PTC Therapeutics, Inc.: Form 10-Q for the period ended Jun 30, 2025

The following discussion and analysis is meant to provide material information relevant to an assessment of the financial condition and results of operations of our company, including an evaluation of the amounts and certainty of cash flows from operations and from outside resources, so as to allow investors to better view our company from management’s perspective. The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the notes to those financial statements appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2024 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2025, or our 2024 Annual Report. This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those set forth in Part II, Item 1A. (Risk Factors) of this Quarterly Report on Form 10-Q and Part I, Item 1A. (Risk Factors) of our 2024 Annual Report, our actual results may differ materially from those anticipated in these forward-looking statements.

Our Company

We are a global biopharmaceutical company dedicated to the discovery, development and commercialization of clinically differentiated medicines for children and adults living with rare disorders. We are advancing a robust and diversified pipeline of transformative medicines as part of our mission to provide access to best-in-class treatments for patients with unmet medical needs. Our strategy is to leverage our scientific expertise and global commercial infrastructure to optimize value for our patients and other stakeholders. We have a diversified therapeutic portfolio pipeline that includes several commercial products and product candidates in various stages of development, including clinical, pre-clinical and research and discovery stages, focused on the development of new treatments for multiple therapeutic areas for rare diseases relating to neurology and metabolism.

Corporate Updates

Sephience™ (sepiapterin)

Sephience (sepiapterin) is a product for the treatment of phenylketonuria, or PKU, a rare inherited metabolic disease which affects the brain. On July 28, 2025, Sephience was approved by the FDA for the treatment of pediatric and adult patients living with PKU in the United States. On June 19, 2025, Sephience was granted marketing authorization by the EC for the treatment of children and adults living with PKU within the EEA. We also made a regulatory submission for Sephience for the treatment of PKU in Brazil in the third quarter of 2024, with a regulatory decision expected in the second half of 2025, and in Japan in the fourth quarter of 2024, with a regulatory decision expected in the fourth quarter of 2025.

Censa Rights Satisfaction Agreement

On August 5, 2025, we, certain of the former securityholders of Censa, and, for the limited purposes set forth in the agreement, Shareholder Representative Services LLC, a Colorado limited liability company, entered into a Rights Satisfaction Agreement, or the Rights Satisfaction Agreement, pursuant to which such former securityholders of Censa, or the Participating Rightsholders, agreed to the cancellation and forfeiture of their rights to receive certain payments based on worldwide annual net sales by us of products containing sepiapterin, or Net Sales of Product, under the Agreement and Plan of Merger, dated as of May 5, 2020, or the Censa Merger Agreement, by and among us, Hydro Merger Sub, Inc., our wholly owned, indirect subsidiary, Censa and, solely in its capacity as the representative, agent and attorney-in-fact of the securityholders of Censa, Shareholder Representative Services LLC, in exchange for the consideration set forth in the Rights Satisfaction Agreement and further detailed below.

Pursuant to the terms of the Rights Satisfaction Agreement, the Participating Rightsholders have canceled and forfeited their rights under the Censa Merger Agreement to receive a percentage of annual net sales during the applicable payment term equal to (i) 8% of annual Net Sales of Product for that portion of annual Net Sales of Product less than or equal to $250.0 million, (ii) 10% of annual Net Sales of Product for that portion of annual Net Sales of Product greater than

$250.0 million but less than $500.0 million and (iii) 12% of annual Net Sales of Product for that portion of annual Net Sales of Product greater than $500.0 million, which we refer to collectively as the Net Sales Payments.

In consideration of the foregoing, we agreed to pay to the Participating Rightsholders an aggregate amount in cash up to $250.0 million, or the Upfront Consideration, upon the consummation of the transactions contemplated by the Rights Satisfaction Agreement, or the Closing, and potential milestone payments, each, an Additional Milestone Payment, of up to $100.0 million each (or up to $500.0 million in the aggregate) based on the achievement of specified Net Sales Thresholds (as defined in the Censa Merger Agreement). The amount of the Upfront Consideration and the Additional Milestone Payments was subject to adjustment in the Rights Satisfaction Agreement based on the number of Participating Rightsholders.

At the Closing, based on the participation of former Censa securityholders holding approximately 90% of Censa’s equity securities prior to the consummation of the transactions contemplated by the Censa Merger Agreement, we paid an aggregate amount of Upfront Consideration in cash of approximately $225.0 million. Additionally, we are obligated to make Additional Milestone Payments in an amount equal to approximately $90.0 million upon achievement of each of the (i) first occurrence of a three or fewer consecutive calendar year period in which aggregate Net Sales of Product are greater than $3.0 billion, (ii) first occurrence of a five or fewer consecutive calendar year period in which aggregate Net Sales of Product are greater than $5.0 billion, (iii) first occurrence of a seven or fewer consecutive calendar year period in which aggregate Net Sales of Product are greater than $7.0 billion, (iv) first occurrence of a nine or fewer consecutive calendar year period in which aggregate Net Sales of Product are greater than $9.0 billion and (v) first occurrence of an 11 or fewer consecutive calendar year period in which aggregate Net Sales of Product are greater than $11.0 billion. If, after the Closing, any additional former securityholder of Censa executes and delivers a joinder to the Rights Satisfaction Agreement and becomes a party thereto, we will pay such former securityholder an amount in cash equal to such former securityholder’s applicable pro rata share of the Upfront Consideration (less any Net Sale Payments previously received) and any Additional Milestone Payments that become payable to Participating Rightsholders under the Rights Satisfaction Agreement.

In addition to the Additional Milestone Payments, and pursuant to the terms of the Censa Merger Agreement, we will make payments of $30.0 million for the first occurrence of a four consecutive calendar quarter period in which aggregate Net Sales of Product (as defined in the Censa Merger Agreement) exceed $250.0 million, $50.0 million for the first occurrence of a four consecutive calendar quarter period in which aggregate Net Sales of Product exceed $500.0 million, and $80.0 million for the first occurrence of a four consecutive calendar quarter period in which aggregate Net Sales of Product exceed $1.0 billion.

The Rights Satisfaction Agreement has no effect on the Censa Merger Agreement other than to provide for the cancellation and forfeiture of the Participating Rightsholders’ rights to receive the Net Sales Payments described above. As a result, all other rights and obligations under the Censa Merger Agreement remain in effect pursuant to their terms, including, without limitation, our obligation to pay certain contingent payments upon the achievement of certain development and Net Sales of Product milestones.

The Rights Satisfaction Agreement contains customary representations, warranties and covenants of us and the Participating Rightsholders and provided for a simultaneous signing and closing.

Global Commercial Footprint

Global DMD Franchise

We have two products, Translarna™ (ataluren) and Emflaza® (deflazacort), for the treatment of Duchenne muscular dystrophy, or DMD, a rare, life-threatening disorder. Translarna has marketing authorization in Russia for the treatment of nonsense mutation Duchenne muscular dystrophy, or nmDMD, in patients aged two years and older, and in Brazil for the treatment of nmDMD in ambulatory patients two years and older and for continued treatment of patients that become non-ambulatory, as well as in various other countries. During the quarter ended June 30, 2025, we recognized $59.5 million in net sales of Translarna. We hold worldwide commercialization rights to Translarna for all indications in all territories.

Emflaza is approved in the United States for the treatment of DMD in patients two years and older. During the quarter ended June 30, 2025, we recognized $36.4 million in net sales of Emflaza.

We previously had a marketing authorization for Translarna in the European Economic Area, or EEA, which had been subject to annual review and renewal by the European Commission, or EC, following reassessment by the European Medicines Agency, or EMA, of the benefit-risk balance of the authorization. In September 2022, we submitted a Type II variation to the EMA to support conversion of the conditional marketing authorization for Translarna to a standard marketing authorization, which included a report on the placebo-controlled trial of Study 041 and data from the open-label extension as further described below. Study 041 was an 18-month, placebo-controlled trial, followed by an 18-month open-label extension of Translarna in the treatment of ambulatory patients with nmDMD aged five years or older. In February 2023, we also submitted an annual marketing authorization renewal request to the EMA. In September 2023, the Committee for Medicinal Products for Human Use, or CHMP, gave a negative opinion on the conversion of the conditional marketing authorization to full marketing authorization of Translarna for the treatment of nmDMD and a negative opinion on the renewal of the existing conditional marketing authorization of Translarna for the treatment of nmDMD. In January 2024, the CHMP issued a negative opinion for the renewal of the conditional marketing authorization following a re-examination procedure. In May 2024, the EC decided not to adopt the CHMP’s negative opinion for the renewal of the conditional marketing authorization of Translarna and returned such opinion to the CHMP for re-evaluation. In June 2024, following the EC’s request for re-review, the CHMP issued a negative opinion on the renewal of the conditional marketing authorization of Translarna for the treatment of nmDMD. In October 2024, the CHMP maintained its negative opinion for the renewal of the conditional marketing authorization following the requested reexamination procedure. In March 2025, the EC adopted the opinion of the CHMP to not renew the authorization of Translarna for the treatment of nmDMD. However, the EC indicated that individual countries within the European Union, or EU, can leverage Articles 117(3) and 5(1) of the EU Directive 2001/83 to allow continued commercial use of Translarna. There is a substantial risk that as a result of the EC’s adoption of the CHMP’s negative opinion we will lose a significant portion of our ability to generate revenue from sales of Translarna in the EEA.

Translarna is an investigational new drug in the United States. During the first quarter of 2017, we filed a New Drug Application, or NDA, for Translarna for the treatment of nmDMD over protest with the United States Food and Drug Administration, or FDA. In October 2017, the Office of Drug Evaluation I of the FDA issued a Complete Response Letter, or CRL, for the NDA, stating that it was unable to approve the application in its current form. In response, we filed a formal dispute resolution request with the Office of New Drugs of the FDA. In February 2018, the Office of New Drugs of the FDA denied our appeal of the CRL. In its response, the Office of New Drugs recommended a possible path forward for the ataluren NDA submission based on the accelerated approval pathway. This would involve a resubmission of an NDA containing the current data on effectiveness of ataluren with new data to be generated on dystrophin production in nmDMD patients’ muscles. We followed the FDA’s recommendation and collected, using newer technologies via procedures and methods that we designed, such dystrophin data in a new study, Study 045, and announced the results of Study 045 in February 2021. Study 045 did not meet its pre-specified primary endpoint. In June 2022, we announced top-line results from the placebo-controlled trial of Study 041. Following this announcement, we submitted a meeting request to the FDA to gain clarity on the regulatory pathway for a potential resubmission of an NDA for Translarna. The FDA provided initial written feedback that Study 041 does not provide substantial evidence of effectiveness to support an NDA resubmission. We held a Type C meeting with the FDA in the fourth quarter of 2023 to discuss the totality of Translarna data. Based on feedback from the FDA, we resubmitted the NDA in July 2024, based on the results from Study 041 and from our international drug registry study for nmDMD patients receiving Translarna. In October 2024, the FDA accepted for review the resubmission of the NDA for Translarna for the treatment of nmDMD. As this was an NDA resubmission following a complete response letter to the NDA which was filed over protest in 2016, the FDA is not obligated to follow the review timelines under Prescription Drug User Fee Act guidelines and an action date has not been provided.

We have previously relied on Emflaza’s seven-year marketing exclusivity period in the United States for its approved indications under the provisions of the Orphan Drug Act of 1983, or the Orphan Drug Act, when commercializing Emflaza. Emflaza’s seven-year period of orphan drug exclusivity related to the treatment of DMD in patients five years and older expired in February 2024. We expect the expiration of this orphan drug exclusivity to potentially have a significant negative impact on Emflaza net product revenue. Emflaza’s orphan drug exclusivity related to the treatment of DMD in patients two years of age to less than five expires in June 2026.

Upstaza™ (eladocagene exuparvovec) / Kebilidi™ (eladocagene exuparvovec-tneq)

Upstaza/Kebilidi is a gene therapy for the treatment of Aromatic L Amino Acid Decarboxylase, or AADC, deficiency, a rare central nervous system, or CNS, disorder arising from reductions in the enzyme AADC that results from mutations in the dopa decarboxylase gene. In July 2022, the EC approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the EEA. In November 2022, the Medicines and Healthcare Products Regulatory Agency approved Upstaza for the treatment of AADC deficiency for patients 18 months and older within the United Kingdom. In November 2024, the FDA granted accelerated approval of our gene therapy for the treatment of children and adults with AADC deficiency, which is marketed with the brand name Kebilidi in the United States.

Tegsedi® (inotersen) and Waylivra™ (volanesorsen)

We hold the rights for the commercialization of Tegsedi and Waylivra for the treatment of rare diseases in countries in Latin America and the Caribbean pursuant to a Collaboration and License Agreement, or the Tegsedi-Waylivra Agreement, dated August 1, 2018, by and between us and Akcea Therapeutics, Inc., or Akcea, a subsidiary of Ionis Pharmaceuticals, Inc. Tegsedi has received marketing authorization in the United States, European Union, or EU, and Brazil for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hereditary transthyretin amyloidosis, or hATTR amyloidosis. In August 2021, ANVISA, the Brazilian health regulatory authority, approved Waylivra as the first treatment for familial chylomicronemia syndrome, or FCS, in Brazil. In December 2022, ANVISA approved Waylivra for the treatment of familial partial lipodystrophy, or FPL. Waylivra has also received marketing authorization in the EU for the treatment of FCS.

Evrysdi® (risdiplam)

We also have a spinal muscular atrophy, or SMA, collaboration with F. Hoffman-La Roche Ltd. and Hoffman La Roche Inc., which we refer to collectively as Roche, and the Spinal Muscular Atrophy Foundation, or SMA Foundation. The SMA program has one approved product, Evrysdi (risdiplam), which was approved by the FDA in August 2020 for the treatment of SMA in adults and children two months and older and by the EC in March 2021 for the treatment of 5q SMA in patients two months and older with a clinical diagnosis of SMA Type 1, Type 2 or Type 3 or with one to four SMN2 copies. Evrysdi also received marketing authorization for the treatment of SMA in over 100 countries. In May 2022, the FDA approved a label expansion for Evrysdi to include infants under two months old with SMA. In August 2023, the EC approved an extension of the Evrysdi marketing authorization to include infants under two months old in the EU.

Diversified Development Pipeline

Splicing Platform

In addition to our SMA program, our splicing platform also includes votoplam (PTC518), which is being developed for the treatment of Huntington’s disease, or HD. We announced the results from our Phase 1 study of votoplam in healthy volunteers in September 2021 demonstrating dose-dependent lowering of huntingtin messenger ribonucleic acid and protein levels, that votoplam efficiently crosses blood brain barrier at significant levels and that votoplam was well tolerated. We initiated a Phase 2 study of votoplam for the treatment of HD in the first quarter of 2022, which consists of an initial 12-week placebo-controlled phase focused on safety, pharmacology and pharmacodynamic effects followed by a nine-month placebo-controlled phase focused on votoplam biomarker effect. In June 2024, we announced interim results from the full Phase 2 study of votoplam. At month 12, votoplam treatment demonstrated durable dose-dependent lowering of mHTT protein in the blood and dose-dependent lowering of mHTT protein in the cerebrospinal fluid in the interim cohort of stage 2 patients. In addition, favorable trends were demonstrated on several relevant HD clinical assessments. Furthermore, following 12 months of treatment, votoplam continued to be well tolerated. In September 2024, the FDA granted Fast Track designation to the votoplam program for the treatment of HD. In December 2024, we held a Type C meeting with the FDA to discuss whether huntingtin protein lowering could be considered a surrogate endpoint for accelerated approval of votoplam. The FDA was aligned on the scientific rationale and asked to see additional data supportive of an association between huntingtin protein lowering and changes in clinical outcome scores. In May 2025, we announced that the Phase 2 study of votoplam met its primary endpoints of blood HTT lowering and safety. The results on the full study population are consistent with the previously reported evidence of dose-dependent HTT lowering, favorable safety profile and early signals of dose-dependent clinical effect at 12 months in Stage 2 patients. In addition, at 24 months of treatment, there were continued trends of dose-dependent favorable clinical effect relative to a propensity-matched natural history cohort as well as dose-dependent NfL lowering. In November 2024, we entered into the License and Collaboration Agreement, or the Novartis Agreement, with Novartis Pharmaceuticals Corporation, or Novartis, relating to our votoplam program. This transaction closed in January 2025. Pursuant to the Novartis Agreement, we are responsible for completing the ongoing Phase 2A clinical trial and continuing the ongoing open label extension, or OLE, clinical trial pursuant to its existing development plan, with the goal of transitioning the ongoing OLE clinical trial to Novartis within 12 months after the effective date of the Novartis Agreement. Novartis will be responsible for all other development of licensed compounds and licensed products and the manufacture and commercialization of licensed compounds and licensed products worldwide. We continue to collaborate with Novartis on next steps and aim to meet with FDA in the fourth quarter of 2025 to discuss Phase 3 clinical trial design and potential accelerated approval pathway.

Inflammation and Ferroptosis Platform

Our inflammation and ferroptosis platform consists of small molecule compounds that target oxidoreductase enzymes that regulate oxidative stress and inflammatory pathways central to the pathology of a number of CNS diseases. The most advanced molecule in our inflammation and ferroptosis platform is vatiquinone. We announced topline results from a registration-directed Phase 3 trial of vatiquinone in children and young adults with Friedreich’s Ataxia, called MOVE-FA, in May 2023. While the study did not meet its primary endpoint of statistically significant change in modified Friedreich Ataxia Rating Scale, or mFARS, score at 72 weeks in the primary analysis population, vatiquinone treatment did demonstrate significant benefit on key disease subscales and secondary endpoints. In addition, in the population of subjects that completed the study protocol, significance was reached in the mFARS endpoint and several secondary endpoints, including the upright stability subscale. Furthermore, vatiquinone was well tolerated. In October 2024, we announced that the pre-specified endpoint for two different FA long-term extension studies was met, with statistically significant evidence of durable treatment benefit on disease progression. In December 2024, we submitted an NDA to the FDA for vatiquinone for the treatment of children and adults living with FA. In February 2025, the FDA accepted for filing the NDA and granted priority review with a target regulatory action date of August 19, 2025.

Multi-Platform Discovery

In addition, we have a pipeline of product candidates and discovery programs that are in early clinical, pre-clinical and research and development stages focused on the development of new treatments for multiple therapeutic areas for rare diseases.

Funding

The success of our products and any other product candidates we may develop depends largely on obtaining and maintaining reimbursement from governments and third-party insurers. Our revenues are primarily generated from sales of Translarna for the treatment of nmDMD in countries where we were able to obtain acceptable commercial pricing and reimbursement terms and in select countries where we are permitted to distribute Translarna under our early access programs, or EAP, programs or through similar styled programs, and from sales of Emflaza for the treatment of DMD in the United States. We also generate revenue from sales of Upstaza for the treatment of AADC deficiency in the EEA, we have recognized revenue associated with milestone and royalty payments from Roche pursuant to a License and Collaboration Agreement, or the SMA License Agreement, by and among us, Roche and, for the limited purposes set forth therein, the SMA Foundation, under our SMA program and we have recognized license revenues related to performance obligations already completed pursuant to the Novartis Agreement.

We have financed our operations to date primarily through the private offerings of convertible senior notes, public and “at the market offerings” of common stock, proceeds from royalty purchase agreements, private placements of our convertible preferred stock and common stock, collaborations, bank and institutional lender debt, other convertible debt, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease area addressed by our product candidates. We have relied on revenue generated from net sales of Translarna for the treatment of nmDMD in territories outside of the United States since 2014, Emflaza for the treatment of DMD in the United States since 2017 and Upstaza for the treatment of AADC deficiency in the EEA since 2022. We have also relied on revenue associated with milestone and royalty payments from Roche pursuant to the SMA License Agreement under our SMA program, revenue generated from net sales of Tegsedi and Waylivra in Latin America and the Caribbean, and license revenues related to performance obligations already completed pursuant to the Novartis Agreement.

In June 2024, we entered into an amendment with Royalty Pharma Investments 2019 ICAV, or Royalty Pharma, and Royalty Pharma plc, to the Amended and Restated Royalty Purchase Agreement, dated October 18, 2023, or the A&R Royalty Purchase Agreement, which amends and restated in its entirety the Royalty Purchase Agreement by and among us, RPI Intermediate Finance Trust, and for the limited purposes set forth in the agreement, Royalty Pharma plc, dated as of July 17, 2020, or the Original Royalty Purchase Agreement, and we exercised our first put option in exchange for $241.8 million in cash consideration. To date, Royalty Pharma has paid to us cash consideration of $1.9 billion (less payments on our right to receive sales-based royalty payments, or the Royalty, on worldwide net sales of Evrysdi and any other product in development pursuant to the SMA License Agreement received by us with respect to assigned Royalties, or the Assigned Royalty Rights) in exchange for 90.49% of the Royalty, which will be reduced to 83.33% after Royalty Pharma receives $1.3 billion in aggregate payments, or the Assigned Royalty Cap, from the Royalty assigned under the Original Royalty Purchase Agreement. We currently retain 9.51% of the Royalty, which increases to 16.67% after the Assigned Royalty Cap has been met. We have the option to sell our retained portions of the Royalty to Royalty Pharma in up to three tranches for the following payments: (1) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, (2) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, and (3) $50.0 million in exchange for 1.90% of the Royalty, which increases to 3.33% after the Assigned Royalty Cap has been met, in each case less Royalty payments received by us with respect to the Assigned Royalty Rights.

In November 2024, we entered into the Novartis Agreement relating to our votoplam HD program which includes related molecules. Pursuant to the Novartis Agreement, we are responsible for completing the ongoing Phase 2A clinical trial and continuing the ongoing OLE clinical trial pursuant to its existing development plan, with the goal of transitioning the ongoing OLE clinical trial to Novartis within 12 months after the effective date. Novartis will be responsible for all other development of licensed compounds and licensed products and the manufacture and commercialization of licensed compounds and licensed products worldwide. Under the Novartis Agreement, and upon the closing of the transaction contemplated by the Novartis Agreement in January 2025, we received an upfront payment of $1.0 billion on the effective date and can receive up to $1.9 billion in development, regulatory and sales milestones, a 40% share of U.S. profits and losses, and tiered double-digit royalties on ex-U.S. sales.

In August 2019, we entered into an At the Market Offering Sales Agreement, or the Sales Agreement, with Cantor Fitzgerald and RBC Capital Markets, LLC, or together, the Sales Agents, pursuant to which, we may offer and sell shares of our common stock, having an aggregate offering price of up to $125.0 million from time to time through the Sales Agents by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or the Securities Act. During the three and six months ended June 30, 2025, we did not issue or sell any shares of common stock pursuant to the Sales Agreement. The remaining shares of our common stock available to be issued and sold, under the Sales Agreement, have an aggregate offering price of up to $93.0 million as of June 30, 2025.

As of June 30, 2025, we had an accumulated deficit of $2,845.2 million. We had a net income of $801.7 million and a net loss of $190.8 million for the six months ended June 30, 2025 and 2024, respectively.

We anticipate that we will continue to incur significant expenses in connection with our commercialization efforts in the United States, the EEA, Latin America and other territories, including expenses related to our commercial infrastructure and corresponding sales and marketing, legal and regulatory, and distribution and manufacturing undertakings as well as administrative and employee-based expenses. In addition to the foregoing, we expect to continue to incur significant costs in connection with ongoing, planned and potential future clinical trials and studies for our splicing and inflammation and ferroptosis programs as well as studies in our products for maintaining authorizations, label extensions and additional indications. We continue to seek marketing authorization for Translarna for the treatment of nmDMD in territories in which we do not currently have marketing authorization. We have submitted an NDA to the FDA for vatiquinione for the treatment of FA in the fourth quarter of 2024. These efforts may significantly impact the timing and extent of our commercialization and manufacturing expenses.

We may seek to expand and diversify our product pipeline through opportunistically in-licensing or acquiring the rights to products, product candidates or technologies and we may incur expenses, including with respect to transaction costs, subsequent development costs or any upfront, milestone or other payments or other financial obligations associated with any such transaction, which would increase our future capital requirements.

With respect to our outstanding 1.50% convertible senior notes due September 15, 2026, or the 2026 Convertible Notes,

cash interest payments are payable on a semi-annual basis in arrears, which will require total funding of $4.3 million

annually.

We expect to make payments to the former Censa Pharmaceuticals, Inc., or Censa, securityholders of $25.0 million in the aggregate in cash for the marketing authorization granted by the EC for Sephience for the treatment of children and adults living with PKU in the EEA, and $32.5 million in the aggregate in cash for the approval by the FDA of Sephience for the treatment of pediatric and adult patients living with PKU in the United States, pursuant to the Censa Merger Agreement.

Upon the potential achievement in 2025 of certain regulatory milestones relating to vatiquinone, which milestones would be payable in 2026, we expect to make payments to BioElectron Technology Corporation, or BioElectron, of $75.0 million in the aggregate, in cash or shares of our common stock, as determined by us, pursuant to an asset purchase agreement by and between the Company and BioElectron, dated October 1, 2019, or the BioElectron Asset Purchase Agreement.

We also have certain significant contractual obligations and commercial commitments that require funding and we have disclosed these items under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Funding Obligations” in our 2024 Annual Report. There were no material changes to these obligations and commitments during the period ended June 30, 2025. Furthermore, since we are a public company, we have incurred and expect to continue to incur additional costs associated with operating as such including significant legal, accounting, investor relations and other expenses.

We will need to generate significant revenues to achieve and sustain profitability, and we may never do so. Accordingly, we may need to obtain substantial additional funding in connection with our continuing operations. Adequate additional financing may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or our commercialization efforts.

Financial operations overview

Revenues

Net product revenues. To date, our net product revenues have consisted primarily of sales of Translarna for the treatment of nmDMD in territories outside of the United States and sales of Emflaza for the treatment of DMD in the United States. We recognize revenue when performance obligations with customers have been satisfied and if it is probable that a significant revenue reversal will not occur. Our performance obligations are to provide products based on customer orders from distributors, hospitals, specialty pharmacies or retail pharmacies. The performance obligations are satisfied at a point in time when our customer obtains control of the product, which is typically upon delivery. We invoice customers after the products have been delivered and invoice payments are generally due within 30 to 90 days of invoice date. We determine the transaction price based on fixed consideration in its contractual agreements. Contract liabilities arise in certain circumstances when consideration is due for goods not yet provided. As we have identified only one distinct performance obligation, the transaction price is allocated entirely to the product sale. In determining the transaction price, a significant financing component does not exist since the timing from when we deliver product to when the customers pay for the product is typically less than one year. Customers in certain countries pay in advance of product delivery. In those instances, payment and delivery typically occur in the same month.

We record product sales net of any variable consideration, which includes discounts, allowances, rebates related to Medicaid and other government pricing programs, and distribution fees. We use the expected value or most likely amount method when estimating variable consideration, unless discount or rebate terms are specified within contracts. The identified variable consideration is recorded as a reduction of revenue at the time revenues from product sales are recognized. These estimates for variable consideration are adjusted to reflect known changes in factors and may impact such estimates in the quarter those changes are known. Revenue recognized does not include amounts of variable consideration that are constrained.

During the three and six months ended June 30, 2025 and 2024, net product revenues consisted of the following:

Disaggregated net product revenues by country for the three and six months ended June 30, 2025 and 2024 are as follows:

For the three months ended June 30, 2025, three of our distributors each accounted for over 10% of our net product sales. For the three months ended June 30, 2024, two of our distributors each accounted for over 10% of our net product sales. For the six months ended June 30, 2025 and 2024, two of our distributors each accounted for over 10% of our net product sales.

In relation to customer contracts, we incur costs to fulfill a contract but do not incur costs to obtain a contract. These costs to fulfill a contract do not meet the criteria for capitalization and are expensed as incurred. We consider any shipping and handling costs that are incurred after the customer has obtained control of the product as a cost to fulfill a promise. Shipping and handling costs associated with finished goods delivered to customers are recorded as a selling expense.

Roche and the SMA Foundation Collaboration. In November 2011, we entered into the SMA License Agreement pursuant to which we are collaborating with Roche and the SMA Foundation to further develop and commercialize compounds identified under our SMA program with the SMA Foundation. The research component of this agreement terminated effective December 31, 2014. We are eligible to receive additional payments from Roche if specified events are achieved with respect to each licensed product, including up to $135.0 million in research and development event milestones, up to $325.0 million in sales milestones upon achievement of specified sales events, and up to double digit royalties on worldwide annual net sales of a commercial product. As of June 30, 2025, we had recognized a total of $310.0 million in milestone payments and $639.6 million royalties on net sales pursuant to the SMA License Agreement. As of June 30, 2025, there are no remaining research and development event milestones that we can receive. The remaining potential sales milestones as of June 30, 2025 are $150.0 million upon achievement of certain sales events.

For the three and six months ended June 30, 2025, collaboration revenue related to the SMA License Agreement with Roche was immaterial. For the three and six months ended June 30, 2024, we did not recognize collaboration revenue related to the SMA License Agreement with Roche.

For the three and six months ended June 30, 2025, we recognized $57.6 million and $94.0 million of royalty revenue, respectively, related to Evrysdi. For the three and six months ended June 30, 2024, we recognized $53.2 million and $84.3 million of royalty revenue, respectively, related to Evrysdi.

Novartis Collaboration for votoplam HD. In November 2024, we entered into the Novartis Agreement with Novartis related to our votoplam HD program. Upon the closing of the transaction contemplated by the Novartis Agreement in January 2025, we received an upfront payment of $1.0 billion on the effective date and can receive up to $1.9 billion in development, regulatory and sales milestones, a 40% share of U.S. profits and losses, and tiered double-digit royalties on ex-U.S. sales

During the three and six months ended June 30, 2025, we recognized $2.9 million and $992.7 million, respectively, in license revenues related to performance obligations for Novartis already completed. The remaining $7.3 million is recorded as deferred revenue on the consolidated balance sheet as of June 30, 2025 and will be recognized over time as the work related to the OLE clinical trial is performed. Collaboration and license revenue during the six months ended June 30, 2025 was partially offset by $3.5 million related to a refund for a prior collaboration arrangement in relation to votoplam.

Pursuant to the A&R Royalty Purchase Agreement, Royalty Pharma has paid to us aggregate cash consideration of $1.9 billion (less Royalty payments received by us with respect to the Assigned Royalty Rights) in exchange for 90.49% of the Royalty, which will be reduced to 83.33% of the Royalty after Royalty Pharma receives $1.3 billion in aggregate payments from the Royalty assigned at the closing of the Original Purchase Agreement. We currently retain 9.51% of the Royalty, which increases to 16.67% after the Assigned Royalty Cap has been met, and all economic rights to receive the remaining potential regulatory and sales milestone payments under the SMA License Agreement.

We have the option to sell our retained portions of the Royalty to Royalty Pharma in up to three tranches for the following payments: (1) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, (2) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, and (3) $50.0 million in exchange for 1.90% of the Royalty, which increases to 3.33% after the Assigned Royalty Cap has been met, in each case less Royalty payments received by us with respect to the Assigned Royalty Rights. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and capital resources—Sources of liquidity” for additional information.

Research and development expense

Research and development expenses consist of the costs associated with our research activities, as well as the costs associated with our drug discovery efforts, conducting preclinical studies and clinical trials, manufacturing development efforts and activities related to regulatory filings. Our research and development expenses consist of:

• external research and development expenses incurred under agreements with third-party contract research organizations and investigative sites, third-party manufacturing organizations and consultants;
• employee-related expenses, which include salaries and benefits, including share-based compensation, for the personnel involved in our drug discovery and development activities; and
• facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, IT, human resources and other support functions, depreciation of leasehold improvements and equipment, and laboratory and other supplies.

We use our employee and infrastructure resources across multiple research projects, including our drug development programs. We track expenses related to our clinical programs and certain preclinical programs on a per project basis.

We expect our research and development expenses to fluctuate in connection with our ongoing activities, particularly in connection with our activities under our splicing and inflammation and ferroptosis programs and performance of our post-marketing requirements imposed by regulatory agencies with respect to our products. The timing and amount of these expenses will depend upon the outcome of our ongoing clinical trials and the costs associated with our planned clinical trials. The timing and amount of these expenses will also depend on the costs associated with potential future clinical trials of our products or product candidates and the related expansion of our research and development organization, regulatory requirements, advancement of our preclinical programs, and product candidate manufacturing costs.

The following tables provides research and development expense for our most advanced principal product development programs, for the three and six months ended June 30, 2025 and 2024.

(in thousands)

(in thousands)

Development. Consists of costs incurred for product candidates following initiation of a clinical trial.

For the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, the changes reflect progressing through different phases of studies as we continue to focus our resources on our differentiated, high potential research and development programs.

Research. Consists of costs incurred for product candidates before initiation of a clinical trial.

For the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, the decrease in research expenses primarily reflected our continued focus of our resources on product candidates approaching approval during the current year periods.

Milestones. Consists of development and regulatory milestone expenses incurred in connection with our collaborative arrangements.

For the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, the decrease in milestone expenses related to the achievement of a $15.0 million success-based regulatory milestone for the validation and acceptance of a marketing authorization application for sepiapterin for PKU in May 2024.

Payroll, benefits, and share-based stock compensation. Consists of costs incurred for salaries and wages, bonus, payroll taxes, benefits and share-based stock compensation associated with employees involved in research and development activities. Share-based stock compensation may fluctuate from period to period based on factors that are not within our control, such as our stock price on the dates share-based grants are issued.

For the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, the change in payroll, benefits, and share-based stock compensation expenses was relatively flat.

Facilities and other. Consists of indirect costs incurred for the benefit of multiple programs, including information technology, and other facility-based expenses, such as rent expense.

For the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, the decrease in facilities and other expenses primarily related to decreases in facility-based expenses at our facility in Hopewell Township, New Jersey as a result of an amendment and restatement of our lease for such facility in June 2024 and at our facility in Warren, New Jersey as a result of an amendment to our lease for such facility in December 2024.

The successful development of our products and product candidates is highly uncertain. This is due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:

• the scope, rate of progress and expense of our clinical trials and other research and development activities;
• the potential benefits of our products and product candidates over other therapies;
• our ability to market, commercialize and achieve market acceptance for any of our products or product candidates that we are developing or may develop in the future, including our ability to negotiate pricing and reimbursement terms acceptable to us;
• clinical trial results;
• the terms and timing of regulatory approvals; and
• the expense of filing, prosecuting, defending and enforcing patent claims and other intellectual property rights.

A change in the outcome of any of these variables with respect to the development of our products or product candidates could mean a significant change in the costs and timing associated with the development of those products or product candidates. For example, if the EMA or FDA or other regulatory authority were to require us to conduct clinical trials beyond those which we currently anticipate will be required for the completion of clinical development of any of our products or product candidates or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.

Selling, general and administrative expense

Selling, general and administrative expenses consist primarily of salaries and other related costs for personnel, including share-based compensation expenses, in our executive, legal, business development, commercial, finance, accounting, information technology and human resource functions. Other selling, general and administrative expenses include facility-related costs not otherwise included in research and development expense; advertising and promotional expenses; costs associated with industry and trade shows; and professional fees for legal services, including patent-related expenses, accounting services and miscellaneous selling costs.

We expect that selling, general and administrative expenses will increase in future periods in connection with our continued efforts to commercialize our products, including increased payroll, expanded infrastructure, commercial operations, increased consulting, legal, accounting and investor relations expenses.

Interest expense, net

Interest expense, net consists of interest expense from the liability for the sale of future royalties related to the A&R Royalty Purchase Agreement and the 2026 Convertible Notes outstanding, offset by interest income earned on investments.

Critical accounting policies and significant judgments and estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we have prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. Actual results may differ from these estimates under different assumptions or conditions.

During the three and six months ended June 30, 2025, there were no material changes to our critical accounting policies as reported in our 2024 Annual Report.

Results of operations

Three months ended June 30, 2025 compared to three months ended June 30, 2024

The following table summarizes revenues and selected expense and other income data for the three months ended June 30, 2025 and 2024.

(in thousands)

Net product revenue. Net product revenue was $118.3 million for the three months ended June 30, 2025, a decrease of $14.9 million, or 11%, from $133.2 million for the three months ended June 30, 2024. The decrease in net product revenue was primarily due to a decrease in net product sales of Emflaza and Translarna. Emflaza net product revenue was $36.4 million for the three months ended June 30, 2025, a decrease of $10.9 million, or 23%, compared to $47.3 million for the three months ended June 30, 2024. These results were driven by additional generic competition. Translarna net product revenues were $59.5 million for the three months ended June 30, 2025, a decrease of $10.9 million, or 15%, compared to $70.4 million for the three months ended June 30, 2024. These results were primarily due to the EC’s adoption of the CHMP’s negative opinion.

Collaboration and license revenue. Collaboration and license revenue was $2.9 million for the three months ended June 30, 2025, an increase of $2.9 million, or 100%, from $0.0 million for the three months ended June 30, 2024. The increase in collaboration and license revenue was due to the receipt of the $1.0 billion upfront payment upon the effective date of the license and collaboration agreement with Novartis related to our votoplam HD program. For the three months ended June 30, 2025, we recognized $2.9 million related to license revenue from the Novartis Agreement for performance obligations completed during the period. For the three months ended June 30, 2024, we did not recognize any collaboration or license revenue.

Royalty revenue. Royalty revenue was $57.6 million for the three months ended June 30, 2025, an increase of $4.4 million, or 8%, from $53.2 million for the three months ended June 30, 2024. The increase in royalty revenue was due to higher Evrysdi sales in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. In accordance with the SMA License Agreement, we are entitled to royalties on worldwide annual net sales of the product.

Manufacturing revenue. Manufacturing revenue was $0.0 million for the three months ended June 30, 2025, a decrease of $0.3 million, or 100%, from $0.3 million for the three months ended June 30, 2024. The decrease was due to the prior completion of all manufacturing services related to the production of plasmid DNA and AAV vectors for gene therapy applications for external customers. In June 2024, we sold our gene therapy manufacturing business in Hopewell Township, New Jersey. Accordingly, we do not expect to have manufacturing revenue going forward.

Cost of product, collaboration and license sales, excluding amortization of acquired intangible assets. Cost of product, collaboration and license sales, excluding amortization of acquired intangible assets was $11.4 million for the three months ended June 30, 2025, a decrease of $4.1 million, or 26%, from $15.5 million for the three months ended June 30, 2024. Cost of product, collaboration and license sales, excluding amortization of acquired intangible assets consisted primarily of royalty payments associated with Emflaza, Translarna, and Upstaza net product sales, costs associated with Emflaza, Translarna, and Upstaza products sold during the period, and inventory reserves. The decrease in cost of product, collaboration and license sales, excluding amortization of acquired intangible assets, was primarily due to decreases in royalty costs driven by Emflaza as a result of the completion of the royalty agreement with Marathon Pharmaceuticals, LLC (now known as Complete Pharma Holdings, LLC), which was partially offset by costs associated with the Novartis Agreement.

Amortization of acquired intangible assets. Amortization of acquired intangible assets was $4.1 million for the three months ended June 30, 2025, an increase of $1.2 million, or 42%, from $2.9 million for the three months ended June 30, 2024. These amounts are related to the Waylivra, Tegsedi, Upstaza/Kebilidi, and Sephience intangible assets, which are all being amortized on a straight-line basis over their estimated useful lives. The amortization increase was driven by multiple approvals during the year ended 2024 related to PTC-AADC. In October 2024, we received regulatory approval for Upstaza in Brazil, and in November 2024, the BLA for our gene therapy treatments of AADC deficiency was approved by the FDA, marketed under the brand name Kebilidi. With these approvals, $10.7 million and $17.4 million for Kebilidi and Upstaza, respectively, was reclassed from the PTC-AADC indefinite lived intangible asset to definite lived intangible assets. We will amortize these allocated balances of $10.7 million and $17.4 million over their expected useful lives of 12 years on a straight-line basis. In June 2025, the EC granted marketing authorization to Sephience for the treatment of children and adults living with PKU in the EEA, which triggered a $25.0 million milestone to the former Censa securityholders. The milestone was recorded as an intangible asset and is being amortized to cost of product sales over its expected useful life on a straight-line basis.

Research and development expense. Research and development expense was $113.0 million for the three months ended June 30, 2025, a decrease of $19.2 million, or 15%, from $132.2 million for the three months ended June 30, 2024. The decrease in research and development expenses primarily related to a $15.0 million regulatory success-based milestone payable to the former Censa securityholders for the three months ended June 30, 2024.

Selling, general and administrative expense. Selling, general and administrative expense was $85.3 million for the three months ended June 30, 2025, an increase of $15.8 million, or 23%, from $69.5 million for the three months ended June 30, 2024. The increase reflected our continued investment to support our commercial activities including our expanding commercial portfolio.

Change in the fair value of contingent consideration. The change in the fair value of contingent consideration was $0.0 million for the three months ended June 30, 2025, a change of $5.1 million, or 100%, from a loss of $5.1 million for the three months ended June 30, 2024. During the first quarter of 2025, the probability of triggering the remaining contingent consideration was determined to be remote, and therefore the balance was written down to zero.

Tangible asset impairment and losses (gains) on transactions, net. Tangible asset impairment and losses (gains) on transactions, net was $0.1 million for the three months ended June 30, 2025, a decrease of $1.7 million, or 94%, from $1.8 million for the three months ended June 30, 2024. This decrease was primarily related to the loss on sale of $4.2 million of certain assets related to gene therapy manufacturing and $0.2 million of fixed asset impairments during the three months ended June 30, 2024. These amounts were partially offset by a gain of $2.2 million on lease terminations and a $0.4 million gain on sales of fixed assets during the three months ended June 30, 2024. During the three months ended June 30, 2025, we recorded $0.1 million related to fixed asset impairments.

Interest expense, net. Interest expense, net was $30.4 million for the three months ended June 30, 2025, a decrease of $13.1 million, or 30%, from $43.5 million for the three months ended June 30, 2024. The decrease in interest expense, net was directly related to the increase in marketable securities – available for sale, resulting in investment income on our marketable securities – available for sale of $18.4 million and $6.8 million for the three months ended June 30, 2025 and 2024, respectively.

Other expense, net. Other expense, net was $5.7 million for the three months ended June 30, 2025, an increase of $3.7 million, or over 100%, from other expense, net of $2.0 million for the three months ended June 30, 2024. The increase in other expense, net primarily relates to net realized and unrealized losses from foreign currency of $8.7 million for the three months ended June 30, 2025, compared to net unrealized losses of $3.4 million from our ClearPoint Neuro. Inc. debt and equity investments, offset by a net realized and unrealized gain from foreign currency of $0.9 million for the three months ended June 30, 2024.

Income tax benefit (expense). Income tax benefit was $6.2 million for the three months ended June 30, 2025, a change of $19.6 million, or over 100%, compared to income tax expense of $13.4 million for the three months ended June 30, 2024. The change in income tax benefit (expense) was driven by the projected utilization of additional tax attributes in 2025.

Six months ended June 30, 2025 compared to six months ended June 30, 2024

The following table summarizes revenues and selected expense and other income data for the six months ended June 30, 2025 and 2024.

(in thousands)

Net product revenue. Net product revenue was $271.8 million for the six months ended June 30, 2025, a decrease of $39.1 million, or 13%, from $310.8 million for the six months ended June 30, 2024. The decrease in net product revenue was primarily due to a decrease in net product sales of Emflaza and Translarna. Emflaza net product revenue was $84.1 million for the six months ended June 30, 2025, a decrease of $20.7 million, or 20%, compared to $104.8 million for the six months ended June 30, 2024. These results were driven by additional generic competition. Translarna net product revenues were $145.6 million for the six months ended June 30, 2025, a decrease of $28.3 million, or 16%, compared to $173.9 million for the six months ended June 30, 2024. These results were primarily due to the EC’s adoption of the CHMP’s negative opinion.

Collaboration and license revenue. Collaboration and license revenue was $989.2 million for the six months ended June 30, 2025, an increase of $989.2 million, or 100%, from $0.0 million for the six months ended June 30, 2024. The increase in collaboration and license revenue was due to the receipt of the $1.0 billion upfront payment upon the effective date of the license and collaboration agreement with Novartis related to our votoplam HD program. For the six months ended June 30, 2025, we recognized $992.7 million related to license revenue from the Novartis Agreement which was partially offset by $3.5 million related to a refund for a prior collaboration arrangement in relation to votoplam. For the six months ended June 30, 2024, we did not recognize any collaboration or license revenue.

Royalty revenue. Royalty revenue was $94.0 million for the six months ended June 30, 2025, an increase of $9.7 million, or 12%, from $84.3 million for the six months ended June 30, 2024. The increase in royalty revenue was due to higher Evrysdi sales in the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. In accordance with the SMA License Agreement, we are entitled to royalties on worldwide annual net sales of the product.

Manufacturing revenue. Manufacturing revenue was $0.0 million for the six months ended June 30, 2025, a decrease of $1.7 million, or 100%, from $1.7 million for the six months ended June 30, 2024. The decrease was due to the prior completion of all manufacturing services related to the production of plasmid DNA and AAV vectors for gene therapy applications for external customers. In June 2024, we sold our gene therapy manufacturing business in Hopewell Township, New Jersey. Accordingly, we do not expect to have manufacturing revenue going forward.

Cost of product, collaboration and license sales, excluding amortization of acquired intangible assets. Cost of product, collaboration and license sales, excluding amortization of acquired intangible assets was $24.3 million for the six months ended June 30, 2025, a decrease of $6.0 million, or 20%, from $30.3 million for the six months ended June 30, 2024. Cost of product, collaboration and license sales, excluding amortization of acquired intangible assets consisted primarily of royalty payments associated with Emflaza, Translarna, and Upstaza net product sales, costs associated with Emflaza, Translarna, and Upstaza products sold during the period, and inventory reserves. The decrease in cost of product, collaboration and license sales, excluding amortization of acquired intangible assets, was primarily due to decreases in royalty costs driven by Emflaza as a result of the completion of the royalty agreement with Marathon Pharmaceuticals, LLC (now known as Complete Pharma Holdings, LLC), which was partially offset by costs associated with the Novartis Agreement.

Amortization of acquired intangible assets. Amortization of acquired intangible assets was $7.9 million for the six months ended June 30, 2025, a decrease of $46.5 million, or 86%, from $54.4 million for the six months ended June 30, 2024. These amounts are related to the Emflaza rights acquisition, as well as the Waylivra, Tegsedi, Upstaza/Kebilidi, and Sephience intangible assets, which are all being amortized on a straight-line basis over their estimated useful lives. The amortization decrease was driven by the Emflaza rights intangible asset being fully amortized as of February 2024. As a result, there is no further amortization for Emflaza as of February 2024.

Research and development expense. Research and development expense was $222.0 million for the six months ended June 30, 2025, a decrease of $26.3 million, or 11%, from $248.3 million for the six months ended June 30, 2024. The decrease in research and development expenses related to decreases in program spend as we continued to focus our resources on our differentiated, high potential research and development programs. For the six months ended June 30, 2024, research and development expense also includes a $15.0 million regulatory success-based milestone paid to the former Censa securityholders.

Selling, general and administrative expense. Selling, general and administrative expense was $166.2 million for the six months ended June 30, 2025, an increase of $23.5 million, or 16%, from $142.8 million for the six months ended June 30, 2024. The increase reflected our continued investment to support our commercial activities including our expanding commercial portfolio.

Change in the fair value of contingent consideration. The change in the fair value of contingent consideration was a gain of $0.8 million for the six months ended June 30, 2025, a change of $5.8 million, or over 100%, from a loss of $5.0 million for the six months ended June 30, 2024. During the first quarter of 2025, the probability of triggering the remaining contingent consideration was determined to be remote, and therefore the balance was written down to zero.

Tangible asset impairment and losses (gains) on transactions, net. Tangible asset impairment and losses (gains) on transactions, net was $0.2 million for the six months ended June 30, 2025, a decrease of $1.6 million, or 90%, from $1.8 million for the six months ended June 30, 2024. This decrease was primarily related to the loss on sale of $4.2 million of certain assets related to gene therapy manufacturing and $0.2 million of fixed asset impairments during the six months ended June 30, 2024. These amounts were partially offset by a gain of $2.2 million on lease terminations and a $0.4 million gain on sales of fixed assets during the six months ended June 30, 2024. During the six months ended June 30, 2025, we recorded $0.1 million related to fixed asset impairments and $0.1 million related to losses on the sale of fixed assets.

Interest expense, net. Interest expense, net was $64.5 million for the six months ended June 30, 2025, a decrease of $19.9 million, or 24%, from $84.3 million for the six months ended June 30, 2024. The decrease in interest expense, net was directly related to the increase in investments on our marketable securities – available for sale, resulting in investment income on our marketable securities – available for sale of $32.5 million and $13.7 million for the six months ended June 30, 2025 and 2024, respectively.

Other expense, net. Other expense, net was $12.0 million for the six months ended June 30, 2025, an increase of $11.6 million, or over 100%, from other expense, net of $0.4 million for the six months ended June 30, 2024. The increase in other expense, net, primarily relates to net realized and unrealized losses from foreign currency of $15.0 million for the six months ended June 30, 2025 compared to net realized and unrealized gains from foreign currency of $2.1 million for the six months ended June 30, 2024.

Income tax expense. Income tax expense was $57.1 million for the six months ended June 30, 2025, an increase of $36.7 million, or over 100%, compared to income tax expense of $20.3 million for the six months ended June 30, 2024. The increase in income tax expense was attributable to the recognition of the revenue associated with the Novartis Agreement in 2025. Additionally, we incur income tax expenses in various foreign jurisdictions, and our foreign tax liabilities are largely dependent upon the distribution of pre-tax earnings among these different jurisdictions.

Liquidity and capital resources

Sources of liquidity

While we have generated net income in the six months ended June 30, 2025, we have historically incurred significant operating losses.

As a growing commercial-stage biopharmaceutical company, we are engaging in significant commercialization efforts for our products while also devoting a substantial portion of our efforts on research and development related to our products, product candidates and other programs. To date, our product revenue has primarily consisted of sales of Translarna for the treatment of nmDMD in territories outside of the United States and from Emflaza for the treatment of DMD in the United States. Our ongoing ability to generate revenue from sales of Translarna for the treatment of nmDMD is dependent upon our ability to maintain our marketing authorizations in Brazil and Russia and secure market access through commercial programs following the conclusion of pricing and reimbursement terms at sustainable levels in the member states of the EEA or through EAP programs or similar styled programs in the EEA and other territories. In March 2025, the EC adopted the opinion of the CHMP to not renew the authorization of Translarna for the treatment of nmDMD. However, the EC indicated that individual countries within the EU can leverage Articles 117(3) and 5(1) of the EU Directive 2001/83 to allow continued use of Translarna. Our ability to generate product revenue from Emflaza will largely depend on the coverage and reimbursement levels set by governmental authorities, private health insurers and other third-party payors. Additionally, Emflaza’s seven-year period of orphan drug exclusivity related to the treatment of DMD in patients five years and older expired in February 2024. We have previously relied on this exclusivity period to commercialize Emflaza in the United States. We expect the expiration of this orphan drug exclusivity to potentially have a significant negative impact on Emflaza net product revenue. Emflaza’s orphan drug exclusivity related to the treatment of DMD in patients two years of age to less than five expires in June 2026.

We have financed our operations to date primarily through the private offerings of convertible senior notes, public offerings and “at the market offerings” of common stock, proceeds from royalty purchase agreements, private placements of our preferred stock and common stock, collaborations, bank and institutional lender debt, other convertible debt, grant funding and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by our product candidates. We expect to continue to incur significant expenses and operating losses for at least the next fiscal year. The net income and losses we incur may fluctuate significantly from quarter to quarter.

In August 2019, we entered into the Sales Agreement, pursuant to which, we may offer and sell shares of our common stock, having an aggregate offering price of up to $125.0 million from time to time through the Sales Agents by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Corporate Updates—Funding” for additional information.

In September 2019, we closed a private offering of $287.5 million aggregate principal amount of 2026 Convertible Notes, which included an option to purchase up to an additional $37.5 million in aggregate principal amount of the 2026 Convertible Notes, which was fully exercised by the initial purchasers. The 2026 Convertible Notes bear cash interest at a rate of 1.50% per year, payable semi-annually on March 15 and September 15 of each year, beginning on March 15, 2020. The 2026 Convertible Notes will mature on September 15, 2026, unless earlier repurchased or converted. We received net proceeds of $279.3 million after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by us.

We have received fundings from Royalty Pharma under the A&R Royalty Purchase Agreement in July 2020, October 2023 and June 2024 totaling $1.9 billion (less Royalty payments received by us with respect to the Assigned Royalty Rights). In exchange for these fundings, we sold Royalty Pharma 90.49% of the Royalty, which will be reduced to 83.33% after Royalty Pharma receives the Assigned Royalty Cap from the Royalty assigned under the Original Royalty Purchase Agreement. We currently retain 9.51% of the Royalty, which increases to 16.67% after the Assigned Royalty Cap has been met. We have the option to sell our retained portions of the Royalty to Royalty Pharma in up to three tranches for the following payments: (1) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, (2) $100.0 million in exchange for 3.81% of the Royalty, which increases to 6.67% after the Assigned Royalty Cap has been met, and (3) $50.0 million in exchange for 1.90% of the Royalty, which increases to 3.33% after the Assigned Royalty Cap has been met, in each case less Royalty payments received by us with respect to the Assigned Royalty Rights.

In November 2024, we and Novartis entered into the Novartis Agreement relating to our votoplam HD program which includes related molecules. Pursuant to the Novartis Agreement, we are responsible for completing the ongoing Phase 2A clinical trial and continuing the ongoing OLE clinical trial pursuant to its existing development plan, with the goal of transitioning the ongoing OLE clinical trial to Novartis within 12 months after the effective date. Novartis will be responsible for all other development of licensed compounds and licensed products and the manufacture and commercialization of licensed compounds and licensed products worldwide. Under the Novartis Agreement, and upon the closing of the transaction contemplated by the Novartis Agreement in January 2025, we received an upfront payment of $1.0 billion on the effective date and can receive up to $1.9 billion in development, regulatory and sales milestones, a 40% share of U.S. profits and losses, and tiered double-digit royalties on ex-U.S. sales.

Cash flows

As of June 30, 2025, we had cash, cash equivalents and marketable securities of $1.99 billion.

The following table provides information regarding our cash flows and our capital expenditures for the periods indicated.

(in thousands)

Net cash provided by operating activities was $811.8 million for the six months ended June 30, 2025, compared to net cash used in operating activities of $0.7 million for the six months ended June 30, 2024. The net cash provided by operating activities for the six months ended June 30, 2025, was primarily related to the upfront payment of $1.0 billion in cash received upon the closing of the transaction contemplated by the Novartis Agreement in January 2025, partially offset by spend supporting clinical development and commercial activities. The net cash used in operating activities for the six months ended June 30, 2024 was primarily related to spend supporting clinical development and commercial activities, partially offset by the cash received from the sales milestone of $100.0 million for the achievement of $1.5 billion in worldwide net sales from Evrysdi.

Net cash used in investing activities was $606.4 million for the six months ended June 30, 2025, compared to $180.9 million for the six months ended June 30, 2024. Cash used in investing activities for the six months ended June 30, 2025 and 2024, were primarily related to the acquisition of product rights, purchases of marketable securities, and purchases of fixed assets, partially offset by net sales and redemption of marketable securities and proceeds from sale of fixed assets.

Net cash provided by financing activities was $13.4 million for the six months ended June 30, 2025, compared to $247.0 million for the six months ended June 30, 2024. Cash provided by financing activities for the six months ended June 30, 2025 was primarily attributable to proceeds from our employee stock purchase plan and proceeds from the exercise of options, partially offset by payments on contingent consideration obligation. Cash provided by financing activities for the six months ended June 30, 2024 was primarily attributable to proceeds from sales of future royalties, proceeds from our employee stock purchase plan, and proceeds from the exercise of options, partially offset by payments on our finance lease principal.

Funding requirements

We anticipate that we will continue to incur significant expenses in connection with our commercialization efforts in the United States, the EEA, Latin America and other territories, including expenses related to our commercial infrastructure and corresponding sales and marketing, legal and regulatory, and distribution and manufacturing undertakings as well as administrative and employee-based expenses. In addition to the foregoing, we expect to continue to incur significant costs in connection with ongoing, planned and potential future clinical trials and studies for our splicing and inflammation and ferroptosis programs as well as studies in our products for maintaining authorizations, label extensions and additional indications. We continue to seek marketing authorization for Translarna for the treatment of nmDMD in territories that we do not currently have marketing authorization in. We submitted an NDA to the FDA for vatiquinone for the treatment of FA in December 2024. These efforts may significantly impact the timing and extent of our commercialization and manufacturing expenses.

In addition, our expenses will increase if and as we:

• seek to satisfy contractual and regulatory obligations that we assumed through our acquisitions and collaborations;
• execute our commercialization strategy for our products, including initial commercialization launches of our products, label extensions or entering new markets;
• are required to complete any additional clinical trials, non-clinical studies or Chemistry, Manufacturing and Controls, or CMC, assessments or analyses in order to advance our products or product candidates in the United States or elsewhere;
• are required to take other steps to maintain our current marketing authorization in Brazil and Russia for Translarna for the treatment of nmDMD or to obtain further marketing authorizations for Translarna for the treatment of nmDMD or other indications;
• initiate or continue the research and development of sepiapterin and our splicing and inflammation and ferroptosis programs as well as studies in our products for maintaining authorizations, label extensions and additional indications;
• seek to discover and develop additional product candidates;
• seek to expand and diversify our product pipeline through strategic transactions;
• maintain, expand and protect our intellectual property portfolio; and
• add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts.

We believe that our cash flows from product sales, together with existing cash and cash equivalents, and marketable securities, will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next twelve months. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Our future capital requirements will depend on many factors, including:

• our ability to maintain the marketing authorization for Translarna and our other products in territories outside of the EEA;
• our ability to commercialize and market our products and product candidates that may receive marketing authorization;
• our ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms, on a timely basis, with third-party payors for our products and products candidates;
• the amount of generic drug competition that we face for Emflaza for the treatment of DMD in patients five years and older;
• our ability to obtain marketing authorization for Translarna for the treatment of nmDMD in the United States;
• our ability to obtain marketing authorization for vatiquinone for the treatment of FA in the United States;
• our ability to successfully complete all post-marketing requirements imposed by regulatory agencies with respect to our products;
• the progress and results of activities for Sephience and our splicing and inflammation and ferroptosis programs as well as studies in our products for maintaining authorizations, label extensions and additional indications;
• the scope, costs and timing of our commercialization activities, including product sales, marketing, legal, regulatory, distribution and manufacturing, for any of our products and for any of our other product candidates

that may receive marketing authorization or any additional territories in which we receive authorization to market Sephience or Translarna;

• the costs, timing and outcome of regulatory review of our splicing and inflammation and ferroptosis programs and Sephience, Translarna and Upstaza/Kebilidi in other territories;
• our ability to satisfy our obligations under the indenture governing the 2026 Convertible Notes;
• the timing and scope of any potential future growth in our employee base;
• the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our other product candidates, including those in our splicing and inflammation and ferroptosis programs;
• revenue received from commercial sales of our products or any of our product candidates;
• our ability to obtain additional and maintain existing reimbursed named patient and cohort EAP programs for Translarna for the treatment of nmDMD on adequate terms, or at all;
• the ability and willingness of patients and healthcare professionals to access Translarna through alternative means if pricing and reimbursement negotiations in the applicable territory do not have a positive outcome;
• the costs of preparing, filing and prosecuting patent applications, maintaining, and protecting our intellectual property rights and defending against intellectual property-related claims;
• the extent to which we acquire or invest in other businesses, products, product candidates, and technologies, including the success of any acquisition, in-licensing or other strategic transaction we may pursue, and the costs of subsequent development requirements and commercialization efforts, including with respect to our acquisitions of Emflaza, Agilis, our inflammation and ferroptosis platform and Censa and our licensing of Tegsedi and Waylivra;
• our ability to establish and maintain collaborations, including our collaborations with Roche and the SMA Foundation, and our ability to obtain research funding and achieve milestones under these agreements.
• the progress and results of activities for our votoplam program, including our right to receive any development, regulatory and sales milestones, profit sharing and royalty payments from Novartis; and
• unexpected decreases in revenue or increase in expenses resulting from potential widespread outbreaks of contagious disease.

With respect to our outstanding 2026 Convertible Notes, cash interest payments are payable on a semi-annual basis in arrears, which will require total funding of $4.3 million annually.

We expect to make payments to the former Censa securityholders of $25 million in the aggregate in cash for the marketing authorization granted by the EC for Sephience for the treatment of children and adults living with PKU, and $32.5 million in the aggregate in cash for approval by the FDA of Sephience for the treatment of pediatric and adult patients living with PKU in the United States, pursuant to the Censa Merger Agreement.

Upon the potential achievement in 2025 of certain regulatory milestones relating to vatiquinone, which milestones would be payable in 2026, we expect to make payments to BioElectron of $75.0 million in the aggregate, in cash or shares of our common stock, as determined by us, pursuant to the BioElectron Asset Purchase Agreement.

We also have certain significant contractual obligations and commercial commitments that require funding and we have disclosed these items under the heading “Management’s Discussion and Analysis of Financial Condition and Results of

Operations-Funding Obligations” in our 2024 Annual Report. There were no material changes to these obligations and commitments during the period ended June 30, 2025.

We will need to generate significant revenues to achieve and sustain profitability, and we may never do so. We may need to obtain substantial additional funding in connection with our continuing operations. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs primarily through a combination of equity offerings, debt financings, collaborations, strategic alliances, grants and clinical trial support from governmental and philanthropic organizations and patient advocacy groups in the disease areas addressed by our product and product candidates and marketing, distribution or licensing arrangements. Adequate additional financing may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, our shareholders ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.

If we are unable to raise additional funds through equity, debt or other financings when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

During the period ended June 30, 2025, there were no material changes in our market risk or how our market risk is managed, compared to those disclosed under the heading “Quantitative and Qualitative Disclosures about Market Risk” in our 2024 Annual Report.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. The term “disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the quarter ended June 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We have set forth in Item 1A to our Annual Report on Form 10-K for the year ended December 31, 2024, risk factors relating to our business, our industry, our structure and our common stock. Readers of this Quarterly Report on Form 10-Q are referred to such Item 1A for a more complete understanding of risks concerning us. The risk factor disclosure in our Annual Report on Form 10-K for the year ended December 31, 2024 is qualified by the additional information that is described in this Quarterly Report on Form 10-Q, including the updated risk factor disclosure set forth below.

A substantial portion of our commercial sales currently occurs in territories outside of the United States which subjects us to additional business risks that could adversely affect our revenue and results of operations.

We commercialize Sephience, Translarna, Upstaza, Tegsedi and Waylivra outside of the United States. We have operations in multiple European countries, Latin America and other territories. We expect that we will continue to expand our international operations in the future, including in emerging growth markets, pending successful completion of the applicable regulatory processes. International operations inherently subject us to a number of risks and uncertainties, including:

• political, regulatory, compliance and economic developments that could restrict our ability to manufacture, market and sell our products, including the Russia-Ukraine conflict and related sanctions that have been imposed by various countries in response thereto;
• financial risks such as longer payment cycles, difficulty collecting accounts receivable, potentially high inflation rates, sustained high interest rates and exposure to fluctuations in foreign currency exchange rates;
• difficulty in staffing and managing international operations;
• potentially negative consequences from changes in or interpretations of tax laws;
• changes in international medical reimbursement policies and programs;
• unexpected changes in healthcare policies of ex-U.S. jurisdictions;
• trade protection measures, including import or export licensing requirements and tariffs;
• our ability to develop relationships with qualified local distributors and trading companies;
• political and economic instability in particular ex-U.S. economies and markets, in particular in emerging markets, for example in Brazil;
• diminished protection of intellectual property in some countries outside of the United States;
• differing labor regulations and business practices;
• regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ and service providers’ activities that may fall within the purview of the Foreign Corrupt Practices Act, UK Bribery Act or similar local regulation; and
• various effects and responsive measures relating to outbreaks of contagious disease.

For example, the Brazilian Ministry of Health has previously experienced significant administrative delays processing centralized group purchase orders. Almost all of our product revenue for Translarna in Brazil is attributable to such purchase orders. These centralized group purchase order delays have caused, and may continue to cause, fluctuations in our ability to generate revenue in Brazil.

In addition, some countries in which a product candidate is not approved allow patients access to the product candidate through other legal mechanisms, including court intervention or EAP programs, if the product is approved in another jurisdiction. The price that is ultimately approved by governmental authorities in any country pursuant to commercial pricing and reimbursement processes may be significantly lower than the price we are able to charge for sales under such legal mechanisms and we may become obligated to repay such excess amount.

Some of the countries in which our products are available for sale are in emerging markets. Some countries within emerging markets, including those in Latin America, may be especially vulnerable to periods of global or regional financial instability or may have very limited resources to spend on. We also may be required to increase our reliance on third-party agents within less developed markets. In addition, many emerging market countries have currencies that fluctuate substantially and if such currencies devalue and we cannot offset the devaluations, our financial performance within such countries could be adversely affected.

Furthermore, in some countries, including Brazil and Russia, orders for named patient sales may be for multiple months of therapy, which can lead to an unevenness in orders which could result in significant fluctuations in quarterly net product sales. Other factors may also contribute to fluctuations in quarterly net product sales including a product’s availability in any particular territory, government actions, economic pressures, political unrest and other factors. Net product sales are impacted by factors such as the timing of decisions by regulatory authorities and our ability to successfully negotiate favorable pricing and reimbursement processes on a timely basis in the countries in which we have or may obtain regulatory approval, including the United States, EEA and other territories.

Any of these factors may, individually or as a group, have a material adverse effect on our business and results of operations. As we continue to expand our existing international operations, we may encounter new risks.

Our products or product candidates may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which would harm our business.

We may not obtain adequate coverage or reimbursement for our products, or we may be required to sell our products at an unsatisfactory price. In addition, obtaining pricing, coverage and reimbursement approvals can be a time consuming and expensive process. Our business would be materially adversely affected if we do not receive these approvals on a timely basis.

The regulations and practices that govern marketing authorizations, pricing, coverage and reimbursement for new drug products vary widely from country to country. Current and future legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. Some countries, including almost all of the member states of the EEA, require approval of the sale (list) price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some ex-U.S. markets, including the European market, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain marketing authorization for a product in a particular country, but then be subject to price regulations, in some countries at national as well as regional levels, that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenues we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more products or other product candidates, even following marketing authorization.

Our ability to successfully commercialize our products or product candidates that may receive marketing authorization will depend in large part on the extent to which coverage and reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers, managed healthcare organizations and other third-party payors and organizations. Government authorities and other third-party payors, such as private health insurers and managed healthcare organizations, decide which medications they will pay for and establish reimbursement conditions and rates. A primary trend in the EU and U.S. healthcare industries and elsewhere is cost containment. Government authorities, including the United States government and state legislatures, and other third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Prices at which our products are reimbursed can be subject to challenge, reduction or denial by the government and other payers. Increasingly, third-party payors are requiring that drug companies provide them with discounts off the products’ sale (list) prices and are challenging the prices manufacturers charge for medical products. We cannot be sure that coverage will be available for any product or product candidate that we may commercialize and, if coverage is available, the level of reimbursement is also uncertain.

Reimbursement levels may impact the demand for, or the price of, any product or product candidate for which we obtain marketing authorization. Obtaining reimbursement for our products has been and is expected to continue to be, particularly difficult due to price considerations typically associated with drugs that are developed to treat conditions that affect a small population of patients. In addition, third-party payors are likely to impose strict requirements for reimbursement of a higher priced drug, such as prior authorization and the requirement to try other therapies first (i.e., step edits), or high co-payments which can result in patient rejection. Decreases in third-party reimbursement for a product or a decision by a third-party payor to not cover a product could reduce physician usage of the product. If reimbursement is not available or is available only on a limited basis, we may not be able to successfully commercialize any product or product candidate for which we have obtained or may obtain marketing authorization.

There may be significant delays in obtaining coverage for newly approved drugs, and coverage may be more limited than the drug’s approved indications as determined by the applicable regulatory authority. Moreover, eligibility for reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent, and programs intended to provide patient assistance until coverage is established can be very costly and limited in duration by law. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs, and may be incorporated into existing payments for other services. Further, coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws, enforcement policies or administrative determinations with respect to the importation of drugs into the United States from other countries where they may be sold at lower prices.

In the United States, third-party payors include federal healthcare programs, such as Medicare, Medicaid, TRICARE, and Veterans Health Administration programs; managed care providers, private health insurers and other organizations. Several of the U.S. federal healthcare programs establish ceiling prices or require that drug manufacturers extend discounts or pay rebates to certain programs in order for their products to be covered and reimbursed. For example, the Medicaid Drug Rebate Program requires pharmaceutical manufacturers of covered outpatient drugs to enter into and have in effect a national rebate agreement with the federal government as a condition for coverage of the manufacturer’s covered outpatient drug(s) by state Medicaid programs. The amount of the rebate for each product is based on a statutory formula and may be subject to an additional discount if certain pricing increases more than inflation. State Medicaid programs and Medicaid managed care plans can seek additional “supplemental” rebates from manufacturers in connection with states’ establishment of preferred drug lists. A further requirement for Medicaid coverage is that manufacturers of single source and innovator multiple source drugs enter into a Master agreement and Federal Supply Schedule, or FSS, agreement with the Secretary for Veterans Affairs and charge no more than statutory ceiling prices to the Department of Veteran Affairs, the Department of Defense and certain other federal agencies.

Similarly, in order for a covered outpatient drug to receive federal reimbursement under the Medicare Part B and Medicaid programs, the manufacturer must extend discounts on the covered outpatient drug to entities that are enrolled and participating in the 340B drug pricing program, which is a federal program that requires manufacturers to provide discounts to certain statutorily-defined safety-net providers. The 340B discount for each product is calculated based on certain Medicaid Drug Rebate Program metrics that manufacturers are required to report to CMS.

Sephience and Emflaza are also eligible for reimbursement under the Medicare Part D program. Under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities, which will provide coverage of outpatient prescription drugs. Part D prescription drug formularies are required to include drugs within each therapeutic category and class of covered Part D drugs, though not necessarily all the drugs in each category or class. Any negotiated prices for our products covered by a Part D prescription drug plan likely will be lower than the prices we might otherwise obtain, and payment of Medicare Coverage Gap discounts may further reduce realization on Part D drugs. Further, CMS is proposing to relax Part D coverage requirements to give plans more leverage in negotiating their formularies.

With respect to drugs eligible for reimbursement under Medicare Part B, on November 27, 2020, CMS issued an interim final rule implementing a Most Favored Nations payment model under which reimbursement for certain Medicare Part B drugs and biologicals will be based on a price that reflects the lowest per capita Gross Domestic Product-adjusted (GDP-adjusted) price of any non-U.S. member country of the Organisation for Economic Co-operation and Development (OECD) with a GDP per capita that is at least sixty percent of the U.S. GDP per capita. This rule now has been rescinded but other measures, including the Inflation Reduction Act of 2022, or IRA, have been enacted to address the costs of pharmaceuticals. The Inflation Reduction Act of 2022 requires manufacturers of selected drugs to negotiate discounted prices with the Secretary of the Department of Health and Human Services (HHS). Failure to reach an agreement can subject manufacturers to an excise tax or withdraw of all drug products from coverage under Medicare and Medicaid. Drug price negotiations and other program implementation measures could potentially be affected by the Executive Order, Initial Rescissions of Harmful Executive Orders and Actions, issued on January 20, 2025 and/or the anticipated change in leadership at Health and Human Services and the Centers for Medicare and Medicaid Services (CMS) under the new administration. Such rules and any additional healthcare reform measures could further constrain our business or limit the amounts that federal and state governments will pay for healthcare products and services, which could result in additional pricing pressures.

In addition, U.S. private health insurers often rely upon Medicare coverage policies and payment limitations in setting their own coverage and reimbursement policies. Any such coverage or payment limitations may result in a similar reduction in payments from non-governmental payors. Payment by private payors is also subject to payor-determined coverage and reimbursement policies that vary considerably and are subject to change without notice. We expect that coverage and reimbursement of Emflaza in the United States will vary from commercial payor to commercial payor. Many commercial payors, such as managed care plans, manage access to prescription drugs partly to control costs to their plans, and may use drug formularies and medical policies to limit their exposure. Exclusion from policies can directly reduce product usage in the payor’s patient population and may negatively impact utilization in other payor plans, as well.

There has been recent negative publicity and increasing legislative and public scrutiny around pharmaceutical drug pricing in the U.S., in particular with respect to orphan drugs and specifically with respect to Emflaza. Moreover, U.S. government authorities and third-party payors are increasingly attempting to limit or regulate drug prices and reimbursement, often with particular focus on orphan drugs. For example, certain drugs with an orphan designation may become subject to price negotiations under the IRA. These dynamics may give rise to heightened attention and potential negative reactions to pricing decisions for Emflaza and products for which we may receive regulatory approval in the future, possibly limiting our ability to generate revenue and attain profitability.

Moreover, in 2017, the U.S. Congress modified and amended certain provisions of the 2010 U.S. healthcare reform legislation (the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, known collectively as the Affordable Care Act), which could have an impact on coverage and reimbursement for healthcare items and services covered by the federal and state healthcare programs as well as plans in the private health insurance market. The so-called “individual mandate” was repealed as part of tax reform legislation adopted in December 2017. Legal challenges to the Affordable Care Act continue to arise and there may be future efforts to modify, repeal, or otherwise invalidate all, or certain provisions of the Affordable Care Act. We cannot assure that the Affordable Care Act, as currently enacted or as amended in the future, will not adversely affect our business and financial results and we cannot predict how future federal or state legislative or administrative changes relating to healthcare reform will affect our business.

Additionally, the Budget Control Act of 2011, among other things, created measures for spending reductions by Congress. Failure of the Joint Select Committee on Deficit Reduction to reach required deficit reduction goals triggered the legislation’s automatic reduction to several government programs. This legislation resulted in aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect in April 2013 and will remain in effect through 2031. However, pursuant to the CARES Act and subsequent legislation, these Medicare sequester reductions were suspended through the end of March 2022 and from April 2022 through June 2022, a 1% cut was in effect, with the full 2% cut remaining thereafter. The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we may obtain regulatory approval or the frequency with which any such product candidates is prescribed or used.

In the EU, reference pricing systems and other measures may lead to cost containment and reduced prices with respect to Sephience for the treatment of PKU, Translarna for the treatment of nmDMD, Upstaza for the treatment of AADC deficiency and other product candidates that might receive marketing authorization in the future. Our inability to promptly obtain coverage and profitable payment rates from both government-funded and private payors for our product or any of our product candidates that may receive marketing authorization, or a reduction in coverage for payment rates for our product or any such product candidates, could have a material adverse effect on our business, results of operations and financial condition. In addition, in the EU, an authorized trader, such as a wholesaler, can purchase a medicine in one EU member state and obtain a license to import the product into another EU member state. This process is called “parallel distribution”. As a result, a purchaser in one EU member state may seek to import Translarna from another EU member state where Translarna is sold at a lower price. This could have a negative impact on our business, financial condition, results of operations and growth.

Similarly, sales of Sephience, Emflaza or our other products in the United States could also be reduced if they, or products similar to them, are imported into the United States from lower-priced markets, whether legally or illegally. For example, in the United States, prices for pharmaceuticals are generally higher than in the bordering nations of Mexico and Canada. In October 2020, the Department of Health and Human Services, or HHS, and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program, or SIP, to import certain prescription drugs from Canada into the United States. Certain states have passed laws allowing for the importation of drugs from Canada with the intent of developing SIPs for review and approval by the FDA. Florida received approval for its SIP from the FDA. Further, on November 20, 2020, HHS finalized a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The rule also creates a safe harbor for price reductions reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers. The effective date of the new safe harbors and the revision to the discount safe harbor was delayed by court order until January 1, 2023. Recent legislation further delayed implementation of the new safe harbors and the revision to the discount safe harbor until January 1, 2032.

Commercialization of Sephience, Translarna and Upstaza has been in, and is expected to continue to take place in, countries that tend to impose strict price controls, which may adversely affect our revenues. Failure to obtain and maintain acceptable pricing and reimbursement terms for Sephience for PKU, Translarna for the treatment of nmDMD, or Upstaza for the treatment of AADC deficiency in the EEA and other countries where these products are available would delay or prevent us from marketing our product in such regions, which would adversely affect our business, results of operations, and financial condition. In addition, the recent decision of the European Commission to withdraw Translarna’s marketing authorization materially limits our ability to make Translarna available in the EEA on a reimbursed basis and may impact our revenues in the EEA and regions that relied on the EEA marketing authorization. In addition, some countries in the EEA may require us to make payments based on the withdrawal of the Translarna marketing authorization and related actions by regulatory authorities overseeing market access systems in those countries.

In some countries, particularly the member states of the EEA, the pricing of prescription pharmaceuticals is subject to strict governmental control. Each country in the EEA has its own pricing and reimbursement regulations and may have other regulations related to the marketing and sale of pharmaceutical products in the country. We generally will not be able to commence commercial sales of Sephience for the treatment of PKU, Translarna for the treatment of nmDMD, or Upstaza for the treatment of AADC deficiency pursuant to the marketing authorization granted by the EC in any particular member state of the EEA until we conclude the applicable pricing and reimbursement negotiations and comply with any licensing, employment or related regulatory requirements in that country. In some countries we may be required to conduct additional clinical trials or other studies of our product, including trials that compare the cost-effectiveness of our product to other available therapies in order to obtain reimbursement or pricing approval. We may not be able to conclude pricing and reimbursement negotiations or comply with additional regulatory requirements in the countries in which we seek to commercialize Sephience, Translarna, or Upstaza on a timely basis, or at all.

The pricing and reimbursement process varies from country to country and can take a substantial amount of time from initiation to completion. Pricing negotiations may continue after reimbursement has been obtained. We cannot predict the timing of the commercial launch of our products in countries where we are awaiting pricing and reimbursement guidelines. While we have submitted pricing and reimbursement dossiers with respect to Sephience for the treatment of PKU, Translarna for the treatment of nmDMD, and Upstaza for the treatment of AADC deficiency in many EEA countries, we have only received both pricing and reimbursement approval on terms that are acceptable to us in a limited number of countries.

The price that is approved by governmental authorities in any country pursuant to commercial pricing and reimbursement processes may be significantly lower than the price we are able to charge for sales under our reimbursed EAP programs and various forms of national “market access agreements” may need to be entered into to achieve reimbursement. In some instances, reimbursement may be subject to challenge, reduction or denial by the government and other payors. In some countries, EAP and commercial sales of a product can begin while pricing and reimbursement rates are under discussion with the applicable government health programs. In the event that the negotiated price of the product is lower than the amount reimbursed for sales made prior to the conclusion of price negotiations, we may become obligated to repay such excess amount to the applicable government health program. We will make such retroactive reimbursement, if any, following the conclusion of price negotiations with the applicable government health authority.

In addition, the recent decision of the European Commission to not renew Translarna’s marketing authorization for the treatment of nonsense mutation Duchenne muscular dystrophy following the negative opinion of the CHMP materially limits our ability to make Translarna available in the EEA or to receive reimbursement in connection with such continued availability. While the unprecedented EC decision referenced the possibility for individual countries within the European Union to leverage Articles 117(3) and 5(1) of the EU Directive 2001/83 to allow continued use of Translarna, many EEA countries have not adopted a mechanism for reimbursed access, and those that have done so have placed time restrictions and other conditions on patients. Some countries may never do so, or may request price adjustments or even seek to collect funds from us based on the nonrenewal of the Translarna MAA. For example, in France, the relevant regulatory authorities published a formal decree removing Translarna from the list of medicines available, which triggered a process to determine any payment we may owe based on an analysis of the difference between the price at which Translarna was reimbursed historically and a comparator product. It is possible that this process may result in the French authorities demanding a payment that is materially different than our prior estimates in France for the applicable period. Our ability to oppose such a demand may be limited to actions in the French court system, which may take years and may not be resolved in our favor, and may require advance payment of any disputed payment amount.

Political, economic and regulatory developments may further complicate pricing and reimbursement negotiations and there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. In addition, adverse clinical and regulatory developments may exacerbate these risks.

Reference pricing used by various EU member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices and revenues. Publication of discounts by third-party payors or authorities may lead to further pressure on prices or reimbursement levels within the country of publication and other countries.

If we fail to successfully secure and maintain pricing and reimbursement coverage for Sephience, Translarna or Upstaza or are significantly delayed in doing so or if burdensome conditions are imposed by private payers, government authorities or other third-party payors on such reimbursement, planned launches in the affected countries will be delayed and our business, results of operations and financial condition could be adversely affected.

We contract with third parties for the manufacture and distribution of our products and certain of our product candidates, which may increase the risk that we will not have sufficient quantities of our products or product candidates, such quantities may not meet the applicable regulatory quality standards, or such quantities at an acceptable cost, which could delay, prevent or impair our commercialization or development efforts.

We have limited personnel with experience in drug manufacturing and currently rely on third parties to manufacture our products and certain product candidates on a clinical or commercial scale. We currently rely on third parties for supply of the active pharmaceutical ingredients used in all of our products and product candidates. We outsource most of the manufacturing, packaging, labeling and distribution of our products and certain of our product candidates to third parties, including our commercial supply of Sephience, Translarna, Emflaza and Upstaza/Kebilidi.

We do not directly control manufacturing for our products and product candidates and we are dependent on and will continue to be dependent on, our contract manufacturers for compliance with cGMP or good distribution practice, or GDP, or similar regulatory requirements outside the EU and the United States for manufacture of both active drug substances and finished drug products. Should we or our contract manufacturers fail to comply with these requirements, we and they could face significant regulatory and commercial consequences. For example, regulatory authorities routinely inspect manufacturing and other drug/biologic facilities. Our manufacturers and manufacturing facilities must also be approved by such regulatory authorities pursuant to inspections that will be conducted after we submit our marketing applications and will be subject to continuing regulatory authority inspections should we receive marketing approval. If we or our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the EU member state regulatory authorities, FDA, or other ex-U.S. regulatory agencies, we and they will not be able to secure and/or maintain regulatory approval for the manufacturing facilities, and we would not be able to secure and/or maintain, or may be delayed in securing regulatory approval of marketing applications or supplements for the applicable products or product candidates. We may also have to repeat studies that used product that did not conform with applicable requirements. In addition, we or third-party manufacturers or distributors may not be able to comply with generally accepted worker safety standards, cGMP, GDP or similar regulatory requirements outside the EU and the United States. Our failure, or the failure of our third-party manufacturers or distributors, over whom we have no direct control, to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, clinical holds or termination of clinical studies, warning or untitled letters, regulatory communications warning the public about safety issues with a product, import or export refusals, license revocation, seizures, detentions, or recalls of product candidates or products, operating restrictions, criminal prosecutions or debarment, suits under the civil False Claims act, corporate integrity agreements, or consent decrees, any of which could significantly and adversely affect our reputation and supplies of our products or product candidates and our business, results of operations and financial condition could be materially adversely affected.

In addition, we have no direct control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. Furthermore, all of our contract manufacturers are engaged with other companies to supply and/or manufacture materials or products for such companies, which exposes our manufacturers to regulatory risks for the production of such other materials and products. As a result, failure to meet the regulatory requirements for the production of those materials and products may generally affect the regulatory status of our contract manufacturers’ facilities and our products or product candidates. If the FDA, EU member state regulatory authorities or a comparable ex-U.S. regulatory agency do not approve these or our facilities for the manufacture of our products or product candidates or if it withdraws its approval in the future, we may need to find alternative manufacturing facilities, which would negatively impact our ability to develop, obtain regulatory approval for or market our products or product candidates, if approved. There is also no guarantee that we would be able to find alternative manufacturing facilities or enter into agreements with alternative manufacturers on favorable terms. There may be limited manufacturers who would have the ability to manufacture our products and product candidates, especially our gene therapy product candidates, particularly as the pharmaceutical manufacturing industry becomes increasingly more consolidated. Moreover, any alternative manufacturers would need to be approved by the relevant regulatory authority, which approval is not guaranteed. We, accordingly, may not be able to make alternative manufacturing arrangements, which could adversely affect our products, product candidates, and our business, results of operations and financial condition. See “Item 1. Business—Manufacturing” for additional information regarding the manufacturing of our products and product candidates.

Even if we are able to establish and maintain arrangements with third-party manufacturers, distributors and other third parties, reliance on such third parties entails additional risks, including:

• reliance on the third party for regulatory compliance and quality assurance;
• the possible breach of the agreements by the third party;
• the possible misappropriation of our proprietary information, including our trade secrets and know-how;
• the possibility of commercial supplies of our products not being distributed to commercial vendors or end users in a timely manner, resulting in lost sales;
• the possibility of clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions;
• the possibility of third-party resources not being devoted in the manner necessary to satisfy our requirements within the expected time frame;
• the possibility of third parties not providing us with accurate or timely information regarding their inventories, the number of patients who are using our products, or serious adverse events and/or product complaints regarding our products;
• the possibility of third parties being unable to satisfy their financial obligations to us or to others; and
• the possible termination or nonrenewal of a critical agreement by the third party at a time that is costly or inconvenient to us.

Many additional factors could cause production or distribution interruptions with the manufacture and distribution of any of our products and product candidates, including human error, natural disasters, labor disputes, acts of terrorism or war, equipment malfunctions, contamination, supply chain disruption, including disruptions caused by outbreaks of contagious disease, any new tariffs imposed in the jurisdictions in which we operate, or raw material and component shortages. For example, we have previously experienced delays in receiving certain raw materials in connection with supply chain disruptions caused by the COVID-19 pandemic, however, these delays did not affect or delay our manufacturing given our inventories for such materials at the time. If future supply chain disruptions create prolonged delays, the supplies of our products or products candidates may be significantly and adversely affected and our business, results of operations and financial condition could be materially adversely affected.

Our products and product candidates and any other products that we may develop may compete with other product candidates and products for access to manufacturing facilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us. In addition, changes in cGMP regulations could negatively impact our ability or the ability of our contract manufacturers to complete the manufacturing process of our products and our product candidates in a compliant manner on the schedule we require for commercial and clinical trial use, respectively.

If we or the third parties that we engage to manufacture product for our commercial sales, preclinical tests and clinical trials should, prior to the time that we have validated alternative providers, cease to continue to do so for any reason, we likely would experience delays in our ability to supply our products or product candidates to patients or in our ability to advance our clinical trials while we identify and qualify replacement suppliers and we may be unable to obtain replacement supplies on terms that are favorable to us. In addition, if we are not able to obtain adequate supplies of our products or product candidates or the drug substances used to manufacture them, we will lose commercial sales revenue and it will be more difficult for us to develop our product candidates and compete effectively.

In addition, to the extent that any contract manufactures that we engage develop proprietary manufacturing processes or procedures, should we need to change manufacturers, we may not be able to transfer know-how to a new manufacturer. In such a case, the new manufacturer would need to invest substantial time, money, and effort to develop its own processes and procedures, which would require regulatory authority approval.

Third parties might illegally distribute and sell counterfeit or unfit versions of our products that do not meet our rigorous manufacturing and testing standards. A patient who receives a counterfeit or unfit drug may be at risk for a number of dangerous health consequences. Our reputation and business could suffer harm as a result of counterfeit or unfit drugs sold under our brand name. In addition, thefts of inventory at warehouses, plants or while in-transit, which are not properly stored and which are sold through unauthorized channels, could adversely impact patient safety, our reputation and our business.

Our current and anticipated future dependence upon others for the manufacture and distribution of Sephience, Translarna, Emflaza, Upstaza, Kebilidi, Tegsedi, Waylivra and our product candidates may adversely affect our business, financial condition, results of operations and limit our ability to grow including our ability to develop product candidates and commercialize our products that receive regulatory approval on a timely and competitive basis.

We currently depend, and expect to continue to depend, on collaborations with third parties for the development and commercialization of some of our products and product candidates. If those collaborations are not successful, we may not be able to capitalize on the market potential of these products and product candidates.

For each of our product candidates, we plan to evaluate the merits of retaining commercialization rights for ourselves or entering into selective collaboration arrangements with leading pharmaceutical or biotechnology companies, such as our collaborations with Roche and the SMA Foundation, for our SMA program, including Evrysdi. We have entered into arrangements with certain third parties to market or distribute Sephience for the treatment of PKU and Translarna for the treatment of nmDMD in certain countries and, as we continue to implement our commercialization plans for Sepience and Translarna, we anticipate that we will engage additional third parties to perform these functions for us in other countries. We generally plan to seek collaborators for the development and commercialization of product candidates that have high anticipated development costs, are directed at indications for which a potential collaborator has a particular expertise, or involve markets that require a large sales and marketing organization to serve effectively. Our likely collaborators for any marketing, distribution, development, licensing or broader collaboration arrangements may include: large and mid-size pharmaceutical companies, regional and national pharmaceutical companies and/or biotechnology companies.

We will have limited control over the amount and timing of resources that our collaborators dedicate to the development or commercialization of our product candidates and our collaborators will be subject to the same product development and commercialization risks that we are subject to. Our ability to generate revenues from these arrangements will depend on our collaborators’ desire and ability to successfully perform the functions assigned to them in these arrangements in a compliant manner. In particular, the commercial success of Evrysdi will depend on the success of Roche’s commercialization program. Furthermore, the successful development of another product candidate from our spinal muscular atrophy program will depend on the success of our collaborations with the SMA Foundation and Roche, including whether Roche pursues clinical development of any other compounds identified under the collaborations.

Collaborations involving our products and product candidates, including our collaborations with the SMA Foundation and Roche, pose the following risks to us:

• collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;
• collaborators may not pursue development and commercialization of our products and product candidates or may elect not to continue or renew development or commercialization programs, based on clinical trial results, changes

in the collaborators’ strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities;

• collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;
• collaborators could independently develop, or develop with third parties, products that replace or compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
• collaborators may fail to comply with the applicable regulatory requirements, subjecting them or us to potential regulatory enforcement action;
• a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products;
• collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential litigation;
• collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability;
• disputes may arise between the collaborator and us as to the ownership of intellectual property arising during the collaboration;
• we may grant exclusive rights for our products or product candidates to our collaborators, which would prevent us from collaborating with others, or from using our products or product candidates ourselves;
• disputes may arise between the collaborators and us that result in the delay or termination of the collaboration, which may include ending research, development or commercialization activities for our products or product candidates or that result in costly litigation or arbitration that diverts management attention and resources; and
• collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.

Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all. If a collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program could be delayed, diminished or terminated.

There may be future changes in legal and regulatory requirements that may materially impact our results of operation.

Future changes in legal and regulatory requirements may introduce new risks into our operations and future prospects, which we are not able to currently anticipate. By example, changes taking place in the United States associated with a new federal administration, as well as changes in legal standards, including the reduced level of judicial deference due to administrative agencies following a 2024 Supreme Court decision, may introduce uncertainties with respect to our current and future operations and our future likelihood of success. It is possible that new federal or state laws or regulations may be passed, or laws and regulations may be enforced differently than they were before, which may expose us to additional legal and regulatory risk or uncertainty and require the expenditure of additional resources to ensure that we are able to comply. Such actions could also adversely restrict our business and operations. There could also be changes in the FDA’s approval standards that could impact our ability to obtain product approval and market our product candidates within the currently anticipated timeframes or otherwise impact the competitive market for our product candidates. Such changes may necessitate the conduct of additional development work, including preclinical and clinical trials, and manufacturing development. By example, for products intended for rare and serious diseases with unmet medical needs, the FDA is authorized to exercise regulatory flexibility when making a medical risk-benefit judgment. It is possible that whether and how the FDA exercises any regulatory flexibility, including with respect to specialized pathways, such as accelerated approval, may change, which could impact our ability to obtain product approval. Further, legal and regulatory changes may impact how we may market and sell our products in the future, if they are approved, as well as how they are reimbursed. Moreover, there have been and may continue to be changes in leadership and other staff in the federal workforce, and in agency policies, including at the U.S. Department of Health and Human Services and FDA, that may result in regulatory delays, including with respect to the FDA’s review of marketing applications and other submissions, both those reviewed under the PDUFA program and otherwise. These changes may impact the ability to communicate with and obtain guidance from the agencies, including final regulatory actions. At this time, it is too early to predict the exact nature of any changes that may take place or whether and how they may impact our business and results of operation.