 2024, which also supports advancing this development program toward pivotal trials. TheWe formulationsubmitted optimizationan andIND technicalapplication operationsfor workpitolisant is ongoing,HD with athe goalFDA to initiate a Phase 3 registrational studytrials in narcolepsy and IH in the fourth quarter of 2025. AAfter receiving “Study May Proceed” letters from the FDA, the Phase 1b3 registrational study wasin conductednarcolepsy, to evaluate the safety and tolerability of pitolisant at repeat doses of up to 180mgONSTRIDE1, and the initialPhase results3 areregistrational consistentstudy within theIH, knownONSTRIDE2, safetywere profileinitiated. ofWe pitolisantanticipate topline data from both studies in 2027 and supporta advancement of the pitolisant HD development program. Our anticipatedpotential PDUFA date for the pitolisant HD narcolepsy and IH programs is in 2028. Non-provisionalUtility patents have been filed for both of these formulations, with the potential for patent protection to the mid-2040’s.

In April 2024, we entered into a sublicense agreement with Bioprojet for an orexin-2 receptor agonist (OX2R) (“BP1.15205”) to be evaluated for the treatment of narcolepsy and other potential indications (the “Sublicense”). Under the Sublicense, we have obtained the exclusive right to develop, manufacture and commercialize BP1.15205 in the United States and Latin American territories, which are rights that Bioprojet originally licensed from Teijin Pharma, the innovator of BP1.15205. WeIn believeJune the2025, we announced positive pre-clinical data fromdemonstrating BP1.15205significant is promisingwake-promoting and wecataplexy-suppressing planeffects toin filea standard transgenic mouse model of narcolepsy type 1and presented safety data from the three-month GLP toxicity studies in two different species. We filed an investigational medicinal product dossier (“IMPD”) with the EMA in mid-2025 and beginbegan first-in-human studies in the secondfourth halfquarter of 2025.2025 with topline data anticipated in 2026.

Cost of Product SalesSold

Cost of product salessold includes manufacturing and distribution costs, the cost of API, FDA program fees, royalties due to third parties on net product sales, freight, shipping, handling, storage costs and salaries of employees involved with oversight of production. We expect the cost of product sales to increase as we continue to ramp up production in order to meet future demand for WAKIX and diversify our supply chain for WAKIX.

The shelf life of WAKIX is four years from the date of manufacture, with the earliest expiration of current inventory expected to be OctoberJanuary 2025.2027. We regularly review our inventory levels and expect write-offs from time to time. We will continue to assess inventory levels in future periods as demand for WAKIX and the rate of inventory turnover evolves. We currently have adequate supply of WAKIX to cover demand into the firstthird quarter of 2027, with additional API on-hand inventory to support at least 24 months beyond this time frame.

Research and development expenses primarily include development programs for potential new indications for pitolisant in patients with IH, PWS, and DM1 and the development of our product candidates ZYN002, EPX100,EPX-100, EPX-200 Pitolisant GR, Pitolisant HD, BP1.15205 and HBS-102. We also incur research and development expenses related to our team of Medical Science Liaisons (“MSLs”) who interact with key opinion leaders, with a focus on the science, the role of histamine in sleep-wake state stability and the novel mechanism of action of pitolisant. In addition, our MSLs support our market access team with the presentation of clinical data to payors upon request and our clinical development team to identify potential clinical trial sites. Research and development costs are expensed as incurred. We have significantly increased our research and development efforts as we advance our clinical programs and add product candidates to expand our pipeline. Research and development expenses also include:

A significant portion of our research and development costs are external costs, such as fees paid to CROs and CMOs,CDMOs, central laboratories, contractors, and consultants in connection with our clinical development programs. Internal expenses primarily relate to personnel who are deployed across multiple programs.

Product candidates in later stages of clinical development generally have higher development costs in the current period than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials, milestone payments, and the cost of submitting an NDA to the FDA (and/or other regulatory authorities). We expect our research and development expenses to be significant as we advance our current clinical development programs and prepare to seek regulatory approval for additional indications for pitolisant,pitolisant and Pitolisant GR, complete the Phase 3 clinical trials for ZYN002EPX-100 and EPX100Pitolisant HD, and advance the development of PitolisantBP1.15205, GR, Pitolisant HD, BP1.15205CBS105 and HBS-102 toward new indications.

General and administrative expenses consist primarily of employee-related expenses, such as salaries, share-based compensation, benefits and travel expenses for our personnel in executive, legal, finance and accounting, human resources, investor relations, and other administrative departments. General and administrative expenses also consist of office leases, legal fees, including ANDA litigation expenses, conference attendance, and professional fees, including legal, tax and accounting and consulting fees.

We are party to a right-of-use agreement with Paragon Biosciences, LLC (“Paragon”) whereby we have access to and the right to use certain office space leased by Paragon in Chicago, Illinois. For the year ended December 31, 2024,2025, we paid fees of $0.3$0.5 million pursuantrelated to thisrent agreement.and consulting services.

Net product revenue increased by $132.7$153.7 million, or 22.8%,21.5% for the year ended December 31, 2024,2025, compared to the same period in 2023.2024. The increase was primarily due to aan 17.4%18.3% increase in units shipped, and the impact of a 7%7.0% price increase partially offset by higher rebates of approximately 3%.3.6%. The price increase occurred in January 2024.2025.

Research and development expenses increased by $69.8$43.8 million, or 91.7%,30.0%, for the year ended December 31, 2024,2025, compared to the same period in 2023.2024. The increase was primarily driven by $43.6 million in IPR&D charges related to the Bioprojet Sublicense Agreement, the acquisition of Epygenix and a preclinical milestone achieved for HBS-102, a combined $22.3$47.2 million increase in research and development expenses for the recently acquired product candidates,EPX-100, ZYN002 and EPX100,Pitolisant aGR $5.3and HD as we progressed clinical trials and manufacturing, an $8.0 million increase in personnel costs associated with higher headcount, a $2.7$2.3 million increase in stock compensation associated with new awards,equity awards and a $1.7$3.4 million increase in other research and development,development expenses primarily dueassociated towith preclinicalthe workdevelopment relatedof to BP1.1520, partiallyBP1.15205 offset by a $2.8$7.7 million decrease in clinical development associated with pitolisant, driven by a decrease in clinical trial expenses for theIH, IH indication,and a $2.3$9.3 million decrease in IPR&D chargecharges. The change in IPR&D consisted of clinical milestones achieved for ZYN002 ($15.0 million) and BP1.15205 ($4.3 million) and an upfront fee related to the acquisitionCiRC ofAgreement Zynerba for the year ended December 31, 2023, and a $0.8($15.0 million) IPR&Dthat charge related to preclinical milestones achieved for HBS-102occurred during the year ended December 31, 2023.2025 offset by the acquisition of Epygenix ($17.1 million), a preclinical milestone achieved for HBS-102 ($1.0 million) and the Sublicense ($25.5 million) that occurred during the year ended December 31, 2024.

Sales and marketing expenses increased by $13.5$8.6 million, or 13.9%,7.8%, for the year ended December 31, 2024,2025, compared to the same period in 2023.2024. The increase was primarily due to a $10.0$5.6 million increase in patient engagement and marketing activities, a $2.3 million increase in stock compensation associated with new awards,activities and a $1.2$3.0 million increase in personnel costs. The increase in patient engagement and marketing activities for both comparable periods was driven by our continued growth of WAKIX and the increase in personnel costs was relateddriven toprimarily increasedby higher headcount.

General and administrative expenses increased by $15.1$42.2 million, or 15.8%,38.2%, for the year ended December 31, 2024,2025, compared to the same period in 2023.2024. The increase was primarily due to ana $10.9$39.0 million increase in legal and professional fees, primarily associated with patent lawsuits,lawsuits and settlements, a $6.5$1.1 million increase in stockpersonnel compensationcosts associated with new awards, partially offset by a $2.0higher million decrease in insuranceheadcount and a $1.0$2.1 million decrease in personnel costs driven by the severance chargeincrease associated with thetravel acquisitionand ofconference Zynerba for the year ended December 31, 2023.attendance.

Interest expense decreased by $6.3$2.8 million, or 26.4%,16.3%, for the year ended December 31, 2024,2025, compared to the same period in 2023.2024. The decrease was primarily due to lower interestaverage ratesoutstanding asdebt abalances resultcompared of refinancing intoto the TLAprior Credit Agreement (defined below).year.

Interest income increased by $3.8$3.4 million, or 25.9%,18.2%, for the year ended December 31, 2024,2025, compared to the same period in 2023.2024. The increase was primarily a result of having higher invested balances, and higher investment yields on those balances,balances compared to the prior year.

Income tax expense was $46.3$56.4 million, representing a 24.1%26.2% effective tax rate, for the year ended December 31, 2024,2025, compared to income tax expense of $44.5$46.3 million for the year ended December 31, 2023,2024, representing a 25.7%24.1% effective tax rate. The decreaseincrease in our effective tax rate for the year ended December 31, 20242025, was primarily due to an increase in research and development and orphan drug credits, partially offsetdriven by anthe increaseremeasurement inof nondeductiblestate IPR&Ddeferred expensestax inassets that was incurred during the currentyear year.ended December 31, 2025. The effective tax rate of 24.1%26.2% for the year ended December 31, 2024,2025, included 21.0%3.5% forfrom the provisionremeasurement of federalstate incomedeferred taxestax andassets, 6.4%2.8% for the provision ofin state income taxes, partiallyand 1.5% in non-deductible IPR&D, offset by a 4.7%4.0% benefit from research and development and orphan drug credits, partially offset by 1.8% related to nondeductible IPR&D expenses.credits.

We believe that our existing cash, cash equivalents and investments on hand as of December 31, 2024,2025, will enable us to meet our operational liquidity needs and fund our potential investing activities for at least the next 12 months. We have based our liquidity and cash flow projections on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we expect.

In July 2023, we entered into a Credit Agreement (the “TLA Credit Agreement”) with JPMorgan Chase Bank, N.A., as “Administrative Agent”, and certain lenders.lenders, which was subsequently amended in September 2023. The TLA Credit AgreementAgreement, as amended, provides for a five-year senior secured term loan (the “TLA Term Loan”) in an aggregate principal amount of $185.0$200.0 million.

The repayment schedule for both the TLA Term Loan and the Incremental Term Loan (together, the “Term Loans”) consists of $3.8 million quarterly principal payments, which commencecommenced on December 31, 2023, increasing to $5.0 million quarterly principal payments beginning on December 31, 2025, with a $115.0 million payment due on the maturity date of July 26, 2028. The TLA Term LoansLoan bearbears interest at a per annum rate equal to, at our option, (i) a base rate plus a specified margin ranging from 2.50% to 3.00%, based on our senior secured net leverage ratio (as defined in the TLA Credit Agreement) or (ii) Term SOFR plus a credit spread adjustment of 0.10% plus a specified margin ranging from 3.50% to 4.00%, based on our senior secured net leverage ratio.

In October 2023, our Board of Directors terminated the August 2023 Repurchase Program and approved a share repurchase program (the “October 2023 Repurchase Program”) providing for the repurchase of shares of common stock in an aggregate amount of up to $200.0 million, excluding commissions and transaction fees. The October 2023 Repurchase Program may be suspended, terminated, or modified at any time for any reason. During the year ended December 31, 2024,2025, nowe did not repurchase any shares of common stock werepursuant repurchased and cancelled by the Company underto the October 2023 Repurchase Program. As of December 31, 2024,2025, the remaining amount of common stock authorized for repurchases was $150.0 million.

In April 2024, we acquired all of the outstanding capital stock of Epygenix, pursuant to the terms of a stock purchase agreement. In connection with the closing of the transaction, we paid the former stockholders of Epygenix up front consideration of $35.0 million less a working capital adjustment. In addition, we will also be obligated to pay up to $130.0 million upon the achievement of development and regulatory milestones and up to $515.0 million upon the achievement of certain sales-based milestones, in each case to Epygenix’s former stockholders. As a result, the Companywe now hashave an exclusive license relating to the use of clemizole, initially for the treatment of DS and LGS.

In April 2024, we entered into athe sublicenseSublicense agreement with Bioprojet for an orexin-2 receptor agonist (OX2R), (the “Licensed Compound”)BP1.15205, to be evaluated for the treatment of narcolepsy and other potential indications (the “Sublicense”). Under the Sublicense, the Companywe obtained the exclusive right to develop, manufacture and commercialize the Licensed CompoundBP1.15205 in the United States and Latin American territories (the “Licensed Territories”), which are rights that Bioprojet originally licensed from Teijin Pharma, the innovator of theBP1.15205. Licensed Compound. The Licensed CompoundBP1.15205 is currently in pre-clinical development with a ClinicalPhase Trial1 Applicationclinical currentlytrial anticipatedto assess the safety, tolerability, pharmacokinetics and pharmacodynamics after single and multiple ascending doses in mid-2025.healthy volunteers and sleep-deprived healthy subjects. Under the Sublicense, the Companywe paid Bioprojet an upfront license fee of $25.5 million. In November 2025, we achieved a clinical milestone for BP1.15205 that triggered a $4.3 million andpayment to Bioprojet under the Sublicense. We will also be obligated to pay up to $127.5$123.3 million upon achievement of other development and regulatory milestones and up to $240.0 million upon achievement of certain sales-based milestones, as well as royalty rates in the mid-teens on potential sales in the Licensed Territories.

In SeptemberNovember 2024,2025, we achieved a preclinicalclinical milestone,milestone whichfor BP1.15205 that triggered a $1.0$4.3 million payment to Bioprojet under the provisions of the APA,Sublicense, which was paid in OctoberDecember 2024.2025.

In addition to the other information included in this report, you should carefully consider the discussion of risk factors affecting the Company as set forth in Part I, Item 1A "Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition or future results. The risks described in these reports are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, and operating results. As of MarchJune 31,30, 2026, there have been no material changes from the risk factors previously disclosed in response to Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2025.

All of our forward-looking statements are qualified in their entirety by reference to known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These factors include ,include, but are not limited to, risks and uncertainties relating to:

As of MarchJune 31,30, 2026, we have continued to see growth in the number of unique healthcare professionalprofessionals (“HCP”) prescribers ofprescribing WAKIX since it became available in November 2019. There are approximately 9,000 HCPs who treat patients living with narcolepsy, with approximately 4,000 enrolled in oxybate risk-evaluation and mitigation strategies.strategies (“REMS”) programs. The average number of patients on WAKIX for the three months ended MarchJune 31,30, 2026, was approximately 8,500.8,950. Additionally, as of MarchJune 31,30, 2026, we have secured formulary access for more than 80% of all insured lives (Commercial, Medicare and Medicaid) in the United States.

Research and development expenses primarily include development programs for potential new indications for pitolisant in patients with IH, PWS, and DM1 and the development of our product candidates EPX-100, EPX-200 Pitolisant GR, Pitolisant HD, BP-205 and HBS-102.BP-205. We also incur research and development expenses related to our team of Medical Science Liaisons (“MSLs”) who interact with key opinion leaders, with a focus on the science, the role of histamine in sleep-wake state stability and the novel mechanism of action of pitolisant. In addition, our MSLs support our market access team with the presentation of clinical data to payors upon request and our clinical development team to identify potential clinical trial sites. Research and development costs are expensed as incurred. We have significantly increased our research and development efforts as we advance our clinical programs and add product candidates to expand our pipeline. Research and development expenses also include:

Product candidates in later stages of clinical development generally have higher development costs in the current period than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials, milestone payments, and the cost of submitting an NDA to the FDA (and/or other regulatory authorities). We expect our research and development expenses to be significant as we advance our current clinical development programs and prepare to seek regulatory approval for additional indications for pitolisant and Pitolisant GR, complete the Phase 3 clinical trials for additional indications for pitolisant, EPX-100 and Pitolisant HD, and advance the development of BP-205, CBS105BP-205 and HBS-102CBS105 toward new indications.

Our sales and marketing expenses primarily relate to the market developmentmarketing and commercialization activities of WAKIX for the treatment of EDS and cataplexy in patients six years and older with narcolepsy. Market developmentMarketing and commercial activities account for a significant portion of our operating expenses and are expensed as incurred. We expect our sales and marketing expenses to increase in the near- and mid-term to support WAKIX’s indications for the treatment of EDS or cataplexy in adult patients with narcolepsy, the treatment of EDS in pediatric patients 6 years of age and older with narcolepsy and to expand our portfolio with the anticipated growth from potential additional indications.

We anticipate that our general and administrative expenses will increase in the future to support our continued commercialization efforts,efforts and ongoing and future potential research and development activities, and increased costs of operating as a public company.activities. These increases will likely be driven by costs associated with the hiring of additional personnel and fees paid to outside consultants, lawyers and accountants, among other expenses. Additionally, we anticipate increased costs associated with being a public company, including expenses related to services associated with maintaining compliance with the requirements of Nasdaq and the SEC, insurance and investor relations costs. If any of our current or future indication expansion programs or new product candidates obtain U.S. regulatory approval, we expect that we would incur significantly increased expenses associated with building a sales and marketing team.

We are party to a right-of-use agreement with Paragon whereby we have access to and the right to use certain office space leased by Paragon in Chicago, Illinois. We paid rental fees to Paragon of $0.1 million toand Paragon$0.2 related to rentmillion for each of the three and six months ended MarchJune 31,30, 2026, and 2025, respectively.

Net product revenue increased by $30.7$60.8 million, or 16.6%,30.3%, for the three months ended MarchJune 31,30, 2026, and increased by $91.4 million, or 23.7%, for the six months ended June 30, 2026, compared to the same periodperiods in 2025. The increase for the three months ended MarchJune 31,30, 2026, was primarily due to a 12.1%26.5% increase in the number of units shipped and the impact of a 7% price increase partially offset by higher rebates of approximately 3.7%.4.0%. The increase for the six months ended June 30, 2026, was primarily due to a 19.4% increase in the number of units shipped and the impact of a 7% price increase partially offset by higher rebates of approximately 3.8%. The price increase occurred in January 2026.

Cost of product sold increased by $12.5$25.0 million, or 39.1%,65.6%, for the three months ended MarchJune 31,30, 2026, and increased by $37.6 million, or 53.5%, for the six months ended June 30, 2026, compared to the same periodperiods in 2025. Cost of product sold as a percentage of net product revenue was 20.7%24.2% and 22.6% for the three and six months ended MarchJune 31,30, 2026, respectively, compared to 17.3%19.0% and 18.2% for the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase in cost of product sold was primarily due to higher royalties as a result of the increase in net product revenue of WAKIX. The increase in the cost of product sold as a percentage of net revenue was driven by new royalties related to the Novitium License Agreement.

Research and development expenses increaseddecreased by $34.8$3.6 million, or 100.9%,7.1%, for the three months ended MarchJune 31,30, 2026, and increased by $31.3 million, or 36.9%, for the six months ended June 30, 2026, compared to the same periodperiods in 2025. The increasedecrease for the three months ended MarchJune 31,30, 2026, was primarily driven by a $15.0 million IPR&D charges of $32.0 millioncharge related to upfrontthe licenseCiRC fee paymentsAgreement that occurred during the three months ended MarchJune 31,30, 2026,2025, a $4.4 million decrease related to the phase out of the ZYN002 program in FXS, and a $1.7 million decrease in clinical development associated with pitolisant offset by a combined $7.4$16.4 million increase in research and development expenses for EPX-100BP-205, EPX-100, and Pitolisant GR and HD as we progressed clinical trials and manufacturing, a $1.0 million increase associated with development of BP-205, a $0.8$0.3 million increase in personnel costs associated with higher headcount, and a $0.1$0.4 million increase in stock compensation associated with new equity awards, and a $0.5 million increase in other research and development expenses offset by a $7.0 million decrease in clinical expenses as we phase out the ZYN002 program in FXS.compensation.

Sales and marketing expenses increased by $1.0$4.0 million, or 3.2%,13.5%, for the three months ended MarchJune 31,30, 2026, and increased by $5.0 million, or 8.3%, for the six months ended June 30, 2026, compared to the same periodperiods in 2025. The increase for the three months ended MarchJune 31,30, 2026, was primarily due to a $2.6$2.0 million increase in patient engagement and marketing activities, a $1.6 million increase in personnel costs, a $0.2 million increase in travel expenses and a $0.2 million increase in stock compensation expense. The increase for the six months ended June 30, 2026, was primarily due to a $4.5 increase in patient engagement and marketing activities and a $0.5$2.1 million increase in personnel costs,costs offset by a $1.1 million decrease in travel and meeting expense and a $1.0$0.8 million decrease in stock compensation expense.expense and a $0.8 million decrease in travel expenses. The increase in patient engagement and marketing activities was driven by our continued growth of WAKIX and the increase in personnel costs was driven primarily by higher headcount.headcount as a result of our sales force expansion.

Interest expense decreased by $0.6 million, or 15.7%,15.8%, for the three months ended MarchJune 31,30, 2026, and decreased by $1.2, or 15.7%, for the six months ended June 30, 2026, compared to the same periodperiods in 2025. The decrease for the three and six months ended MarchJune 31,30, 2026, was primarily due to lower average outstanding debt balances and lower interest rates compared to the same periods in the prior year.

Interest income increased by $0.7$1.8 million, or 14.1%,33.5%, for the three months ended MarchJune 31,30, 2026, and increased by $2.5 million, or 24.1%, for the six months ended June 30, 2026, compared to the same periodperiods in 2025. The increase for the three and six months ended MarchJune 31,30, 2026, was primarily a result of having higher invested balances compared to the prior year.

Income tax expense was $7.2$17.8 million, representing ana 18.1%19.1% effective tax rate, for the three months ended MarchJune 31,30, 2026, compared to $11.6$9.9 million, representing a 20.3%19.9% effective tax rate, for the three months ended MarchJune 31,30, 2025. Income tax expense was $25.0 million, representing an 18.8% effective tax rate, for the six months ended June 30, 2026, compared to $21.5 million, representing a 20.1% effective tax rate, for the six months ended June 30, 2025. The decrease in our effective tax rate for theboth threecomparable months ended March 31, 2026,periods was primarily driven by an increase in the benefits from research and development and orphan drug credits. The effective tax rate of 18.1%19.1% for the three months ended MarchJune 31,30, 2026, included 1.3%1.6% in state income taxes offset by a 4.0%4.1% benefit from credits. The effective tax rate of 18.8% for the six months ended June 30, 2026, included 1.5% in state income taxes offset by a 4.1% benefit from credits.

As of MarchJune 31,30, 2026, we had cash, cash equivalents, and investments of $870.5$962.5 million, outstanding debt of $160.0$155.0 million and retained earnings of $193.4$268.8 million.

We believe that our existing cash, cash equivalents and investments on hand as of MarchJune 31,30, 2026, will enable us to meet our operational liquidity needs and fund our potential investing activities for at least the next 12 months. We have based our liquidity and cash flow projections on assumptions that may prove to be incorrect, and we could use our capital resources sooner than we expect.

The repayment schedule for the TLA Term Loan consistsconsisted of $3.8 million quarterly principal payments, which commencedcommencing on December 31, 2023, increasingwhich increased to $5.0 million quarterly principal payments beginning on December 31, 2025, withand includes a $115.0 million payment due on the maturity date of July 26, 2028. The TLA Term Loan bears interest at a per annum rate equal to, at our option, (i) a base rate plus a specified margin ranging from 2.50% to 3.00%, based on our senior secured net leverage ratio (as defined in the TLA Credit Agreement) or (ii) Term SOFR plus a credit spread adjustment of 0.10% plus a specified margin ranging from 3.50% to 4.00%, based on our senior secured net leverage ratio.

The TLA Credit Agreement contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions. As of March 31, 2026, the CompanyWe had an event of default, which dated back to July 2025, related to a nonfinancial covenant due to a delay in a subsidiary joining the TLA Credit Agreement as a guarantor. On May 4, 2026, the Companywe entered into a Waiver and Consent Agreement with the Administrative Agent and certain lenders, whereby the event of default was waived. TheWe Company hashave made all required principal and interest payments on time in connection with the TLA Credit Agreement and isare in compliance with all covenants as of MayJune 7,30, 2026, the date of issuance of these condensed consolidated financial statements.2026.

In October 2023, our Board of Directors approved a share repurchase program (the “October 2023 Repurchase Program”) providing for the repurchase of shares of common stock in an aggregate amount of up to $200,000, excluding commissions and transaction fees. The October 2023 Repurchase Program may be suspended, terminated, or modified at any time for any reason. During the three and six months ended MarchJune 31,30, 2026, no shares of common stock were repurchased by the Company under the October 2023 Repurchase Program. As of MarchJune 31,30, 2026, the remaining amount of common stock authorized for repurchases was $150.0 million.

In April 2024, we entered into a sublicense agreement with Bioprojet for an orexin-2 receptor agonist (OX2R) (the “Licensed Compound”), towhich bewe evaluatedare developing for the treatment of narcolepsy and other potential indications (the “Sublicense”). Under the Sublicense, the Company obtained the exclusive right to develop, manufacture and commercialize the Licensed Compound in the United States and Latin American territories (the “Licensed Territories”), which are rights that Bioprojet originally licensed from Teijin Pharma, the innovator of the Licensed Compound. The Licensed Compound is currently in pre-clinical development with a Clinical Trial Application submission currently anticipated in the second half of 2025. Under the Sublicense, the Company paid Bioprojet an upfront license fee of $25.5 million. In November 2025, we achieved a clinical milestone for BP-205 that triggered a $4.3 million payment to Bioprojet under the Sublicense. We will also be obligated to pay up to $123.3 million upon achievement of other development and regulatory milestones and up to $240.0 million upon achievement of certain sales-based milestones, as well as royalty rates in the mid-teens on potential sales in the Licensed Territories.

In January 2026, we entered into a license agreement (the “Novitium License Agreement”) with Novitium Pharma LLC (“Novitium”),Novitium, which includes an exclusive license to additional intellectual property that will expand our patent estate, as well as a co-exclusive license, under which we intend to develop a new formulation of pitolisant in broad CNS indications outside of sleep/wake. Pursuant to the Novitium License Agreement, we paid an upfront license fee of $15.0 million, which was recognized as an IPR&D charge recorded in research and development within the unaudited condensed consolidated statements of operations and comprehensive income for the threesix months ended MarchJune 31,30, 2026, and will also be obligated to pay up to $10.0 million upon the achievement of certain development milestones, as well as low single-digit royalties on net sales of pitolisant based products.

On February 25, 2026 (the “MSN Effective Date”), we entered into a license agreement (the “MSN License Agreement”) with MSN Laboratories Private Limited (“MSN”),MSN, which includes an exclusive, royalty-bearing license, with the right to grant sublicenses, to additional intellectual property, including pending licensed patents, under which we intend to develop a new formulation of pitolisant in broad CNS indications outside of sleep/wake. Pursuant to the MSN License Agreement, we paid an upfront license fee of $17.0 million, which was recognized as an IPR&D charge recorded in research and development within the unaudited condensed consolidated statements of operations and comprehensive income for the threesix months ended MarchJune 31,30, 2026. In addition, we will be obligated to pay $25.0 million upon approval of the pending licensed patents by the United States Patent and Trademark Office (“USPTO”), which amount we must deposit into an escrow account within nine months from the MSN Effective Date, and which will be returned us if approval by the USPTO does not occur by November 25, 2027. In addition, we will be obligated to pay low single-digit royalties on net sales of future products that include a new formulation of pitolisantpitolisant.

The following table sets forth a summary of our cash flows for the threesix months ended MarchJune 31,30, 2026, and 2025:

Net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026, primarily consisted of net income of $32.5$107.9 million adjusted for non-cash items of $10.3$19.9 million related to stock-based compensation expense, $32.0 million related to acquired IPR&D, $6.0$11.9 million related to intangible amortization and depreciation, offset by $3.9$7.1 million related to deferred tax assets. Net working capital excluding cash increased by $49.6$45.4 million, primarily driven by increases in accounts receivable due to higher net product revenue in the current period and a decrease in accrued expenses primarily from lower accrued royalties and legal and professional feels offset by an increase in accounts payable due to the timing of payments.