Zevra Therapeutics(ZVRA) - 2025 Q1 - Quarterly Report

PART I — FINANCIAL INFORMATION ITEM 1. Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements for Zevra Therapeutics, Inc. as of March 31, 2025, and for the three-month periods ending March 31, 2025, and 2024, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, cash flows, and accompanying notes Key Financial Statement Data (Q1 2025 vs Q1 2024) | Financial Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue, net | $20,401,000 | $3,425,000 | | Loss from operations | $(5,362,000) | $(20,486,000) | | Net loss | $(3,099,000) | $(16,622,000) | | Net loss per share (basic and diluted) | $(0.06) | $(0.40) | | Net cash used in operating activities | $(8,222,000) | $(16,165,000) | Condensed Balance Sheet Highlights | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $37,340,000 | $33,785,000 | | Total assets | $172,708,000 | $178,127,000 | | Total liabilities | $131,685,000 | $138,461,000 | | Total stockholders' equity | $41,023,000 | $39,666,000 | Notes to Unaudited Condensed Consolidated Financial Statements The notes provide critical context to the financial statements, detailing the company's business, significant accounting policies, and specific financial items, including FDA approval of MIPLYFFA®, PRV sale, revenue breakdowns, debt obligations, and a legal dispute - On September 20, 2024, the FDA approved the New Drug Application (NDA) for MIPLYFFA® for Niemann-Pick disease type C (NPC), granting the company a transferable rare pediatric disease priority review voucher (PRV)[27] - Subsequent to the quarter end, on April 1, 2025, the company sold the PRV for $150.0 million, resulting in net proceeds of $148.3 million, which is not reflected in the March 31, 2025 financial statements[28][132] Revenue Breakdown (Three months ended March 31, 2025) | Revenue Source | Amount (in millions) | | :--- | :--- | | MIPLYFFA® Sales | $17.1 | | French AC (arimoclomol) | $2.3 | | OLPRUVA® Sales | $0.1 | | AZSTARYS® License Agreement | $0.9 | | Total Revenue | $20.4 | - The company is engaged in a legal dispute with Commave Therapeutics SA regarding the AZSTARYS® License Agreement, with litigation in the discovery phase and no contingent liability accrued as of March 31, 2025[130] - The company has a $100.0 million senior secured loan facility, of which $60.0 million was drawn as of the closing date, bearing interest at 3-Month Term SOFR plus 7.00% per annum, with a floor of 4.00%[78][79] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance and condition, highlighting its transformation into a leading rare-disease company, covering the commercial launch of MIPLYFFA®, sales of OLPRUVA®, pipeline status, operational results comparison, liquidity, capital resources, and the significant cash infusion from the post-quarter PRV sale Overview and Product Portfolio Zevra is a commercial-stage company focused on rare diseases, with a portfolio including approved products MIPLYFFA® and OLPRUVA®, partnered product AZSTARYS®, and a clinical pipeline featuring celiprolol and KP1077, with the recent FDA approval of MIPLYFFA® and subsequent PRV sale strengthening its financial position - The company's strategic plan focuses on becoming a leading rare-disease company, supported by the commercialization of OLPRUVA® and the recent approval and launch of MIPLYFFA®[136] Active Commercial and Development Assets | Product / Candidate | Indication | Development Status | | :--- | :--- | :--- | | MIPLYFFA® | Niemann-Pick disease type C (NPC) | FDA Approved / European EAP | | OLPRUVA® | Urea Cycle Disorders (UCD) | FDA Approved | | Celiprolol | Vascular Ehlers-Danlos Syndrome (VEDS) | Clinical - Phase 3 Ongoing | | KP1077 | Idiopathic Hypersomnia (IH) / Narcolepsy | Clinical - Phase 2 / Phase 1/2 | | AZSTARYS® | ADHD | FDA Approved and Partnered | - As of March 31, 2025, there were 122 enrollments to receive MIPLYFFA®, including conversions from the U.S. Expanded Access Program (EAP)[146] - The Phase 3 DiSCOVER trial for celiprolol in VEDS has 32 enrolled participants as of March 31, 2025[163] Results of Operations For the three months ended March 31, 2025, Zevra reported a net loss of $3.1 million, a significant improvement from a $16.6 million net loss in the same period of 2024, driven by a $17.0 million revenue increase primarily from MIPLYFFA® sales, partially offset by increased SG&A expenses and decreased R&D expenses Comparison of Operations (Three months ended March 31) | Line Item (in thousands) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue, net | $20,401 | $3,425 | $16,976 | | Research and development | $3,258 | $12,277 | $(9,019) | | Selling, general and administrative | $19,545 | $9,931 | $9,614 | | Loss from operations | $(5,362) | $(20,486) | $15,124 | | Net loss | $(3,099) | $(16,622) | $13,523 | - The $17.0 million revenue increase was primarily due to $17.1 million in product sales of MIPLYFFA®, which was approved in September 2024[187] - R&D expenses decreased by $9.0 million, mainly due to reduced spending for the Phase 2 clinical study of KP1077 and lower personnel costs[190] - SG&A expenses increased by $9.6 million, primarily from higher personnel-related costs and professional fees to build out the commercial organization[191] Liquidity and Capital Resources As of March 31, 2025, the company had $68.7 million in cash, cash equivalents, and investments, significantly bolstered by the post-quarter PRV sale for $148.3 million, with management believing these resources, along with access to a $100 million debt facility, are sufficient to fund operations for at least the next twelve months - As of March 31, 2025, the company held cash, cash equivalents, and investments totaling $68.7 million[193] - On April 1, 2025, the company received net proceeds of $148.3 million from the sale of its PRV, significantly bolstering its cash position[194] Cash Flow Summary (Three months ended March 31) | Cash Flow (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,222) | $(16,165) | | Net cash provided by investing activities | $10,542 | $14,793 | | Net cash provided by financing activities | $1,607 | $1,217 | - The company believes its available cash, operating cash flow, and access to borrowings are sufficient to fund capital requirements for at least the next twelve months[213] ITEM 3. Quantitative and Qualitative Disclosures About Market Risk This item is marked as 'Not applicable' in the report - The company has indicated that this section is not applicable[221] ITEM 4. Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2025, concluding they were effective at a reasonable assurance level, with no material changes to internal control over financial reporting during the quarter - As of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[223] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[224] PART II — OTHER INFORMATION ITEM 1. Legal Proceedings The company is involved in a legal dispute with Commave Therapeutics SA regarding the interpretation of the AZSTARYS® License Agreement, with Commave alleging breach of contract, and while the company's motion to dismiss was denied, it believes the lawsuit is without merit and has not recorded any contingent liability - A dispute has arisen with Commave Therapeutics SA over the AZSTARYS® License Agreement, with Commave filing a complaint on September 4, 2024, alleging breach of contract[227] - The company's motion to dismiss was denied on February 12, 2025, and the case is now in the discovery phase, with the company believing the lawsuit is without merit[228] ITEM 1A. Risk Factors This section states there have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K, but highlights specific risks, including potential adverse effects from political, trade, and regulatory developments, and the company's dependency on retaining key executives and qualified personnel - The report notes no material changes from the risk factors in the Annual Report on Form 10-K, but highlights specific risks[233] - A highlighted risk is that significant political, trade, and regulatory developments, such as tariffs or sanctions, could impair development or commercialization efforts[234] - The company is highly dependent on its ability to retain key executives and attract qualified personnel in a competitive market[235][238] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities and no purchases of equity securities by the issuer or affiliated purchasers during the period - There were no unregistered sales of equity securities during the reporting period[240] ITEM 5. Other Information This section discloses that several of the company's executive officers adopted Rule 10b5-1 trading arrangements in March 2025, intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of a specified number of common stock shares over a defined period - In March 2025, several executive officers, including the CEO, CFO, CMO, CCO, and CLO, adopted Rule 10b5-1 trading arrangements for the future sale of company stock[248][249][250] ITEM 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including the Asset Purchase Agreement for the PRV, the Tenth Amended and Restated Non-Employee Director Compensation Policy, and required officer certifications