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

Our financial performance, including our ability to replace revenue and income lost to generic products and other competitors as well as to grow our business, depends heavily on the commercial success of our products. A substantial amount of our resources is focused on generating, maintaining and/or expanding the revenue generated by our approved products in the U.S. Our major products Qelbree®, GOCOVRI®, Oxtellar XR®, and APOKYN®, and ZURZUVAE® represented approximately 38%,49%, 20%,23%, 16%,6%, and 12%8% of our total net revenues for the year ended December 31, 2024,2025, respectively. If any of our major products were to become subject to problems, such as changes in prescription growth rates, unexpected side effects, loss of intellectual property protection, supply chain or product supply shortages, regulatory proceedings, changes in labeling, publicity adversely affecting doctor or patient confidence in such product, material product liability litigation, pressure from new or existing competitive products, or adverse changes in coverage under managed care programs, the adverse impact on our revenue and profit could be significant. AsFor notedexample, in ITEMNovember 1A.2025 RISKwe FACTORS.announced that supplier constraints were impacting our ability to fully meet demand for ONAPGO and that this required pausing delivery of the product to patients who had not yet started ONAPGO, resulting in an adverse impact on our revenue and profit during the fourth quarter of 2025. In February 2026, we announced that we have made progress securing additional product supply of ONAPGO from the current supplier and as a result has resumed new patient initiation. In addition, we are working with a second supplier that is expected to begin supplying ONAPGO in 2027. In addition, our revenue and profit could be significantly impacted by the timing and rate of commercial acceptance of key new products.

Further, our products are subject to continual review by the FDA. We cannot provide assurance that newly discovered or reported safety issues would not arise. With the use of any marketed drug by a broader patient population, serious adverse events may occur from time to time that initially do not appear to be related to the drug itself. Any safety issues could cause us to suspend or to cease marketing of our approved products; cause us to modify how we market our approved products; subject us to ITEMsubstantial 1A.liabilities; RISKand FACTORS.adversely affect our revenues and financial condition. In the event of a withdrawal of any of our products from the market, our revenues would decline significantly, and our business would be seriously harmed and could fail.

If generics or other versions of our productsproducts, including but not limited to generics containing one or more of the active pharmaceutical ingredients present in our products are approved and successfully commercialized, or if products are developed, approved and successfully commercialized which provide similar benefits of treatment for patients, our business could be materially harmed.

ToThird parties have, and in the extentfuture anymay, third party is successful in obtainingreceive approval to manufacture and market a generic or itstheir own versionversions of a productproducts containing one or more of the active pharmaceutical ingredients present in our products in the U.S., we may not be able to prospectively realize revenues from such products. Accordingly, our business and growth prospects could be materially impaired.U.S.

Our business is operating in an ever more challenging environment, with significant economic pressures exerted by federal and state governments, insurers, and private payors on the pricing of our products, affecting our ability to obtain and/or maintain satisfactory rates of reimbursement for our products. The U.S. federal and state governments and private payors are under intense pressure to control healthcare spending even more tightly than in the past. These pressures are further compounded by consolidation among distributors, retailers, private insurers, managed care organizations, and other private payors, resulting in an increase in their negotiating power, particularly with respect to our products. In addition, these pressures are intensified by increased, adverse publicity about pricing for pharmaceuticals. These prices are sometimes characterized as excessive, leading to government investigationsactions, including investigations, and legal proceedings regarding pharmaceutical pricing practices.

As a threshold for coverage and reimbursement, third-party payors require that drug products be approved for marketing by the FDA. Third-party payors are increasingly challenging the effectiveness of and prices charged for medical products and services.ITEM Government1A. authoritiesRISK and third-party payors have attempted to control costs, in some instances, by limiting coverage, by limiting the amount of reimbursement for particular medications, or by encouraging the use of lower-cost generic products.FACTORS.

There has been increasing legislative and enforcement interest in the U.S. from both the executive and legislative branches with respect to specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed federal and state legislative initiatives designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under the Medicare program, to review the relationship between pricing and manufacturer patient programs, and to reform government reimbursement methodologies for drugs. Additionally, several Executive Orders have been issued generally aimed at lowering the price of certain pharmaceutical products in the United States. For additional information, see "Healthcare cost containment legislation and the failure of third-party payors to provide appropriate levels of coverage and reimbursement for the use of products and treatments facilitated by our products could harm our business and prospects." We expect to experience pricing pressures in connection with the sale of any of our products and product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, additional cost containment initiatives, and additional legislative changes.

In some foreign jurisdictions, where certain of our products are sold by third parties pursuant to license agreements with us, particularly Canada and Europe, the pricing of prescription pharmaceuticals is subject to strict governmental control. In these countries, pricing negotiations with governmental authorities can take 6six to 12twelve months, or longer, after the receipt of regulatory approval and product launch. To obtain favorable reimbursement for the indications sought, or to obtain pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our products or product candidates, if approved, to other available therapies. If reimbursement for our products or product candidates is unavailable in any country in which reimbursement is sought or is limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materially harmed and unprofitable.

As evidenced by the passage of the American Rescue Plan Act of 2021 and Inflation Reduction Act of 2022, discussed in greater detail below, and the President's Executive Orders in 2025, we expect these challenges to continue and to potentially intensify during 2025,2026, as political pressures mount, and healthcare payors, including government-controlled health authorities, insuranceITEM companies,1A. andRISK managed care organizations, step up initiatives to reduce the overall cost of healthcare, restrict access to higher-priced new medicines, increase the use of generic products and impose overall price cuts. Such pressures could have a material adverse impact on our business, financial condition, and results of operations.FACTORS.

The majority of our product sales are to pharmaceutical wholesalers, specialty pharmacies, and distributors who, in turn, sell our products to pharmacies, hospitals, and other customers, including federal and state entities. The majority of sales of Qelbree, Oxtellar XR, Trokendi XR, XADAGO, and MYOBLOC are made to wholesalers and distributors. In addition, MYOBLOC is available for direct purchase by physicians and hospitals. The majority of sales of GOCOVRIGOCOVRI, APOKYN, ONAPGO, and APOKYNZURZUVAE are made to specialty pharmacies.

We plan on expanding our sales and marketing capabilities in the U.S. to commercialize new product candidates if approved. This will require investing significant amounts of financial and management resources. If we are unable to establish and maintain adequate sales and marketing capabilities for new product candidates or do so in a timely manner, we may not be able to generate sufficient product revenues from our product candidates to be profitable. The cost of establishing and maintaining such marketing and sales capabilities may not be economically justifiable in light of the revenues generated by any of our product candidates. With the approval of a new product candidate, we may re-prioritize our marketing and sales efforts, including reassigning our sales representatives who support existing products to devote their full efforts to the launch of the new product candidate. This could have a detrimental impact on the future sales performance of existing products.

We are dependent on obtaining regulatory approval of our product candidates and approval for additional indications for existing products. Our business depends on successful clinical development i.e., successful completion of clinical trials and completion of requisite manufacturing information. We are not permitted to market any of oura product candidatescandidate in the U.S. until we receive approval of an NDA from the FDA or market in any foreign jurisdiction until we receive approval from the requisite authority. Satisfaction of regulatory requirements typically takes many years, is dependent upon the type, complexity, and novelty of the product, and requires the expenditure of substantial resources. We cannot predict whether or when we will obtain regulatory ITEM 1A. RISK FACTORS.

Notwithstanding the approval of many products by the FDA pursuant to Sections 505(b)(1) and 505(b)(2), over the last few years, some pharmaceutical companies and others have objected to the FDA's interpretation of Section 505(b)(2). If the FDA changes its interpretation of Section 505(b)(2), or if the FDA's interpretation is successfully challenged in court, then this could delay or even prevent the FDA from approving any Section 505(b)(2) application that we submit. Any failure to obtain regulatory approval of our product candidates would eliminate our ability to generate revenues for that candidate. Any failure to obtain such approval for all of the indications and labeling claims we deem desirable could reduce our potential revenues.

The FDA could in the future require additional regulation under the medical device provisions of the FDCA. We must comply with the QSR, which sets forth the FDA's cGMP, requirements for medical devices, and other applicable government regulationsITEM and1A. correspondingRISK foreign standards for drug cGMPs. If we fail to comply with these regulations, it could have a material adverse effect on our business and financial condition.FACTORS.

We rely on outsourcing arrangements for some of our critical activities, including manufacturing, preclinical and clinical research, data collection and analysis, and electronic submission of regulatory filings. We may have limited control over third parties, and we cannot guarantee that they will perform their obligations in an effective, competent, and timely manner. For example, in November 2025, we announced that due to stronger than expected demand for ONAPGO, supplier constraints are impacting the Company's ability to fully meet demand. In February 2026, we announced that we have made progress securing additional product supply of ONAPGO from the current supplier and as a result has resumed new patient initiation. In addition, we are working with a second supplier that is expected to begin supplying ONAPGO in 2027. Our reliance on third parties, including third-party Clinical Research Organizations (CROs) and CMOs, entails risks including, but not limited to:

We do not currently own or operate manufacturing facilities for the commercial production of any of our products or for production of clinical supplies of our product candidates, nor do we have plans to do so in the future. We currently depend on third-party clinical manufacturing organizations (CMOs),CMOs, who offer a comprehensive range of contract manufacturing and packaging services, in various countries for the supply of API for our products and product candidates, including raw materials and drug substances for our preclinical research and clinical trials. For most of our products and product candidates, we rely on single source suppliers to produce and package final dosage forms for our products and raw materials, including API. If any of these vendors are unable to perform their obligations to us, including due to violations of the FDA's requirements, our ability to meet regulatory requirements, projected timelines, product demand, and necessary quality standards for the development or commercialization of products would be adversely affected. Further, if we were required to change suppliers, it could result in substantial delays in our regulatory approval efforts, significantly increase our costs, and delay generation of revenues. Accordingly, the loss of any of our current or future third-party manufacturers or suppliers could have a material adverse effect on our business, results of operations, financial condition, and business prospects.

There is a risk that supplies of our products or product candidates may be significantly delayed by or may become unavailable as a result of manufacturing, equipment, process, supply chain or business-related issues or geopolitical events affecting our suppliers. At this time while we do not know of any geopolitical events impacting our supply chain, we cannot determine the impact of current or future geopolitical events which may ultimately have an impact on our supply chains or may create other unforeseen consequences affecting us or our suppliers. Any future curtailment in the availability of raw materials or finished goods could result in production or other delays, resulting adverse business effects. In addition, because regulatory authorities must generally approve or grant a waiver with respect to raw material sources for pharmaceutical products, changes in raw material suppliers may result in production delays or higher raw material costs. We may also encounter similar risks with the other products and product candidates where raw materials or finished goods are purchased from suppliers outside the U.S., as is the case for example for ONAPGO (formerly known as SPN-830), Qelbree, APOKYN, XADAGO, and MYOBLOC where various suppliers are based in Europe.Europe, and ZURZUVAE where suppliers are based in Asia.

The manufacture of pharmaceutical products requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Pharmaceutical companies and their suppliers often encounter difficulties in manufacturing, particularly in scaling up the production of their products. These problems can adversely affect production costs and yields, quality control, the stability of the product and quality assurance testing, as well as compliance with federal, state, and foreign regulations. If we are unable to demonstrate stability in accordance with commercial requirements, or if our manufacturers were to encounter difficulties or otherwise fail to comply with their obligations to us, our ability to obtain ITEM 1A. RISK FACTORS.

with federal, state, and foreign regulations. If we are unable to demonstrate stability in accordance with commercial requirements, or if our manufacturers were to encounter difficulties or otherwise fail to comply with their obligations to us, our ability to obtain or maintain FDA approval and to market our products and product candidates, respectively, would be jeopardized. In addition, any delay or interruption in producing clinical trial supplies could delay or prohibit the completion of our clinical trials, increase the costs associated with conducting our clinical trials and, depending upon the period of delay, require us to commence new trials at the significant additional expense or to terminate a trial.

If we are unable to obtain marketing exclusivity for our subsequent product candidates, then our competitors may obtain approval for competing products more easily than if we had such marketing exclusivity. In such an event, our future revenues from such product candidates could be reduced materially.

Once an NDA, including a Section 505(b)(2) application, is approved, the product covered thereby becomes a listed drug, which can be cited by potential competitors in support of approval of an ANDA. FDCA, FDA regulations and other applicable regulations and policies provide incentives to manufacturers to create modified, non-infringing versions of a drug to facilitate the approval of an ANDA or other application for generic substitutes. These manufacturers might only be required to conduct a relatively inexpensive study to show that their product has the same active ingredient(s), dosage form, strength, route of administration, and conditions of use or labeling, as our product or product candidate and that the generic product is bioequivalent to our product. Bioequivalence implies that a product is absorbed in the body at the same rate and to the same extent as our product or product candidate. These generic equivalents, which must meet the same quality standards as branded pharmaceuticals, would be significantly less costly than ours to bring to market. Companies that produce generic equivalents are generally able to offer their products at significantly lower prices. Thus, regardless of the regulatory approval pathway, after the introduction of a generic competitor, a significant percentage of the sales of any branded product are typically lost to the generic product through ITEM 1A. RISK FACTORS.

offer their products at significantly lower prices. Thus, regardless of the regulatory approval pathway, after the introduction of a generic competitor, a significant percentage of the sales of any branded product are typically lost to the generic product through both price and volume erosion. Accordingly, as we have observed with Trokendi XR and Oxtellar XR, competition from generic equivalents adversely, materially, and permanently impact our revenues, profitability, and cash flows from those products and may substantially limit our ability to obtain a return on the investments we have made in our products.

In addition to competition for our current commercial products, we anticipate that we will face intense competition whenif our pipeline product candidates are approved by regulatory authorities and begin their commercialization process. In particular, we are aware of Serina Therapeutics developing a product candidate that may compete with ONAPGO (formerly SPN-830). Also, AbbVie has developed and received FDA approval in October 2024 to market a subcutaneous 24-hour infusion of levodopa-based therapy for the treatment of motor fluctuations in adults with advanced Parkinson disease (PD).

As a result of these factors, our competitors may obtain regulatory approval of their products more rapidly than we are able to or may obtain patent protection or other intellectual property rights that limit or block us from developing or commercializing our product candidates. Our competitors may also develop drugs that are more effective, have faster onset to action, are better tolerated, subject to fewer or less severe side effects, are more widely prescribed or accepted, or are less costly than ours. They may also be more successful than us in manufacturing and marketing their products. If we are unable to compete effectively with the products of our competitors, or if such competitors are successful in developing products that compete with any of our approved product candidates, our business, results of operations, financial condition, and prospects may be materially and adversely affected. Mergers and acquisitions in the pharmaceutical industry may result in an even higher level of resources being concentrated at competitors. Competition may intensify as a result of advances made in the commercial applicability of technologies and as a result of greater availability of capital for investment.

Even though U.S. regulatory approval has been obtained for our products, the FDA may impose significant restrictions on their indicated uses, or may impose restrictions on marketing, or may impose requirements for costly post-approval studies. For example, certain of our products, including Qelbree, ONAPGO, ZURZUVAE, Oxtellar XR, Trokendi XR, and MYOBLOC, were approved on the basis of post-approval commitments.

We have post-marketing commitments for Qelbree including the requirement to (i) conduct a clinical efficacy and six month open label safety extension study for ADHD in pediatric patients 4 to 5 years of age, a lactation study and a descriptive study related to the use of Qelbree during pregnancy, and to(ii) assess the risks of adverse events and potential complications. We are working toward meeting these post-marketing commitments for Qelbree in a timely manner. We also have a post-marketing ITEM 1A. RISK FACTORS.

We also have post-marketing commitments for Oxtellar XR and MYOBLOC. Although we have initiated work on some of these post-marketing commitments, we have not been able to accomplish them. We were released from the majority of our post-marketing commitments for Trokendi XR in 2024. If we do not meet our post-marketing commitments and are unable to show good cause for our inability to adhere to the timetables laid out in the approval letters, then the FDA could take enforcement action against us, including withdrawal of approval.

Our products, product candidates, and our collaborators' approved products are subject to ongoing FDA requirements governing the labeling, packaging, storage, advertising, promotion, recordkeeping, and submission of safety and other information. In addition, manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with current good manufacturing practice (cGMP) regulations. If we, our collaborators, or a regulatory authority discover previously unknown problems with a product, including side effects that are unanticipated in severity or frequency, or problems with the facility where the product is manufactured, then a regulatory authority may impose restrictions on that product or on the manufacturer, including requiring withdrawal of the product from the market or suspension of manufacturing.

If we or our collaborators, or our products, product candidates, or our collaborators' products, or the manufacturing facilities for our products, product candidates or our collaborators' products fail to comply with applicable regulatory requirements, then a regulatory authority may:

In addition, our product labeling, advertising, and promotion of our approved products are subject to regulatory requirements and continuing regulatory review. The FDA strictly regulates the promotional claims that may be made about prescription products. In particular, a product may not be promoted for uses that are not approved by the FDA, as reflected in the product's approved labeling. Notwithstanding,However, physicians may nevertheless prescribe products to their patients in a manner that is inconsistent with the approved label, which is known as "off label use". The FDA and other authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have promoted off-label use may be subject to significant sanctions. The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined companies from engaging in off-label promotion. If we are found to have promoted off-label use, then we may be enjoined from such off-label promotion and become subject to significant liability. This could have an adverse effect on our reputation, business, revenues, and profits.

Further, the FDA's policies may prospectively change. Additional government regulations may be enacted that could affect our productsproducts, or prevent, limitlimit, or delay regulatory approval of our product candidates. If we are unable to adapt on a timely basis, or at all, to changes in existing requirements or to adopt new requirements or policies, or if we are not able to maintain regulatory compliance, then we may lose any marketing approval that we have obtained, adversely affecting our business,business and prospects, andas well as our ability to achieve or sustain profitability.

We rely on third-party collaborators and strategic partners to market and commercialize our products and product candidates outside the U.S. We are party to and rely on several arrangements with third parties which provide us with rights to intellectual property that are necessary for the development of certain of our product candidates. We also have agreements with leading CMOs to manufacture other commercial products and the API for such products Under the Britannia Supply Agreement, we have been granted certain intellectual property and product rights in relation to APOKYN,APOKYN and ONAPGO, including the right to use and market APOKYNthose products in the United States. Additionally, the Britannia Supply Agreement grants Britannia certain intellectual property and product rights in relation to APOKYN, including the right to use and market APOKYN in the rest of the world, excluding the United States. Per the Agreement, Britannia has an obligation to supply us with APOKYN for our marketing and sale of the product.product, and supplies us with ONAPGO.

Britannia may terminate its obligation to supply APOKYN for cause, or at any time, by giving at least twenty-four months' written notice. The Britannia Supply Agreement does not provide technology transfer assistance from Britannia to any new suppliers we might engage following termination. In addition, the Britannia Supply Agreement is silent in providing us with an explicit license grant to any intellectual property, or to access know-how necessary or useful for manufacturing APOKYN.APOKYN or ONAPGO. If we materially breach the Britannia Supply Agreement, or Britannia chooses to terminate the Britannia Supply Agreement for convenience, we could lose the right and resources necessary for the manufacture of APOKYN and ONAPGO or could incur significant costs implementing technology transfer assistance.

We rely on third-party collaborators and strategic partners to market and commercialize our products and product candidates outside the U.S. We are party to and rely on several arrangements with third parties which provide us with rights to intellectual property that are necessary for the development of certain of our product candidates. In addition, we may enter into similar arrangements in the future for other product candidates. Our current arrangements impose various development, financial and other obligations on us. If we materially breach these obligations, of if third parties fail to adequately perform their respective obligations, these arrangements could be terminated. Certain agreements may be terminated whichby our third-party collaborators without cause. The termination of those agreements could result in our inability to develop, manufacture, market and sell products that are covered by such intellectual properties. We may not have sufficient resources to successfully establish future collaborations or license future arrangements on acceptable terms, if at all. We also face competition in our search for collaborators and licensing partners. By entering into strategic collaborations or similar arrangements, we rely on third parties to financially support their local operations, including support required for development, commercialization, sales, marketing, and regulatory activities, as well as expertise in each of those subject areas.

Unless the content requires otherwise, the words "Supernus," "we," "our" and "the Company" refer to Supernus Pharmaceuticals, Inc. and/or one or more of its subsidiaries, as the case may be. These terms are used solely for the convenience of the reader. Supernus Pharmaceuticals, Inc. and each of its subsidiaries are distinct legal entities. For example, MDD US Operations, LLC, a wholly-owned indirect subsidiary of Supernus Pharmaceuticals, Inc., is the exclusive licensee and distributor of APOKYN in the United States and its territories. Adamas Operations, LLC, a wholly-owned indirect subsidiary of Supernus Pharmaceuticals, Inc., wholly owns the patents and patent applications related to GOCOVRI and Osmolex ER and has a license agreement with Supernus Pharmaceuticals, Inc., granting Supernus Pharmaceuticals, Inc. rights to market and sell GOCOVRI and Osmolex ER. Sage Therapeutics, LLC, a wholly-owned indirect subsidiary of Supernus Pharmaceuticals, Inc., has granted Supernus Pharmaceuticals, Inc. a license to market and sell zuranolone in the United States.

We are a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases. Our diverse neuroscience portfolio includes approved treatments for attention-deficit hyperactivity disorder (ADHD), dyskinesia in Parkinson's Disease (PD) patients receiving levodopa-based therapy, hypomobility in PD, postpartum depression (PPD), epilepsy, migraine, cervical dystonia, and chronic sialorrhea. We are developing a broad range of novel CNS product candidates including new potential treatments for epilepsy, depression, and other CNS disorders.

•Qelbree® (viloxazine) extended-release capsules isare a novel non-stimulant product indicated for the treatment of ADHD in adults and pediatric patients 6 years and older. The United States Food and Drug Administration (FDA) approved Qelbree for the treatment of ADHD in pediatric patients 6 to 17 years of age in April 2021, and in adult patients in April 2022. The Company launched Qelbree for pediatric patients in May 2021 and for adult patients in May 2022 in the United States (U.S.). In January 2025, the FDA approved an expanded label update for Qelbree to include new data on the pharmacodynamics and use in breastfeeding mothers.

•GOCOVRI® (amantadine) extended-release capsules isare the first and only FDA approved medicine indicated for the treatment of dyskinesia in patients with PD receiving levodopa-based therapy, with or without concomitant dopaminergic medications, and as an adjunctive treatment to levodopa/carbidopa with PD experiencing "OFF" episodes.

SPN-817 represents a novel mechanism of action (MOA) for an anticonvulsant. SPN-817 is a novel synthetic form of huperzine A, whose MOA includes potent acetylcholinesterase inhibition, with pharmacological activities in CNS conditions such as epilepsy. The development will initially focus on the drug's anticonvulsant activity, which has been shown in preclinical models to be effective for the treatment of partial seizures and Dravet Syndrome. SPN-817 is in clinical development and has received Orphan Drug Designation for several epilepsy indications from the FDA.development.

The Company completed a Phase 1 single dose study in healthy adults in 2024 following submission of an Investigational New Drug Application. The study was a first in human, pilot pharmacokinetic study of two oral formulations of SPN-443 in healthy adults. The primary objective of the study was to assess safety and tolerability. This molecule, along with its major metabolites, is an inhibitor of norepinephrine, dopamine and serotonin, also known as a triple reuptake inhibitor. Both formulations of SPN-443 showed adequate bioavailability and were well tolerated. The Company plans to initiate Single Ascending Dose (SAD) and Multiple Ascending Dose (MAD) studies in the second half of 2026.

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

SPN-443 – Novel stimulant for attention-deficit/hyperactivity disorder (ADHD/CNS)

Our principal source of revenue is product sales. Revenue from product sales is recognized when physical control of our products is transferred to our customers, who are primarily pharmaceutical wholesalers, specialty pharmacies, and distributors. Product sales are recorded net of various forms of variable consideration, including: estimated rebates; sales discounts; and an estimated liability for future product returns (collectively, "sales deductions").

We maintain a return policy that allows our customers to return products within a specified period of time. Sales of our products are not subject to a general right of return; however, we will accept return of expired product 6 months prior to, and up to 12twelve months subsequent to, the product's expiry date for certain products. Our products have a shelf life of up to 48 months from date of manufacture. The product return accrual is estimated principally based on historical experience, the level and estimated shelf life of inventory in the distribution channel, changes in the current wholesaler prices, our return policy and expected market events, including generic competition. The time lag from date of sale of our products when we accrue our provision for product returns and the time at which we issue credit for expired product can occur up to several years after the sale of our product. Estimates associated with our provision for product returns are particularly susceptible to adjustment given the extensive time lag. The Company launched Qelbree in May 2021. The Company is actively monitoring returns activity in light of the timeline from the date of sale and the time at which we issue credit for expired products. We had favorable actual returns in 2024 and 2025 for Qelbree and as a result, the Company changed its estimated provision for Qelbree product returns based on the most recent experience. The Company has entered into settlement and license agreements with third parties, permitting the sale of a generic version of Trokendi XR beginning in January 2023. In addition, the Company entered into settlement and license agreements with third parties, permitting the sale of a generic version of Oxtellar XR beginning in September 2024. The Company is actively monitoring returns activity in light of the loss of exclusivity and actual and possible further future sales decline based on timing of generic entry. The entry of a generic competitor may cause our future Trokendi XR and Oxtellar XR product return rates to change from historical trends, and this change could have a material effect on the future provision for product returns. Historically, we have experienced changes in estimates in return reserve calculations, but those adjustments have not been material to net earnings. However, given the extensive number of inputs and assumptions, described above, future changes in our return reserves could be material.

Rebates are discounts which we pay under either public sector or private sector health care programs. Rebates paid under public sector programs are generally mandated under law, whereas private sector rebates are generally contractually negotiated by us with managed care providers. Both types of rebates vary over time. Rebate amounts are typically based upon the volume of purchases using contractual or statutory prices, which may vary by product and by payer. For each type of rebate, the factors used in the calculations of the accruals for that rebate include the identification of the products subject to the rebate, applicable price terms and estimated lag time between sale and payment of the rebate, which can be significant. In order to establish the rebate accruals, we use both internal and external data to estimate the level of inventory in the distribution channel and the rebate claims processing lag time for each type of rebate. To estimate the rebate percentage or net price, we track sales by product and by customer or payer. We evaluate inventory data reported by wholesalers, available prescription volume information, product pricing, historical experience and other factors in order to determine the adequacy of our accruals. We regularly monitor our accruals and record adjustments when rebate trends, rebate programs and contract terms, legislative changes, or other significant events indicate that a change in reserve is appropriate. Historically, adjustments to rebate accruals have not been material to net earnings.earnings (loss).

Specifically, a significant portion of rebates we pay are on state Medicaid programs. We participate in state Medicaid programs wherein the lag time from the date of sale of our product when we accrue for provision for rebates and the ultimate invoicing by the individual state Medicaid program can occur up to several quarters after the sale of our product. Because of the time lag for Medicaid, in any particular quarter, our adjustments may incorporate revisions of accruals for prior periods. Estimates associated with our participation in state Medicaid programs are particularly susceptible to adjustment given the extensive time lag. Historically, adjustments to rebate accruals have not been material to net earnings,earnings (loss), but there continues to be an extensive time lag related to certain programs that could result in variability in future periods.

Management assesses the potential impairment of our finite-lived intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The carrying amount of the definite-lived intangible assets, net was $397.9$569.5 million as of December 31, 2024.2025. Changes that could prompt such an assessment may include significant or adverse changes in the legal and regulatory environment, the introduction or advancement of competitive products and product candidates, changes in market demand, declining revenue and/or other events that indicate it is more likely than not that fair value is less than its carrying value. If a review of the definite-lived intangibles indicates that the carrying value of certain of these assets is more than the estimated undiscounted future cash flows, an impairment charge is made, as required, to adjust the carrying value to the estimated fair value. Evaluating for impairment requires judgment, including evaluating current economic and competitive circumstances, estimating future cash flows, future growth rates and future profitability. The primary inputs and assumptions used in the model included timing and projections of estimated future revenues and cash flows, loss of exclusivity, and discount rate. If the carrying amount of the asset exceeds its fair value, the Company writes down the asset to its estimated fair value, and an impairment loss equal to the difference between the assets fair value and carrying value is recognized in the consolidated statement of earnings (loss) in the period at which such determination is made. The use of different assumptions could increase or decrease the estimated fair value of assets and could therefore affect any impairment measurement. The Company recognized impairment charges of $20.2 million in 2023 mainly due to the partial write-off of the carrying value of some of its acquired intangible assets, primarily XADAGO. The primary factors that led to the impairment determinations were the following: (1) the performance of the commercial products; (2) forthcoming loss of exclusivity of XADAGO in December 2027, or earlier under certain circumstances, due to settlement agreements with third party generic companies; and (3) the change in the Company's future outlook of the brands.

The following table provides a summary of activities with respect to accrued product returns and rebates and sales discounts for the years ended December 31, 20242025 and 20232024 (dollars in thousands):

The accrued product returns balance decreased from $57.3 million as of December 31, 2023 to $53.4 million as of December 31, 2024.2024 to $37.8 million as of December 31, 2025. This decrease was primarily due to $11.9a decrease of $20.7 million of adjustments in the estimated provision for product returns related to prior year sales offset by higher net product sales and timing of related return activity.sales. The majority of the adjustmentprovision for product returns related to prior year sales is attributable to Qelbree, reflecting continued favorable actual returns experienced in 2024.2025. As a result, the Company changed its estimated provision for product returns based on the most recent experience.

Any investment in our business involves a high degree of risk. Before making an investment decision, you should carefully consider the information we include in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and related notes; the additional information in the other reports we file with the Securities and Exchange Commission; and the risks described in our Annual Report on Form 10-K for the year ended December 31, 2025 and quarterly report on Form 10-Q for the period ended MarchJune 31,30, 2026. These risks may result in material harm to our business and our financial condition and results of operations. If a material, adverse event was to occur, the market price of our common stock may decline, and you could lose part or all of your investment.

We are a biopharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases. Our diverse neuroscience portfolio includes approved treatments for attention-deficit hyperactivity disorder (ADHD), dyskinesia in Parkinson's Disease (PD) patients receiving levodopa-based therapy, hypomobility in PD, postpartum depression (PPD), epilepsy, migraine, cervical dystonia, and chronic sialorrhea. We are developing a broad range of novel CNS product candidates including new potential treatments for epilepsy, depression, attention deficit hyperactivity disorder (ADHD) and other CNS disorders.

The Company initiatedis conducting a follow-on Phase 2b multi-center, randomized, double-blind, placebo-controlled trial in approximately 200 adults with MDD. The study will examine the safety and tolerability of SPN-820 2400 mg2400mg given intermittently (twice weekly) as an adjunctive treatment to the current baseline antidepressant therapy, as well as assess the rapid onset of improvement in depressive symptoms.

•ONAPGO net product sales were $8.4$13.5 million in the firstsecond quarter of 2026, reflecting resumption of new patient initiation in February 2026. Since the launch in April 2025, and through the end of AprilJuly 2026, approximately 2,2002,600 enrollment forms have been submitted by moreapproximately than 645720 prescribers. The Company expectsremains on-track to filesubmit a regulatory submissionfiling to the FDA for a second supplier for ONAPGO in the third quarter of 2026, with potential FDA approval for the second supplier by mid-year 2027.

•Collaboration revenue from ZURZUVAE was $27.6$35.4 million in the firstsecond quarter of 2026. Collaboration revenue represents 50% of the net revenues for ZURZUVAE recorded by Biogen Inc. FirstSecond quarter 2026 U.S sales of ZURZUVAE, as reported by Biogen Inc., increased approximately 100%53% compared to the same period in 2025. The total number of prescriptions for ZURZUVAE increased by 82%62% in the firstsecond quarter of 2026 compared to the same period last year.

•Net sales of Qelbree increased 20%15% to $77.9$89.2 million in the firstsecond quarter of 2026, compared to the same period in 2025. Total IQVIA prescriptions for Qelbree were 254,824264,545 for the firstsecond quarter 2026, representing an increase of 19%17% compared to the same period last year. ThePrescription total number of prescribers reached an all-time high of approximately 43,000growth in the firstadult quarterand ofpediatric 2026.populations was 25% and 14%, respectively.

•Net sales of GOCOVRI increased 15%2% to $35.2$37.6 million in the firstsecond quarter of 2026, compared to the same period in 2025. Total number of prescriptions grew by 7%9% in the firstsecond quarter of 2026 compared to the same period last year.

•The Phase 2b multi-center, randomized, double-blind, placebo-controlled trial in approximately 200 adults with MDD.MDD is ongoing. The study will examine the safety and tolerability of SPN-820 2400 mg2400mg given intermittently (twice weekly) as an adjunctive treatment to the current baseline antidepressant therapy, as well as assess the rapid onset of improvement in depressive symptoms.

Comparison of the Three and Six Months ended Months Ended MarchJune 31,30, 2026 and 2025

Revenues consist primarily of net product sales of our commercial products in the U.S., supplemented by our collaboration revenue from the Biogen Collaboration Agreement and royalty and licensing revenues from our collaborative licensing arrangements. The following table provides information regarding our revenues during the three and six months ended MarchJune 31,30, 2026 (dollars in thousands):

Net product sales were $150.8$165.7 million and $142.0$158.0 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Net product sales were $316.5 million and $300.0 million for the six months ended June 30, 2026 and 2025, respectively. The increase was primarily due to increases in net product sales from Qelbree and GOCOVRI due to higher volume and higher price, and ONAPGO, which was launched in the second quarter of 2025, and Qelbree due to higher volume and higher price, partially offset by decline in net product sales of APOKYN due to lower volume, and decline in net product sales of Oxtellar XR and Trokendi XR due to generic erosion.

Adjustments related to prior year sales for the threesix months ended MarchJune 31,30, 2026 were approximately 1% of net product sales. Adjustments related to prior year sales for the threesix months ended MarchJune 31,30, 2025 were approximately 5%4% of net product sales. In 2025, the Company had favorable actual returns experience and as a result, the Company changed its estimated provision for product returns based on the most recent experience. Adjustments related to prior year sales for the threesix months ended MarchJune 31,30, 2025 were primarily attributable to Qelbree. Refer to discussion Sales Deductions and Related Accruals below.

The accrued product returns balance decreased to $37.2$36.7 million as of MarchJune 31,30, 2026 from $49.9$46.0 million as of MarchJune 31,30, 2025. This decrease was primarily due to favorable returns processed in 2025. During 2025, the Company had favorable actual returns experience. As a result, the Company changed its estimated provision for product returns based on the most recent experience. The provision for product returns related to prior year sales, which was $0.4$0.6 million and $7.0$12.5 million as of MarchJune 31,30, 2026 and 2025, respectively. The provision for product returns related to prior year salesrespectively, was primarily attributable to Qelbree, reflecting continued favorable actual returns experienced in 2025.

The accrued product rebates balance increased to $152.5$162.1 million as of MarchJune 31,30, 2026 from $120.2$134.9 million as of MarchJune 31,30, 2025 primarily due to timing of payments associated with government programs.

The provision for product returns increased to $1.2$2.9 million for the threesix months ended MarchJune 31,30, 2026 from $(2.3$5.2) million for the threesix months ended MarchJune 31,30, 2025. The increase was primarily due to aforementioned change in estimated provision for product returns in 2025 based on the most recent experience, which was primarily attributable to Qelbree.

The provision for product rebates increased to $124.1$249.5 million for the threesix months ended MarchJune 31,30, 2026 from $105.2$207.5 million for the threesix months ended MarchJune 31,30, 2025. The increase was primarily attributable to higher Qelbree, GOCOVRI, and ONAPGO sales.

Collaboration revenue (ZURZUVAE) was $27.6$35.4 million and $63.0 million for the three and six months ended MarchJune 31,30, 2026. The increaseCollaboration wasrevenue (ZURZUVAE) revenue stream is due to the Sage Acquisition in July 2025.

Royalty, licensing and other revenues were $29.3$18.0 million and $7.8$7.5 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Royalty, licensing and other revenues were $47.3 million and $15.3 million for the six months ended June 30, 2026 and 2025, respectively. The increase was primarily due to anincreased increasepurchases inof inventory under the Company's collaboration agreement with Shionogi, and the recognition of $20.0 million of licensing revenues related to the achievement of a commercial milestone under the Company's collaboration agreement with Shionogi.Shionogi in the six month period ended June 30, 2026.

Cost of revenues waswere $23.4$33.7 million and $15.8$16.8 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Cost of revenues were $57.1 million and $32.6 million for the six months ended June 30, 2026 and 2025, respectively. The increase was primarily driven by higher costs of Qelbree due to increased sales, ONAPGO, which was launched in the second quarter of 2025,2025 and increased sales in the first half of 2026, and higher manufacturingbulk costsand commercial inventory sales related to ZURZUVAE. These increases were partially offset by lower APOKYN royalties due to lower sales and lower Trokendi XR and Oxtellar XR costs, primarily due to generic erosion.

Research and Development (R&D) expenses were $39.4$29.5 million and $26.9$22.1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. R&D expenses were $68.9 million and $49.0 million for the six months ended June 30, 2026 and 2025, respectively. The increase in the three month period ended June 30, 2026 is primarily due to the increase in clinical program costs on SPN-817 and early-stage programs. The increase in the six month period ended June 30, 2026 was primarily due to an increase in clinical program costs on SPN-817, which includes the $10.0 million expense to former Biscayne security holders, andas thewell Company'sas shareincreased of R&D expenses from the collaboration arrangement with Biogen which was acquired through the Sage Acquisition in July 2025, partially offset by decreased clinical program costsspending on SPN-820.other early-stage programs.

Selling and marketing expenses were $87.0$92.8 million and $63.3$65.1 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Selling and marketing expenses were $179.8 million and $128.4 million for the six months ended June 30, 2026 and 2025, respectively. The increase in both periods was primarily due to the Company's proportionate share of expenses from the collaboration arrangement with Biogen, higher professional and consulting expenses, higher employee-related expenses, and higher marketing expense related to ONAPGO, which was launched in the second quarter of 2025, and the Company's proportionate share of expenses from the collaboration arrangement with Biogen.2025.

General and administrative expenses were $38.2$40.8 million and $26.7$28.4 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. General and administrative expenses were $79.0 million and $55.1 million for the six months ended June 30, 2026 and 2025, respectively. The increase in both periods was primarily due to the Company's proportionate share of expenses from the collaboration arrangement with Biogen, higher professional and consulting expenses, and higher operating expenses related to ONAPGO, which was launched in the second quarter of 2025, and the Company's proportionate share of expenses from the collaboration arrangement with Biogen.2025.

Amortization of intangible assets was $25.6$25.3 million and $19.8$20.8 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Amortization of intangible assets was $51.0 million and $40.6 million for the six months ended June 30, 2026 and 2025, respectively. The increase was primarily due to ONAPGO and ZURZUVAE intangible assets amortization expense in the first quarter of 2026. ONAPGO was previously accounted for as an indefinite-lived intangible asset not subject to amortization until FDA approval in February 2025.expense. ZURZUVAE intangible asset was acquired as part of the Sage Acquisition in July 2025.

There was no contingent consideration loss for the three months ended June 30, 2026 and 2025. Contingent consideration loss was $2.4 million and $7.7 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The contingent consideration loss for the firstsix quartermonths ofended June 30, 2026 was primarily due to the accretion of a Sage CVR to the full milestone payment amount with the achievement of a regulatory milestone with the approval of ZURZUVAE for the treatment of MDD in Japan. For the firstsix quartermonths ofended June 30, 2025, the loss was due to the accretion to the full milestone payment amount with the achievement of the USWM milestones. ONAPGO was approved by the FDA in February 2025 and was launched in April 2025.

Other Income (Expense), Net

Other income (expense), net was an income of $2.4$0.3 million and $4.4$4.5 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Other income (expense), net was an income of $2.7 million and $9.0 million for the six months ended June 30, 2026 and 2025, respectively. The decrease was due to lowerinterest investmentexpense incurred in the three and six month periods ended June 30, 2026 that did not occur in the corresponding 2025 periods, lower interest income on marketable securitiessecurities, andas well as lower market interest rates in 2026 compared to 2025. The cash consideration paid for the Sage acquisition in 2025 was funded through the Company's cash, cash equivalents and marketable securities holdings.

Income tax expense (benefit) was a expense of $0.7 million ((1.3)% effective tax rate) and income tax benefit of $3.7$2.9 million (61.5%4.6% effective tax rate) for the three and six months ended MarchJune 31,30, 2026, as compared to an income tax expensebenefit of $6.0$5.8 million ((102.835.0)% effective tax rate) and income tax expense of $0.2 million (1.5% effective tax rate) for the three and six months ended MarchJune 31,30, 2025. The change in income tax expense (benefit) and effective income tax rate was primarily due to an increase ina forecasted full year pre-tax earnings (losses) and an increase in non-deductible expendituresloss for the three and six months ended MarchJune 31,30, 2026, as compared to forecasted full year income for the same period in 2025.

The Company's effective income tax rate for the three and six months ended MarchJune 31,30, 2026 varies from the statutory federal tax rate in the United States (U.S. federal tax rate) of 21% primarily due to the effects of non-deductible executive compensation, non-deductible payments related to contingent consideration, and state taxes. The Company's effective income tax rate for the three and six months ended MarchJune 31,30, 2025 vary from the statutory U.S. federal tax rate primarily due to the impact of recurring permanent differences on a forecast near break-even loss.

The annual forecasted earnings represent the Company's best estimate as of MarchJune 31,30, 2026 and 2025, are subject to change and could have a material impact on the effective tax rate in subsequent periods. ASC 740, Income Taxes (ASC 740), requires the Company to estimate the annual effective income tax rate for the full year and apply it to pre-tax income (loss) for each interim period, taking into account year-to-date amounts and projected results for the full year.

The Company believes its balances of cash, cash equivalents, and unrestricted marketable securities, which totaled $384.2$372.1 million as of MarchJune 31,30, 2026, along with cash generated from ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements over the next twelve months and beyond.

We have financed our operations primarily with cash generated from product sales, supplemented by revenues from royalty and licensing arrangements, as well as proceeds from the sale of equity and debt securities. Continued cash generation is highly dependent on the success of our commercial products, as well as the success of our product candidates if approved by the FDA. While we expect continued profitability in future years, we anticipate there may be significant variability from year to year in the level of our profits particularly due to continued market and payor pressures for our commercial products; the unfavorable impact of the loss of patent exclusivity for Trokendi XR in January 2023 and Oxtellar XR in September 2024; the potential unfavorable impact of the forthcoming loss of exclusivity of XADAGO; funding for research and development of our product candidates; the additional funding for the launch of ONAPGO, which was approved by the FDA in February 2025 and launched in April 2025, the additional funding for the marketing of ZURZUVAE, and managing the Biogen Collaboration Agreement and obligations under the Biogen Collaboration Agreement which were acquired as part of the Sage Acquisition in July 2025.

We may, from time to time, consider raising additional capital through: new collaborative arrangements; strategic alliances; additional equity and/or financings from debt or other sources, especially in conjunction with opportunistic business development initiatives. If the Transactions contemplated by the Merger Agreement are consummated, we expect a significant reduction to our balances of cash and cash equivalents and marketable securities will occur to fund a portion of the one-time special cash dividend to stockholders of Indivior. We will continue to actively manage our capital structure and to consider all financing opportunities that could strengthen our long-term financial profile. Any such capital raises may or may not be similar to transactions in which we have engaged in the past. There can be no assurance that any such financing opportunities will be available on acceptable terms, if at all.

Net cash provided by operating activities was $66.5$61.7 million compared to $30.6$89.1 million for the threesix months ended MarchJune 31,30, 2026, and 2025, respectively. The increasedecrease in cash flows provided by operating activities was primarily due to the decreaseincrease in net loss as well as changes in working capital. The Company reported net loss of $2.3$60.7 million and $11.8net earnings of $10.7 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. The decreaseincrease in net loss was primarily due to the impairment of an intangible asset and increase in total revenues due to the addition of revenues from ONAPGOresearch and ZURZUVAE products, as well as licensing revenue from the achievement of a commercial milestone under our collaboration agreement with Shionogi. The Company launched ONAPGO in April 2025development and acquiredselling, ZURZUVAEgeneral, asand partadministrative of the Sage Therapeutics, Inc. acquisition in July 2025.activities.

Net cash used in investing activities was $19.2$12.1 million for the threesix months ended MarchJune 31,30, 2026 compared to net cash provided by investing activities of $37.3$6.7 million during the same period in 2025. The change was primarily due to a decrease in the maturities of marketable securities partially offset by a decrease in the purchases of marketable securities.

Net cash provided by financing activities was $9.1$1.9 million for the threesix months ended MarchJune 31,30, 2026 compared to net cash used in financing activities of $21.4$20.5 million during the same period in 2025. The change was primarily due to an increase in proceeds from the issuance of common stock and a decrease in the payment of USWM contingent consideration milestones in 2025.amount.

The Company has various potential milestone payments a result of the acquisition of Sage Therapeutics, Inc. OnIn March 19, 2026, Shionogi announced the successful commercial launch of a product containing zuranolone for the treatment of MDD in Japan. As such, a milestone was met and became due and payable at that time. The Company paid the milestone payment in June of 2026. Refer to Note 7, Contingent Consideration, in the Notes to the Consolidated Financial Statements in Part I, Item 1, Unaudited Condensed Consolidated Financial Statements, of this Quarterly Report on Form 10-Q for discussion of contingent consideration associated with the Acquisition of Sage Therapeutics, Inc. for further details.

On January 22, 2026, the Company entered into a First Amendment (Amendment) to the Agreement and Plan of Merger (Agreement) dated September 12, 2018, with former Biscayne security holders. The Amendment relates to the timing and payment of certain milestones under the Biscayne merger agreement. The Company agreed to pay former Biscayne security holders $10.0 million, one of the milestones specified in the Agreement, by June 30, 2026. The Company paid the milestone in June 2026.