JAGX 10-K & 10-Q changes, risk factors and insider trading
Jaguar Health, Inc. · Nasdaq · Pharmaceutical Preparations · CIK 1585608 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Risks Related to the Preferred Stock Dividend”
New heading “Our issuance of additional common stock and other securities to repay debt would dilute your proportionate ownership and voting rights and could have a negative impact on the market price of our common stock.”
New heading “*Calculated based on the shares of our Common Stock outstanding as of April 7, 2026 which was 13,019,277.”
New heading “Risks Related to the Preferred Stock Dividend”
New heading “The Series O Preferred Stock is not freely transferable and therefore provides limited liquidity to investors.”
New heading “The potential issuance of a large number of shares of common stock upon the conversion of our Series O Preferred Stock may have a negative effect on the trading price of our common stock as well as a significant dilutive effect.”
New heading “*Calculated based on the shares of our common stock outstanding as of April 7, 2026 which was 13,019,277.”
New heading “Holders of Eligible Warrants will not actually receive the Preferred Stock Dividend unless and until the exercise of the Eligible Warrants and will cease to be entitled to the Preferred Stock Dividend upon transfer of the Eligible Warrants.”
Removed heading “We will need to increase the size of our organization and may not successfully manage such growth.”
Largest changes
“If our common stock were delisted from Nasdaq voluntarily or involuntarily, trading of our Common Stock most likely will be conducted in the over-the-counter market on an electronic bulletin board established for unlisted securities such as OTCID, OTCQX, OTCBX or OTC Pink which will reduce the market liquidity of our Common Stock. …”see in full comparison
“Geopolitical instability and armed conflict could disrupt our clinical trials and delay development of our product candidates. Geopolitical instability and armed conflict in regions where we support or conduct clinical trials or other research and development activities could disrupt our operations and delay development of our product candidates. …”see in full comparison
“The Series O Preferred Stock is not freely transferable and therefore provides limited liquidity to investors.”see in full comparison
“In addition, while Listing Rule 5550(a)(5) currently requires the market value of publicly held shares of at least $1 million, Nasdaq has recently announced its intention to amend its rules to not only increase the market value of publicly held shares requirement to at least $5 million, but accelerate the suspension and delisting process for certain noncompliant companies. …”see in full comparison
“Holders of Eligible Warrants will not actually receive the Preferred Stock Dividend unless and until the exercise of the Eligible Warrants and will cease to be entitled to the Preferred Stock Dividend upon transfer of the Eligible Warrants.”see in full comparison
“The potential issuance of a large number of shares of common stock upon the conversion of our Series O Preferred Stock may have a negative effect on the trading price of our common stock as well as a significant dilutive effect.”see in full comparison
Full comparison: every changed paragraph (124)
We expect to incur significant additional costs as we continue commercializationresearch and development efforts for current prescription drug candidates or other product candidates and undertake the clinical trials necessary to obtain any necessary regulatory approvals, whichas willwe increasefocus ouron losses.rare disease programs.
We will need to raise substantial additional capital in the future in the event that we conduct clinical trials for new indications and for thenew launch of Gelclair,products, and we may be unable to raise such funds when needed and on acceptable terms, which would force us to delay, limit, reduce or terminate one or more of our product development programs.
We are substantially dependent on the success of our new licensee, Woodward Specialty LLC (“Woodward”) and its affiliates, for Mytesi, our current lead prescription drug product, and Canalevia-CA1, our conditionally approved prescription drug product for CID in dogs. We cannot be certain that necessary approvals will be received for planned Mytesi or Canalevia-CA1 follow-on indications or that these product candidates will be successfully commercialized, either by us or any of our partners. Our future revenue stream will only come from one customer, Woodward, and will solely be dependent on the Manufacturing and Supply Agreement (as defined hereunder) with Woodward. We cannot be certain that we will be successful in the commercialization of Gelclair.
We face uncertainty in the launch of Gelclair as the market for oral mucositis treatments is highly competitive, with established companies and emerging therapies. Gelclair's success depends on its ability to differentiate itself and gain market share.
If we are not successful in identifying, licensing, developing, and commercializing additional product candidates and products, our ability to expand our business and achieve our strategic objectives could be impaired.
The failure to identify a reasonable regulatory pathway to make crofelemer available for breast cancer patients based on a responder analysis may lead us to pause, change or discontinue commercialization of other products within our cancer supportive care business.
The results of our earlier studies of Mytesi may not be predictive of the results in any future clinical trials and species-specific formulation studies, respectively, and we may not be successful in our efforts to develop or commercialize line extensions of Mytesi.
Development of prescription drug products is inherently expensive, time-consuming, and uncertain, and any delay or discontinuance of our current or future pivotal trials would harm our business and prospects.
We will partially rely on third parties to conduct our development activities. If these third parties do not successfully carry out their contractual duties, we may be unable to obtain regulatory approvals or commercialize our current or future human or animal product candidates on a timely basis or at all.
Even if we obtain regulatory approval for planned follow-on indications of crofelemer, Canalevia, or our other product candidates, they may never achieve market acceptance. Further, even if weWoodward areis successful in the ongoing commercialization of Mytesi and Canalevia, we may not achieve commercial success.
Human and animal gastrointestinal health products are subject to unanticipated post-approval safety or efficacy concerns, which may harm our business and reputation.
Future federal and state legislation may result in increased exposure to product liability claims, which could result in substantial losses.
If we fail to retain current members of our senior management or to identify, attract, integrate, and retain additional key personnel, our business will be harmed.
If we are unable to establish sales capabilities on our own or through third parties, we may not be able to market and sell our current or future human products and product candidates, if approved, and generate product or other revenue.
We will need to increase the size of our organization and may not successfully manage such growth.
Canalevia-CA1 and our animal health prescription drug product candidates may be marketed in the US only in the target animals and for the indications for which they are approved, and if we want to expand the approved animals or indications, it will need to obtain additional approvals, which may not be granted.
The misuse or extra-label use of Mytesi, Canalevia, and our human or animal prescription drug product candidates, if approved by regulatory authorities, may harm our reputation or result in financial or other damages.
We may be unable to obtain, or obtain on a timely basis, a renewal of conditional approval for Canalevia-CA1 or to eventually obtain full regulatory approval of Canalevia-CA1, which would harm our operating results.
We may not maintain the benefits associated with MUMS designation, including market exclusivity.
The market for our human and animal products, and the gastrointestinal health market as a whole, is uncertain and may be smaller than we anticipate, which could lead to lower revenue and harm our operating results.
Insurance coverage for Mytesi for its current approved indication could decrease or end, or Mytesi might not receive insurance coverage for any approved follow-on indications, which could lead to lower revenue and harm our operating results.
We may face challenges obtaining favorable reimbursement and insurance coverage for Gelclair, which could limit its market adoption and commercial success.
We may engage in future acquisitions that increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks.
Certain of the countries in which we plan to commercialize our products in the future are developing countries, some of which have potentially unstable political and economic climates.
Changing political environment in the US could adversely affect our business and financial performance.
Fluctuations in the exchange rate of foreign currencies could result in currency transaction losses.
Laws and regulations governing global trade compliance could adversely impact our business.
There are other gastrointestinal-focused human pharmaceutical companies, and we face competition in the marketplaces in which we operate or plan to operate.
Our obligations to Streeterville Capital, LLC (“Streeterville”) are secured by a security interest in all of Napo’s NP-300 assets, so if we default on those obligations, Streeterville could foreclose on the NP-300 assets.
Failure in our information technology systems, through cyber-attacks or other data security incidents, could significantly disrupt our operations.
Global macroeconomic conditions may negatively affect us and may magnify certain risks that affect our business.
Unfavorable global economic conditions could adversely affect our business, financial condition, or results of operations.
Substantially all of our revenue for recent periods has been received from two customers.
The Company’s ability to attract and retain qualified members of our board of directors may be impacted due to new state laws, including recently enacted gender quotas.
Evolving expectations around corporate responsibility practices, specifically related to environmental, social, and governance (“ESG”) matters, may expose us to reputational and other risks.
The growing use of artificial intelligence (“AI”) systems to automate processes, analyze data, and support decision-making poses inherent risks.
We may be involved in lawsuits to protect or enforce our patents, which could be expensive, time-consuming, and unsuccessful, and third parties may challenge the validity or enforceability of our patents, and they may be successful.
If we are unable to prevent disclosure of our trade secrets or other confidential information to third parties, our competitive position may be impaired.
Changes in US patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.
We may not be able to protect our intellectual property rights throughout the world, which could impair our business.
Our business could be harmed if we fail to obtain certain registered trademarks in the US or in other countries.
We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential third-party information.
Even if we receive any of the required regulatory approvals for our current or future prescription drug product candidates and non-prescription products, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expenses.
Any of our current or future prescription drug product candidates or non-prescription products may cause or contribute to adverse medical events that we would be required to report to regulatory authorities and if we fail to do so, we could be subject to sanctions that would harm our business.
Legislative or regulatory reforms with respect to animal health may make it more difficult and costly for us to obtain regulatory clearance or approval for any of our current or future product candidates and to produce, market, and distribute our products after clearance or approval is obtained.
We believe that our non-prescription products are not subject to regulation by regulatory agencies in the US, but there is a risk that regulatory bodies may disagree with our interpretation or may redefine the scope of their regulatory reach in the future, which would result in additional expense and could delay or prevent the commercialization of these products.
Even if we receive the required regulatory approvals for our current or future prescription drug product candidates and non-prescription products, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expenses.
A possible “short squeeze” due to a sudden increase in demand for our common stock that largely exceeds supply may lead to further price volatility in our common stock.
You may be unable to resell our common stock when you wish to sell it or at a price that you consider attractive or satisfactory.
If securities or industry analysts do not publish research or reports about our company, or if they issue adverse or misleading opinions regarding us or our stock, our stock price and trading volume could decline.
YouWe do not intend to use the ATM, but if we do, you may be diluted by exercises of outstanding options and warrants, and issuances of securities pursuant to our ATM Agreement and/or our stockholder rights plan.
Our issuance of additional common stock and other securities to repay debt would dilute your proportionate ownership and voting rights and could have a negative impact on the market price of our common stock.
Risks Related to the Preferred Stock Dividend
The Series O Preferred Stock is not freely transferable and therefore provides limited liquidity to investors.
The potential issuance of a large number of shares of common stock upon the conversion of our Series O Preferred Stock may have a negative effect on the trading price of our common stock as well as a significant dilutive effect.
Holders of Eligible Warrants (as defined further below) will not actually receive the Preferred Stock Dividend unless and until the exercise of the Eligible Warrants and will cease to be entitled to the Preferred Stock Dividend upon transfer of the Eligible Warrants.
Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management.
Our amended and restated bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.
We do not intend to pay dividends on our common stock, and your ability to achieve a return on your investment will depend on appreciation in the market price of our common stock.
The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act and the requirements of the Sarbanes-Oxley Act, may strain our resources, increase our costs, and distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.
Management's Discussion & Analysis (MD&A)
New heading “Sales and Marketing”
New heading “General and Administrative”
New heading “Impairment Loss on Indefinite-lived Intangible Assets”
Removed heading “Sales and Marketing Expense”
Removed heading “General and Administrative Expense”
Largest changes
“As of December 31, 2025, we had cash of $968,000. As of December 31, 2025, the carrying amount of JAGX Holdings' assets included in our consolidated financial statements was restricted cash of $6.9 million. While our historical resources were insufficient to fund our operating plan for one year from the issuance of these financial statements, our liquidity position improved in January 2026. We entered into a US licensing agreement that provided $18.0 million in total upfront fees. …”see in full comparison
“Impairment Loss on Indefinite-lived Intangible Assets”see in full comparison
“Jaguar is currently supporting three proof-of-concept (POC) investigator-initiated trials (IIT), and conducting two Phase 2 studies, of crofelemer for the rare diseases short bowel syndrome (SBS) with intestinal failure and/or MVID in the US, EU, and/or Middle East/North Africa regions. …”see in full comparison
“The Inflation Reduction Act, effective January 1, 2023, introduces several provisions that may impact the Company's operations and financial results. While the full effects of the Act on future results are uncertain, management acknowledges potential changes in market conditions, tax incentives, and regulatory requirements that could arise as a result of this legislation. Management is currently unable to predict the likelihood or timing of these changes and their specific implications for the Company’s financial performance. …”see in full comparison
“Napo is also supporting an IIT in the US to evaluate crofelemer powder for oral solution for treatment of adult SBS-IF patients. The Company plans to pursue approval of crofelemer powder for oral solution for MVID in the US following the completion of the pivotal pediatric MVID trial. In accordance with the guidelines of specific EU countries, published data from such clinical investigations could support reimbursed early patient access to crofelemer for these debilitating IF conditions. …”see in full comparison
“The Company continues to monitor the effects of ongoing inflationary pressures and the IRA, which became effective on January 1, 2023. Inflation has contributed to higher operating costs across the pharmaceutical industry, including increases in raw material prices, distribution expenses, and labor costs. These cost pressures have affected the Company’s gross margins and may continue to do so in future periods.”see in full comparison
Full comparison: every changed paragraph (156)
Jaguar Health, Inc. (“Jaguar”), in conjunction with Jaguar family company Napo Pharmaceuticals, Inc. (“Napo”), develops novel proprietary prescription drugs sustainably derived from plants for people with complicated gastrointestinal (“GI”) disease states. Jaguar family companies Napo and Napo Therapeutics, S.p.A., an Italian corporation Jaguar established in Milan, Italy in 2021, are focused on expanding global crofelemer access and are developing new therapies for orphan and rare GI conditions. Jaguar Animal Health is a Jaguar tradename. Magdalena Biosciences, a joint venture formed by Jaguar and Filament Health Corp., is focused on developing novel prescription medicines derived from plants for mental health indications.
Jaguar Health, Inc. (“Jaguar” or the “Company”) is a commercial-stage pharmaceuticals company focused on developing novel, plant-based, sustainably derived prescription medicines for people and animals with gastrointestinal (“GI”) distress, including chronic, debilitating diarrhea. Jaguar's wholly owned subsidiary, Napo Pharmaceuticals, Inc. (“Napo”), focuses on developing and commercializing proprietary plant-based human prescriptions from plants for essential supportive care and management of neglected GI symptoms across multiple complicated disease states. Our crofelemer drug product candidate is the subject of the OnTarget study, a recently conducted pivotal Phase 3 clinical trial for prophylaxis of diarrhea in adult cancer patients receiving targeted therapy. The recently completed analysis of the prespecified subgroup of adult patients with breast cancer from OnTarget indicates that crofelemer achieved statistical significance in this subgroup. Patients with breast cancer accounted for 183 of the 287 participants in this unprecedented prophylactic clinical trial in adult patients with solid tumors receiving targeted therapy with or without standard chemotherapy. The OnTarget results in breast cancer were the subject of a poster presentation conducted December 11, 2024 at the San Antonio Breast Cancer Symposium ("SABCS"). Overall, crofelemer was significantly more effective than placebo in providing sustained response in breast cancer patients in OnTarget, potentially helping them stay on their cancer therapies. This research underscores the potential of crofelemer for prophylaxis of cancer therapy-related diarrhea (“CTD”). A full study report for the breast cancer results is expected to be submitted to a peer-reviewed journal.
As part of our strategy to expand our commercial footprint beyond HIV-related supportive care to include cancer-related supportive care, on April 12, 2024, we entered into an exclusive 5-year in-license agreement with United Kingdom-based Venture Life Group PLC (“Venture Life”), an international consumer health company focused on the global self-care market, for Venture Life's 510(k) cleared oral mucositis prescription product, Gelclair, for the US market. Gelclair is a 510(k) cleared prescription product and can be commercialized without any clinical development costs for Jaguar. We initiated the commercial launch in October 2024 for Gelclair. Oral mucositis is among the most common, painful, and debilitating cancer treatment-related side effects. Gelclair is a protective gel with a mechanical action indicated for the management of pain and relief of pain by adhering to the mucosal surface of the mouth, soothing oral lesions of various etiologies, including oral mucositis/stomatitis. Unlike other products for oral mucositis, it is not a numbing agent and does not sting the mouth.
Jaguar is the majority stockholder of Napo Therapeutics S.p.A. (“Napo Therapeutics”), an Italian corporation established by Jaguar in Milan, Italy, in 2021, focusing on expanding crofelemer access in Europe. Napo Therapeutics’ core mission is to provide access to crofelemer in Europe to address significant rare/orphan disease indications, including, initially, two key rare disease target indications: Short bowel syndrome (“SBS”) with intestinal failure and microvillus inclusion disease (“MVID”) an ultrarare congenital diarrheal disorder (“CDD"”). Jaguar Animal Health is a tradename of Jaguar Health. Magdalena Biosciences Inc. (“Magdalena”), a joint venture formed by Jaguar and Filament Health Corp. (“Filament”) that emerged from Jaguar’s Entheogen Therapeutics Initiative (“ETI”), is focused on identifying the next generation of plant-based first-in-class agents for treatment of mental health conditions.
Jaguar was founded in San Francisco, California as a Delaware corporation on June 6, 2013 (inception). The Company was a majority-owned subsidiary of Napo until the close of the Company's initial public offering on May 18, 2015. The Company was formed to develop and commercialize first-in-class prescription and non-prescription products for companion animals.
Jaguar was founded in San Francisco, California, as a Delaware corporation on June 6, 2013 (“inception”). The Company was a majority-owned subsidiary of Napo until the close of the Company's initial public offering on May 18, 2015. The Company was formed to develop and commercialize first-in-class prescription and non-prescription products for companion animals. On July 31, 2017, Jaguar completed a merger with Napo pursuant to the Agreement and Plan of Merger dated March 31, 2017, by and among Jaguar, Napo, Napo Acquisition Corporation (“Merger Sub”), and Napo's representative (the “Merger Agreement”). In accordance with the terms of the Merger Agreement, upon the completion of the merger, Merger Sub merged with and into Napo, with Napo surviving as the wholly owned subsidiary (the “Merger” or “Napo Merger”). Immediately following the Merger, Jaguar changed its name from “Jaguar Animal Health, Inc.” to “Jaguar Health, Inc.” Napo now operates as a wholly owned subsidiary of Jaguar focused on human healthhealth, including the ongoing development of crofelemer and commercialization of Mytesi.
Napo’s crofelemer 125 mg delayed-release tablets (Mytesi) is an FDA-approved prescription drug for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. In January 2026, following Napo’s entry into a US licensing agreement with an affiliate of privately held Future Pak, LLC (“Future Pak”), Future Pak became the exclusive marketer for Mytesi as well as the tablet formulation for animal health, Canalevia-CA1, which is Jaguar’s crofelemer prescription drug for the treatment of chemotherapy-induced diarrhea in dogs. Jaguar was provided with $16 million of non-dilutive capital in January 2026 upon closing of the agreement with Future Pak, with an additional $2 million due to Jaguar upon completion of post-closing conditions. Per the terms of the agreement, Jaguar also has the opportunity to receive up to $20 million in milestone payments and other future payments. Jaguar will continue to manufacture crofelemer for Mytesi and Canalevia-CA1 for Future Pak. Mytesi and Canalevia-CA1 are both delayed-release tablet formulations of crofelemer.
In May 2025, Napo conducted a Type C Meeting with the Division of Gastroenterology at the FDA to discuss the responder analysis results of crofelemer in the cohort of breast cancer patients receiving targeted therapies with or without cytotoxic chemotherapy for prophylaxis of diarrhea from the company’s pivotal OnTarget Phase 3 clinical trial. OnTarget was a 24-week (two 12-week stages), randomized, multicenter, placebo-controlled, double-blind global study to evaluate the safety and efficacy of crofelemer in diarrhea prophylaxis in adult solid tumor patients receiving targeted therapies with or without standard chemotherapy. As previously announced, the top line results from the OnTarget study showed that the trial did not meet its primary endpoint for the prespecified analysis of all tumor types and all targeted therapies. As previously announced, in the prespecified subgroup of patients with breast cancer, crofelemer showed statistically significant improvement in the monthly responder analysis. Breast cancer patients represent one of the largest group of adult patients with solid tumors with patients often remaining on targeted therapy over prolonged periods in both adjuvant and metastatic settings.
The results in the cohort of patients with breast cancer are based on responder analysis, as was also the primary endpoint in the pivotal Phase 3 ADVENT trial that led to FDA approval of crofelemer for its currently commercialized indication, under the brand name Mytesi, for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. Patients with breast cancer accounted for 183 of the 287 participants in the OnTarget clinical trial, and the results of responder analysis for patients with breast cancer were the subject of a poster presentation at the Multinational Association of Supportive Care in Cancer (MASCC) in Seattle in June 2025.
A greater proportion of patients with breast cancer randomized to the crofelemer arm were monthly responders for the entire 3-month period of the OnTarget study. This research underscores the potential of crofelemer for prophylaxis of cancer therapy-related diarrhea (CTD) in adult patients with breast cancer receiving targeted therapies with or without chemotherapy.
As previously announced, it has been reported that patients with cancer-related diarrhea (“CRD”) were 40% more likely to discontinue chemotherapy or targeted therapy than patients without CRD. The persistence of index cancer therapy and the time to switch were also lower for patients with CRD. Strategies to control CRD and continue cancer therapy are urgently needed. Furthermore, it has been reported that patients with CRD used significantly more resources, including outpatient services, emergency room visits, and hospitalizations. Effective prevention of CRD provides an untapped market opportunity to reduce the overall cost of cancer care. Findings from studies have indicated that patients with CRD had nearly 2.9 times higher all-cause total cost of care than patients without CRD after adjusting for covariates. Thus, prophylaxis of CRD is expected to result in a significant reduction in cancer treatment costs.
Napo also participated in an in-person Type C Meeting on May 28, 2025 with the Division of Gastroenterology of the FDA to discuss these statistically significant responder analysis results for adult patients with breast cancer in the OnTarget trial. Napo proposed two concurrent potential approaches during the meeting for potentially making crofelemer available to metastatic breast cancer patients with the significant unmet medical need of CTD: 1) proposed conduct of a pivotal treatment trial to facilitate approval of crofelemer for CTD in patients with metastatic breast cancer; and 2) the conduct of an expanded access program for treatment of breast cancer patients with CTD who may not be eligible for the planned phase 3 treatment trial, by including breast cancer patients in the adjuvant and neoadjuvant settings. The FDA formally acknowledged both of these key discussion points in correspondence to Napo, and Napo plans to submit a protocol to the FDA for a pivotal treatment trial for metastatic breast cancer patients using crofelemer.
In the second half of 2026, based on discussions with the FDA in May 2025, the company plans to submit to the FDA the final clinical study report (CSR) for the OnTarget trial together with additional details of the responder analysis in the cohort of breast cancer patients, along with a patient survey evaluating clinically meaningful reductions in the frequency of weekly loose/watery stools for patients metastatic cancer patients receiving targeted therapies with or without standard chemotherapy. The currently estimated US metastatic breast cancer population potentially also qualifies as an orphan population, in alignment with the Company’s core focus on orphan diseases. The Company therefore intends to request orphan drug designation from the FDA for the CTD indication in this population. Given crofelemer’s novel and paradigm-shifting physiological mechanism of action, the Company also plans to seek Fast Track designation from the FDA to support potentially expedited regulatory review and potential approval in the US for crofelemer for CTD in metastatic breast cancer patients.
Napo is developing a novel, highly concentrated lyophilized crofelemer powder for oral solution for its prioritized focus on intestinal failure (IF) for the treatment of the ultrarare pediatric disorder, microvillus inclusion disease (MVID), and short bowel syndrome with intestinal failure (SBS-IF). Crofelemer oral powder for solution formulation is a paradigm-shifting and first-in-class drug for the development of novel therapies for these serious unmet medical conditions. This lyophilized oral powder for solution is in advanced clinical development with near-term New Drug Application (NDA) opportunity for MVID and rapid time to market for this potentially breakthrough drug. The lyophilized crofelemer powder for solution has a unique IP position with a long period of exclusivity due to the botanical origin of the drug.
Intestinal failure (IF) is a debilitating condition that often requires patients to receive life-sustaining fluids, electrolytes and nutrients through intravenous administration, which consists of total parenteral nutrition (TPN) with supplemental intravenous fluids, which together constitute parenteral support (PS). Many intestinal failure patients require PS up to 7 days a week, and sometimes for 20 hours or more per day. While crucial for IF patients, PS is associated with significant toxicities to patients, similar to some toxicities associated with chemotherapy, often causing serious health problems including infections, metabolic complications, and liver and kidney function problems. These symptoms may emerge at any time in intestinal failure patients and often become life-threatening.
MVID is an ultrarare, fatal pediatric disorder with around 200 patients in the US and EU combined. There are currently no approved therapies and only lifelong PS, making it one of the most serious unmet medical needs in pediatric patients due to the lethal natural history of the disease. Crofelemer's unique physiological mechanism of modulating intestinal chloride ion secretion results in normalizing electrolyte and fluid balance in the gastrointestinal (GI) tract which reduces the need for electrolyte and fluid requirements through PS. Since MVID patients lack a brush border membrane, this physiological MOA addresses the pathophysiology of MVID, and represents a paradigm-shifting therapy for reduction of PS, which would potentially reduce TPN- and MVID-related comorbidities and improve clinical outcomes.
SBS-IF affects an estimated 12,000 patients in the US. SBS-IF patients without colon-in-continuity have poor prognosis with significant comorbidities associated with life-sustaining PS and disease pathology. Despite availability of GLP-2 therapies, which require intestinal adaptation of 2-3 years following abdominal surgery in a subset of SBS-IF patients, PS remains the life-sustaining standard of care for these patients. Novel crofelemer powder for oral solution is a first-in-class paradigm-shifting therapy which does not require intestinal adaptation and can be initiated within 6-12 months after surgery upon stabilization of PS. Since it is not a growth hormone, it can be used in SBS-IF patients who have had abdominal surgery due to cancer, mesenteric etiologies, and inflammatory bowel conditions such as Crohn’s disease and colitis. Furthermore, crofelemer, due to its unique physiological MOA of modulating intestinal chloride ion secretion for maintaining electrolyte and fluid balance, can be used in combination with GLP-2 analogs as well as in patients who are either intolerant or for whom GLP-2 is contraindicated.
Napo’s marketed drug Mytesi (crofelemer 125 mg delayed-release tablets) is a first-in-class oral botanical drug product approved by the US Food and Drug Administration (“FDA”) for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. To date, this is the only oral plant-based botanical prescription medicine approved under the FDA’s Botanical Guidance. The Company’s Canalevia-CA1 (crofelemer delayed-release tablets) drug is the first and only oral plant-based prescription product that is FDA conditionally approved to treat chemotherapy-induced diarrhea (“CID”) in dogs.
Jaguar is currently supporting three proof-of-concept (POC) investigator-initiated trials (IIT), and conducting two Phase 2 studies, of crofelemer for the rare diseases short bowel syndrome (SBS) with intestinal failure and/or MVID in the US, EU, and/or Middle East/North Africa regions. The Company’s Phase 2 study to evaluate the efficacy of crofelemer for MVID in pediatric patients has been initiated, as has the Company’s Phase 2 study to evaluate the efficacy of crofelemer for SBS with intestinal failure (SBS-IF) in adults, the independent IIT of crofelemer in pediatric patients with SBS-IF or MVID in Abu Dhabi in the United Arab Emirates, and the independent IIT in the US to evaluate crofelemer for SBS-IF in adults. The additional IIT is expected to initiate in Q2 2025, with the availability of the first POC IIT result potentially in H1 2025, and with additional POC IIT results expected throughout 2025. In accordance with the guidelines of specific European Union countries, published data from such clinical investigations could support reimbursed early patient access to crofelemer for these debilitating conditions in 2025 while the company pursues approval of crofelemer for SBS and MVID from the EMA and the FDA. Participation in early access programs, which do not exist in the US, provides an opportunity for reimbursement while impacting the morbidity and high cost of care for these chronic unmet needs. Additionally, the Company expects that if even just a very small number of MVID patients show benefit with crofelemer, this may potentially allow pathways for regulatory approval in the US and other regions and qualify crofelemer for participation in PRIME, a European Medicines Agency (EMA) program providing enhanced interaction and early dialogue with drug developers of novel medicines targeting unmet medical needs, and in the FDA’s Breakthrough Therapies program. If a drug is designated as breakthrough therapy, the FDA will expedite the development and review of the drug.
Crofelemer was granted Orphan Drug Designation (“ODD”) by the FDA in February 2023 for MVID and granted ODD for MVID by the European Medicines Agency (“EMA”) in October 2022. Crofelemer was granted ODD for SBS by the EMA in December 2021 and by the FDA in August 2017. In August 2023, Napo’s Investigational New Drug (“IND”) application was activated by the FDA for a new crofelemer powder for oral solution formulation for treating MVID. Our global MVID Phase 2 trial for Jaguar is being conducted under this IND.
The global phase 2 trial of crofelemer in adults with SBS-IF is taking place under a Clinical Trial Application ("CTA") approved by European health authorities. We expect that enrollment will continue in 2025 for the MVID phase 2 trial and the phase 2 trial for SBS with intestinal failure, with data expected in the beginning of 2026 for both trials.
Napo Therapeutics is initiating efforts to commence clinical development of crofelemer in SBS patients in support of the Company’s key focus on leveraging the EMA’s accelerated conditional marketing authorization pathway in Europe for these rare diseases. SBS affects approximately 10,000 to 20,000 people in the US, according to the Crohn'sCrohn’s & Colitis Foundation, and it is estimated that the population of SBS patients in Europe is approximately the same size.size, and the US population of SBS-IF patients was estimated at 12,000 patients in 2021 in a well-done epidemiology study. Despite limited treatment options, the global market for SBS marketwas exceededvalued $568at million$2 billion in 20192024 and is expectedprojected to reach $4.6$6.4 billion by 2027,2030, according to a report by VisionResearchAndMarkets.com. ResearchMVID Reports.is an ultrarare pediatric disease, with an estimated prevalence of a couple of hundred patients globally. Jaguar estimates that the global market size for MVID therapies is in the range of $50 million to $100 million, based on market research with key opinion leaders (KOLs) and payers.
Crofelemer was granted Orphan Drug Designation (“ODD”) by the FDA in February 2023 for MVID, an ultra-rare congenital diarrheal disorder (“CDD”), and granted ODD for MVID by the European Medicines Agency (“EMA”) in October 2022. Crofelemer was granted ODD for short bowel syndrome (“SBS”) by the EMA in December 2021 and by the FDA in August 2017. In August 2023, the FDA activated Napo’s Investigational New Drug (“IND”) application for a new crofelemer powder for oral solution formulation for the treatment of MVID.
The Orphan Drug Act (“ODA”) in the US grants special status to a small molecule drug or biological product to treat a rare disease or condition upon request of a sponsor. This status is referred to as ODD (or sometimes "orphan status"). ODD qualifies the drug's sponsor for various development incentives, including tax credits for qualified clinical testing and relief of filing fees. Additionally, the ODA provides a seven-year period of marketing exclusivity to the first sponsor who obtains marketing approval for a designated orphan drug. In the EU, receipt of ODD supports some specific regulatory pathways, and sponsors who obtain ODD for their drug can benefit from Scientific Advice from the EMA for clinical trials for the orphan indication and receive market exclusivity for a period of ten years once the medicine is approved for commercialization.
Napo is currently supporting multiple proof-of-concept (POC) investigator-initiated trials (IIT), and also conducting two pivotal clinical trials, of crofelemer powder for oral solution for MVID and SBS-IF in the US, European Union (EU), and/or Middle East. The Company’s trial to evaluate the safety and efficacy of crofelemer powder for oral solution in pediatric MVID patients is ongoing at multiple sites. Napo Therapeutics is conducting a Phase 2 study in adult SBS-IF patients at multiple clinical sites in Italy and Germany. An open label IIT is ongoing in pediatric IF patients with MVID and/or SBS in Abu Dhabi in the United Arab Emirates. Groundbreaking results from pediatric IF patients with MVID and SBS-IF were presented at North American Society for Pediatric Gastroenterology, Hepatology and Nutrition (NASPGHAN 2025) in Chicago. The study showed that the liquid formulation of crofelemer powder resulted in a reduction of parenteral support (PS) of up to 37% in a pediatric MVID patient who has remained on crofelemer therapy for >1 year. PS reductions of up to 15.6% were observed in two pediatric SBS-IF patients who have also remained on crofelemer oral liquid treatment for >1 year.
Napo is also supporting an IIT in the US to evaluate crofelemer powder for oral solution for treatment of adult SBS-IF patients. The Company plans to pursue approval of crofelemer powder for oral solution for MVID in the US following the completion of the pivotal pediatric MVID trial. In accordance with the guidelines of specific EU countries, published data from such clinical investigations could support reimbursed early patient access to crofelemer for these debilitating IF conditions. Participation in early access programs, which do not exist in the US, provides an opportunity for reimbursement while impacting the morbidity and high cost of care for these chronic unmet needs. Additionally, the Company expects that if even just a very small number of MVID patients show benefit with crofelemer, this may potentially allow expedited pathways for regulatory approval in the US. Napo Therapeutics plans to pursue the opportunity for crofelemer powder for oral solution for PRIME designation, a European Medicines Agency (EMA) program providing enhanced interaction and early dialogue with drug developers of novel medicines targeting unmet medical needs. In the US, Napo plans to pursue Breakthrough Therapy Designation (BTD) from the FDA. If a drug is designated as breakthrough therapy, the FDA will expedite the review timeline for the drug.
Most of the activities of the Company are focused on the development and commercialization of Mytesi, the ongoing clinical development of crofelemer for the prophylaxis of diarrhea in adult patients receiving targeted cancer therapy, the ongoing commercial launch of Gelclair, and our prioritized clinical program centered around investigator-initiated POC trials of crofelemer for SBS and MVID.
In the field of animal health, we are continuing limited activities related to developing and commercializing first-in-class gastrointestinal products for dogs, dairy calves and foals.
Crofelemer is a novel, first-in-class anti-secretory antidiarrheal drug that has a normalizing effect on electrolyte and fluid balance in the gut, and this mechanism of action has the potential to benefit multiple disorders that cause GI distress, including diarrhea and abdominal discomfort. Crofelemer is in development for multiple possible follow-on indications, including for our lead Phase 3 program in CTD, investigating prophylaxis of diarrhea related to targeted therapy with or without standard chemotherapy. Crofelemer delayed-release tablets are also being evaluated in diarrhea-predominant irritable bowel syndrome (“IBS-D”) and being evaluated for chronic idiopathic/functional diarrhea in investigator-initiated trials.
Crofelemer powder for oral solution is being developed to support orphan or rare disease indications for adults with SBS with intestinal failure and for pediatric MVID patients.
In addition, a second-generation proprietary anti-secretory antidiarrheal drug (“NP-300”) is in development for symptomatic relief and treatment of moderate-to-severe diarrhea, with or without concomitant antimicrobial therapy, from bacterial, viral, and parasitic infections, including Vibrio cholerae, the bacterium that causes cholera. This program is being pursued with the potential targeted incentive from the FDA forof a tropical disease priority review voucher.voucher from the FDA.
In keeping with the Company’s focus on supportive care for patients undergoing cancer treatment, Jaguar in April 2024 signed an exclusive 5-year in-license agreement with United Kingdom-based Venture Life Group PLC ("Venture Life"), an international consumer health company focused on the global self-care market, for Venture Life's FDA-approved oral mucositis prescription product, Gelclair, for the US market. In October 2024, Jaguar initiated the commercial launch of Gelclair, the Company’s third commercialized prescription product, in the US.
Oral mucositis is among the most common, painful, and debilitating cancer treatment-related side effects. Gelclair is a gel with a mechanical action indicated for the management of pain and relief of pain by adhering to the mucosal surface of the mouth. It coats and protects the oral mucosa, which supports healing. Gelclair is convenient and easy to use, provides rapid and long-lasting pain relief, and improves the ability of oral mucositis patients to eat, drink, and swallow. Unlike other products for oral mucositis, it is not a numbing agent and does not sting the mouth.
As announced, Jaguar is seeking a partner to fund and execute the development and commercialization of NP-300 for the treatment of general, non-infectious diarrhea in dogs, in exchange for commercial rights to the product in the US Diarrhea is one of the most common reasons for veterinary office visits for dogs and is the second most common reason for visits to the veterinary emergency room, yet there are currently no FDA-approved drug to treat canine diarrhea. According to the American Veterinary Medical Association, there were an estimated 89.7 million dogs in the United States in 2024, with nearly half (45.5%) of US households owning a dog in 2024. Devastating diarrhea-related dehydration can occur rapidly for the animal, and the lack of control in urban settings where owners don't have easy access to outdoor facilities is a significant problem for families with dogs. Jaguar estimates that estimate that US veterinarians see approximately six million cases of acute and chronic diarrhea in dogs annually.
In January 2023, Jaguar and Filament,Filament Health, with funding from One Small Planet, formed the US-based joint venture Magdalena.Magdalena Biosciences (“Magdalena”). Magdalena’s focus is on the development of novel, natural prescription medicines derived from plants for mental health indications, including, initially, attention-deficit/hyperactivity disorder (“ADHD”) in adults. The goal of the collaboration is to extend the botanical drug development capabilities of Jaguar and Filament in order to develop pharmaceutical-grade, standardized drug candidates for mental health disorders and to partner with a potential future licensee to develop and commercialize these novel plant-based drugs. This venture aligns with Jaguar's Entheogen Therapeutics Initiative (ETI program) and Filament'sFilament’s corporate mission to develop novel, natural prescription medicines from plants. Magdalena willis leverageleveraging Jaguar'sJaguar’s proprietary medicinal plant library and Filament'sFilament’s proprietary drug development technology. Jaguar’s library of 2,300 highly characterized medicinal plants and 3,500 plant extracts, all from firsthand ethnobotanical investigation by Jaguar and members of the ETI Scientific Strategy Team, is a key asset we have generated over 30 years that bridges the knowledge of traditional healers and Western medicine. Magdalena holds an exclusive license to plants and plant extracts in Jaguar's library, not including any sources of crofelemer or NP-300, for specific indications and is in the process of identifying plant candidates in the library that may prove beneficial for addressing indications such as ADHD.Team. Magdalena is currently approximately 40-percent owned by Jaguar.
As announced, Jaguar recently executed an out-license deal with Magdalena for a botanical drug candidate for possible schizophrenia and psychoses indications and for development with potential corporate partners. Sourced from a medicinal plant that has a long history of use by traditional healers, the drug candidate demonstrates antipsychotic activity and has a mechanism of action distinct from currently FDA-approved therapies for schizophrenia and other mental conditions that present psychotic symptoms. The drug candidate may have the potential to be the first in a new class of plant-based antipsychotic compounds.
In the field of animal health, Jaguar Animal Health is continuing limited activities related to developing first-in-class gastrointestinal products for dogs. In December 2021, wethe Company received conditional approval from the FDA to market Canalevia-CA1 (crofelemer delayed-release tablets), our oral plant-based prescription drug and the only available veterinary drug for the treatment of chemotherapy-induced diarrhea (CID) in dogs, and Canalevia-CA1 is now available to multiple leading veterinary distributors in the US Canalevia-CA1 is a tablet that is given orally and can be prescribed for home treatment of CID.dogs. The FDA conditionally approvesapproved Canalevia-CA1 under application number 141-552. Conditional approval allows for product commercialization while Jaguar Animal Health continues to collect the substantial evidence of effectiveness required for full approval. We have received a Minor Use in a Major Species (“MUMS”) designation from the FDA for Canalevia-CA1 to treat CID in dogs. FDA has established a “"small number”" threshold for minor use in each of the seven major species covered by the MUMS Act. The small number threshold is currently 80,000 for dogs, representing the largest number of dogs that can be affected by a disease or condition over the course of a year and still have the use qualify as a minor use.
As announced, the Company plans to pursue approval from the EMA’s Committee for Veterinary Medicinal Products (“CVMP”) for Canalevia in the European Union for treatment of general diarrhea in dogs. Jaguar’s primary objective for Canalevia is to identify a partner with which to collaborate to achieve our three parallel goals for the drug: Obtain approval in the EU for Canalevia for treatment of general diarrhea in dogs based on existing Jaguar study data; maintain continuity of availability in the US of Canalevia for treatment of CID in dogs; and to expand the US indication from CID in dogs to treatment of general diarrhea in dogs.
Napo completed its requisite preclinical and formulation activities to support the IND application for NP-300, its second-generation, plant-based oral prescription drug product, for clinical development for the symptomatic relief and treatment of moderate-to-severe diarrhea, with or without concomitant antimicrobial therapy, from bacterial, viral and parasitic infections including Vibrio cholerae, the bacterium that causes cholera. Following the completion of the Phase 1 trial, the Company will be positioned to initiate the next stage of our clinical development program for cholera-related diarrhea when our development team has the requisite resources and bandwidth to initiate the additional required trials.
Cholera produces a devastating loss of electrolytes and fluid in patients, and without appropriate reduction in loss of fluid and electrolytes, patients experience significant hospitalization and mortality. NP-300 provides the opportunity to treat cholera patients in combination with oral rehydration salts (“ORS”) and the recommended guidelines from the World Health Organization (“WHO”) for the use of appropriate antibiotics to reduce the burden of the pathogen. Appropriate preclinical toxicity studies and formulation development activities are ongoing to support the conduct of clinical studies with NP-300.
Napo received partial financial support for preclinical services from the National Institute of Allergy and Infectious Diseases (“NIAID”) of the National Institutes of Health, and Napo is grateful for their support of NP-300’s development.
Cholera is an acute diarrheal illness caused by intestine infection with the bacterium Vibrio cholerae. According to the Centers for Disease Control and Prevention of the US Department of Health & Human Services, an estimated 1.3 to 4 million people around the world get cholera each year, and 21,000 to 143,000 people die from it. The infection is often mild or without symptoms but can sometimes be severe. Approximately one in ten infected persons will have severe disease characterized by profuse, watery diarrhea, vomiting, and leg cramps. In these people, rapid loss of body fluids leads to dehydration and shock. Without treatment, death can occur within hours. Cholera is now endemic in many countries outside the US. From January 1, 2024 to July 28, 2024, a cumulative total of 307,433 cholera cases and 2,326 deaths were reported from 26 countries across five World Health Organization (WHO) regions. WHO classified the global resurgence of cholera as a grade 3 emergency in January 2023, the highest internal level for emergencies in WHO. Based on the number of outbreaks and their geographic expansion, alongside the shortage of vaccines and other resources, WHO continues to assess the risk at the global level as very high and the event remains classified as a grade 3 emergency.
We expect that NP-300 could be significantly less expensive and would support development efforts to receive a tropical disease priority review voucher (“TDPRV”) from the FDA for an indication of the symptomatic treatment of diarrhea from acute infections such as cholera. The FDA grants priority review vouchers as an incentive to develop treatments for neglected diseases and rare pediatric diseases. Priority review vouchers are transferable and, in past transactions by other companies, have sold for prices ranging from $60 million to $350 million. The NP-300 program is paired with funding from a promissory note related to the potential future sale of a possible TDPRV.
Napo has actively ensured that its intellectual property (“IP”) filings in support of the development of crofelemer for various proposed indications are protected appropriately. The IP portfolio for crofelemer includes the relief and treatment of HIV-associated diarrhea and CID as well as planned indications for inflammatory diarrhea, IBS-D, CDD, and SBS, with all indications, Napo prioritizes IP protection. Napo currently holds approximately 195 patents, the majority of which do not expire until 2027-2031.
Napo and Napo Therapeutics remain focused on the development of crofelemer powder for solution for the rare disease indications of MVID and SBS-IF. Our management team has significant experience in gastrointestinal product development. We have assembled an impressive group of scientific advisory board (“SAB”) members who work closely with the Chair of Jaguar’s Scientific Advisory Board, Dr. Pravin Chaturvedi, who also serves as the Chief Scientific Officer (“CSO”) of Jaguar.
We believe Jaguar is poised to realize the opportunities for the commercialization of crofelemer powder for oral solution for our IF programs from MVID and SBS-IF. Jaguar, through Napo, holds global unencumbered rights for crofelemer.
We believe Jaguar is poised to realize a number of synergistic, value-adding benefits—an expanded pipeline of potential blockbuster human follow-on indications of crofelemer and a second-generation anti-secretory agent—upon which to build global partnerships. Jaguar, through Napo, holds global unencumbered rights for crofelemer, Mytesi, and Canalevia-CA1. Additionally, several drug product opportunities in Jaguar’s crofelemer pipeline are backed by Phase 2 and POC evidence from human clinical trials.
On a consolidated basis, we have not yet generated enough revenue to date to achieve break-even or positive cash flow, and we expect to continue to incur significant research and development and other expenses. Our net comprehensive losses were $39.0$54.4 million and $41.9$39.0 million for the years ended December 31, 20242025 and 2023,2024, respectively. As of December 31, 2024,2025, we had total stockholders' equitydeficit of $6.5$18.7 million, an accumulated deficit of $346.5$399.9 million, an accumulated other comprehensive loss of $467,000$833,000 and cash of $8.0 million.$968,000. We expect to continue to incur losses, and experience increased expenditures for the foreseeable future as we expand our product development activities, seek necessary approvals for our product candidates, conduct species-specific formulation studies for our non-prescription products, establish API manufacturing capabilities and begin additional commercialization activities. Payments of cash compensation to directors under the Director Compensation Program for the year ended December 31, 20242025 amounted to $442,495.$431,000.
Revenues from the license agreement made with Gen Ilac Ve Saglik Urunleri Sanayi Ve Ticaret, A.S., ("Gen") (or "Licensee") from which all finished Mytesi are sold in the licensed territory.
Cost of Product Revenue
CostThe cost of revenue consists of direct drug substance and drug product materials expense,expenses, direct labor, distribution fees, royaltiesroyalties, and other related expenses associated with the sale of our products.
Research and Development Expense
Research and development ("R&D") expenses consist primarily of clinical trial expenses and contract manufacturing expense,costs, personnel and related benefitbenefits, expense,stock-based stock‑based compensation expense,compensation, employee travel expensetravel, and reforestation expenses. Clinical and contract manufacturing expenseexpenses consistsconsist primarily of costs tofor conductexecuting stability,clinical study protocols for safety and efficacy studies,together with evaluating the stability, and manufacturing startupcosts expensesfor atcrofelemer delayed-release tablets as well as crofelemer drug substance from Alivus an outsourcedoutsourced, FDA-approved crofelemer API provider in Italy.India. It also includes expenses with a third-party provider for the transfer oftransferring the Mytesi manufacturing process,process and the related feasibility and validation activities.activities at a contract manufacturing facility in the US.
We capitalize certain tangible research and development materials, such as API and intermediate lyophilized products, that have a probable alternative future use. We reclassify and expense these materials as R&D expense when they are consumed in research activities or become specifically dedicated to a clinical trial. The determination of when materials are "specifically dedicated" to a clinical trial is a critical accounting estimate because it requires significant management judgment. We evaluate dedication based on several factors, including the finalization of clinical protocols, trial-specific labeling requirements, and the initiation of trial-specific manufacturing or packaging runs. If management’s judgment regarding the timing or probability of clinical trial commencement were to change, it could result in the immediate expensing of significant capitalized balances. A material delay or change in clinical strategy could result in the recognition of substantial R&D expenses in a single period, which could materially impact our reported results of operations.
We typically use our employee and infrastructure resources across multiple development programs. We track outsourced development costs by prescription drug product candidate and non‑prescriptionnon-prescription productproduct, butand dowe not allocatetrack personnel or other internal costs related to the development toof specific programs or development compounds.
Research and development expenses decreased following the completion of the in-life portion of the Phase 3 OnTarget Trial in first half of 2025. During the second half of 2026, the Company will submit clinical study report (CSR) and new protocols for the additional phase 3 clinical trial of crofelemer delayed-release tablets for the treatment of diarrhea in adult patients with metastatic breast cancer. Following FDA clearance for this new study in metastatic breast cancer patients, the costs associated with the clinical trial conduct will incur in the succeeding months in 2026.
We expect research and development expenses to decrease as the Phase 3 OnTarget Trial concluded; though we expect start-up costs associated with our clinical trials for other indications.
On January 12, 2026, Napo and the Company, entered into a license agreement with Woodward Specialty LLC (“Woodward”), an affiliate of Future Pak, LLC (“Future Pak”), and Future Pak, pursuant to which, Napo (a) granted to Woodward an exclusive, nontransferable, sublicensable, royalty-free right and license (subject to certain exceptions as set forth in the License Agreement) under the Napo Mytesi Patents (as defined in the License Agreement) to sell, offer for sale, have sold, make, have made, promote, distribute and otherwise commercialize the Mytesi Product and the Canalevia Product. Thus, we expect no sales and marketing expenses for these products going forward.
We expect sales and marketing expenses to increase going forward as we focus on expanding our market access activities and commercial partnerships to develop follow-on indications of Mytesi, Gelclair and crofelemer.
In the near term, we expect general and administrative expense to remain flatdecrease as we focus on our pipeline development and market access expansion.expansion Thison willour includeIntestinal effortsFailure to(IF) grow the business.programs.
What changed in the latest 10-Q
Risk Factors
Largest changes
“On May 26, 2026, we were formally notified by Nasdaq that we had regained compliance with the Bid Price Rule (the “Compliance Determination”) but that the Panel would maintain jurisdiction over the Company and its listing until September 1, 2026, the outside date of the Panel’s discretion in this matter. The Compliance Determination further stated that, in accordance with Listing Rule 5815(d)(4)(B), the Company is subject to a Mandatory Panel Monitor for a period of one year from the date of the Compliance Determination, or May 26, 2027. …”see in full comparison
“In addition, while Listing Rule 5550(a)(5) currently requires the market value of publicly held shares of at least $1 million, Nasdaq has recently announced its intention to amend its rules to not only increase the market value of publicly held shares requirement to at least $5 million, but accelerate the suspension and delisting process for certain noncompliant companies. …”see in full comparison
“In addition, on July 22, 2026, the SEC’s Division of Trading and Markets approved a new Nasdaq continued listing standard that would require us to maintain a market value of listed securities of at least $5.0 million. Unlike many other of Nasdaq’s continued listing standards, this new listing standard provides no cure or compliance period, and requests for review by a Nasdaq Hearings Panel do not stay the suspension of trading. However, on July 29, 2026, the SEC stayed approval of this rule after two parties filed notices of intent to seek SEC review. …”see in full comparison
“On May 23, 2024, we effected a 1-for-60 reverse stock split of our outstanding voting common stock. On March 24, 2025, we effected a 1-for-25 reverse stock split of our outstanding voting common stock.”see in full comparison
Full comparison: every changed paragraph (6)
On May 23, 2024, we effected a 1-for-60 reverse stock split of our outstanding voting common stock. On March 24, 2025, we effected a 1-for-25 reverse stock split of our outstanding voting common stock.
This notice stated that unless we timely request by March 12, 2026, an appeal before a Hearings Panel (the “Panel”), our securities would be scheduled for delisting from Nasdaq. We requested an appeal before the Panel, and had a hearing before the Panel on April 7, 2026 regarding itsour non-compliance with the Bid Price Rule.
This notice was also a formal notification that the Panel would consider this matter in their decision regarding our continued listing on The Nasdaq Capital Market. In addition, Staff noted that under Nasdaq Listing Rule 5810(c)(3)(A), we would remain non-compliant with both the minimum $1 bid price requirement and the Publicly Held Shares Requirement until the Publicly Held shares deficiency is cured and, thereafter, the Company evidences a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days, unless Staff exercises its discretion to extend this 10 day period as discussed in Nasdaq Listing Rule 5810(c)(3)(H).
On May 26, 2026, we were formally notified by Nasdaq that we had regained compliance with the Bid Price Rule (the “Compliance Determination”) but that the Panel would maintain jurisdiction over the Company and its listing until September 1, 2026, the outside date of the Panel’s discretion in this matter. The Compliance Determination further stated that, in accordance with Listing Rule 5815(d)(4)(B), the Company is subject to a Mandatory Panel Monitor for a period of one year from the date of the Compliance Determination, or May 26, 2027. If within the one-year monitoring period Nasdaq determines that the Company has failed to evidence a closing bid price of at least $1.00 per share for 30 consecutive business days, the Company will not be afforded a 180-day grace period otherwise automatically available under Listing Rule 5810(c)(3). Rather, Nasdaq would issue a delist determination, at which time the Company may request a new hearing before the Panel. The Company’s request for a hearing would stay any further action by Nasdaq at least pending the hearing and the expiration of any extension period that may be granted by the Panel following such hearing.
In addition, on July 22, 2026, the SEC’s Division of Trading and Markets approved a new Nasdaq continued listing standard that would require us to maintain a market value of listed securities of at least $5.0 million. Unlike many other of Nasdaq’s continued listing standards, this new listing standard provides no cure or compliance period, and requests for review by a Nasdaq Hearings Panel do not stay the suspension of trading. However, on July 29, 2026, the SEC stayed approval of this rule after two parties filed notices of intent to seek SEC review. As a result, we cannot predict whether or when the new listing standard will take effect.
In addition, while Listing Rule 5550(a)(5) currently requires the market value of publicly held shares of at least $1 million, Nasdaq has recently announced its intention to amend its rules to not only increase the market value of publicly held shares requirement to at least $5 million, but accelerate the suspension and delisting process for certain noncompliant companies. Specifically, assuming the proposed amendment to the rules as is adopted, if a company remains noncompliant with the $5 million market value of publicly held shares requirement for 30 consecutive trading days, it will be subject to immediate suspension and delisting without a compliance period.
Management's Discussion & Analysis (MD&A)
New heading “Comparison for the three months ended June 30, 2026”
New heading “Product revenue”
New heading “Research and Development”
New heading “Sales and Marketing”
New heading “General and Administrative”
New heading “Interest Income (Expense)”
New heading “Change in Fair Value of Financial Instruments and Hybrid Instrument Designated at FVO”
New heading “Loss on Extinguishment of Debt”
Removed heading “License revenue”
Removed heading “Cost of Product Revenue”
Largest changes
Napo is currently supporting multiple proof-of-concept (POC) investigator-initiated trials (IIT), and also conducting two pivotal clinical trials, of crofelemer powder for oral solution for MVID and SBS-IF in the US, European Union (EU), and/or Middle East. The Company’s trial to evaluate the safety and efficacy of crofelemer powder for oral solution in pediatric MVID patients is ongoing at multiple sites. Napo Therapeutics is conducting a Phase 2 study in adult SBS-IF patients at multiple clinical sites in Italy and Germany. An open label IIT is ongoing in pediatric IF patients with MVID and/or SBS in Abu Dhabi in the United Arab Emirates. As presented at the 58th Annual European Society for Pediatric Gastroenterology, Hepatology & Nutrition (ESPGHAN) Meeting in Lille, France in June 2026, the results of ongoing investigations of liquid oral crofelemer demonstrate substantial reductions of PS and PS normalized to body weight in pediatric IF patients dosed orally for more than one year, with no significant clinical or laboratory abnormalities. In one MVID patient, the weekly PS requirements normalized to body weight have been reduced by up to 48% following >12 months of liquid oral high-dose crofelemer therapy. In two pediatric SBS-IF patients, weekly PS requirements normalized to body weight were reduced up to 40% following >12 months of liquid oral high dose crofelemer therapy. Napo is also supporting an IIT in the US to evaluate crofelemer powder for oral solution for treatment of adult SBS-IF patients. The Company plans to pursue approval of crofelemer powder for oral solution for MVID in the US following the completion of the pivotal pediatric MVID trial. In accordance with the guidelines of specific EU countries, published data from such clinical investigations could support reimbursed early patient access to crofelemer for these debilitating IF conditions. Participation in early access programs, which do not exist in the US, provides an opportunity for reimbursement while impacting the morbidity and high cost of care for these chronic unmet needs. Additionally, the Company expects that if even just a very small number of MVID patients show benefit with crofelemer, this may potentially allow expedited pathways for regulatory approval in the US.see in full comparisonNapo Therapeutics plans to pursue the opportunity for crofelemer powder for oral solution for PRIME designation, a European Medicines Agency (EMA) program providing enhanced interaction and early dialogue with drug developers of novel medicines targeting unmet medical needs.In the US, Napo plans to pursue Breakthrough Therapy Designation (BTD) from the FDA. If a drug is designated as breakthrough therapy, the FDA will expedite the review timeline for the drug.
“Change in Fair Value of Financial Instruments and Hybrid Instrument Designated at FVO”see in full comparison
Full comparison: every changed paragraph (147)
Jaguar Health, Inc. (“Jaguar”), in conjunction with Jaguar family company Napo Pharmaceuticals, Inc. (“Napo”), develops novel proprietary prescription drugs sustainably derived from plants for people with complicated gastrointestinal (“GI”) disease states. Jaguar family companies Napo and Napo Therapeutics, S.p.A., an Italian corporation Jaguar established in Milan, Italy in 2021, are focused on expanding global crofelemer access and are developing new therapies for orphan and rare GI conditions. Jaguar Animal Health is a Jaguar tradename. Magdalena Biosciences, a joint venture formed by Jaguar and Filament Health Corp., is focused on developing novel prescription medicines derived from plants for mental health indications. Jaguar Animal Health is a tradename the Company uses in the animal health space. In the animal health field, the Company focuses on developing and commercializing non-prescription GI products for companion and production animals.
Napo’s crofelemer 125 mg delayed-release tablets (Mytesi) is an FDA-approved prescription drug for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. In January 2026, following Napo’s entry into a US commercial licensing agreement with an affiliate of privately held Future Pak, LLC (“Future Pak”), Future Pak became the exclusive US marketer for Mytesi as well as the tablet formulation for animal health, Canalevia-CA1, which is Jaguar’s crofelemer prescription drug for the treatment of chemotherapy-induced diarrhea in dogs. Jaguar was provided with $16.0 million of non-dilutive capital in January 2026 upon closing of the agreement with Future Pak, withand ansatisfied additionalthe specified post-closing conditions required to receive payment of the non-dilutive $2.0 million dueholdback to Jaguar upon completionamount of post-closingthe conditions.upfront fee from Future Pak. Per the terms of the agreement, Jaguar also has the opportunity to receive up to $20$17.0 million in additional milestone payments and other future payments. Jaguar will continue to manufacture crofelemer for Mytesi and Canalevia-CA1 for Future Pak. Mytesi and Canalevia-CA1 are both delayed-release tablet formulations of crofelemer.
InOn May 2025, Napo conducted a Type C Meeting with the Division of Gastroenterology at the FDA to discuss the responder analysis results of crofelemer in the cohort of breast cancer patients receiving targeted therapies with or without cytotoxic chemotherapy for prophylaxis of diarrhea from the company’s pivotal OnTarget Phase 3 clinical trial. OnTarget was a 24-week (two 12-week stages), randomized, multicenter, placebo-controlled, double-blind global study to evaluate the safety and efficacy of crofelemer in diarrhea prophylaxis in adult solid tumor patients receiving targeted therapies with or without standard chemotherapy. As previously announced, the top line results from the OnTarget study showed that the trial did not meet its primary endpoint for the prespecified analysis of all tumor types and all targeted therapies. As previously announced, inIn the prespecified subgroup of patients with breast cancer, crofelemer showed statistically significant improvement in the monthly responder analysis. Breast cancer patients represent one of the largest group of adult patients with solid tumors with patients often remaining on targeted therapy over prolonged periods in both adjuvant and metastatic settings.
During the Type C Meeting in May 2025 with the Division of Gastroenterology of the FDA Napo discussed the statistically significant responder analysis results for adult patients with breast cancer in the OnTarget trial, and proposed two concurrent potential approaches during the meeting for potentially making crofelemer available to metastatic breast cancer patients with the significant unmet medical need of CTD: 1) proposed conduct of a pivotal treatment trial to facilitate approval of crofelemer for CTD in patients with metastatic breast cancer; and 2) the conduct of an expanded access program for treatment of breast cancer patients with CTD who may not be eligible for the planned phase 3 treatment trial, by including breast cancer patients in the adjuvant and neoadjuvant settings. The FDA formally acknowledged both of these key discussion points in correspondence to Napo, and Napo plans to submit a protocol to the FDA for a pivotal treatment trial for metastatic breast cancer patients using crofelemer.
Based on discussions with the FDA in May 2025, the company plans to submit to the FDA the final clinical study report (CSR) for the OnTarget trial together with additional details of the responder analysis in the cohort of breast cancer patients, along with a patient survey evaluating clinically meaningful reductions in the frequency of weekly loose/watery stools for patients metastatic cancer patients receiving targeted therapies with or without standard chemotherapy.
Napo also participated in an in-person Type C Meeting on May 28, 2025 with the Division of Gastroenterology of the FDA to discuss these statistically significant responder analysis results for adult patients with breast cancer in the OnTarget trial. Napo proposed two concurrent potential approaches during the meeting for potentially making crofelemer available to metastatic breast cancer patients with the significant unmet medical need of CTD: 1) proposed conduct of a pivotal treatment trial to facilitate approval of crofelemer for CTD in patients with metastatic breast cancer; and 2) the conduct of an expanded access program for treatment of breast cancer patients with CTD who may not be eligible for the planned phase 3 treatment trial, by including breast cancer patients in the adjuvant and neoadjuvant settings. The FDA formally acknowledged both of these key discussion points in correspondence to Napo, and Napo plans to submit a protocol to the FDA for a pivotal treatment trial for metastatic breast cancer patients using crofelemer.
In the second half of 2026, based on discussions with the FDA in May 2025, the company plans to submit to the FDA the final clinical study report (CSR) for the OnTarget trial together with additional details of the responder analysis in the cohort of breast cancer patients, along with a patient survey evaluating clinically meaningful reductions in the frequency of weekly loose/watery stools for patients metastatic cancer patients receiving targeted therapies with or without standard chemotherapy. The currently estimated US metastatic breast cancer population potentially also qualifies as an orphan population, in alignment with the Company’s core focus on orphan diseases. The Company therefore intends to request orphan drug designation from the FDA for the CTD indication in this population. Given crofelemer’s novel and paradigm-shifting physiological mechanism of action, the Company also plans to seek Fast Track designation from the FDA to support potentially expedited regulatory review and potential approval in the US for crofelemer for CTD in metastatic breast cancer patients.
Intestinal failure (IF) is a debilitating condition that often requires patients to receive life-sustaining fluids, electrolytes and nutrients through intravenous administration, which consists of total parenteral nutrition (TPN) with supplemental intravenous fluids, which together constitute parenteral support (PS). Many intestinal failure patients require PS up to 7 days a week, and sometimes for 20 hours or more per day. While crucialPS foris IFsupportive, patients,palliative PSand life-sustaining, it is associated with significant toxicities to patients, similar to some toxicities associated with chemotherapy, often causing serious health problemscomplications including infections, metabolic complications, and liver and kidney function problems. These symptoms may emerge at any time in intestinal failure patientstoxicities, and oftencompromised becomecognitive life-threatening.functioning, and can have negative impact on growth and survival.
SBS affects approximately 10,000 to 20,000 people in the US, according to the Crohn’s & Colitis Foundation, and it is estimated that the population of SBS patients in Europe is approximately the same size, and the US population of SBS-IF patients was estimated at 12,000 patients in 2021 in a well-done epidemiology study. Despite limited treatment options, the global market for SBS was valued at $2 billion in 2024 and is projectedestimated to reach $6.4$7.93 billion by 2030,2033, according to a report by ResearchAndMarkets.com.DataM Intelligence. MVID is an ultrarare pediatric disease, with an estimated prevalence of a couple of hundred patients globally. JaguarAccording estimatesto thata third-party market research report, the globalvalue of the market sizefor nutritional support for MVID therapiesis is$856 million in 2026 in North America, Europe and the rangeMENA of(Middle $50East millionand North Africa) region combined, and estimated to $100exceed million,$1 basedbillion onin marketthese researchmarkets withas keya opinionwhole leadersby (KOLs) and payers.2033.
Crofelemer was granted Orphan Drug Designation (“ODD”) by the FDA in February 2023 for MVID, an ultra-rareultrarare congenital diarrheal disorder (“CDD”), and granted ODD for MVID by the European Medicines Agency (“EMA”) in October 2022. Crofelemer was granted ODD for short bowel syndrome (“SBS”) by the EMA in December 2021 and by the FDA in August 2017. In August 2023, the FDA activated Napo’s Investigational New Drug (“IND”) application for a new crofelemer powder for oral solution formulation for the treatment of MVID.
Napo is currently supporting multiple proof-of-concept (POC) investigator-initiated trials (IIT), and also conducting two pivotal clinical trials, of crofelemer powder for oral solution for MVID and SBS-IF in the US, European Union (EU), and/or Middle East. The Company’s trial to evaluate the safety and efficacy of crofelemer powder for oral solution in pediatric MVID patients is ongoing at multiple sites. Napo Therapeutics is conducting a Phase 2 study in adult SBS-IF patients at multiple clinical sites in Italy and Germany. An open label IIT is ongoing in pediatric IF patients with MVID and/or SBS in Abu Dhabi in the United Arab Emirates. Groundbreaking results from pediatric IF patients with MVID and SBS-IF were presented at North American Society for Pediatric Gastroenterology, Hepatology and Nutrition (NASPGHAN 2025) in Chicago. The study showed that the liquid formulation of crofelemer powder resulted in a reduction of parenteral support (PS) of up to 37% in a pediatric MVID patient who has remained on crofelemer therapy for >1 year. PS reductions of up to 15.6% were observed in two pediatric SBS-IF patients who have also remained on crofelemer oral liquid treatment for >1 year.
Napo is currently supporting multiple proof-of-concept (POC) investigator-initiated trials (IIT), and also conducting two pivotal clinical trials, of crofelemer powder for oral solution for MVID and SBS-IF in the US, European Union (EU), and/or Middle East. The Company’s trial to evaluate the safety and efficacy of crofelemer powder for oral solution in pediatric MVID patients is ongoing at multiple sites. Napo Therapeutics is conducting a Phase 2 study in adult SBS-IF patients at multiple clinical sites in Italy and Germany. An open label IIT is ongoing in pediatric IF patients with MVID and/or SBS in Abu Dhabi in the United Arab Emirates. As presented at the 58th Annual European Society for Pediatric Gastroenterology, Hepatology & Nutrition (ESPGHAN) Meeting in Lille, France in June 2026, the results of ongoing investigations of liquid oral crofelemer demonstrate substantial reductions of PS and PS normalized to body weight in pediatric IF patients dosed orally for more than one year, with no significant clinical or laboratory abnormalities. In one MVID patient, the weekly PS requirements normalized to body weight have been reduced by up to 48% following >12 months of liquid oral high-dose crofelemer therapy. In two pediatric SBS-IF patients, weekly PS requirements normalized to body weight were reduced up to 40% following >12 months of liquid oral high dose crofelemer therapy. Napo is also supporting an IIT in the US to evaluate crofelemer powder for oral solution for treatment of adult SBS-IF patients. The Company plans to pursue approval of crofelemer powder for oral solution for MVID in the US following the completion of the pivotal pediatric MVID trial. In accordance with the guidelines of specific EU countries, published data from such clinical investigations could support reimbursed early patient access to crofelemer for these debilitating IF conditions. Participation in early access programs, which do not exist in the US, provides an opportunity for reimbursement while impacting the morbidity and high cost of care for these chronic unmet needs. Additionally, the Company expects that if even just a very small number of MVID patients show benefit with crofelemer, this may potentially allow expedited pathways for regulatory approval in the US. Napo Therapeutics plans to pursue the opportunity for crofelemer powder for oral solution for PRIME designation, a European Medicines Agency (EMA) program providing enhanced interaction and early dialogue with drug developers of novel medicines targeting unmet medical needs. In the US, Napo plans to pursue Breakthrough Therapy Designation (BTD) from the FDA. If a drug is designated as breakthrough therapy, the FDA will expedite the review timeline for the drug.
In January 2023, Jaguar and Filament Health, with funding from One Small Planet, formed the US-based joint venture Magdalena Biosciences (“Magdalena”). Magdalena’s focus is on the development of novel, natural prescription medicines derived from plants for mental health indications, including, initially, attention-deficit/hyperactivitycognitive disorderimpairment associated with schizophrenia (“ADHD”CIAS) in adults.. The goal of the collaboration is to extend the botanical drug development capabilities of Jaguar and Filament in order to develop pharmaceutical-grade, standardized drug candidates for mental health disorders and to partner with a potential future licensee to develop and commercialize these novel plant-based drugs. This venture aligns with Jaguar's Entheogen Therapeutics Initiative (ETI) and Filament’s corporate mission to develop novel, natural prescription medicines from plants. Magdalena is leveraging Jaguar’s proprietary medicinal plant library and Filament’s proprietary drug development technology. Jaguar’s library of 2,300 highly characterized medicinal plants and 3,500 plant extracts, all from firsthand ethnobotanical investigation by Jaguar and members of the ETI Scientific Strategy Team. Magdalena is currently approximately 40-percent owned by Jaguar.
In the field of animal health, Jaguar Animal Health is continuing limited activities related to developing first-in-class gastrointestinal products for dogs. In December 2021, the Company received conditional approval from the FDA to market Canalevia-CA1 (crofelemer delayed-release tablets) for the treatment of chemotherapy-induced diarrhea (CID) in dogs. The FDA conditionally approved Canalevia-CA1 under application number 141-552. Conditional approval allows for product commercialization while Jaguar Animal Health continues to collect the substantial evidence of effectiveness required for full approval. We have received a Minor Use in a Major Species (“MUMS”) designation from the FDA for Canalevia-CA1 to treat CID in dogs. FDA has established a "small number" threshold for minor use in each of the seven major species covered by the MUMS Act. The small number threshold is currently 80,000 for dogs, representing the largest number of dogs that can be affected by a disease or condition over the course of a year and still have the use qualify as a minor use.
In June 2026 the company completed submission of its New Animal Drug Application (NADA) to the FDA’s Center for Veterinary Medicine for full approval of crofelemer for the treatment of CID in dogs.
As announced, Jaguar is planning the commercial launch of Neonorm Dog, a new extension of Jaguar’s Neonorm franchise for companion animals. Neonorm Dog is designed to provide dog owners with access to a plant-based, non-prescription product intended to support normal stool consistency and GI fluid balance in dogs. Jaguar expects to make Neonorm Dog available through both Amazon and Chewy. The Neonorm franchise currently includes Neonorm Foal and Neonorm Calf, plant-based products developed to support proper hydration and bowel health in pre-weaned foals and calves. Neonorm products contain a standardized botanical extract derived from the sustainably harvested Croton lechleri tree, which acts locally in the gut.
As announced, the Company plans to pursue approval from the EMA’s Committee for Veterinary Medicinal Products (“CVMP”) for Canalevia in the European Union for treatment of general diarrhea in dogs. Jaguar’s primary objective for Canalevia is to identify a partner with which to collaborate to achieve our three parallel goals for the drug: Obtain approval in the EU for Canalevia for treatment of general diarrhea in dogs based on existing Jaguar study data; maintain continuity of availability in the US of Canalevia for treatment of CID in dogs; and to expand the US indication from CID in dogs to treatment of general diarrhea in dogs.
Napo and Napo Therapeutics remain focused on the development of crofelemer powder for solution for the rare disease intestinal failure (IF) indications of MVID and SBS-IF. Our management team has significant experience in gastrointestinal product development. We have assembled an impressive group of scientific advisory board (“SAB”) members who work closely with the Chair of Napo’s and Jaguar’s Scientific Advisory Board, Dr. Pravin Chaturvedi, who also serves as the Chief Scientific Officer (“CSO”) of Napo and Jaguar.
On a consolidated basis, we have not yet generated enough revenue to date to achieve break-even or positive cash flows, and we expect to continue to incur significant research and development and other expenses. Our net income (losses) were $8.7$4.1 million net incomeloss and $10.6$21.2 million net losses for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. As of MarchJune 31,30, 2026, we had a total stockholders' equity (deficit) of $15.8$4.9 million, an accumulated deficit of $391.1$403.7 million, an accumulated other comprehensive loss of $1.2 million and cash of $7.3$3.8 million. We expect to continue to incur losses, and experience increased expenditures for the foreseeable future as we expand our product development activities, seek necessary approvals for our product candidates, conduct species-specific formulation studies for our non-prescription products, establish API manufacturing capabilities and begin additional commercialization activities. Payments of cash compensation to directors under the Director Compensation Program for the three and six months ended MarchJune 31,30, 2026,2026 amounted to $109,000.$108,000 and $217,000, respectively.
Revenues from the sale of Mytesi and Canalevia, which are sold exclusively to Woodward Specialty LLC (“Woodward”), an affiliate of Future Pak, LLC (“Future Pak”), pursuant to the Supply Agreement entered into on January 12, 2026. Under this arrangement, Napo manufactures or has the Mytesi Product manufactured and supplies it to the Licensee for commercialization in the U.S.
Our policy typically permits returns if the product is damaged, defective, or otherwise cannot be used when received by the customer if the product has expired. Returns are accepted for productproducts that will expire within sixthree months or that have expired up to one year after their expiration dates. Estimates for expected returns of expired products are based primarily on an ongoing analysis of our historical return patterns.
The cost of product revenue consists of direct drug substance and drug product materials expenses, direct labor, distribution fees, royalties, and other related expenses associated with the sale of our products.
As of March 31, 2026, theThe Company has incurred approximately $25.0 million onof expenses for its primary R&D projects.projects from the inception of the projects until June 30, 2026. The timing and amount of our research and development expenses will depend largely upon the outcomes of current and future trials for our prescription drug product candidates, as well as the related regulatory requirements, the outcomes of current and future species-specific formulation studies for our non-prescription products, manufacturing costs and any costs associated with the advancement of our line extension programs. We cannot determine with certainty the duration and completion costs of the current or future development activities. The total project costs remain uncertain due to regulatory and clinical trial complexities. Management continues to monitor timelines closely to address any risks that could impact timely project completion and future operations.
Research and development expenses decreased following the completion of the in-life portion of the Phase 3 OnTarget Trial in first half of 2025. During the second half of 2026, the Company will submit clinical study report (CSR) and new protocols for the additional phase 3 clinical trial of crofelemer delayed-release tablets for the treatment of diarrhea in adult patients with metastatic breast cancer. Following FDA clearance for this new study in metastatic breast cancer patients, the costs associated with the clinical trial conduct will incur in the succeeding months in 2026..
Materials expense and tree planting refers to the Company's ongoing environmental costs related to the sustainable sourcing of crofelemer and reforestation activities in the Amazon Rainforest. These expenses include capital investments in seedling nurseries and tree planting. As of MarchJune 31,30, 2026, no significant non-recurring environmental remediation costs are anticipated. The Company continues to monitor its environmental impact and may incur future costs as needed.
Sales and marketing expenses consist of personnel and related benefits, stock-based compensation, direct sales and marketing, employee travel, and management consulting expenses. We currently incur sales and marketing expenses to promote Mytesi and Gelclair. We do not have significant marketing or promotional expenses related to Canalevia-CA1 and Neonorm Calf or Neonorm Foal for the threesix months ended MarchJune 31,30, 2026 and 2025.
On January 12, 2026, Napo and the Company entered into a license agreement with Woodward Specialty LLC (“Woodward”), an affiliate of Future Pak, LLC (“Future Pak”), and Future Pak, pursuant to which, Napo granted to Woodward an exclusive, nontransferable, sublicensable, royalty-free right and license (subject to certain exceptions as set forth in the License Agreement) under the Napo Mytesi Patents (as defined in the License Agreement) to sell, offer for sale, have sold, make, have made, promote, distribute and otherwise commercialize the Mytesi Product and the Canalevia Product. Thus, we expect no sales and marketing expenses for these products going forward.
In the near term, we expect general and administrative expenseexpenses to decrease as we focus on our pipeline development and market access expansion on our Intestinal Failure (IF) programs.
Change in fair value of freestanding and hybrid financial instruments designated at Fairfair Valuevalue Optionoption ("FVO") consists of gain or loss recognized related to fair values changes of our instruments designated at FVO.
For the three and six months ended MarchJune 31,30, 2026, the only material impacts of IRA are a significant reduction in the Company’s Medicare Part D rebates payable to CMS and a reduction in patients’ out-of-pocket copays for their Mytesi prescriptions. Management continues to assess the evolving implications of the IRA on pricing, reimbursement, and research incentives.
As of MarchJune 31,30, 2026, the Company holds several lease agreements, including two San Francisco office leases: Suite 400 and Suite 600. Both offices comprise 10,526 rentable square feet, with each suite accounting for 5,263 square feet. Both leases began on September 1, 2021, with an original expiration date of August 31, 2024. The first amendment executed on December 24, 2021, initially extended both leases to February 28, 2025, with monthly rent escalating from $42,000 to $45,000 in the final year.
Comparison for the threesix months ended MarchJune 31,30, 2026 and 2025
The following table summarizes the Company’s results of operations with respect to the items set forth in such table for the threesix months ended MarchJune 31,30, 2026 and 2025, together with the change in such items in dollars and as a percentage.
Due to the Company’s arrangements, including elements of variable consideration, gross product sales are reduced in order to reflect the expected consideration to arrive at net product sales. Deductions to reduce gross product sales to net product sales for the threesix months ended MarchJune 31,30, 2026 and 2025, were as follows:
Our gross product revenues were approximately $1.3$2.5 million and $3.2$7.1 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. These figures reflect revenue from the sale of our human drug Mytesi, our animal products branded as Neonorm Calf and Neonorm Foal and exclusive distribution agreement for the sale of Gelclair.
The decrease in gross product revenue of $1.9$4.6 million for threesix months ended MarchJune 31,30, 2026 compared to the same period in 2025, was primarily due to the decrease in sales volume of Mytesi.Mytesi, following the license agreement entered by the Company with Woodward on January 12, 2026.
Medicaid and AIDS Drug Assistance Program (“ADAP”) rebates were $64,000 and $735,000$1.4 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, a decrease of $671,000$1.3 million due to lower product utilization within the program coupled with changes in rebate agreements.agreements and the license agreement entered by the Company with Woodward.
Sales discounts were $24,000 and $260,000$566,000 for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, a decrease of $236,000$542,000 due to changes in sales discount arrangements to various customers.
Sales returns were $0 and $17,000$21,000 for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, a decrease of $17,000$21,000 due to the decrease in volume of sales returns.
License revenue
License revenues increased by $19.0 million from $43,000$86,000 for the threesix months ended MarchJune 31,30, 2025 to $19.0 million in the same period in 2026, due to license agreement entered by the Company with Woodward on January 12, 2026.Woodward. The license revenue is recognized asat a point in time when control of the underlying functional intellectual property is transferred, permitting Woodward receivesto use and consumes the benefitsbenefit from the Company’s performance of providing access to its intellectual property at point in time.license.
Cost of Product Revenue
The following table presents the components of cost of product revenue for the threesix months ended MarchJune 31,30, 2026 and 2025, together with the change in such components in dollars and as a percentage:
The increase in cost of product revenue of $643,000$1.1 million for the threesix months ended MarchJune 31,30, 2026 compared to 2025 was primarily due to:
Material cost increased by $772,000$1.2 million from $189,000$421,000 for the threesix months ended MarchJune 31,30, 2025 to $961,000$1.6 million in the same period in 2026, due to the sale of remaining Mytesi and Canalevia inventory on hand under the licensing and supply agreement with Woodward (affiliate of Future Pak).Woodward.
Direct labor decreased by $172,000$192,000 from $228,000$433,000 for the threesix months ended MarchJune 31,30, 2025 to $56,000$241,000 in the same period in 2026, dueprimarily to the decreased time spentdriven by employeeslower direct labor hours spent manufacturing Mytesi becausedue ofto thesecond quarter's production schedule inchanges after the firsteffectivity quarter.of licensing and supply agreement with Woodward.
Distribution fees decreased by $54,000 from $87,000 for the six months ended June 30, 2025 to $33,000 in the same period in 2026, due to lower distribution costs resulting from the sale of Mytesi under the licensing and supply agreement with Woodward, as Woodward took over the distribution of Mytesi and Canalevia.
Other cost of product revenue increased by $183,000 from $101,000 for the six months ended June 30, 2025 to $284,000 in the same period in 2026, due to the increase in royalty expense related to Gelclair sales. The increase reflects a higher sales volume threshold for royalty calculations, which increased from $2.6 million in 2025 to $6.3 million in 2026, forming the basis for royalty payments.
The following table presents the components of R&D expense for the threesix months ended MarchJune 31,30, 2026 and 2025, together with the change in such components in dollars and as a percentage:
The increase in R&D expense of $198,000$269,000 for the threesix months ended MarchJune 31,30, 2026, compared to 2025 was primarily due to:
Clinical and contract manufacturing expenses increased by $838,000$1.6 million from $1.3$2.3 million for the threesix months ended MarchJune 31,30, 2025 to $2.1$4.0 million in the same period in 2026. The increase was primarily attributable to the progression of crofelemer lyophilization into the development phase, which resulted in higher clinical trial–related costs and increased external contract manufacturing services related to lyophilization activities.
Personnel and related benefits decreased by $222,000$698,000 from $1.5$3.0 million for the threesix months ended MarchJune 31,30, 2025 to $1.3$2.3 million in the same period in 2026, due to a reduction in force (RIF) within the Clinical and QA groups, which resulted in lower headcount for clinical trial, research, and quality assurance functions during the period.
Third-party consulting services decreased by $239,000$308,000 from $560,000$906,000 for the threesix months ended MarchJune 31,30, 2025 to $321,000$598,000 in the same period in 2026, as the Phase 3 On Target Clinical Trial concluded, reducing the consulting and contractor expenses.
Stock-based compensation expense decreased by $60,000$93,000 from $117,000$209,000 for the threesix months ended MarchJune 31,30, 2025 to $57,000$116,000 in the same period in 2026, due to higherreduction RSUin cancellationsheadcount of employees subject to the stock-based compensation program, reduction of awards granted, and decline in fair value of newly granted options, despite the increase in higher options and RSUs granted during the current year.options.
Other R&D expenses decreased by $44,000$71,000 from $106,000 million$194,000 for the threesix months ended MarchJune 31,30, 2025 to $62,000 million$123,000 in the same period in 2026, due to the RIF within the Clinical and QA groups and the conclusion ofas the Phase 3 ONOn Target clinicalClinical trial,Trial bothconcluded, ofreducing whichother reducedexpenses travelsuch requirementsas forconsulting, researchformulation, and clinicalregulation purposes.fees.
The following table presents the components of R&D expense per project for the threesix months ended MarchJune 31,30, 2026 and 2025, together with the change in such components in dollars and as a percentage:
The increase in R&D expense of $198,000$269,000 for the threesix months ended MarchJune 31,30, 2026 compared to 2025 was primarily due to:
CDD and MVID clinical trial expenses increased by $891,000$1.8 million from $690,000$1.6 million for the threesix months ended MarchJune 31,30, 2025 to $1.6$3.3 million in the same period in 2026, due to the increased lyophilization of the Mytesi project and the addition of clinical trials across the US, EU, and Middle East.
CTD clinical trial expenses decreased by $370,000 from $497,000 for the three months ended March 31, 2025 to $127,000 in the same period in 2026, due to the winding down of the statistically significant Breast Cancer clinical trial, following the FDA-recommended additional one-year study period.
SBS-IF clinical trial expenses decreased by $216,000$559,000 from $327,000$670,000 for the threesix months ended MarchJune 31,30, 2025 to $111,000 in the same period in 2026, due to a strategic shift in research priorities, as the company is currently focusing on MVID.
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