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

We are a clinical development-stage biopharmaceutical company. In November 2013, we merged with Sonkei Pharmaceuticals, Inc. (“Sonkei”), and, in February 2014, we acquired Mind-NRG Sarl (“Mind-NRG”), which were also clinical development-stage biopharmaceutical companies. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval or become commercially viable. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we may never generate product revenue or achieve profitability. Our net incomeloss was $1.4$293.4 million and our net lossincome was $30.0$1.4 million for the fiscal years ended December 31, 20242025 and 2023,2024, respectively. As of December 31, 2024,2025, we had an accumulated deficit of approximately $395.4$688.8 million.

Our operations and the historic operations of Sonkei and Mind-NRG have consumed substantial amounts of cash since inception. As of December 31, 2024,2025, we had cash, cash equivalents, and restricted cash of $21.5$82.4 million. We believe that ourthis existing cash, cash equivalents, and restricted cashamount will be sufficient to meet our cashoperating commitments for at least the next 12twelve months afterfrom the date that the year-end condensedour financial statements are issued. The process of drug development can be costly, and the timing and outcomes of clinical trials are uncertain. The assumptions upon which we have based our estimates are routinely evaluated and may be subject to change. The actual amount of our expenditures will vary depending upon a number of factors, including, but not limited to, the design, timing and duration of future clinical trials, the progress of our research and development programs, the infrastructure to support a commercial enterprise, the cost of a commercial product launch, and the level of financial resources available.

We will require additional capital in the short-term to continue advancing the development and regulatory approval process of roluperidone. We will also require additional capital in the long-term to advance the development, regulatory approval process and potential commercialization of roluperidone and other potential product candidates that we may develop in the future. Because the length of time and activities associated with successful development of product candidates are highly uncertain, we are unable to estimate with certainty the actual funds we will require for development and any approved marketing and commercialization activities. Additional capital may not be available in sufficient amounts, on the requisite timing or on reasonable terms, if at all, and our ability to raise additional capital may be adversely impacted by global economic conditions, geopolitical conflicts, such as the war in Ukraine and hostilities in the Middle East, and other factors. Our future funding requirements, both short and long-term, will depend on many factors, including:

Our ability to use our federal and state NOL carryforwards to offset potential future taxable income is dependent upon our generation of future taxable income before the expiration dates of the NOL carryforwards, and we cannot predict with certainty when, or whether, we will generate sufficient taxable income to use all of our NOL carryforwards. Under currentU.S. tax law, federal NOL carryforwards generated in taxable years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such NOL carryforwards is limited to 80% of taxable income. Many states have similar laws. As of December 31, 2024,2025, we had approximately $156.8$188.2 million of federal net operating losses that will begin to expire in 2036, if not utilized. Of the total federal net operating loss, approximately $135.4$166.8 million has an unlimited carryforward and therefore will not expire. As of December 31, 2024,2025, we had approximately $7.7 million of New Jersey and approximately $148.1$180.4 million of Massachusetts operating losses that will begin to expire in 2029 and 2037, respectively, if not utilized. Accordingly, certain of our federal and state NOL carryforwards could expire unused and be unavailable to offset future income tax liabilities.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), federal NOL carryforwards may become subject to an annual limitation in the event of certainan cumulativeownership changeschange (generally defined as a greater than 50% change, by value, in ourits ownership. An “ownership change” pursuant to Section 382 of the Code generally occurs if one or more stockholders or groups of stockholders who own at least 5% of the company’s stock increase theirequity ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period.period). We may be subject to an annual limitations on the amount of NOL carryforwards that can be utilized in each year. It is also possible that some or all of our NOL carryforwards could be limited by the provisions of Section 382 of the Code as a result of future changes in ownership, including as a result of subsequent sales of securities by us or our stockholders. Further, state NOL carryforwards may be similarly limited. Any such disallowances may result in greater tax liabilities than we would incur in the absence of such a limitation and any increased liabilities could adversely affect our business, results of operations, financial condition and cash flow.

The tax regimes we are subject to or operate under, including income and non-income taxes, are unsettled and may be subject to significant change. Changes in tax laws, regulations, or rulings, or changes in interpretations of existing laws and regulations, could materially affect our financial position and results of operations. For example, the Tax Cuts and Jobs ActAct, Taxthe Coronavirus Aid, Relief, and Economic Security Act, the Inflation Reduction Act, or the IRA, and the One Big Beautiful Bill Act enacted in 2017 (the “Tax Act”) made broadmany and complex changes to the U.S. tax code, includingsignificant changes to U.S. federaltax laws, including the imposition by the IRA of, among other rules, a 15% minimum tax rates, additional limitations on the deductibility of interest, both positive and negative changes to the utilization of future NOL carryforwards, allowing for the expensing of certain capital expenditures, and putting into effect the migration from a “worldwide” system of taxation to a territorial system. Moreover, the IRA provides for a minimum tax equal to 15% of the adjusted financial statementbook income of certain large corporations,corporations as well asand a 1% excise tax on certain sharecorporate buybacksstock byrepurchases. publicFurther, corporationsexisting thattax wouldlaws, statutes, rules, regulations, or ordinances could be imposedinterpreted differently, changed, repealed, or modified at any time. Any such enactment, interpretation, change, repeal, or modification could adversely affect us, possibly with retroactive effect. In particular, changes in corporate tax rates, the realization of net deferred tax assets, the taxation of foreign earnings, and the deductibility of expenses could have a material impact on suchthe corporations. The issuancevalue of additionalour regulatorydeferred ortax accountingassets, guidanceresult relatedin tosignificant theone-time Taxcharges, Actand or the IRA could materially affectincrease our tax obligations and effectivefuture tax rate.expenses. In addition, our tax position could be adversely impacted by changes in tax laws applicable to corporate multinationals which have been proposed, and, in some cases, enacted by various countries, and by other international tax developments including the implementation of the base erosion and profit shifting project led by the Organization for Economic Cooperation and Development and certain tax initiatives proposed by the European Commission. These changes and developments include changes to the existing framework in respect of income taxes, as well as the imposition of new types of non-income taxes (such as taxes based on a percentage of revenue) which could apply to our business. These types of changes to the taxation of our activities could increase our worldwide effective tax rate, increase the amount of taxes imposed on our business and our compliance costs, and harm our financial position. Such changes may also apply retroactively to our historical operations and result in taxes greater than the amounts estimated and recorded in our financial statements.

If, following submission, our application is not accepted for substantive review or approved, the EMA, FDA or other comparable foreign regulatory authorities may require that we conduct additional clinical or pre-clinical trials, provide additional data, manufacture additional validation batches or develop additional analytical tests methods before they will reconsider our application. On October 14, 2022, we received a refusal-to-file communication from the FDA for our NDA submission for roluperidone, our lead product candidate, which decision was confirmed by the FDA in a subsequent Type A meeting. On April 27, 2023, the FDA filed our NDA for roluperidone following our request for formal dispute resolution and appeal of the refusal-to-file letter. On May 8, 2023, we received confirmation from the FDA that our NDA for roluperidone had been assigned a standard review classification and a PDUFA goal date of February 26, 2024. The FDA also advised that it identified potential review issues that had been previously cited in the RTF decision letter, which included those discussed at the Type C meeting in March 2022. See the section titled “Item 1. Business— Our Clinical-Stage Programs—Clinical and Regulatory Updates—Type C Meeting” for more information. On February 26, 2024, the FDA issued a CRL to our NDA for roluperidone. See the section titled “Item 1. Business—Our Clinical-Stage Programs—Clinical and Regulatory Updates—Complete Response Letter” for more information. See also the risk factor above titled “We have incurred significant losses since our inception. We expect to continue to incur losses over the next several years and may never achieve or maintain profitability.” As a result of the CRL, we potentiallyneed needto conduct an additional studies.Phase Additional3 studiestrail, andwhich data wouldwill impose increased costs and delays in the regulatory approval process,process. whichOur C19 Phase 3 confirmatory trial may requirenot usbe tosuccessful, expendmay morebe resourcessignificantly thandelayed, weand havemay available.not result in marketing authorization for roluperidone in any jurisdiction. In addition, the EMA, FDA or other comparable foreign regulatory authorities may not consider any additional required trials, data or information that we perform or provide to be sufficient, or we may decide, or be required, to abandon the program.

The results of pre-clinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. Interpretation of results from early, usually smaller, trials that suggest positive trends in some subjects require caution. Results from later stages of clinical trials enrolling more subjects may fail to show the desired safety and efficacy results or otherwise fail to be consistent with the results of earlier trials of the same product candidate. For example, our Phase 3 trial (C07) of roluperidone for the treatment of negative symptoms of schizophrenia failed to meet its primary endpoint despite our Phase 2b trial (C03) of the same design achieving statistical significance on the same endpoint. Inconsistencies such as this may occur for a variety of reasons, including differences in trial design, trial endpoints (or lack of trial endpoints in exploratory studies), subject population, number of subjects, subject selection criteria, trial duration, drug dosage and formulation or due to the lack of statistical power in the earlier trials. A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unacceptable safety profiles, notwithstanding positive results in earlier trials.

We mayhave in the past and intend to conduct our future clinical trials at sites outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of this data would be subject to certain conditions imposed by the FDA. For example, the study population must adequately represent the applicable United States population, and the data must be applicable to the American population and medical practice in ways that the FDA deems clinically meaningful. In addition, while clinical trials conducted outside of the United States are subject to the applicable local laws, FDA acceptance of the data from such trials will be dependent upon its determination that the trials were conducted consistent with all applicable United States laws and regulations. There can be no assurance the FDA will accept data from trials conducted outside of the United States as adequate support of an application for regulatory approval,approval. andFor itour isConfirmatory notPhase unusual3 fortrial, we agreed with the FDA tothat requirebest someefforts Phasewill 3be clinical trial datamade to besecure generated25-30% inof patients from the UnitedU.S., States.subject to competitive recruitment. If we are unable to enroll 25-30% of our C19 patients from the U.S. or if the FDA does not accept the data from our international clinical trials,trial sites, it would likely result in the need for additional trials in the United States,, which would be costly and time-consuming and could delay or permanently halt the development of one or more of our product candidates.roluperidone. Similar requirements and consequences apply outside the United States in relation to acceptance by for foreign regulatory authorities of data from clinical trials conducted outside their territory.

We rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials in Europe and, we expect, eventuallyand in the United States and, while we have agreements governing their committed activities, we have limited influence over their actual performance. We may also experience difficulties enrolling subjects for our clinical trials relating to roluperidone due to the mental health of the subjects that we will need to enroll, related diagnoses and drop-out rates.

Our product candidates and the activities associated with their development and commercialization in the United States, including, but not limited to, their advertising and promotion, will further be heavily scrutinized by the FDA, the United States Department of Justice, the United States Department of Health and Human Services’ (“HHS’s”) Office of Inspector General, state attorneys general, members of Congress and the public. Violations of applicable law, including advertising, marketing and promotion of our products for unapproved (or off-label) uses, are subject to enforcement letters, inquiries and investigations, and civil, criminal and/or administrative sanctions by regulatory authorities. Additionally, comparable foreign regulatory authorities will heavily scrutinize advertising and promotion of any product candidate that obtains approval outside of the United States. In the EU, the advertising and promotion of medicinal products are subject to both EU and EU Member States’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, misleading and comparative advertising and unfair commercial practices. Although general requirements for advertising and promotion of medicinal products are established under EU legislation, the details are governed by regulations in individual EU Member States and can differ from one country to another. For example, applicable laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics, or SmPC, as approved by the competent authorities in connection with a marketing authorization. Promotional activity that does not comply with the SmPC is considered off-label and is prohibited in the EU. Direct-to-consumer advertising of prescription medicinal products is also prohibited in the EU. Enforcement of advertising and promotional requirements relating to medicinal products in the EU is carried out at the national level by the national competent authorities of EU Member States. Furthermore, national or industry codes of conduct or practice, such as the Association of the British Pharmaceutical Industry (the United Kingdom innovative pharmaceutical industry trade association) code of practice, may established additional, stricter requirements than applicable legislative requirements.

We currently have a limitedno marketing and sales organization. If we are unable to establish greater marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to effectively market and sell our product candidates, if approved, or generate product revenues.

We currently have a limitedno marketing or sales organization for the marketing, sales and distribution of pharmaceutical products. In order to commercialize any product candidates, we must build our marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. We may not be successful in doing so on commercially reasonable terms or at all.

For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, “ACA”) broadened access to health insurance, reduced or constrained the growth of healthcare spending, enhanced remedies against healthcare fraud and abuse, add imposed new transparency requirements for healthcare and health insurance industries, imposed new taxes and fees on pharmaceutical manufacturers and imposed additional health policy reforms. Since the ACA’s enactment, there have been executive, judicial and Congressional challenges and amendments to certain aspects of the ACA. For example, on July 4, 2025, the IRA,One Big Beautiful Bill Act (“OBBBA”) was signed into law, which narrowed access to ACA marketplace exchange enrollment and declined to extend the ACA enhanced advanced premium tax credits that expired at the end of 2025, which, among other things,provisions extendsin enhancedthe subsidieslaw, are anticipated to reduce the number of Americans with health insurance. The OBBBA also is expected to reduce Medicaid spending and enrollment by implementing work requirements for individualssome purchasingbeneficiaries, healthcapping insurancestate-directed coveragepayments, inreducing federal funding, and limiting provider taxes used to fund the program. Congress is considering proposed legislation intended to further reduce healthcare costs with alternatives to replace the expired ACA marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program.subsidies. It is possible that the ACA will be subject to judicial or Congressional challenges in the future. It is unclear how any such challenges and additional healthcare reform measures of the second Trumpcurrent administration will impact the ACA and our business.

Further, Congress is considering additional health reform measures. We expect that federal and state healthcare reform measures that may be adopted in the future may result in more rigorous coverage criteria and lower reimbursement, and in additional downward pressure on the price that may be charged for any of our product candidates, if approved.

Prior to November 2013, we operated without full-time employees, relying on the services of consultants, including representatives of our former affiliate, Care Capital LLC, to provide certain accounting and finance functions. We have since hired personnel and continue to develop our disclosure control procedures; however, if we are unsuccessful in building an appropriate infrastructure, or unable to develop procedures and controls to ensure timely and accurate reporting, we may be unable to meet our disclosure requirements under the Exchange Act, which could adversely affect the market price of our common stock and impair our access to the capital markets.

We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees and independent contractors, such as principal investigators, CROs, manufacturers, consultants, commercial partners and vendors, could include failures to comply with regulations of the FDA or comparable foreign regulatory authorities, to provide accurate information to the FDA or comparable foreign regulatory authorities to comply with manufacturing standards we have established, to comply with US federal and state healthcare fraud and abuse laws and comparable foreign regulatory requirements, to report financial information or data accurately or to disclose unauthorized activities to us. For example, in our Phase 3 trial of roluperidone (C07) for the treatment of negative symptoms of schizophrenia, one clinical site that recruited 17 patients reported implausible behavioral (schizophrenia symptoms) and physiological (blood pressure) data. As a result, these 17 patients were excluded and made part of an mITT analysis set. Sales, marketing and other business arrangements in the healthcare industry are subject to extensive laws intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws may restrict or prohibit a wide range of business activities, including, but not limited to certain activities related to research, manufacturing, distribution, pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee and independent contractor misconduct could also involve the improper use of individually identifiable information, including, without limitation, information obtained in the course of clinical trials, which could result in sanctions, monetary penalties, and serious harm to our reputation. In addition, federal procurement laws impose substantial penalties for misconduct in connection with government contracts and require certain contractors to maintain a code of business ethics and conduct.

Obligations related to data privacy and security (and consumers’individuals’ data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying with these obligations requires us to devote significant resources. These obligations may, and certain cases have, necessitate changes to our information technologies, systems, and data processing practices and to those of any third parties that process personal data on our behalf.

Cyberattacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive information and information technology systems, and those of the third parties with whom we work. Such threats are prevalent, continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors. Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we and the third parties with whom we work may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our goods and services. We and the third parties with whom we work may be subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.

While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures, or those of the third parties with whom we work, will be effective. We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties with whom we work), but we may not be able to detect and remediate all such vulnerabilities including on a timely basis. Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident. Also, threat actors may use an initial compromise of one part of our environment to gain access to other parts of our environment or leverage a compromise of our networks or systems to gain access to the networks or systems of third parties with whom we work, such as through phishing or supply chain attacks.

Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties with whom we work. A security incident or other interruption could disrupt (and has in the past disrupted) our ability (and that of third parties with whom we work) to provide our services or conduct our operations. For example, a cyber-attack on one of our external contractors during the summer of 2019 resulted in a disruption to patient recruitment in our Phase 3 clinical trial of roluperidone. We expend significant resources and may have to modify our business activities (including our clinical trial activities) to try to protect against security incidents. Certain data privacy and security obligations require us to implement and maintain specific security measures, industry-standard or reasonable security measures to protect our information technology systems and sensitive information.

Our contracts may not contain relevant limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations. We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.

We depend on our collaboration with Tanabe Pharma Corporation (formerly Mitsubishi Tanabe Pharma Corporation) (“MTPCTanabe Pharma”) , and could be seriously harmed if our license agreement with MTPCTanabe Pharma was terminated.

We exclusively license roluperidone, our lead product candidate, from MTPC,Tanabe Pharma, with the rights to develop, sell and import roluperidone globally, excluding most of Asia. If our license agreement with MTPCTanabe Pharma was terminated, it could have a material impact on our operations.

On January 19, 2021, we entered into an agreement with Royalty Pharma under which Royalty Pharma acquired our royalty interest in seltorexant for an upfront payment of $60 million and up to $95 million in future milestone payments that are contingent upon the achievement of certain clinical, regulatory and commercial milestones for seltorexant by Janssen Pharmaceutica NV, one of the Janssen Pharmaceutical Companies of Johnson & Johnson (“Janssen”), or any other party in the event that Janssen sells seltorexant. For more information regarding this arrangement, see the sections titled “Item 1. Business—Overview” and “Item 1. Business—Our Clinical-Stage Programs—Seltorexant (MIN-202)” in this Annual Report on Form 10-K.

Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting our product candidates might expire before or shortly after our product candidates obtain regulatory approval, which may subject us to increased competition and reduce or eliminate our ability to recover our development costs. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. Finally, any patent that grants from our U.S. patent applications relating to methods of using MIN-301 to treat neurologic and psychiatric diseases is expected to expire as early as 2028. Although we expect to seek extensions of patent terms where available, including in the United States under the Drug Price Competition and Patent Term Restoration Act of 1984, which permits a patent term extension of up to five years beyond the expiration of the patent, we cannot be certain that an extension will be granted, or if granted, what the applicable time period or the scope of patent protection afforded during any extended period will be. The applicable authorities, including the FDA, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request. If this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and pre-clinical data and launch their product earlier than might otherwise be the case.

adverse results or delays in our preclinical or clinical trials or those of our competitors;

To our knowledge, our executive officers, directors, holders of 5% or more of our capitaloutstanding common stock and their respective affiliates beneficially ownowned approximately 42.2%55.9% of our votingoutstanding common stock as of December 31, 2024,2025. includingAccordingly, 19.3%if heldour byexecutive fundsofficers, affiliated with Federated Hermes, Inc. (“Federated”)directors and 18.2%stockholders heldwho byowned BImore (asthan defined5% below).of Accordingly,our Federatedoutstanding andcommon BIstock willacted havetogether, significantthey may be able to significantly influence in determining the outcome of any corporate transaction or other matter submitted to the stockholders for approval, including mergers, consolidations, and the sale of all or substantially all of our assets and other significant corporate actions. Unless full participation of all stockholders takes place in such stockholder meetings, Federatedthe and/orlarger BIstockholders may be able to approve such matters itself. This concentration of ownership may (i) delay or deter a change of control of our Company; (ii) deprive stockholders of an opportunity to receive a premium for their common stock as part of a sale of our Company; and (iii) affect the market price and liquidity of our common stock. In conjunction with the Private Placement (as defined below), we provided BI with the right to designate an observer at all meetings of our board of directors and any committee thereof so long as BI holds not less than 10% of shares of our common stock (including shares of common stock issuable upon exercise of pre-funded warrants), unless a change of control of the Company occurs sooner. The interests of our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates may not always coincide with the interests of other stockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders. The effect of these rights and these principal stockholders’ influence may impact the price that investors are willing to pay for our securities. If these principal stockholders sell a substantial number of shares of our common stock in the public market, the market price of our common stock could be adversely impacted. The perception among the public that these sales will occur could also contribute to a decline in the market price of our common stock.

In addition, in the future, we may issue shares of common stock, or other equity or debt securities convertible into common stock, in connection with a financing, acquisition, employee arrangement or otherwise. Any such issuance, including pursuant to any at-the-market agreements, such as the at-the-market offering program that we entered into with Jefferies LLC in September 2022, could result in substantial dilution to our existing stockholders and could cause the price of our common stock to decline.

We are a clinical-stage biopharmaceutical company focused on the development and commercialization of certain proprietary product candidates to treat patients suffering from central nervous system diseases. Leveraging our scientific insights and clinical experience, we have acquired or in-licensed compounds that we believe have innovative mechanisms of actions and therapeutic profiles that potentially address the unmet needs of patients with these(“CNS”) diseases.

Our lead product candidate, roluperidone, is in development for the treatment of negative symptoms in patients diagnosed with schizophrenia. In August 2022, we submitted a New Drug Application (“NDA”) with the U.S. Food and Drug Administration (“FDA”) for our lead product candidate, roluperidone,roluperidone for the treatment of negative symptoms in schizophrenia. On February 26, 2024, the FDA issued a Complete Response Letter (“CRL”) regarding our NDA for roluperidone. SinceSubsequent receivingto the CRL, we have continuedhad to havemultiple interactions with the FDA withto confirm the goaldesign of addressingan additional Phase 3 confirmatory clinical trial to address the questionsdeficiencies raisedcited in the CRL.CRL and resubmit the NDA.

In June 2020addition, we exercisedpreviously ourco-developed rightseltorexant towith optJanssen outPharmaceutica NV (“Janssen”), a subsidiary of Johnson & Johnson, for the treatment of insomnia disorder and adjunctive treatment of Major Depressive Disorder (“MDD”). As a result of our agreementcollaboration with Janssen for the future Phase 3 development and commercialization of seltorexant. Under the terms of the opt-out agreement,Janssen, we were entitled to collect royalties in the mid-single digits on potential future worldwide sales of seltorexant in certain indications, with no further financial obligations to Janssen. In January 20212021, we sold our rights to these potential royalties to Royalty Pharma plc (“Royalty Pharma”) for a $60 million cash payment and up to an additional $95 million in potential future milestone payments, subject to completion of Phase 3 trials by Janssen and regulatory approvals. The $60 million payment received from Royalty Pharma has been included onTo our balanceknowledge, sheetJanssen is currently recruiting patients under liabilitya relatedPhase to3 thetrial salewith of future royalties.seltorexant.

Research and development expenses were $11.9$5.8 million and $12.7$11.9 million for the years ended December 31, 20242025 and 2023,2024, respectively, a decrease of $0.8$6.1 million. The decrease in research and development expenses was primarily due to costs associatedincurred withduring the2024 C18for study and lower compensation expenses, partially offset by higher costs associated with oura drug substance validation campaign.campaign and safety study, as well as lower consultant fees and compensation expenses during 2025. Non-cash stock compensation costs included in research and development expenses were $0.5$0.4 million and $0.9$0.5 million for the years ended December 31, 20242025 and 2023,2024, respectively.

General and administrative expenses were $9.9$9.3 million and $10.4$9.9 million for the years ended December 31, 20242025 and 2023,2024, respectively, a decrease of $0.5$0.6 million. The decrease in general and administrative expenses was primarily due to lower compensation expenses, partially offset by higher professional service fees.fees and insurance costs. Non-cash stock compensation costs included in general and administrative expenses were $0.9 million andfor $1.1 million forboth the years ended December 31, 20242025 and 2023, respectively.2024.

Foreign exchange losses were $2$57 thousand and $40$2 thousand for the years ended December 31, 20242025 and 2023,2024, respectively, aan decreaseincrease of $38$55 thousand, primarily due to currency movements.

Non-cash interest expense for the sale of future royalties was $4.6 millionzero and $8.3$4.6 million for the years ended December 31, 20242025 and 2023,2024, respectively, a decrease of $3.7$4.6 million. The decrease in non-cash interest expense for the sale of future royalties was due to revising our estimates for the timing and amount of future royalty payments to be received under the royalty arrangement. During the third quarter of 2024,2024 webased adjustedon available data, a revision was made to the assumptions used to calculate estimated future cash flows to be received by us under the royalty purchase agreement with Royalty Pharma. Due to the reduction in future cash flow estimates, the carrying amount of ourthe liability related to the sale of future royalties was reduced from $86.6 million to the initial cash payment received of $60$60.0 million. This adjustment resulted in the recognition of $26.6 million in non-cash other income during the third quarter of 2024, representingwhich represented the amount of non-cash interest expense amortizedpreviously recognized through June 30, 2024. No further non-cash interest expense associated with the liability related to the sale of future royalties has been recognized, and as a result, no interest expense was recognized in the fourth quarter of 2024 or full year 2025.

Other income was zero and $26.6 million and zero for the years ended December 31, 20242025 and 2023,2024, respectively, ana increasedecrease of $26.6 million,million. The decrease in other income was due to recognizing $26.6 million in non-cash other income induring the third quarter of 2024 asdue to a resultreduction of the adjustment toin the carrying amount of the liability related to the sale of future royalties.

We are a clinical development-stage biopharmaceutical company. In November 2013, we merged with Sonkei Pharmaceuticals, Inc. (“Sonkei”), and, in February 2014, we acquired Mind-NRG Sarl (“Mind-NRG”), which were also clinical development-stage biopharmaceutical companies. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval or become commercially viable. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we may never generate product revenue or achieve profitability. Our net loss was $125.4$107.9 million and $3.8$7.0 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of approximately $814.2$796.7 million.

Our operations and the historic operations of Sonkei and Mind-NRG have consumed substantial amounts of cash since inception. As of MarchJune 31,30, 2026, we had cash, cash equivalents, marketable securities and restricted cash of $78.2$75.4 million. We believe that this amount will be sufficient to meet our operating commitments for at least twelve months from the date that our interim condensed financial statements are issued.

As of MarchJune 31,30, 2026, there were (i) 1,559,0082,619,947 shares of common stock issuable upon conversion of outstanding Series A Preferred Stock for no additional consideration, (ii) 37,272,40032,826,200 shares of common stock issuable upon exercise of outstanding tranche A warrants to purchase Series A Preferred Stock and (iii) 18,920,000 shares of common stock issuable upon exercise of outstanding tranche B warrants to purchase Series A Preferred Stock. The outstanding Series A Preferred Stock is convertible any time at the option of the holder thereof subject to beneficial ownership limitations. The tranche A warrants became exercisable immediately upon issuance. The exercise of such warrants and conversion of the Series A Preferred Stock for shares of our common stock will result in further dilution of our stockholders’ investment and could negatively affect the market price of our common stock. In addition, stockholders may experience further dilution if we issue common stock, or securities convertible into common stock, in the future. As a result of this dilution, stockholders may receive significantly less than the full purchase price paid for the shares in the event of liquidation.

On March 31, 2026, we announced that the first patient had been screened in the C19 trial. The trial is designed to enroll 380 patients, randomized on a 1:1 basis to receive either placebo or a double-blinded single daily 64 mg dose of roluperidone. The primary efficacy endpoint of the C19 trial is expected to be the change from baseline in the PANSS Marder negative symptoms factor score (“NSFS”) at 12 weeks of treatment with roluperidone compared to placebo. Following the initial 12-week treatment period, patients are expected to enter a 40-week52-week relapse assessment phase, during which patients will crossover to receive either a daily 64 mg dose of roluperidone or antipsychotics. On March 31, 2026, we announced that the first patient had been screened in the C19 trial. We currently expect topline efficacy results in the second half of 2027 and relapse assessment data in the second half of 2028.

In addition, we previously co-developed seltorexant with Janssen Pharmaceutica NV (“Janssen”), a subsidiary of Johnson & Johnson, for the treatment of insomnia disorder and adjunctive treatment of Major Depressive Disorder (“MDD”). As a result of our collaboration with Janssen, we were entitled to collect royalties in the mid-single digits on potential future worldwide sales of seltorexant in certain indications, with no further financial obligations to Janssen. In January 2021, we sold our rights to these potential royalties to Royalty Pharma plc (“Royalty Pharma”) for a $60 million cash payment and up to an additional $95 million in potential future milestone payments, subject to completion of Phase 3 trials by Janssen and regulatory approvals. To our knowledge, Janssen is currently recruitingconducting patients under atwo Phase 3 trialtrials with seltorexant.

We have not received any regulatory approvals to commercialize any of our product candidates, and we have not generated any revenue from the sales or license of our product candidates. We routinely evaluate the status of our drug development programs as well as potential strategic options. We have incurred significant operating losses since inception and expect to continue to incur net losses and negative cash flows from operating activities for the foreseeable future. As of MarchJune 31,30, 2026 and December 31, 2025, we had an accumulated deficit of $814.2$796.7 million and $688.8 million, respectively. For the threesix months ended MarchJune 31,30, 2026 and 2025, we recorded net loss of $125.4$107.9 million and $3.8$7.0 million, respectively. We expect our clinical and administrative costs will increase as we begin to incur clinical trial costs and hire additional support staff to support the Phase 3 trial of roluperidone.

Changes in fair value of the warrant liability consist of the gain (loss) associated with the adjustment to the carrying amount of the warrantywarrant liability.

Comparison of Three Months Ended MarchJune 31,30, 2026 versus MarchJune 31,30, 2025

Research and development expenses were $5.3$7.2 million and $1.4$1.3 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, an increase of approximately $3.9$5.9 million. The increase in research and development expenses was primarily due to expenses related to the initiation of the C19 trial as well as higher compensation costs. Non-cash stock compensation costs included in research and development expenses were $0.7$1.0 million and $0.1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

General and administrative expenses were $11.4$3.5 million and $2.5$2.1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, an increase of approximately $8.9$1.4 million. The increase in general and administrative expenses was primarily due to costs related to Mr. Race’s settlement agreement, which included a $6.6 million one-time, non-cash charge related to the modification of the terms of previously granted stock options, as well as higher professional service fees and compensation costs. Non-cash stock compensation costs included in general and administrative expenses were $8.0$1.3 million and $0.2 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Foreign exchange losses were $2$14 thousand and $8$21 thousand for the three months ended MarchJune 31,30, 2026 and 2025, respectively, a decrease of $6$7 thousand, primarily due to currency movements.

Investment income was $0.6 million and $0.2$0.1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, an increase of approximately $0.4$0.5 million, primarily due to higher cash equivalents and marketable securities balances and interest rates.balances.

Changes in fair value of the warrant liability were a lossgain of $109.4$27.6 million and zero for the three months ended MarchJune 31,30, 2026 and 2025, respectively, aan decreaseincrease of $109.4$27.6 million. The lossgain on the change in fair value of the warrant liability is related to the warrants issued in conjunction with the October 2025 private placement. The fair value of the non-cash warrant liability at MarchJune 31,30, 2026 was $278.6$232.7 million. Accordingly, we recognized a non-cash lossgain of $109.4$27.6 million for the three-month period ended MarchJune 31,30, 2026, reflecting both the increasedecrease in fair value of the warrant liability and losses recognized upon the exercise of warrants during 2026. This non-cash lossgain was recorded within other income (expense) in the statement of operations.

Non-GAAP total liabilities is defined as GAAP total liabilities, excluding warrant liability and liability related to the sale of future royalties. Reconciliations of reported GAAP total liabilities to non-GAAP total liabilities foras theof threeJune months ended March 31,30, 2026 and December 31, 2025 were as follows (in thousands):

Non-GAAP adjusted net income (loss) is defined as GAAP net loss, adjusted to exclude non-cash items related to:income (iloss) stock-based compensation expense and (ii) changes in fair value of the warrant liability. Non-GAAP adjusted net loss per share, basic and diluted, is defined as GAAP net loss per share, basic and diluted,, adjusted to exclude non-cash items related to: (i) stock-based compensation expense and (ii) changes in fair value of the warrant liability. Reconciliations of reported GAAP net income (loss) to non-GAAP adjusted net loss,income and reported GAAP net (loss per share, basic and diluted, to non-GAAP adjusted net loss per share, basic and diluted,) for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows (in thousands, except share and per share amountsthousands):

As of MarchJune 31,30, 2026, we had an accumulated deficit of approximately $814.2$796.7 million. We anticipate that we will continue to incur net losses for the foreseeable future as we continue the development and potential commercialization of our product candidates and to support our operations as a public company. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we may never generate product revenue or achieve profitability. As of MarchJune 31,30, 2026, we had approximately $78.2$75.4 million in cash, cash equivalents, marketable securities and restricted cash, which we believe will be sufficient to meet our operating commitments for the next 12 months from the date our interim condensed financial statements are issued. Our cash requirements primarily relate to expenditures to support the development of roluperidone, which includes advancing the program through the regulatory process.

On October 21, 2025, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain accredited investors, pursuant to which we agreed to issue and sell, in a private placement (the “Private Placement”), (i) 80,000 shares of Series A Convertible Preferred Stock, par value $0.0001 per share (“Series A Preferred Stock”), at a purchase price of $1,000 per share, (ii) tranche A warrants (the “Preferred Tranche A Warrants”) to acquire shares of Series A Preferred Stock (the “Tranche A Warrant Shares”) and (iii) tranche B warrants (the “Preferred Tranche B Warrants,” together with the Preferred Tranche A Warrants, the “Preferred Warrants”) to acquire shares of Series A Preferred Stock for an aggregate offering price of up to $200 million. The Private Placement closed on October 23, 2025 (the “Closing Date”), pursuant to which we received aggregate gross proceeds of $80.0 million, before deducting placement agent fees, financial advisor fees, and other offering expenses. We incurred approximately $5.7 million in offering costs, including deferred issuance costs included within accounts payable as of March 31, 2026, resulting in net proceeds of approximately $74.3 million. $3.1 million of the offering costs were allocated to the Preferred Warrants, which are classified as liabilities, and expensed as incurred. $2.6 million of the offering costs attributable to the issuance of Series A Preferred Stock were recorded as a reduction of the carrying value of the Preferred Stock. On the Closing Date, we recorded a loss on issuance of convertible preferred stock and warrants of $321.5 million, reflecting the initial fair values of the Series A Preferred Stock of $184.6 million and the warrants of $216.9 million, offset by $80.0 million in gross proceeds received from investors. The value of the Series A Preferred Stock at issuance was determined based on the contractual conversion ratio multiplied by the closing price of our common stock on the Closing Date. For further discussion regarding the warrant liability and related valuation assumptions, please refer to Note 7, Warrant Liability, to our condensed consolidated financial statements appearing elsewhere in this Form 10-Q.

On December 23, 2025, following the announcement of the stockholders’ approval of the issuance of common stock issuable upon conversion of the Series A Preferred Stock, we issued an aggregate of 36,280,992 shares of common stock upon the automatic conversion of an aggregate of 76,704 shares of Series A Preferred Stock in accordance with the terms set forth in the Certificate of Designation of Preferences, Rights and Limitations of the Series A Convertible Voting Preferred Stock (the “Certificate of Designation”). As of MarchJune 31,30, 2026, an aggregate of 3,296 shares of Series A Preferred Stock remain outstanding,outstanding after the automatic conversion in December 2025, which are convertible into an aggregate of 1,559,008 shares of common stock, subject to the limitations on conversion set forth in the Certificate of Designation. Each share of Series A Preferred Stock automatically converted into the number of shares of common stock at the conversion price of $2.11 per share, rounded down to the nearest whole share, subject to the terms and limitations contained in the Certificate of Designation, including that shares of Series A Preferred Stock shall not be convertible if the conversion would result in a holder beneficially owning more than 9.99% (the “Beneficial Ownership Limitation”) of our outstanding shares of common stock as of the applicable conversion date. By written notice to us, the holder may from time to time increase or decrease the Beneficial Ownership Limitation to any other percentage not in excess of 19.99% specified in such notice; provided, that any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to us.

Each Preferred Tranche A Warrant has an exercise price of $1,000 and may only be exercised for cash. The Preferred Tranche A Warrants are immediately exercisable upon issuance for an aggregate of 80,000 shares of Series A Preferred Stock for an aggregate cash exercise price of up to $80 million until the tenth day following the date of our public announcement that we have achieved, on a statistically significant basis, the primary endpoint of our Phase 3 confirmatory trial of roluperidone in schizophrenia at the 12-week timepoint (the “Milestone Event”). As of MarchJune 31,30, 2026, an aggregate of 78,80069,400 Preferred Tranche A Warrants remaining outstanding.

Each Preferred Tranche B Warrant has an exercise price of $1,000 and may be exercised by a cashless exercise. The Preferred Tranche B Warrants are exercisable for an aggregate of 40,000 shares of Series A Preferred Stock for an aggregate cash exercise price of up to $40 million commencing on the earlier of (i) our public announcement of the Milestone Event and (ii) the three year anniversary of the Closing Date. The Preferred Tranche B Warrants will expire on the four (4)-year anniversary of the Closing Date. As of MarchJune 31,30, 2026, an aggregate of 40,000 Preferred Tranche B Warrants remaining outstanding.

The Preferred Warrants are subject to forfeiture in the event the applicable holder engages in any Short Sales (as defined in the Securities Purchase Agreement) involving our securities during the 48-months period following the Closing Date. In addition, the shares of common stock and/or Series A Preferred Stock, as applicable, underlying the Preferred Tranche B Warrants are subject to reduction if the applicable holder sells or transfers any shares of Series A Preferred Stock purchased on the Closing Date or shares of common stock received upon conversion of the Series A Preferred Stock purchased on the Closing Date, in either case before the Exercisability Date (as defined therein), except to affiliates for no consideration.

InDuring Marchthe three months ended June 30, 2026, 1,200an aggregate of 9,400 Preferred Tranche A Warrants were exercised at an exercise price of $1,000 per share, resulting in total proceeds of $1,200,000$9,400,000 to us. TheUpon warrantsexercise, were9,400 convertedshares intoof Series A Preferred Stock,Stock whichwere issued. Of these, 7,157 shares were immediately converted into 567,600an aggregate of 3,385,261 shares of our common stock.stock, Followingand thesethe exercises,remaining 78,8002,243 shares of Series A Preferred TrancheStock A Warrants remainremained outstanding.

Net cash used in operating activities of approximately $5.4$18.8 million during the threesix months ended MarchJune 31,30, 2026 was primarily due to our net loss of $125.4$107.9 million,million and a $3.6 million increase in prepaid expenses, partially offset by a $109.4$81.8 million increase in fair value of the warrantywarrant liability, and a stock-based compensation expense of $8.7$11.0 million, a $1.5 million increase in accounts payable, and a $0.8 million increase in accrued expenses.million.

Net cash used in operating activities of approximately $4.1$6.1 million during the threesix months ended MarchJune 31,30, 2025 was primarily due to our net loss of $3.8$7.0 million,million and a $1.0$0.7 million decrease in accounts payable, partially offset by stock-based compensation expense of $0.3$0.6 million, a $0.3$0.6 million decrease in prepaid expenses, and a $0.1$0.4 million increase in accrued expenses.

Net cash used in investing activities of approximately $45.3$50.1 million during the threesix months ended MarchJune 31,30, 2026 was primarily due to the purchase of marketable securities.securities of $55.1 million, partially offset by the maturity and redemption of marketable securities of $5.0 million.

Net cash used in investing activities was zero during the threesix months ended MarchJune 31,30, 2025.

Net cash provided by financing activities of approximately $1.1$11.3 million during the threesix months ended MarchJune 31,30, 2026 was primarily due to the proceeds from the exercise of Preferred Tranche A Warrants.

Net cash provided by financing activities was zero during the threesix months ended MarchJune 31,30, 2025.

In our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, our most critical accounting policies and estimates upon which our financial status depends were identified as those relating to research and development costs; goodwill; and the liability related to the sale of future royalties. We reviewed our policies and determined that those policies were our most critical accounting policies for the threesix months ended MarchJune 31,30, 2026.