PART I — FINANCIAL INFORMATION Financial Statements Zevra Therapeutics achieved a net income of $71.6 million for the six months ended June 30, 2025, a significant turnaround driven by a $148.3 million gain from a PRV sale and increased revenue from MIPLYFFA, despite an OLPRUVA impairment. Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $256.3 million from $178.1 million at year-end 2024, primarily due to higher cash and marketable securities, while total stockholders' equity grew substantially to $117.2 million. Balance Sheet Summary | Balance Sheet Item | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 47,712 | 33,785 | | Securities at fair value | 169,988 | 41,721 | | Total current assets | 226,337 | 86,027 | | Intangible assets, net | 7,053 | 68,993 | | Total assets | 256,277 | 178,127 | | Liabilities & Equity | | | | Total current liabilities | 28,832 | 34,065 | | Long-term debt | 60,692 | 59,504 | | Total liabilities | 139,047 | 138,461 | | Total stockholders' equity | 117,230 | 39,666 | - The significant decrease in net intangible assets from $69.0 million to $7.1 million is primarily due to a $58.7 million impairment charge related to OLPRUVA recorded in Q2 202517113 Condensed Consolidated Statements of Operations The company reported a net income of $74.7 million for Q2 2025 and $71.6 million for the first six months, a significant improvement from prior-year losses, driven by a $148.3 million gain on a PRV sale and increased net revenue, partially offset by a $58.7 million OLPRUVA impairment. Statements of Operations Summary | Metric ($ in thousands, except EPS) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue, net | 25,881 | 4,449 | 46,282 | 7,874 | | Impairment of intangible assets | 58,710 | — | 58,710 | — | | Loss from operations | (71,039) | (23,795) | (76,401) | (44,281) | | Gain on sale of PRV | 148,325 | — | 148,325 | — | | Net income (loss) | 74,707 | (19,925) | 71,608 | (36,547) | | Diluted EPS | $1.21 | $(0.48) | $1.16 | $(0.87) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities decreased to $11.8 million, while investing activities provided $22.5 million, primarily from $150.0 million in PRV sale proceeds, partially offset by investment purchases. Cash Flow Activity Summary | Cash Flow Activity ($ in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | (11,823) | (35,274) | | Net cash provided by investing activities | 22,476 | 14,664 | | Net cash provided by financing activities | 2,988 | 16,547 | | Net increase (decrease) in cash | 13,927 | (3,789) | - The primary driver of positive cash flow from investing activities was the $150.0 million received from the sale of the Priority Review Voucher (PRV)27 Notes to Financial Statements The notes detail significant events including FDA approval and commercialization of MIPLYFFA, the $150.0 million PRV sale, a $58.7 million OLPRUVA intangible asset impairment, revenue breakdown, debt structure, and ongoing litigation with Commave. - The company sold a transferable rare priority review voucher (PRV) received with the FDA approval of MIPLYFFA for $150.0 million, resulting in a net gain of $148.3 million in Q2 202541 - A $58.7 million intangible asset impairment charge was recorded in Q2 2025 for OLPRUVA after a triggering event indicated its carrying amount was not recoverable113 - For the six months ended June 30, 2025, the company recognized an inventory write-down charge of approximately $11.7 million for unsaleable inventory, compared to $3.2 million in the same period of 202454 Revenue by Source | Revenue Source ($ in millions) | Six Months Ended June 30, 2025 | | :--- | :--- | | MIPLYFFA Sales | 38.6 | | Arimoclomol French AC | 5.0 | | AZSTARYS License Agreement | 2.1 | | OLPRUVA Sales | 0.4 | | Total Revenue | 46.3 | Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses the company's transformation into a commercial-stage rare disease company, highlighting the successful launch of MIPLYFFA, the $148.3 million PRV gain, and the $58.7 million OLPRUVA impairment, with $217.7 million in cash and investments providing sufficient funding for the next twelve months. Overview Zevra has transformed into a commercial-stage rare disease company with approved products MIPLYFFA and OLPRUVA, driven by the FDA approval of MIPLYFFA, the $148.3 million PRV sale, and the acquisition of Acer Therapeutics, focusing on late-stage development. - The company's five-year strategic plan focuses on transforming Zevra into a leading rare-disease company by prioritizing late-stage clinical development and commercial opportunities over in-house drug discovery127 - MIPLYFFA was approved by the FDA on September 20, 2024, for Niemann-Pick disease type C (NPC), and the associated Priority Review Voucher (PRV) was sold for net proceeds of $148.3 million on April 1, 2025129 - The acquisition of Acer Therapeutics was completed on November 17, 2023, adding the FDA-approved product OLPRUVA and the investigational candidate celiprolol to Zevra's portfolio130 Results of Operations For the six months ended June 30, 2025, net income was $71.6 million, a significant improvement driven by a $38.4 million increase in revenue from MIPLYFFA sales and a $148.3 million PRV gain, partially offset by a $58.7 million OLPRUVA impairment. Operations Metrics | Metric ($ in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue, net | 46,282 | 7,874 | 38,408 | | Impairment of intangible assets | 58,710 | — | 58,710 | | Research and development | 6,691 | 22,798 | (16,107) | | Selling, general and administrative | 40,327 | 22,535 | 17,792 | | Gain on sale of PRV | 148,325 | — | 148,325 | | Net income (loss) | 71,608 | (36,547) | 108,155 | - The increase in net income was primarily attributable to the $148.3 million gain on the sale of the PRV and a $38.4 million increase in revenue, mainly from MIPLYFFA sales185186 - R&D expenses decreased by $16.1 million, primarily due to reduced spending on the Phase 2 clinical study for KP1077190 - SG&A expenses increased by $17.8 million, reflecting higher personnel costs, professional fees, and other expenses related to building the commercial organization191 Liquidity and Capital Resources As of June 30, 2025, the company held $217.7 million in cash, cash equivalents, and investments, with liquidity bolstered by product sales and $148.3 million net proceeds from a PRV sale, and management believes current capital is sufficient for at least the next twelve months. - As of June 30, 2025, the company had cash, cash equivalents and investments of $217.7 million193 - In August 2024, the company completed an equity offering, raising net proceeds of approximately $64.5 million to support commercialization and development activities199 - The company has a senior secured loan facility for up to $100.0 million, with $60.0 million funded as of the Term Loans Closing Date on April 5, 2024205 - Management believes available cash and future operating cash flow are sufficient to fund capital requirements for at least the next twelve months214 Quantitative and Qualitative Disclosures About Market Risk This section is not applicable for the reporting period. - Not applicable222 Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter. - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level224 - No material changes to internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025225 PART II — OTHER INFORMATION Legal Proceedings The company is engaged in a legal dispute with Commave Therapeutics SA regarding the AZSTARYS License Agreement, with the case currently in the discovery phase, and Zevra intends to vigorously defend itself against the alleged breach of contract. - A legal dispute has arisen with Commave Therapeutics SA concerning the AZSTARYS License Agreement, with Commave filing a complaint in the Court of Chancery of the State of Delaware in September 2024227228 - The case is currently in the discovery phase after the company's motion to dismiss was denied in February 2025, and the company believes the lawsuit is without merit but cannot predict the outcome229230 Risk Factors The company highlights risks including potential impairment of remaining assets after a $58.7 million OLPRUVA charge, the impact of healthcare reforms like the Inflation Reduction Act, challenges in retaining key personnel, and geopolitical disputes affecting supply chains. - Following a $58.7 million impairment charge on definite-lived intangible assets in Q2 2025, there is a risk that remaining assets could become impaired in the future, which would negatively affect operating results239 - Healthcare reform, including the Inflation Reduction Act of 2022 (IRA) and the fictional One Big Beautiful Bill Act of July 2025, could increase costs, create pricing pressure, and negatively impact the business through measures like Medicare price negotiations and Medicaid funding reductions240244245 - The company's success is highly dependent on its ability to retain key executives and qualified scientific, clinical, and commercial personnel in a competitive hiring environment236238 - The company faces risks from significant political, trade, and regulatory developments, such as tariffs and sanctions, which could impair development and commercialization efforts by affecting supply chains and increasing costs235 Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or purchases of equity securities by the issuer during the reporting period. - None262 Other Information During the three months ended June 30, 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement. - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter267 Exhibits This section lists the exhibits filed as part of the Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer. - The exhibits filed with this report include Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to SEC rules268
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