ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our audited financial statements and the accompanying notes to the financial statements and other disclosures included in this report (including the “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this report and the “Risk Factors” section in Part I, Item 1A of this report).
Overview
We are a global biotechnology company focused on developing and commercializing medicines for hereditary angioedema (“HAE”) and other rare diseases, driven by our deep commitment to improving the lives of people living with these conditions. We have built a robust commercial infrastructure to support the successful commercialization of ORLADEYO, an oral, once-daily therapy discovered and developed internally for the prevention of HAE attacks. Our business strategy includes leveraging this established commercial platform to successfully commercialize a pipeline of potential first-in-class or best-in-class oral small molecule and injectable protein therapeutics targeting a range of rare diseases. These programs are being pursued through both internal discovery efforts and strategic business development. By utilizing our existing commercial capabilities and focusing on rare disease markets, we believe that we can more effectively optimize our costs and strategically allocate resources to support long-term, sustainable growth.
Products and Product Candidates
ORLADEYO® (berotralstat)
ORLADEYO is an oral, once-daily therapy discovered and developed by us for the prevention of HAE attacks. A capsule formulation of ORLADEYO is approved in the United States and other global markets for the prevention of HAE attacks in adults and pediatric patients 12 years and older. In addition, in December 2025, the FDA approved an oral pellet formulation of once-daily ORLADEYO for prophylactic therapy in pediatric patients with HAE aged 2 to <12 years.
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Based on proprietary analyses of HAE prevalence and market research studies with HAE patients, physicians, and payors in the United States and Europe, and five full years of commercialization experience with ORLADEYO, we anticipate that the global commercial market for ORLADEYO has the potential to reach a global peak of $1 billion in annual net ORLADEYO revenues. Based on our commercialization experience with ORLADEYO, we believe there is a seasonal impact to our business in the first quarter of each year due to typical first quarter requirements from payors for prescription reauthorization of specialty products, like ORLADEYO, that can temporarily move patients from paid drug to free product. These expectations are subject to numerous risks and uncertainties that may cause our actual results, performance, or achievements to be materially different. There can be no assurance that our commercialization methods and strategies will succeed, or that the market for ORLADEYO will develop in line with our current expectations. See “Risk Factors—Risks Relating to Our Business—Risks Relating to Product Development and Commercialization—There can be no assurance that our or our partners’ commercialization efforts, methods, and strategies for our products or technologies will succeed, and our future revenue generation is uncertain” in Part I, Item 1A of this report for further discussion of these risks.
Revenue from sales of ORLADEYO in 2025, which was our fifth full year of ORLADEYO sales, is discussed under “Results of Operations” in this MD&A. Revenue from sales of ORLADEYO in future periods is subject to uncertainties and will depend on several factors, including, but not limited to the success of our and our partners’ commercialization efforts in the United States and elsewhere, the number of new patients switching to ORLADEYO, patient retention and demand, the number of physicians prescribing ORLADEYO, the rate of monthly prescriptions, reimbursement from third-party and government payors, the number of patients receiving free product, our pricing strategy, and market trends. We monitor and analyze this data on an ongoing basis as we continue to commercialize ORLADEYO and adjust our forecasts accordingly.
Navenibart (STAR-0215)
On January 23, 2026 (the “Closing Date”), we completed the previously announced Merger (as defined below) with Astria (as defined below). Pursuant to the Merger, on the Closing Date, we acquired Astria’s lead product candidate navenibart, an injectable monoclonal antibody designed to inhibit plasma kallikrein for the treatment of HAE. Navenibart is currently in Phase 3 clinical development, and the FDA has granted Fast Track and Orphan Drug designations to navenibart for the treatment of HAE. In addition, the European Commission has granted Orphan Medicinal Product Designation to navenibart for the treatment of HAE. The goal for navenibart is to develop a potentially best-in-class injectable prophylactic therapy with a differentiated every 3- and 6-month administration schedule, which could offer significant improvements over existing injectable options and address key unmet needs in the HAE patient community.
BCX17725 (Netherton syndrome)
BCX17725 is a potent and selective investigational protein therapeutic KLK5 inhibitor designed to provide best-in-class, potentially disease-modifying, treatment for people with Netherton syndrome. Netherton syndrome is a serious, rare, lifelong genetic disorder causing disruption of the skin barrier with premature separation of the skin layers, chronic inflammation and vulnerability to serious infections, caused by lack of normal function of a natural inhibitor of KLK5. People with Netherton syndrome often have itchy, red, scaly, inflamed skin, fragile hair, and are more likely to develop severe food allergies, asthma and eczema. Netherton syndrome can be life-threatening, especially during infancy when patients are vulnerable to dehydration and recurrent infections. Currently, there are no approved treatments that target the underlying cause of Netherton syndrome. BCX17725 is designed to replace missing functions of the natural KLK5 inhibitor, which could restore the normal skin barrier and result in improved skin function, including protection from severe inflammatory and infectious complications of the disease.
Avoralstat
Avoralstat, an investigational plasma kallikrein inhibitor, is designed to treat patients with diabetic macular edema (“DME”) through the delivery of avoralstat to the back of the eye through the suprachoroidal space. DME is an important cause of vision loss in diabetes and is due to leakage of fluid from the blood vessels in the retina. While current treatments focus on vascular endothelial growth factor (“VEGF”) inhibition, DME can develop from other mechanisms, such as the kallikrein-bradykinin pathway. This is supported by observations that many DME patients have an incomplete response to intravitreal anti-VEGF therapies that are administered every four to eight weeks. Avoralstat targets the kallikrein-bradykinin system on the retinal vascular endothelial cells and may result in less vascular leakage and less edema. Avoralstat, delivered to the suprachoroidal space, is designed to provide long-lasting exposure to the retinal vessels, which
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could result in less frequent injections and a reduced burden on patients and the healthcare system. We plan to seek a strategic partner for development of avoralstat beyond phase 1.
STAR-0310
Pursuant to the Merger, on the Closing Date, we acquired STAR-0310, which is a monoclonal antibody OX40 antagonist that incorporates YTE half-life extension technology for the treatment of atopic dermatitis (“AD”) and potentially other indications. STAR-0310 was designed as a potentially best-in-class, long-acting OX40 inhibitor with the goal of addressing the need for a safe, effective, and infrequently administered AD treatment. AD is an immune disorder associated with loss of skin barrier function and itching and is caused by diverse mechanisms, spanning the spectrum of T cell-driven pathology. STAR-0310 is currently in a Phase 1a trial to assess the safety, tolerability, pharmacokinetics, and immunogenicity of STAR-0310 in healthy subjects. We plan to seek strategic alternatives for this asset.
RAPIVAB®/RAPIACTA®/PERAMIFLU® (peramivir injection)
RAPIVAB (peramivir injection) is approved in the United States for the treatment of acute uncomplicated influenza for patients six months and older. Peramivir injection is also approved in Canada (RAPIVAB), Australia (RAPIVAB), Japan (RAPIACTA), Taiwan (RAPIACTA), and Korea (PERAMIFLU).
Revenues and Expenses
Our revenues are difficult to predict and depend on several factors, including those discussed in the “Risk Factors” section in Part I, Item 1A of this report. For example, our revenues depend, in part, on regulatory approval decisions for our products and product candidates, the effectiveness of our and our collaborative partners’ commercialization efforts, market acceptance of our products, particularly ORLADEYO, and the resources dedicated to our products and product candidates by us and our collaborative partners, as well as entering into or modifying licensing agreements for our product candidates. Furthermore, revenues related to our collaborative development activities are dependent upon the progress toward, and the achievement of, developmental milestones by us or our collaborative partners.
Our operating expenses are also difficult to predict and depend primarily on research and development activities, including clinical research activities and the ongoing requirements of our development programs, as well as the costs of commercialization, drug manufacturing, direction from regulatory agencies, and the factors discussed in the “Risk Factors” section in Part I, Item 1A of this report. Management may be able to control the timing and level of research and development and selling, general and administrative expenses, but many of these expenditures will occur irrespective of our actions due to contractually committed activities and/or payments.
As a result of these factors, we believe that period-to-period comparisons are not necessarily meaningful, and you should not rely on them as an indication of future performance. Due to the foregoing factors, it is possible that our operating results will be below the expectations of market analysts and investors. In such event, the prevailing market price of our common stock could be materially adversely affected.
Recent Developments
ORLADEYO (berotralstat)
On November 6, 2025, we announced new data demonstrating the early and negative psychosocial impact of HAE and resulting emergency department and hospital visits on pediatric patients and their caregivers, as well as new one-year data from the ongoing APeX-P clinical trial showing early and sustained reductions in monthly attack rates over one year in pediatric patients with HAE aged 2 to <12 years treated with once-daily ORLADEYO.
On December 12, 2025, we announced that the FDA approved our new drug application (“NDA”) for the use of an oral pellet formulation of once-daily ORLADEYO for prophylactic therapy in pediatric patients with HAE aged 2 to <12 years. ORLADEYO is the first and only targeted oral prophylactic therapy for children with HAE aged 2 to <12 years. We also filed an application for the use of ORLADEYO oral pellets in patients with HAE aged 2 to <12 years with the European Medicines Agency and the Japan Pharmaceutical and Medical Devices Agency, and additional regulatory filings are planned in other global territories.
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Navenibart (STAR-0215)
On February 26, 2026, we announced that new positive, interim results from the long‐term, open‐label ALPHA‐SOLAR trial show sustained, robust HAE attack suppression with navenibart administered every three and six months.
BCX17725 (Netherton syndrome)
On February 26, 2026, we announced that we expect to report data from the clinical trial of BCX17725 for the treatment of Netherton syndrome in up to 12 patients by the end of 2026.
Avoralstat
On November 3, 2025, we announced that we plan to seek a strategic partner for development of avoralstat beyond phase 1.
Neopharmed Gentili S.p.A. Transaction
As previously disclosed, on June 27, 2025, we entered into a stock purchase agreement (the “Stock Purchase Agreement”) with BioCryst Ireland Limited (“BioCryst Ireland”), a private limited company incorporated under the laws of Ireland and a wholly owned subsidiary of the Company, and Neopharmed Gentili S.p.A., a corporation organized under the laws of Italy (“Neopharmed”). On October 1, 2025 (the “Closing”), under the terms of the Stock Purchase Agreement, we sold to Neopharmed all of our equity interests in BioCryst Ireland, which, together with its subsidiaries, holds certain assets, rights, and employees related to our European ORLADEYO business. At the Closing, we received total cash proceeds of $254.5 million, comprised of the purchase price of $250.0 million and customary purchase price adjustments of $4.5 million as set forth in the Stock Purchase Agreement. In addition, Neopharmed has agreed to pay us up to $14.0 million if certain revenue milestones are achieved prior to December 31, 2032. In connection with the Closing, Neopharmed also paid a $15.0 million royalty release fee to RPI 2019 Intermediate Finance Trust. See “Note 2—Divestiture of BioCryst Ireland Limited” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report for additional information about the sale of the European ORLADEYO business.
Pharmakon Loan Agreement
On October 8, 2025, we used a portion of the proceeds from the sale of the European ORLADEYO business to pay off in full the outstanding principal balance of $198.7 million and terminate the Pharmakon Loan Agreement (as defined below).
Astria Therapeutics, Inc. Merger
On October 14, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Axel Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”), and Astria Therapeutics, Inc., a Delaware corporation (“Astria”). Pursuant to the Merger Agreement, on the Closing Date, Merger Sub merged with and into Astria, with Astria surviving as a wholly owned subsidiary of the Company (the “Merger”).
Under the terms of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of Astria common stock, par value $0.001 per share, issued and outstanding immediately prior to the Effective Time (excluding shares held by BioCryst, Astria or their wholly owned subsidiaries or dissenting stockholders) was converted into the right to receive (i) 0.59 of a share of the Company’s common stock (and, if applicable, cash in lieu of fractional shares), and (ii) $8.55 in cash, without interest, subject to certain adjustments and applicable withholding taxes. Holders of Astria’s Series X Convertible Preferred Stock, warrants, and certain options were treated as set forth in the Merger Agreement.
Blackstone Loan Agreement
On the Closing Date, we also entered into a Loan Agreement (the “Blackstone Loan Agreement”) with Blackstone Alternative Credit Advisors LP and Blackstone Life Sciences Advisors L.L.C., (together, “Blackstone”), as the Blackstone representatives thereunder, the guarantors from time to time party thereto, the lenders from time to time party thereto, and Wilmington Trust, National Association, as agent, pursuant to which the lenders funded initial term loans in the aggregate principal amount of $400.0 million (the “Term Loans”). Subject to the mutual agreement between the Company,
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Blackstone and the lenders, we may request additional term loans up to an aggregate principal amount not exceeding $150.0 million. Our obligations under the Blackstone Loan Agreement are secured by a security interest in, subject to certain exceptions, substantially all of our and our subsidiaries’ assets. We used the proceeds from the Term Loans (i) to pay the cash portion of the consideration required to consummate the Merger and pay other expenses related to the Merger and (ii) to pay the fees, premiums, expenses and other transaction costs incurred in connection with the transactions related to the Merger and the Loan Agreement. The maturity date of the Term Loans under the Loan Agreement is January 23, 2031, the fifth anniversary of the Closing Date. See “Note 21—Subsequent Events” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report for additional information about the Blackstone Loan Agreement.
Results of Operations
The discussion below presents a summary of our results of operations for fiscal years 2025 and 2024. See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 25, 2025, for a summary of our results of operations for the fiscal year ended December 31, 2023.
Year Ended December 31, 2025 Compared to 2024
Revenues
The following table summarizes our revenues for the periods indicated (in thousands):
Years Ended December 31,
ORLADEYO:
Total revenues increased to $874.8 million for the year ended December 31, 2025 compared to $450.7 million for the year ended December 31, 2024. The $424.1 million increase in total revenues was primarily driven by the following:
•$244.0 million increase in license revenue primarily comprised of $243.3 million related to the license of intellectual property to Neopharmed;
•$168.7 million increase in ORLADEYO revenue, excluding revenues associated with our European ORLADEYO business, primarily due to an increase in volume of direct sales of ORLADEYO, which was driven by strong patient demand, an increase in price, and an increase in the rate of paid shipments; and
•$16.0 million increase in other revenue primarily attributed to an increase in direct sales of peramivir.
These increases were partially offset by a $4.5 million decrease in revenues associated with our European ORLADEYO business due to the sale of our European ORLADEYO business to Neopharmed on October 1, 2025.
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Cost of product sales
The following table summarizes our cost of product sales for the periods indicated (in thousands):
Years Ended December 31,
Cost of product sales increased to $19.1 million for the year ended December 31, 2025 compared to $12.3 million for the year ended December 31, 2024. The increase in cost of product sales was primarily due to the increase in peramivir direct sales.
Research and development expenses
Research and development expenses include all direct and indirect expenses relating to research and development activities. Direct expenses consist of compensation for research and development personnel and costs of outside parties to conduct laboratory studies, develop manufacturing processes and manufacture the product candidates, and conduct and manage clinical trials, as well as other costs related to our clinical and preclinical studies. Additionally, direct expenses consist of those costs necessary to discontinue and close out a development program, including termination fees and other commitments. Indirect expenses consist of lab supplies and services, facility expenses, depreciation of development equipment and other overhead of our research and development efforts. Research and development expenses vary according to the number of programs in clinical development and the stage of development of our clinical programs. Later stage clinical programs tend to cost more than earlier stage programs due to the longer length of time of the clinical trials and the higher number of patients enrolled in these clinical trials.
We do not maintain or evaluate internal research and development costs on a program-by-program basis. As a result, a significant portion of our research and development expenses are not tracked on a program-by-program basis as the costs may benefit multiple programs. Beginning in the year ended December 31, 2025, we no longer allocate non-program specific external costs or internal costs to programs. These costs are separately presented on the respective line items listed below. Research and development expenses have been reclassified for the year ended December 31, 2024 for comparability. There is no impact on total research and development expenses.
The following table summarizes our research and development expenses, including program specific costs and shared or indirect operating costs recognized as research and development expenses for the periods indicated (in thousands):
Years Ended December 31,
Research, discovery and preclinical programs 17,677 12,733
Compensation and related personnel costs 51,015 57,094
Other non-program specific and indirect costs 27,957 32,033
European ORLADEYO business (excluding stock-based compensation) 1,539 2,723
Research and development expenses decreased to $166.1 million for the year ended December 31, 2025 from $174.6 million for the year ended December 31, 2024. The decrease was primarily driven by the following:
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•$8.1 million decrease in Factor D Program due to the discontinuation and close-out of the program in 2024;
•$6.1 million decrease in compensation and related personnel costs primarily attributed to a decrease in research and development related headcount net of $2.0 million of expense associated with our December 2025 workforce reduction;
•$4.1 million decrease in other non-program specific and indirect costs primarily attributed to a decrease in the general and administrative expense allocation due to our commercial progression;
•$1.8 million decrease in stock-based compensation expense primarily due to the acceleration of stock-based compensation expense upon adoption of the Retirement Policy (as defined in “Note 13—Stock-Based Compensation” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report) in July 2024 and a decrease in research and development related headcount, partially offset by an increase in restricted stock unit awards granted; and
•$1.2 million decrease in research and development expenses associated with our European ORLADEYO business (excluding stock-based compensation) due to the sale of our European ORLADEYO business to Neopharmed on October 1, 2025.
These decreases were partially offset by the following:
•$4.9 million increase in BCX17725 primarily due to an increase in manufacturing and clinical operations as we enroll our phase 1 trial in healthy volunteers and patients;
•$4.9 million increase in research, discovery and preclinical programs due to investigational new drug application-enabling activities related to our early-phase pipeline programs;
•$2.0 million increase in avoralstat due to an increase in manufacturing and clinical startup activities; and
•$0.9 million increase in berotralstat primarily attributed to an increase in manufacturing and other costs to support FDA approval in pediatric patients.
Selling, general, and administrative expenses
Sales and marketing expenses include compensation, benefits, and related costs associated with sales and marketing personnel, safety, regulatory, manufacturing, and distribution activities related to marketed products, market research, marketing, medical affairs, market access, and advertising costs. General and administrative expenses include compensation, benefits, and related costs associated with general and administrative personnel, quality activities related to marketed products, finance, human resources, information technology, legal expenses, licenses and other administrative costs, including transaction-related costs.
The following table summarizes our selling, general, and administrative expenses for the periods indicated (in thousands):
Years Ended December 31,
Sales and marketing (excluding stock-based compensation) $ 146,590 $ 116,914
General and administrative (excluding stock-based compensation) 107,917 70,055
European ORLADEYO business (excluding stock-based compensation) 38,584 45,251
Total selling, general, and administrative expenses $ 348,647 $ 266,348
Sales and marketing expenses (excluding stock-based compensation) increased to $146.6 million for the year ended December 31, 2025 from $116.9 million for the year ended December 31, 2024. The increase was primarily driven by the following:
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•$4.9 million increase in manufacturing related costs, including $3.9 million of process development costs;
•$4.9 million increase in compensation and related personnel costs due to the transition of certain regulatory, safety, and manufacturing support roles from research and development to sales and marketing in connection with ORLADEYO’s continued commercial progression;
•$4.7 million increase in compensation and related personnel costs primarily due to compensation increases as a result of strong performance and annual merit increases;
•$2.8 million increase in distribution related costs primarily attributed to increased ORLADEYO sales;
•$1.8 million of expense associated with our December 2025 workforce reduction;
•$0.7 million of transaction-related costs; and
•$11.1 million increase in other sales and marketing expenses, primarily related to costs to support the launch of ORLADEYO in pediatric patients and ORLADEYO commercial growth.
General and administrative expenses (excluding stock-based compensation) increased to $107.9 million for the year ended December 31, 2025 from $70.1 million for the year ended December 31, 2024. The increase was primarily driven by the following:
•$20.4 million of transaction-related costs associated with the sale of our European ORLADEYO business to Neopharmed and the Merger with Astria;
•$11.2 million increase in compensation and related personnel costs primarily due to an increase in compensation and average general and administrative headcount, including $4.4 million due to the transition of certain quality support roles from research and development to general and administrative in connection with ORLADEYO’s continued commercial progression;
•$3.8 million increase due to a change in the allocation of general and administrative expenses to research and development expenses; and
•$2.5 million of expense associated with our December 2025 workforce reduction.
Expenses associated with our European ORLADEYO business (excluding stock-based compensation) decreased to $38.6 million for the year ended December 31, 2025 from $45.3 million for the year ended December 31, 2024 due to the sale of our European ORLADEYO business to Neopharmed on October 1, 2025.
Stock-based compensation expense increased to $55.6 million for the year ended December 31, 2025 from $34.1 million for the year ended December 31, 2024. The increase was primarily due to a modification to extended the post-termination exercise period of certain vested stock option awards at the time of retirement for certain individuals to the original expiration date, resulting in $11.3 million of incremental expense, and an increase in restricted stock unit awards granted.
Other income (expense)
For the year ended December 31, 2025, interest income was $10.7 million compared to $14.7 million for the year ended December 31, 2024. The decrease in interest income was primarily the result of an overall decrease in our average investment portfolio and a decrease in interest rates. Net foreign currency losses were $0.2 million for the year ended December 31, 2025 compared to $0.6 million for the year ended December 31, 2024.
Interest expense for the year ended December 31, 2025 was $78.9 million compared to $98.5 million for the year ended December 31, 2024. Interest expense is primarily comprised of non-cash interest expense due to the amortization of interest associated with the royalty financing obligations and interest expense associated with the borrowings under the Pharmakon Loan Agreement (as defined below), including the amortization of the deferred financing costs, associated with the borrowings under the Pharmakon Loan. The decrease in interest expense was primarily the result of the payoff of the Pharmakon Term Loan in three separate prepayments in 2025 totaling $323.7 million and a decrease in the effective
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interest rate during the period in which the debt was outstanding in 2025. In addition, there was a decrease in interest expense associated with our OMERS Royalty Purchase Agreement (as defined in “Note 9—Royalty Financing Obligations” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report) as result of a lower outstanding principal balance.
For the year ended December 31, 2025, we recognized a one-time loss on extinguishment of debt of $17.3 million as a result of the payoff of the Pharmakon Term Loan.
For the year ended December 31, 2025, other income was $12.1 million, which was primarily comprised of the $4.3 million mark-to-market adjustment on liability classified awards, $3.6 million gain recognized on the sale of BioCryst Ireland to Neopharmed, $2.1 million of pre-close transaction services BioCryst performed on behalf of Neopharmed, and $1.6 million of post-close transition services BioCryst provided to Neopharmed.
Income tax expense
For the year ended December 31, 2025, income tax expense was $3.5 million compared to $1.9 million for the year ended December 31, 2024. The increase in income tax expense was primarily driven by the increase in domestic and foreign taxable income for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Liquidity and Capital Resources
Sources of Liquidity
Our operations have principally been funded through our credit facilities; revenues from ORLADEYO; royalty financing transactions; public offerings and private placements of equity securities; and cash from collaborative and other research and development agreements, including U.S. Government contracts. In addition to the above, we have received funding from other sources, including government grants, research grants, and interest income on our investments.
On the Closing Date, we entered into the Blackstone Loan Agreement, pursuant to which the lenders funded the initial Term Loans in the aggregate principal amount of $400.0 million. We used the proceeds from the Term Loans to pay the cash portion of the consideration required to consummate the Merger. The maturity date of the Term Loans under the Blackstone Loan Agreement is January 23, 2031, the fifth anniversary of the Closing Date. Our obligations under the Blackstone Loan Agreement are secured by a security interest in, subject to certain exceptions, substantially all of our and our subsidiaries’ assets.
The Blackstone Loan Agreement also contains representations and warranties and affirmative and negative covenants customary for financings of this type, as well as customary events of default. Certain of the customary negative covenants limit our ability and certain of our subsidiaries to, among other things, dispose of assets, engage in mergers, acquisitions and similar transactions, incur additional indebtedness, grant liens, make investments, pay dividends or make distributions or certain other restricted payments in respect of equity, prepay certain other indebtedness, enter into restrictive agreements, undertake fundamental changes or amend certain material contracts, among other customary covenants, in each case subject to certain exceptions. A failure to comply with the covenants in the Blackstone Loan Agreement, or an occurrence of any other event of default, could permit the lenders under the Blackstone Loan Agreement to declare the borrowings thereunder, together with accrued interest and fees, and any applicable yield protection premium, to be immediately due and payable. See “Note 21—Subsequent Events” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report for additional information about the Blackstone Loan Agreement.
On April 17, 2023, we entered into a $450.0 million Loan Agreement (the “Pharmakon Loan Agreement”) with BioPharma Credit Investments V (Master) LP and BPCR Limited Partnership, as lenders, and BioPharma Credit PLC, as collateral agent for the lenders. The Pharmakon Loan Agreement provided for an initial term loan in the principal amount of $300.0 million (the “Tranche A Loan”), which was funded on April 17, 2023. We utilized a portion of the proceeds from the Tranche A Loan to repay the approximate $241.8 million of outstanding indebtedness under the then-existing credit facility with Athyrium Opportunities III Co-Invest 1 LP and to pay transaction costs and fees, and we used the remaining net proceeds of approximately $25.8 million for other general corporate purposes.
The Pharmakon Loan Agreement also provided for three additional term loan tranches in principal amounts of $50.0 million each, which we could have requested, at our option, on or prior to September 30, 2024. We chose not to request any of the additional term loan tranches. The maturity date of the Pharmakon Loan Agreement was April 17, 2028. On April 18, 2025, we made a partial prepayment of $75.0 million of the outstanding principal amount under the Pharmakon Loan
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Agreement, and on July 24, 2025, we made an additional partial prepayment of $50.0 million of the outstanding principal amount under the Pharmakon Loan Agreement. On October 8, 2025, we used a portion of the proceeds from the sale of the European ORLADEYO business to pay off in full the outstanding principal balance of $198.7 million and terminate the Pharmakon Loan Agreement.
In 2020 and 2021, we entered into the Royalty Purchase Agreements (as defined in “Note 9—Royalty Financing Obligations” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report) with RPI 2019 Intermediate Finance Trust (“RPI”) and OCM IP Healthcare Holdings Limited, an affiliate of OMERS Capital Markets (“OMERS”). Under the Royalty Purchase Agreements, RPI and OMERS are entitled to receive tiered, sales-based royalties on net product sales of ORLADEYO in the United States and certain key European markets (collectively, the “Key Territories”), and other markets where we sell ORLADEYO directly or through distributors. In addition, RPI and OMERS are entitled to receive a tiered revenue share on amounts generally received by us on account of ORLADEYO sublicense revenue or net sales by licensees outside of the Key Territories. Our required payments to OMERS commenced with the calendar quarter beginning October 1, 2023. No royalty payments are due on direct sales over $550.0 million. See “Note 9—Royalty Financing Obligations” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report for additional information about these financing transactions.
Our principal sources of liquidity at December 31, 2025 were approximately $335.9 million in cash and cash equivalents and available-for-sale investments.
Cash Flows
The following table summarizes our cash flows for each period presented (in thousands):
Years Ended December 31,
Net cash provided by (used in):
Decrease in cash, cash equivalents and restricted cash $ (14,986) $ (6,124)
Operating Activities
During the year ended December 31, 2025, net cash provided by operating activities of $347.4 million consisted primarily of net income of $263.9 million and $140.4 million of non-cash items. Non-cash items were primarily comprised of $85.1 million of stock-based compensation expense, $53.2 million of non-cash interest expense on royalty financing obligations, a $17.5 million contra-revenue adjustment related to the modification of equity awards in connection with the sale of BioCryst Ireland, and a $17.3 million loss on extinguishment of debt. Net income and non-cash items were partially offset by $56.9 million of changes in operating assets and liabilities, primarily due to a decrease in royalty financing obligations and increases in receivables and accounts payable and accrued expenses, and $23.7 million in payments of Pharmakon PIK interest.
During the year ended December 31, 2024, net cash used in operating activities of $52.0 million consisted primarily of a net loss of $88.9 million and $87.3 million of changes in operating assets and liabilities, primarily due to a decrease in royalty financing obligations and increases in receivables and accounts payable and accrued expenses, partially offset by $124.1 million of non-cash items. Non-cash items primarily consisted of $65.4 million of stock-based compensation expense, $56.0 million of non-cash interest expense on royalty financing obligations, and $11.6 million of non-cash interest expense on secured term loan and amortization of debt issuance costs, partially offset by $11.5 million of amortization of premiums and discounts on investments.
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Investing Activities
During the year ended December 31, 2025, net cash used in investing activities of $13.7 million primarily related to purchases of investment securities and proceeds from the sale of BioCryst Ireland, net of cash divested, partially offset by sales and maturities of investment securities.
During the year ended December 31, 2024, net cash provided by investing activities of $52.6 million primarily related to maturities of investment securities, partially offset by purchases of investment securities.
Financing Activities
During the year ended December 31, 2025, net cash used in financing activities of $349.9 million primarily consisted of the repayment of Pharmakon term loan principal and related prepayment premium and fees totaling $309.9 million, $22.9 million in principal payments on royalty financing obligations, $15.5 million in payments of royalty release fees to RPI and OMERS in connection with the sale of the Company’s European ORLADEYO business to Neopharmed, and $8.8 million of withholding taxes paid on stock-based awards, partially offset by $9.1 million of net proceeds from common stock issued under stock-based compensation plans.
During the year ended December 31, 2024, net cash used in financing activities of $5.8 million primarily consisted of withholding taxes paid on stock-based awards and principal payments on finance lease liabilities, partially offset by net proceeds from common stock issued under stock-based compensation plans.
Plan of Operation and Future Funding Requirements
We intend to contain costs and cash flow requirements by closely managing our third-party costs and headcount, leasing scientific equipment and facilities, and contracting with other parties to conduct certain research and development projects. We may incur additional expenses, potentially resulting in significant losses, as we continue to pursue our research and development activities, commercialize ORLADEYO, and engage in strategic business development. We may incur additional expenses related to the filing, prosecution, maintenance, defense, and enforcement of patent and other intellectual property claims and additional regulatory costs as our clinical programs advance through later stages of development or as regulatory exclusivity for our products expires. The objective of our investment policy is to ensure the safety and preservation of invested funds, as well as to maintain liquidity sufficient to meet cash flow requirements. We place our excess cash with high credit quality financial institutions. We invest in marketable debt securities that may consist of U.S. Treasury obligations, U.S government agency securities, money market funds, certificates of deposit, and corporate notes and bonds in order to limit the amount of our credit exposure. We have not realized any significant losses on our investments.
In the future, we may finance our needs principally from the following:
•our existing capital resources and interest earned on that capital;
•revenues from product sales;
•payments under current or future collaborative and licensing agreements with corporate partners;
•lease, royalty, or loan financing; and
•public or private equity and/or debt financing.
Our current and planned clinical trials, plus the related development, manufacturing, regulatory approval process requirements, and additional resources required for the continuing development of our product candidates and the commercialization of our products will consume significant capital resources and could increase our expenses.
Our expenses, revenues and cash utilization rate could vary significantly depending on many factors, including the progress and results of our current and proposed clinical trials for our product candidates; the progress made in the manufacturing of our lead product candidates; the success of our commercialization efforts for, and market acceptance of, our products; the overall progression of our other programs; our business development activities; the amount of funding or assistance, if any, we receive from new partnerships with third parties for the development and/or commercialization of our products and product candidates; the development progress of any collaborative agreements for our product candidates; and the amount and timing of funding we receive, if any, from U.S. Government contracts.
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Based on our expectations for revenue and operating expenses, we believe our financial resources will be sufficient to fund our operations for at least the next 12 months. Our liquidity needs will be largely determined by the success of operations in regard to the successful commercialization of our products and the future progression of our product candidates. From time to time, we evaluate other opportunities to fund future operations, including: (1) out-licensing rights to certain of our products or product candidates, pursuant to which we would receive cash milestone payments; (2) obtaining additional product candidate regulatory approvals, which would generate revenue, milestone payments and cash flow; (3) reducing spending on one or more research and development programs, including by discontinuing development; (4) restructuring operations to change our overhead structure; and/or (5) securing U.S. Government funding of our programs, including obtaining procurement contracts. We may, in the future, issue securities, including common stock, preferred stock, depositary shares, purchase contracts, warrants, debt securities, and units, through private placement transactions or registered public offerings. Our future liquidity needs, and our ability to address those needs, will largely be determined by the success of our products and product candidates; the success of our business development efforts; the timing, scope, and magnitude of our research and development and commercial expenses; and key developments and regulatory events and our decisions in the future.
Our long-term capital requirements and the adequacy of our available funds will depend upon many factors, including:
•sustained market acceptance of approved products and successful commercialization of such products by either us or our partners;
•the progress and magnitude of our research, drug discovery and development programs;
•changes in existing collaborative relationships;
•our ability to establish additional collaborative relationships if and when needed;
•the extent to which our partners will share in the costs associated with the development of our programs or run the development programs themselves;
•our ability to negotiate favorable development and marketing strategic alliances for certain products and product candidates;
•any decision to build or expand internal development and commercial capabilities;
•the scope and results of preclinical studies and clinical trials to identify and develop product candidates;
•our ability to engage sites and enroll subjects in our clinical trials;
•the scope of manufacturing of our products to support our commercial operations and of our product candidates to support our preclinical research and clinical trials;
•increases in personnel and related costs to support the development and commercialization of our products and product candidates;
•the scope of manufacturing of our drug substance and product candidates required for future NDA filings;
•competitive and technological advances;
•the time and costs involved in obtaining regulatory approvals;
•post-approval commitments for any products that receive regulatory approval;
•our business development activities; and
•the costs involved in all aspects of intellectual property strategy and protection, including the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing patent claims.
We may, in the future, be required to raise additional capital to complete the development and commercialization of our products and product candidates, and we may seek to raise capital in the future, including to take advantage of favorable opportunities in the capital markets. Additional funding may not be available when needed or in the form or on terms acceptable to us. Our future working capital requirements, including the need for additional working capital, will largely be determined by the advancement of our portfolio of product candidates and the commercialization of ORLADEYO. More specifically, our working capital requirements will be dependent on the number, magnitude, scope and timing of our development programs; regulatory approval of our product candidates; the cost, timing and outcome of regulatory reviews, regulatory investigations, and changes in regulatory requirements; the costs of obtaining patent protection for our product candidates; the timing and terms of business development activities; the rate of technological advances relevant to our operations; the efficiency of manufacturing processes developed on our behalf by third parties; the timing, scope and magnitude of commercial spending; and the level of required administrative support for our daily operations. See “Risk Factors—Risks Relating to Our Business—Financial and Liquidity Risks” in Part I, Item 1A of this report for further discussion of the risks related to obtaining additional capital.
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Critical Accounting Estimates
The preparation of these consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures for the periods presented. Some of these estimates can be subjective and complex with a significant level of estimation uncertainty, and, consequently, actual results may differ from these estimates. The judgments and assumptions used by management are based on historical experience and information available to us at the time that we make these estimates and judgments. To the extent there are material differences between these estimates and actual results, our consolidated financial statements will be affected. Although we believe that our judgments and estimates are appropriate, actual results may differ from these estimates.
While our significant accounting policies are more fully described in “Note 1—Significant Accounting Policies and Concentrations of Risk” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this report, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Revenue Recognition
The application of Accounting Standards Codification (“ASC”) Topic 606 substantially impacts our reported results, particularly product sales, net, which requires certain estimates in determining the transaction price.
Net revenue from sales of ORLADEYO is recorded at net selling price (transaction price), which includes reserves for variable consideration such as (i) estimated government rebates, such as Medicaid and Medicare Part D reimbursements, and estimated managed care rebates, (ii) estimated chargebacks, (iii) estimated costs of co-payment assistance programs, and (iv) product returns. These reserves, representing our best estimates of the amount of consideration to which we are entitled based on the terms of the applicable contracts and statutory requirements, are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable if no payments are required of us or a current liability if a payment is required of us. Actual amounts of consideration may differ from our estimates. If actual results vary from estimates, these estimates are adjusted, which would affect net product revenue and earnings in the period such variances become known.
The most subjective of these estimates are government and managed care rebates. We contract with group purchasing organizations associated with managed care organizations and participate in certain government programs or, collectively, third-party payors, so that ORLADEYO will be eligible for purchase by, or partial or full reimbursement from, such third-party payors. We estimate the rebates we will provide to third-party payors and deduct these estimated amounts from total gross product revenues at the time the revenues are recognized, resulting in a reduction of product revenue and the establishment of a current liability. We estimate the rebates that we will provide to third-party payors based upon (i) our contracts with these third-party payors, (ii) the contractually mandated discounts applicable to the programs, and (iii) product distribution information obtained from our specialty pharmacy regarding payor mix.
Research and Development Expenses and Related Accruals
As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses. This process involves reviewing open contracts and purchase orders, communicating with applicable Company personnel to identify services that have been performed on our behalf and estimating the actual work completed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost. The majority of our service providers invoice us monthly in arrears for services performed. We periodically confirm the accuracy of our estimates with the service providers and make adjustments if necessary. When evaluating the adequacy of accrued expenses, we consider facts and circumstances known to us at the time, which can include assumptions such as expected patient enrollment, site activation and estimated project duration. Examples of estimated accrued research and development expenses include (i) fees paid to CROs in connection with preclinical and toxicology studies and clinical trials, (ii) fees paid to investigative sites in connection with clinical trials, (iii) fees paid to contract manufacturers in connection with the production of our raw materials, drug substance, drug products, and product candidates, and (iv) professional fees.
The financial terms of our agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of milestones. We record liabilities under these contractual commitments when we determine
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an obligation has been incurred, regardless of the timing of the invoice. In expensing service fees, we estimate the time period over which services will be performed and the level of effort expended in each period. If the actual timing of the performance of services or the level of effort varies from our estimate, we will adjust the accrual accordingly. If we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of these costs, our actual expenses could differ from our estimates.
Royalty Financing Obligations
Under the royalty financing obligations, RPI and OMERS are entitled to receive sales-based royalties on net product sales of ORLADEYO. Interest expense is accrued using the effective interest rate method over the estimated period each of the related liabilities will be paid. This requires us to estimate the total amount of future royalty payments to be generated from product sales over the life of the agreements. We impute interest on the carrying values of each of the royalty financing obligations and record interest expense using an imputed effective interest rate. We reassess the expected royalty payments each reporting period and account for any changes through adjustments to the effective interest rates on a prospective basis. The assumptions used in determining the expected repayment terms of the debt and amortization periods of the issuance costs requires that we make estimates that could impact the carrying value of each of the liabilities, as well as the periods over which associated issuance costs will be amortized. A significant increase or decrease in forecasted net sales could materially impact each of the liability balances, interest expense and the time periods for repayment.
Income Taxes
The liability method is used in our accounting for income taxes. Significant management judgment is required in determining our provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. We have recorded a valuation allowance against substantially all potential tax assets, due to uncertainties in our ability to utilize deferred tax assets, primarily consisting of certain net operating losses carried forward, before they expire. The valuation allowance is based on estimates of future earnings in each of the jurisdictions in which we operate and the period over which our deferred tax assets will be recoverable.
We account for uncertain tax positions in accordance with U.S. GAAP. Uncertain tax positions are recorded based upon certain recognition and measurement criteria. We re-evaluate uncertain tax positions and consider various factors, including, but not limited to, changes in tax law and the measurement of tax positions taken or expected to be taken in tax returns. We adjust the amount of the liability to reflect any subsequent changes in the relevant facts and circumstances surrounding the uncertain tax positions.
Recent Accounting Pronouncements
“Note 1—Significant Accounting Policies and Concentrations of Risk” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report discusses accounting pronouncements recently issued or proposed but not yet required to be adopted.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Interest Rate Risk
We are subject to interest rate risk on our investment portfolio as of December 31, 2025. We invest in marketable securities in accordance with our investment policy. The primary objectives of our investment policy are to preserve capital, maintain proper liquidity to meet operating needs and earn a competitive level of return. Our investment policy specifies credit quality standards for our investments and limits the amount of credit exposure to any single issue, issuer or type of investment. We place our excess cash with high credit quality financial institutions, commercial companies, and government agencies in order to limit the amount of credit exposure. Some of the securities we invest in may have market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate.
Our investment exposure to market risk for changes in interest rates relates to the increase or decrease in the amount of interest income we can earn on our portfolio, changes in the market value due to changes in interest rates and other market factors, as well as the increase or decrease in any realized gains and losses. Our investment portfolio includes only marketable securities and instruments with active secondary or resale markets to help ensure portfolio liquidity. A hypothetical 100 basis point increase or decrease in interest rates along the entire interest rate yield curve would not significantly affect the fair value of our interest sensitive financial instruments, but may affect our future earnings and cash
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flows. We generally have the ability to hold our fixed-income investments to maturity and, therefore, do not expect that our operating results, financial position or cash flows will be materially impacted due to a sudden change in interest rates. However, our future investment income may fall short of expectations due to changes in interest rates, or we may suffer losses in principal if forced to sell securities which have declined in market value due to changes in interest rates or other factors, such as changes in credit risk related to the securities’ issuers. To minimize this risk, we schedule our investments to have maturities that coincide with our expected cash flow needs, thus avoiding the need to redeem an investment prior to its maturity date. Accordingly, we do not believe that we have material exposure to interest rate risk arising from our investments. Generally, our investments are not collateralized. We have not realized any significant losses from our investments.
We do not use interest rate derivative instruments to manage exposure to interest rate changes. We ensure the safety and preservation of invested principal funds by limiting default risk, market risk and reinvestment risk. We reduce default risk by investing exclusively in investment grade securities.
Foreign Currency Risk
Most of our revenues and expenses are denominated in U.S. dollars. Our royalties from Torii are in Japanese Yen. We also had other transactions denominated in foreign currencies during the year ended December 31, 2025, including contract manufacturing and ex-U.S. clinical trial activities, and we expect to continue to do so. In addition, during the nine months ended September 30, 2025, we had transactions denominated in foreign currencies related to our operations in Europe. Our limited foreign currency exposure relative to our operations is to fluctuations in the Euro, British Pound, and Canadian Dollar.
We do not anticipate that foreign currency transaction gains or losses will be significant at our current level of operations. We have not engaged in foreign currency hedging during 2025; however, we may do so in the future.
Inflation Risk
Inflation generally impacts us by potentially increasing our operating expenses, including cost of product sales, clinical trial costs and selling activities. We do not believe that inflation has had a material impact on our business or results of operations during the periods for which the consolidated financial statements are presented in this report. Significant adverse changes in inflation could negatively impact our future results of operations.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
BIOCRYST PHARMACEUTICALS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value amounts)
December 31,
Assets
Current assets:
Prepaid expenses and other current assets 17,182 13,752
Liabilities and Stockholders’ Deficit
Current liabilities:
Share-based liability 13,743 —
Operating lease liabilities 317 937
Stockholders’ deficit:
Accumulated other comprehensive income 38 921
Total liabilities and stockholders’ deficit $ 514,158 $ 490,420
See accompanying notes to consolidated financial statements.
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BIOCRYST PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share amounts)
Years Ended December 31,
Revenues:
Expenses:
Other income (expense):
Other comprehensive income (loss):
Foreign currency translation adjustment (674) (776) 180
Unrealized (loss) gain on available for sale investments (209) 360 1,131
Total other comprehensive (loss) income (883) (416) 1,311
Net income (loss) per common share: basic $ 1.26 $ (0.43) $ (1.18)
Net income (loss) per common share: diluted $ 1.21 $ (0.43) $ (1.18)
See accompanying notes to consolidated financial statements.
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BIOCRYST PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Years Ended December 31,
Cash flows from operating activities:
Equity modification associated with sale of BioCryst Ireland 17,548 — —
Mark-to-market adjustment on share-based liability (4,313) — —
Payment of Pharmakon PIK Interest (23,704) — —
Non-cash interest expense on royalty financing obligations 53,163 55,969 70,356
Loss on impairment — — 1,548
Gain on sale of non-financial asset (550) — —
Gain on sale of BioCryst Ireland (3,566) — —
Changes in operating assets and liabilities:
(Increase) decrease in prepaid expenses and other assets (7,827) 1,959 (6,820)
Decrease in deferred revenue — — (1,230)
Cash flows from investing activities:
Acquisitions of property and equipment (2,468) (1,124) (2,168)
Sale of non-financial asset 550 — —
Proceeds from sale of BioCryst Ireland, net of cash divested (6,183) — —
Cash flows from financing activities:
Withholding taxes paid on stock-based awards (8,847) (7,535) (2,172)
Common stock issued to directors in lieu of cash retainer 59 34 342
Net proceeds from term loans — — 300,000
Prepayment premium and fees on term loans (9,886) — (21,261)
Payment of debt issuance costs on Pharmakon Tranche A term loan — — (11,147)
Principal payments on royalty financing obligations (22,883) — —
Payment of royalty release fees (15,500) — —
Principal payments on finance lease liabilities (1,989) (1,704) (1,165)
Net cash (used in) provided by financing activities (349,931) (5,761) 32,485
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Cash, cash equivalents and restricted cash:
Reconciliation of cash, cash equivalents and restricted cash:
Restricted cash in other assets 1,400 1,400 —
Supplemental cash flow disclosure:
Capitalized software costs included in accrued expenses $ 608 $ — $ —
See accompanying notes to consolidated financial statements.
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BIOCRYST PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(In thousands)
Shares Amount
Other comprehensive income — — — 1,311 — 1,311
Vesting of restricted stock units 1,276 13 (13) — — —
Issuance of shares to directors in lieu of cash retainer 37 — 342 — — 342
Stock-based compensation expense — — 55,615 — — 55,615
Other comprehensive loss — — — (416) — (416)
Vesting of restricted stock units 1,902 19 (19) — — —
Issuance of shares to directors in lieu of cash retainer 4 — 34 — — 34
Stock-based compensation expense — — 65,413 — — 65,413
Other comprehensive loss — — — (883) — (883)
Vesting of restricted stock units 2,796 28 (28) — — —
Issuance of shares to directors in lieu of cash retainer 7 — 59 — — 59
Stock-based compensation expense — — 85,137 — — 85,137
Remeasurement of share-based liability — — 2,050 — — 2,050
See accompanying notes to consolidated financial statements.
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BIOCRYST PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
Note 1—Significant Accounting Policies and Concentrations of Risk
The Company
BioCryst Pharmaceuticals, Inc. (the “Company”) is a global biotechnology company focused on developing and commercializing medicines for hereditary angioedema (“HAE”) and other rare diseases, driven by the Company’s deep commitment to improving the lives of people living with these conditions. The Company has built a robust commercial infrastructure to support the successful commercialization of ORLADEYO®, an oral, once-daily therapy discovered and developed internally for the prevention of HAE attacks. The Company’s business strategy includes leveraging this established commercial platform to successfully commercialize a pipeline of potential first-in-class or best-in-class oral small-molecule and injectable protein therapeutics targeting a range of rare diseases. These programs are being pursued through both internal discovery efforts and strategic business development. By utilizing its existing commercial capabilities and focusing on rare disease markets, the Company believes that it can more effectively optimize its costs and strategically allocate resources to support long-term, sustainable growth. The Company was founded in 1986 and incorporated in Delaware in 1991, and its headquarters is located in Durham, North Carolina.
The Company’s marketed products include oral, once-daily ORLADEYO® for the prevention of HAE attacks and RAPIVAB® (peramivir injection) for the treatment of acute uncomplicated influenza in the United States. ORLADEYO has received regulatory approval in the United States and other global markets. The Company is commercializing ORLADEYO in each of these territories directly or through other parties. In addition to its approval in the United States, peramivir injection has received regulatory approvals in Canada (RAPIVAB), Australia (RAPIVAB), Japan (RAPIACTA), Taiwan (RAPIACTA) and Korea (PERAMIFLU).
Based on the Company’s expectations for revenue and operating expenses, the Company believes its financial resources available at December 31, 2025 will be sufficient to fund its operations for at least the next 12 months. The Company’s liquidity needs will be largely determined by the success of operations in regard to the successful commercialization of its products and the future progression of its product candidates. From time to time, the Company evaluates other opportunities to fund future operations, including: (1) out-licensing rights to certain of its products or product candidates, pursuant to which the Company would receive cash milestone payments; (2) obtaining additional product candidate regulatory approvals, which would generate revenue, milestone payments and cash flow; (3) reducing spending on one or more research and development programs, including by discontinuing development; (4) restructuring operations to change its overhead structure; and/or (5) securing U.S. Government funding of its programs, including obtaining procurement contracts. The Company may, in the future, issue securities, including common stock, preferred stock, depositary shares, purchase contracts, warrants, debt securities and units, through private placement transactions or registered public offerings. The Company’s future liquidity needs, and ability to address those needs, will largely be determined by the success of its products and product candidates; the success of its business development efforts; the timing, scope and magnitude of its research and development and commercial expenses; and key developments and regulatory events and its decisions in the future.
Basis of Presentation
The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances among the consolidated entities have been eliminated from the consolidated financial statements. The Company operates and manages its business as one reportable and operating segment (see “Note 18—Segment Information”).
The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Such consolidated financial statements reflect all adjustments that are, in management’s opinion, necessary to present fairly, in all material respects, the Company’s consolidated financial position, results of operations, and cash flows. There were no adjustments other than normal recurring adjustments. Certain prior year amounts have been reclassified to conform to the current year presentation.
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Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Revenue Recognition
The Company recorded the following revenues for the years ended December 31, 2025, 2024, and 2023 (in thousands):
Years Ended December 31,
Pursuant to Accounting Standards Codification (“ASC”) Topic 606, the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, Topic 606 includes provisions within a five-step model that includes (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations, and (v) recognizing revenue when, or as, an entity satisfies a performance obligation.
At contract inception, the Company identifies the goods or services promised within each contract, assesses whether each promised good or service is distinct and determines those that are performance obligations. The Company recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied.
Product Sales, Net
The Company’s principal sources of product sales are sales of ORLADEYO and sales of peramivir (RAPIVAB/RAPIACTA/PERAMIFLU) to the Company’s licensing partners and to the U.S. Department of Health and Human Services (“HHS”). In the United States, the Company generally ships ORLADEYO directly to patients through a single specialty pharmacy, which is considered its customer. Outside the United States, the Company generally sells ORLADEYO to specialty distributors which are considered its customers.
The Company recognizes revenue when the customer obtains control of the product, which generally occurs upon delivery.
Net revenue from sales of ORLADEYO is recorded at net selling price (transaction price), which includes reserves for variable consideration such as (i) estimated government rebates, such as Medicaid and Medicare Part D reimbursements, and estimated managed care rebates, (ii) estimated chargebacks, (iii) estimated costs of co-payment assistance programs and (iv) product returns. These reserves, representing the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the applicable contracts and statutory requirements, are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable if no payments are required of the Company or a current liability if a payment is required of the Company. Actual amounts of consideration may differ from the Company's estimates. If actual results vary from estimates, these estimates are adjusted, which would affect net product revenue and earnings in the period such variances become known.
Government and Managed Care Rebates. The Company contracts with group purchasing organizations associated with managed care organizations and participates in certain government programs, collectively, third-party payors, so that ORLADEYO will be eligible for purchase by, or partial or full reimbursement from, such third-party payors. The Company estimates the rebates it will provide to third-party payors and deducts these estimated amounts from total gross product revenues at the time the revenues are recognized, resulting in a reduction of product revenue and the establishment of a current liability. The Company estimates the rebates that it will provide to third-party payors based upon (i) the Company's
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contracts with these third-party payors, (ii) the contractually mandated discounts applicable to the programs, and (iii) product distribution information obtained from the Company's specialty pharmacy regarding payor mix.
Chargebacks. Chargebacks are discounts that occur when certain contracted customers, pharmacy benefit managers, insurance companies, and government programs purchase directly from the Company’s specialty pharmacy. These customers purchase the Company’s product under contracts negotiated between them and the Company’s specialty pharmacy. The specialty pharmacy, in turn, charges back to the Company the difference between the price that the specialty pharmacy paid and the negotiated price paid by the contracted customers, which may be higher or lower than the specialty pharmacy’s purchase price with the Company. The Company estimates chargebacks and adjusts gross product revenues and establishes a current liability at the time revenues are recognized.
Co-payment assistance programs. Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. Based upon the terms of the program and co-payment assistance utilization reports received from the specialty pharmacy, the Company estimates the co-payment assistance amounts, which are recorded in the same period in which the related revenue is recognized, resulting in a reduction of product revenue and establishment of a current liability.
Patient assistance programs. The Company offers a patient assistance program that provides free drug product, for a limited period of time, to allow a patient’s insurance coverage to be established. Based on patient assistance program utilization reports provided by the specialty pharmacy, the Company records gross revenue of the product provided and a full reduction of the revenue amount for the free drug discount.
Product returns. The Company does not provide contractual return rights to its customers, except in instances where the product is damaged or defective. Non-acceptance by the patient of shipped drug product by the specialty pharmacy is reflected as a reversal of sales in the period in which the sales were originally recorded. Reserves for estimated non-acceptances by patients are recorded as a reduction of revenue in the period that the related revenue is recognized, as well as a reduction to accounts receivable. Estimates of non-acceptance are based on quantitative information provided by the specialty pharmacy.
License and Collaborative and Other Revenues
The Company has collaboration and license agreements with a number of third parties. The terms of the agreements typically include one or more of the following: upfront license fees; development, regulatory and sales-based milestone payments; and royalties on net sales of licensed products. For agreements with multiple performance obligations, revenue is allocated to each performance obligation based on its relative standalone selling price. The Company uses judgment to identify performance obligations and determine whether variable consideration should be included in the transaction price.
Upfront license fees. If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenue from upfront license fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company determines whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue.
Development, regulatory or commercial milestone payments. At the inception of each arrangement that includes payments based on the achievement of certain development, regulatory and commercial events, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the Company’s or the customer’s control are not considered probable until the milestone is achieved. At the end of each subsequent reporting period, the Company re-evaluates the probability of achieving such development and regulatory milestones and any related constraint, and if necessary, adjusts the Company’s estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis and recognized as revenue during the period of adjustment.
Sales-based milestone payments and royalties. For arrangements that include sales-based royalties, including milestone payments based on the volume of sales, the Company determines whether the license is deemed to be the predominant item to which the royalties or sales-based milestones relate and if such is the case, the Company recognizes
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revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
Cash and Cash Equivalents
The Company considers cash equivalents to be highly liquid investments with maturities of three months or less from the date of purchase.
Restricted Cash
Total restricted cash was $1,601 and $1,610 as of December 31, 2025 and 2024, respectively, and primarily consisted of $1,400 as of December 31, 2025 and 2024, for a letter of credit the Company is required to maintain associated with its Birmingham lease. The letter of credit associated with the Birmingham lease of $1,400 is reflected within other assets in the Consolidated Balance Sheets as of December 31, 2025 and 2024.
Investments
The Company invests in high credit quality investments in accordance with its investment policy. The objectives of the Company’s investment policy are to eliminate or greatly minimize the probability of a loss of principal value, maintain sufficient liquidity to meet cash flow requirements, and earn a competitive level of return. The Company places its excess cash with high credit quality financial institutions to limit the amount of its credit exposure. In accordance with its policy, the Company is able to invest in marketable debt securities that may consist of U.S. Treasury obligations, U.S government agency securities, money market funds, certificates of deposits, and corporate notes and bonds. The Company’s investment policy requires it to purchase high-quality marketable securities with a maximum individual maturity of two years and requires an average portfolio maturity of no more than 12 months. Some of the securities in which the Company invests may have market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, the Company schedules its investments with maturities that coincide with expected cash flow needs, thus avoiding the need to redeem an investment prior to its maturity date. Accordingly, the Company does not believe it has a material exposure to interest rate risk arising from its investments. The Company has not realized any significant losses from its investments.
The Company classifies all of its investments as available-for-sale. Available-for-sale investments are reported at fair value at each balance sheet date, and include any unrealized holding gains and losses in accumulated other comprehensive income, unless an unrealized loss is considered to be other than temporary, in which case the unrealized loss is charged to operations. The Company reviews its investments for other than temporary declines in fair value below cost basis at the end of each reporting period and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Factors considered to determine whether an unrealized loss is temporary include whether a decline in fair value below the amortized cost basis is due to credit-related factors or non-credit-related factors, the financial condition and near-term prospects of the Company, and the Company's intent and ability to hold the investment to allow for an anticipated recovery in fair value. A credit-related impairment is recognized as an allowance in the balance sheet with a corresponding adjustment to earnings. Any impairment that is not credit-related is recognized in other comprehensive income, net of applicable taxes unless deemed other than temporary. Realized gains and losses are reflected in interest and other income in the Consolidated Statements of Comprehensive Income (Loss) and are determined using the specific identification method with transactions recorded on a settlement date basis. Investments with original maturities at date of purchase beyond three months and which mature at or less than 12 months from the balance sheet date are classified as current. Investments with a maturity beyond 12 months from the balance sheet date are classified as long-term.
Fair Value Measurements
Assets and liabilities recorded at fair value on a recurring basis in the Consolidated Balance Sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement
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date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.
Assets measured at fair value on a recurring basis include cash equivalents and investments (See “Note 4—Investments”). The carrying amounts reflected in the Consolidated Balance Sheets for cash and cash equivalents, trade receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.
Trade Receivables
The Company’s trade receivables represent amounts due from its customers and partners for product sales and royalties. Trade receivables are generally stated at the invoiced amount with standard payment terms that require payment within 30 to 90 days and do not bear interest.
The Company provides reserves against trade receivables for estimated losses that may result from a customer's inability to pay. Receivables are evaluated to determine if any reserve or allowance should be recorded based on consideration of the current economic environment, expectations of future economic conditions, specific circumstances and the Company’s own historical collection experience. Amounts determined to be uncollectible are charged or written-off against the reserve.
Inventory
The Company values its inventory at the lower of cost or estimated net realizable value and classifies inventory based on when consumption or sale of the inventory is expected to occur, either within 12 months from the balance sheet date (short-term) or beyond (long-term). The Company uses an actual cost method and determines the cost of its inventory on a first-in, first-out basis. Raw materials and work-in-process include all inventory costs prior to packaging and labeling, including raw material, active product ingredient, and the drug product. Finished goods include packaged and labeled products.
The Company’s inventory is subject to expiration dating. At each reporting date, the Company evaluates the carrying value of its inventory and provides valuation reserves for any estimated excess, obsolete, short-dated or unmarketable inventory. In addition, the Company may experience spoilage of its raw materials and supplies. The Company’s determination that a valuation reserve might be required, in addition to the quantification of such reserve, requires it to utilize significant judgment. Additionally, the Company’s inventory is subject to strict quality control and monitoring that is performed throughout the manufacturing process, including release of work-in-process to finished goods. In the event that certain batches or units of product do not meet quality specifications, the Company will record a write-down of any potential unmarketable inventory to its estimated net realizable value and record the expense as cost of product in the Consolidated Statements of Comprehensive Income (Loss).
Prior to obtaining initial regulatory approval for an investigational product candidate, the Company expenses costs relating to production of pre-launch inventory as research and development expense in its Consolidated Statements of Comprehensive Income (Loss) in the period incurred. After regulatory approval has been received, the Company capitalizes inventory costs.
Property and Equipment
Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Computer equipment and office equipment are depreciated over a life of three years. Laboratory equipment, software, and furniture and fixtures are depreciated over a life of five years. Leasehold improvements are amortized over their estimated useful lives or the expected lease term, whichever is less. Construction in progress reflects amounts incurred for construction or improvements of property and equipment that have not been placed in service.
The Company periodically reviews its property and equipment for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are
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written down to their estimated fair values. Property and equipment to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.
Accrued Expenses
The Company enters into contractual agreements with third-party vendors who provide research and development, manufacturing, distribution, and other services in the ordinary course of business. Some of these contracts are subject to milestone-based invoicing, and services are completed over an extended period of time. The Company records liabilities under these contractual commitments when it determines an obligation has been incurred, regardless of the timing of the invoice. This process involves reviewing open contracts and purchase orders, communicating with applicable Company personnel to identify services that have been performed on its behalf and estimating the actual work completed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of actual cost. The majority of service providers invoice the Company monthly in arrears for services performed. The Company estimates accrued expenses as of each balance sheet date based on the facts and circumstances known at that time, which can include assumptions such as expected patient enrollment, site activation and estimated project duration. The Company accrues expenses for clinical trial activities based on the estimates of services received pursuant to contracts with multiple research institutions and clinical research organizations (“CROs") that conduct and manage clinical trials on the Company’s behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones.
The Company periodically confirms the accuracy of its estimates with the service providers and makes adjustments if necessary. Examples of estimated accrued expenses include (i) fees paid to CROs in connection with preclinical and toxicology studies and clinical trials; (ii) fees paid to investigative sites in connection with clinical trials; (iii) fees paid to contract manufacturers in connection with the production of the Company’s raw materials, drug substance, drug products, and product candidates; and (iv) professional fees. If the Company underestimates or overestimates the level of these costs, actual expenses could differ from such estimates.
Cost of Product Sales
Cost of product sales includes the cost of producing inventory that is related to product revenue during the respective period. Cost of product sales also includes costs related to excess or obsolete inventory adjustment charges.
Research and Development Expenses
Research and development expenses include all direct and indirect expenses relating to research and development activities, including costs associated with product development efforts, preclinical trials, clinical trials and manufacturing activities. Research and development expenses are expensed as incurred. Most of the Company’s clinical and preclinical studies are performed by third-party CROs. Costs for studies performed by CROs are accrued based upon estimates of the actual work completed in accordance with the third-party agreements. Advance payments for goods or services that will be used or rendered for future research and development activities are deferred and capitalized. Such amounts are expensed when the related goods are delivered or the related services are performed.
Direct expenses consist of compensation for research and development personnel and costs of outside parties to conduct laboratory studies, develop manufacturing processes and manufacture the product candidate, conduct and manage clinical trials, as well as other costs related to the Company’s clinical and preclinical studies. Additionally, direct expenses consist of those costs necessary to discontinue and close out a development program, including termination fees and other commitments. Indirect expenses consist of lab supplies and services, facility expenses, depreciation of development equipment and an allocation of general and administrative overhead costs that support the Company’s research and development efforts.
Selling, General and Administrative Expenses
Selling, general and administrative expenses are comprised of sales and marketing expenses and general and administrative expenses. Sales and marketing expenses include compensation, benefits, and related costs associated with sales and marketing personnel, safety, regulatory, manufacturing, and distribution activities related to marketed products, market research, marketing, medical affairs, market access, and advertising costs. Advertising costs related to
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ORLADEYO of $13,824, $13,566 and $14,404 were expensed as incurred for the years ended December 31, 2025, 2024 and 2023, respectively.
General and administrative expenses include compensation, benefits, and related costs associated with general and administrative personnel, quality activities related to marketed products, finance, human resources, information technology, and legal expenses, licenses and other administrative costs, including transaction-related costs. All patent related costs are expensed to general and administrative expenses when incurred as recoverability of such expenditures is uncertain.
Leases
The Company leases certain assets under operating and finance leases, which consist of real estate leases, laboratory equipment leases and office equipment leases as of December 31, 2025. The Company determines whether a contract is, or contains, a lease at inception. The Company accounts for lease obligations in accordance with ASU 2016-02: Leases (Topic 842), which requires a lessee to recognize a right-of-use asset and a lease liability in its balance sheet for most leases. The Company elected the practical expedient that exempts leases with an initial lease term of twelve months or less, as well as the practical expedient that allows companies to select, by class of underlying asset, not to separate lease and non-lease components.
Certain of the Company’s operating leases provide for renewal options, which can vary by lease. The right-of-use asset and lease liabilities in the Company’s Consolidated Balance Sheets represent payments over the lease term, which include renewal options for certain real estate leases that the Company is reasonably certain to exercise. Certain operating leases include rent escalation provisions, which the Company recognizes as expense on a straight-line basis. Lease expense for leases with an initial term of twelve months or less was not material.
The discount rate used to determine the Company’s right-of-use asset and lease liability is the Company’s incremental borrowing rate on a collateralized basis over a similar term and amount in a similar economic environment, as generally an implicit rate in the lease is not readily determinable.
The Company has not made any residual value guarantees related to its leases; therefore, the Company has no corresponding liability recorded in its Consolidated Balance Sheets.
Stock-Based Compensation
All share-based payments, including grants of stock option awards and restricted stock unit awards, are recognized in the Company’s Consolidated Statements of Comprehensive Income (Loss) based on their fair values. Stock-based compensation cost is estimated at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period of the award. Determining the appropriate fair value model and the related assumptions for the model requires judgment, including estimating the stock price volatility and the expected term. The Company utilizes the Black-Scholes option-pricing model or binomial lattice model to value its stock option awards. The Company reduces stock-based compensation expense for estimated forfeitures. The estimation of share-based payment awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from the Company’s current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. Actual results, and future changes in estimates, may differ substantially from the Company’s current estimates.
Debt
Costs directly associated with term loan borrowings were capitalized and netted against the corresponding debt liabilities in the Consolidated Balance Sheets. These costs were amortized to interest expense over the terms of the corresponding borrowings using the effective interest rate method. When utilizing the effective interest method, in periods in which payment-in-kind (“PIK”) interest was designated and added to the outstanding principal balance of the borrowing, the amortization of the deferred debt fees and issuance costs was accretive.
Royalty Financing Obligations
The royalty financing obligations are eligible to be repaid based on royalties from net sales of ORLADEYO. Interest expense is accrued using the effective interest rate method over the estimated period each of the related liabilities will be paid. This requires the Company to estimate the total amount of future royalty payments to be generated from product sales over the life of the agreements. The Company imputes interest on the carrying value of each of the royalty financing
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obligations and records interest expense using an imputed effective interest rate. The Company reassesses the expected royalty payments each reporting period and accounts for any changes through adjustments to the effective interest rates on a prospective basis. The assumptions used in determining the expected repayment terms of the debt and amortization periods of the issuance costs require that the Company make estimates that could impact the carrying values of each of the liabilities, as well as the periods over which associated issuance costs will be amortized. A significant increase or decrease in forecasted net sales could materially impact each of the liability balances, interest expense and the time periods for repayment.
Income Taxes
The liability method is used in the Company’s accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.
Significant management judgment is required in determining the Company’s provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. The Company has recorded a valuation allowance against substantially all potential tax assets, due to uncertainties in its ability to utilize deferred tax assets, primarily consisting of certain net operating losses carried forward, before they expire. The valuation allowance is based on estimates of future earnings in each of the jurisdictions in which the Company operates and the period over which its deferred tax assets will be recoverable.
The Company accounts for uncertain tax positions in accordance with U.S. GAAP. Uncertain tax positions are recorded based upon certain recognition and measurement criteria. The Company re-evaluates uncertain tax positions and considers various factors, including, but not limited to, changes in tax law and the measurement of tax positions taken or expected to be taken in tax returns. The Company adjusts the amount of the liability to reflect any subsequent changes in the relevant facts and circumstances surrounding the uncertain tax positions. The Company recognizes interest and penalties related to income tax matters in income tax expense.
The Company accrues for U.S. state taxes and foreign income taxes for jurisdictions where the Company has presence and nexus has been established.
Research and development costs are capitalized and amortized over a 15-year period in accordance with Section 174 of the Internal Revenue Code of 1986, as amended (“IRC”). The amortization period begins with the midpoint of any taxable year that IRC Section 174 costs are first incurred, regardless of whether the expenditures were made prior to or after July 1, and runs until the midpoint of year sixteen.
Certain countries in which the Company has operations have adopted legislation influenced by the Organization for Economic Cooperation and Development (“OECD”) Pillar Two rules, including a minimum tax rate of 15%. It is uncertain whether the U.S. will enact legislation to adopt the Pillar Two framework. While the Company is currently not within the scope of the rules, it is continuing to review and evaluate additional guidance released by the OECD, along with the pending legislative adoption by additional individual countries where the Company operates.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, making permanent certain provisions of the Tax Cuts and Jobs Act, including permanent 100% bonus depreciation, expensing of domestic research costs, and amendments to the business interest expense limitation. In accordance with ASC Topic 740, Income Taxes, the Company recognized the effects of the new tax law in the period of enactment. As the Company maintains a full valuation allowance on its U.S. federal deferred tax assets, the legislation did not have a material impact on its consolidated financial statements for the year ended December 31, 2025.
Foreign Currency
The functional currency of each of the Company’s foreign subsidiaries is primarily the local currency of the country in which the subsidiary operates. The Company’s asset and liability accounts are translated at the current exchange rate as of the balance sheet date. Revenue and expense accounts are translated at the average exchange rate over the period. Adjustments resulting from the translation of the financial statements of the Company’s foreign subsidiaries into U.S. dollars are accumulated as a separate component of stockholders’ equity within accumulated other comprehensive income. Gains or losses resulting from transactions denominated in foreign currencies are included in foreign currency losses, net, within the Consolidated Statement of Comprehensive Income (Loss).
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Net Income (Loss) Per Share
Basic net income (loss) per share is based upon the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is based upon the weighted average number of common shares outstanding and potentially dilutive common shares during the period as determined by using the treasury stock method. Potential common equivalent shares are excluded if their effect is anti-dilutive.
Accumulated Other Comprehensive Income
Accumulated other comprehensive income is comprised of cumulative foreign currency translation adjustments and unrealized gains and losses on available-for-sale investments and is disclosed as a separate component of stockholders’ equity. Realized gain and loss amounts on available-for-sale investments are reclassified from accumulated other comprehensive income and recorded as interest and other income in the Consolidated Statements of Comprehensive Income (Loss). There were no realized gains or losses reclassified out of accumulated other comprehensive income for the years ended December 31, 2025, 2024 and 2023.
Significant Customers and Other Risks
Significant Customers
The Company’s primary sources of revenue and cash flow are the sales of ORLADEYO in the United States and license revenue related to the sale of the Company’s European ORLADEYO business to Neopharmed Gentili S.p.A. (see “Note 2—Divestiture of BioCryst Ireland Limited ”) for the year ended December 31, 2025.
ORLADEYO is generally distributed through an arrangement with a single specialty pharmacy in the United States. The specialty pharmacy subsequently sells ORLADEYO to its customers (pharmacy benefit managers, insurance companies, government programs and group purchasing organizations) and dispenses product to patients. Peramivir is also generally distributed through the same specialty pharmacy in the United States. The specialty pharmacy’s inability or unwillingness to continue these distribution activities could adversely impact the Company’s business, results of operations and financial condition. Product revenue where the specialty pharmacy is considered the customer was approximately 88%, 87%, and 89% of total product sales for the years ended December 31, 2025, 2024, and 2023, respectively. The Company is distributing ORLADEYO in other global markets directly or through other parties.
Risks from Third-Party Manufacturing and Distribution Concentration
The Company relies on a single source manufacturer for active pharmaceutical ingredient and finished drug product manufacturing of product candidates in development and on a single specialty pharmacy for distribution of approved drug product in the United States. Delays or disruption in the manufacture or distribution of any product could adversely impact the future procurement stockpiling of the Company’s commercial product, commercial revenue and product candidates.
Further, the Company’s drug development activities are performed by a limited group of third-party vendors. If any of these vendors were unable to perform its services, this could significantly impact the Company’s ability to complete its drug development activities.
Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, investments, and accounts receivable. The Company maintains its cash and cash equivalents with high-credit quality financial institutions in the United States. Such amounts may exceed federally-insured limits. The Company believes it has established guidelines for investment of its excess cash relative to diversification and maturities that maintain safety and liquidity. To minimize the exposure due to adverse shifts in interest rates, the Company maintains a portfolio of investments with an average maturity of approximately 12 months or less.
The Company’s receivables from sales of ORLADEYO are primarily due from one customer, resulting in a concentration of credit risk.
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Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 as of January 1, 2025. The adoption of this standard resulted in additional disclosures but did not have a material effect on the Company’s consolidated balance sheet, statement of comprehensive income (loss), or statement of cash flows (see “Note 14—Income Taxes”).
New Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public entities, on an annual and interim basis, to provide disaggregated disclosure of certain income statement expenses into specified categories within the footnotes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its disclosures. The Company does not expect the adoption of this ASU to have a material effect on its consolidated balance sheet, statement of comprehensive income (loss), or statement of cash flows.
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which clarifies and modernizes the accounting for costs related to internal-use software, eliminating references to project stages and clarifying the threshold entities apply to begin capitalizing costs. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted. The Company plans to early adopt ASU 2025-06 as of January 1, 2026. The Company does not expect the adoption of this ASU to have a material effect on its consolidated balance sheet, statement of comprehensive income (loss), or statement of cash flows.
The Company does not expect any other recently issued accounting standards to have a material impact to its financial statements or disclosures.
Note 2—Divestiture of BioCryst Ireland Limited
On June 27, 2025, the Company entered into a definitive agreement (the “Stock Purchase Agreement”) with BioCryst Ireland Limited (“BioCryst Ireland”), a wholly owned subsidiary that operates the European ORLADEYO business, and Neopharmed Gentili S.p.A. (“Neopharmed”). On October 1, 2025 (the “Closing”), under the terms of the Stock Purchase Agreement, the Company sold to Neopharmed all of its equity interests in BioCryst Ireland, which, together with its subsidiaries, held certain assets, rights, and employees related to the Company’s European ORLADEYO business.
Concurrent with the Closing of the transactions contemplated by the Stock Purchase Agreement, on October 1, 2025, the Company and BioCryst Ireland amended and restated their existing intellectual property licence agreement pursuant to which the Company will continue to grant to BioCryst Ireland certain commercialization, manufacturing, and development rights with respect to ORLADEYO in the Territory, as defined in the Stock Purchase Agreement (the “Amended and Restated IP Licence Agreement”). The Company retains ownership and control of the underlying intellectual property. The terms of the Amended and Restated IP Licence Agreement also extend to the pediatric line extension of ORLADEYO, subject to certain regulatory approvals.
At the Closing, the Company received total cash proceeds of $254,477, comprised of the purchase price of $250,000 and customary purchase price adjustments of $4,477 as set forth in the Stock Purchase Agreement. In addition, Neopharmed will pay the Company up to $14,000 if certain revenue milestones are achieved prior to December 31, 2032. Concurrent with the Closing, Neopharmed also paid a $15,000 royalty release fee to RPI 2019 Intermediate Finance Trust on the Company’s behalf. Pursuant to the Amended and Restated IP Licence Agreement, the Company is entitled to receive quarterly royalty payments from BioCryst Ireland equal to amounts owed under its Royalty Purchase Agreements with RPI and OMERS for the sale of ORLADEYO products in the Territory (See “Note 9— Royalty Financing Obligations”).
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In connection with the Closing, on October 1, 2025, the Company entered into the following additional agreements with BioCryst Ireland:
•a supply agreement, pursuant to which the Company will be the exclusive supplier of ORLADEYO products to BioCryst Ireland for commercialization in the Territory (the “Supply Agreement”);
•a global brand and support agreement, which provides for coordination of brand and regulatory activities between the Company and BioCryst Ireland regarding ORLADEYO products (the “Global Brand and Support Agreement”);
•a mutual transition services agreement, pursuant to which the Company and BioCryst Ireland will provide each other with certain transition services for the periods of time and for the compensation set forth under the agreement, on customary commercial terms (the “Transition Services Agreement”); and
•a trademark license agreement, pursuant to which the Company granted to BioCryst Ireland a non-exclusive transitionary license to use the “BioCryst” name, solely to develop, manufacture and commercialize ORLADEYO products in the Territory for a limited period of time, and an exclusive license to use the ORLADEYO product name to commercialize ORLADEYO products for such uses for the term of the Amended and Restated IP Licence Agreement, in each case subject to the terms and conditions set forth therein (the “Trademark License Agreement”).
The following table summarizes the carrying value of the major classes of assets and liabilities sold (in thousands):
October 1,
Cash and cash equivalents $ 14,840
Prepaid expenses and other current assets 1,902
Non-current assets 4,058
Accounts payable (1,714)
Other current liabilities (338)
Non-current liabilities (436)
Net assets sold $ 6,191
The Company accounted for the transaction as (i) a license of intellectual property and (ii) the sale of BioCryst Ireland. The Company recognized $243,271 as “License and other revenues” in the Consolidated Statements of Comprehensive Income (Loss) at Closing related to the license which represents functional intellectual property. The Company will recognize quarterly royalty payments and milestone revenue from the license as the ORLADEYO product sales in the Territory occur. During the three months ended December 31, 2025, the Company recognized $708 related to the first quarterly royalty payment in “License and other revenues” in the Consolidated Statements of Comprehensive Income (Loss).
The Company recognized a gain on sale of $3,566, which is recorded in “Other income” in the Consolidated Statements of Comprehensive Income (Loss). The gain reflects the excess of consideration allocated to BioCryst Ireland over the carrying value of its net assets, together with the release of $1,100 of cumulative translation adjustments upon deconsolidation.
In connection with the transaction, the Company modified certain stock option awards and restricted stock unit awards held by employees who transferred to Neopharmed. The modifications allowed previously unvested awards to continue to vest and extended the post-termination exercise periods for certain vested stock option awards, subject to the employees’ continued service to Neopharmed. These post-close services benefit Neopharmed and the incremental fair value conveyed through the modified awards represents consideration payable to Neopharmed and was recognized as contra-revenue when the revenue related to the license of intellectual property was recognized at Closing (see “Note 13— Stock-Based Compensation”).
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The European ORLADEYO business was not considered a discontinued operation under ASC 205-20, as it did not represent a strategic shift that would have a major effect on the Company’s operations or financial results. Therefore, the results of operations for the European ORLADEYO business are included in income from continuing operations for all periods presented. BioCryst Ireland and its subsidiaries were classified as held for sale beginning in the second quarter of 2025. The Company no longer maintains any foreign operations or foreign presence in the territories formerly served by BioCryst Ireland following completion of the transaction.
Note 3—Revenue
The Company recorded the following revenues for the years ended December 31, 2025, 2024, and 2023 (in thousands):
Years Ended December 31,
ORLADEYO:
ORLADEYO revenues represent total revenues from product sales and royalties. License revenue represents revenue related to the license of intellectual property to Neopharmed (see “Note 2— Divestiture of BioCryst Ireland Limited”) and quarterly royalty payments from BioCryst Ireland (see “Note 9— Royalty Financing Obligations”). Other revenues primarily relate to the Company’s product sales and royalties for peramivir.
No individual country outside of the U.S. exceeded 10% of total revenues for the years ended December 31, 2025, 2024, and 2023.
Note 4—Fair Value Measurements and Investments
Fair Value Measurements
Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value is determined based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. As a basis for considering such assumptions, U.S. GAAP establishes a three-tier value hierarchy, which prioritizes the inputs used to develop the assumptions and for measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets for identical assets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs for which there is little or no market data, which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.
Assets measured at fair value on a recurring basis were as follows (in thousands):
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Assets
Obligations of U.S. Government and its agencies — 246,175 — 246,175
Assets
Obligations of U.S. Government and its agencies — 236,460 — 236,460
The Company’s investments consist of fixed income securities whose valuations are based on observable direct and indirect inputs, primarily quoted prices of similar, but not identical, instruments in active markets or quoted prices for identical or similar instruments in markets that are not active. These fair values are obtained from independent pricing services.
Investments
The following tables summarize the fair value of the Company’s investments by type (in thousands):
As of December 31, 2025, the Company had one security with a total estimated fair value of $20,303 in an unrealized loss position. The Company believes the unrealized loss represents a temporary decline primarily resulting from
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interest rate changes. The Company does not have an intent to sell this investment, and it is more likely than not that the investment will be held until recovery of its amortized cost basis. As such, no allowance was recognized.
The following table summarizes the scheduled maturity for the Company’s investments at December 31, 2025 and 2024 (in thousands):
December 31,
Maturing after one year through two years 61,164 20,323
Note 5—Trade Receivables
Product sales
Receivables from product sales are recorded for amounts due to the Company related to sales of ORLADEYO and peramivir. At December 31, 2025 and 2024, receivables, net of reserves, related to sales of ORLADEYO were $92,351 and $76,282, respectively. At December 31, 2025 and 2024, receivables related to sales of peramivir were $10,491 and $564, respectively.
License and other revenue
At December 31, 2025 and 2024, receivables related to license and other revenue were $3,976 and $2,223, respectively.
Note 6—Inventory
At December 31, 2025 and 2024, the Company’s inventory related to ORLADEYO and peramivir.
The Company’s inventories consisted of the following (in thousands):
December 31,
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Note 7—Property and Equipment
Property and equipment consisted of the following (in thousands):
December 31,
Construction in progress — 97
Less accumulated depreciation and amortization (9,394) (12,349)
Property and equipment, net $ 8,783 $ 7,777
Depreciation expense for the years ended December 31, 2025, 2024, and 2023 was $1,389, $1,246, and $1,655, respectively.
During the year ended December 31, 2023, the Company recorded an impairment loss of $1,548 and contract termination fees of $440 related to the discontinuation of the Birmingham research facilities expansion, which was recognized in research and development expenses during the year ended December 31, 2023. The Company did not record any impairment losses during the years ended December 31, 2025 and 2024.
Note 8—Accrued Expenses
Accrued expenses consisted of the following (in thousands):
December 31,
Revenue-related reserves for discounts and allowances 26,632 32,116
Transaction-related costs 5,480 —
Note 9—Royalty Financing Obligations
On December 7, 2020, the Company and RPI 2019 Intermediate Finance Trust (“RPI”) entered into a Purchase and Sale Agreement (the “2020 RPI Royalty Purchase Agreement”), pursuant to which the Company sold to RPI the right to receive certain royalty payments from the Company for a purchase price of $125,000 in cash. Under the 2020 RPI Royalty Purchase Agreement, RPI is entitled to receive tiered, sales-based royalties on net product sales of ORLADEYO in the United States and certain key European markets (collectively, the “Key Territories”), and other markets where the Company sells ORLADEYO directly or through distributors (collectively, the “Direct Sales”) in an amount equal to: (i) 8.75% of aggregate annual net sales of ORLADEYO for annual net sales up to $350,000 and (ii) 2.75% of annual net sales for annual net sales between $350,000 and $550,000. No royalty payments are payable on annual Direct Sales over $550,000.
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Under the 2020 RPI Royalty Purchase Agreement, RPI is also entitled to receive a tiered revenue share on ORLADEYO sublicense revenue or net sales by licensees outside of the Key Territories (the “Other Markets”) equal to: (i) 20% of the proceeds received by the Company for upfront license fees and development milestones for ORLADEYO in the Other Markets, (ii) 20% of proceeds received on annual net sales of up to $150,000 in the Other Markets, and (iii) 10% of proceeds received by the Company on annual net sales between $150,000 and $230,000 in the Other Markets. No royalty payments are payable on annual net sales above $230,000 in the Other Markets.
On November 19, 2021, the Company and RPI entered into (i) a Purchase and Sale Agreement (the “2021 RPI Royalty Purchase Agreement” and together with the 2020 RPI Royalty Purchase Agreement, the “RPI Royalty Purchase Agreements”), pursuant to which the Company sold to RPI the right to receive certain royalty payments from the Company for a purchase price of $150,000 in cash, and (ii) a Purchase and Sale Agreement with OCM IP Healthcare Holdings Limited, an affiliate of OMERS Capital Markets (“OMERS”) (the “OMERS Royalty Purchase Agreement” and collectively with the RPI Royalty Purchase Agreements, the “Royalty Purchase Agreements”), pursuant to which the Company sold to OMERS the right to receive certain royalty payments from the Company for a purchase price of an additional $150,000 in cash.
Under the 2021 RPI Royalty Purchase Agreement, RPI is entitled to receive tiered, sales-based royalties on Direct Sales in an amount equal to: (i) 0.75% of aggregate annual net sales of ORLADEYO for annual net sales up to $350,000 and (ii) 1.75% of annual net sales of ORLADEYO for annual net sales between $350,000 and $550,000. No royalty payments are payable on Direct Sales over $550,000. RPI is also entitled to receive a tiered revenue share on ORLADEYO sublicense revenue or net sales by licensees in the Other Markets in an amount equal to (i) 3.0% of proceeds received by the Company on annual net sales of up to $150,000 in the Other Markets and (ii) 2.0% of proceeds received by the Company on annual net sales between $150,000 and $230,000 in the Other Markets. No royalty payments are payable on annual net sales above $230,000 in the Other Markets.
The royalties payable under the 2021 RPI Royalty Purchase Agreement are in addition to the royalties payable to RPI under the 2020 RPI Royalty Purchase Agreement.
Concurrent with entering into the 2021 RPI Royalty Purchase Agreement, the Company and RPI entered into a Common Stock Purchase Agreement pursuant to which the Company sold common stock to RPI for a premium of $4,269. The premium was deferred and is being amortized through interest expense using the effective interest method over the term of the applicable arrangement.
Under the OMERS Royalty Purchase Agreement, for the calendar quarter beginning October 1, 2023, OMERS was entitled to receive tiered, sales-based royalties on Direct Sales in an amount equal to: (i) 7.5% of aggregate annual net sales of ORLADEYO for annual net sales up to $350,000 and (ii) 6.0% of annual net sales of ORLADEYO for annual net sales between $350,000 and $550,000 (with no royalty payments payable on annual Direct Sales over $550,000). Commencing with the calendar quarter beginning January 1, 2024, OMERS is entitled to receive tiered, sales-based royalties on Direct Sales in an amount equal to: (i) 10.0% of aggregate annual net sales of ORLADEYO for annual net sales up to $350,000 and (ii) 3.0% of annual net sales of ORLADEYO for annual net sales between $350,000 and $550,000 (with no royalty payments payable on annual Direct Sales over $550,000).
Under the OMERS Royalty Purchase Agreement, OMERS is also entitled to receive a tiered revenue share on ORLADEYO sublicense revenue or net sales by licensees in the Other Markets in an amount equal to: (i) 20.0% of the proceeds received by the Company for upfront license fees and development milestones for ORLADEYO in the Other Markets, (ii) 20.0% of proceeds received by the Company on annual net sales of up to $150,000 in the Other Markets, and (iii) 10.0% of proceeds received by the Company on annual net sales between $150,000 and $230,000 in the Other Markets. No royalty payments are payable on annual net sales above $230,000 in the Other Markets. OMERS is also entitled to receive profit share amounts of up to 10% from certain other permitted sales in certain other markets.
Under the 2020 RPI Royalty Purchase Agreement, the Company is required to make royalty payments of amounts owed to RPI each calendar quarter following the first commercial sale of ORLADEYO in any country. Under the 2021 RPI Royalty Purchase Agreement, the Company is required to make payments to RPI in respect of net sales or sublicense revenue in each calendar quarter from and after October 1, 2021. Under the OMERS Royalty Purchase Agreement, the Company is required to make payments to OMERS in respect of net sales or sublicense revenue in each calendar quarter from and after October 1, 2023. OMERS will no longer be entitled to receive any payments on the date in which aggregate payments actually received by OMERS equals 155.0% of the $150,000 purchase price.
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The transactions contemplated by each of the Royalty Purchase Agreements are referred to herein as the “Royalty Sales”.
Under the Royalty Purchase Agreements, the Company has agreed to specified affirmative and negative covenants, including covenants regarding periodic reporting of information by the Company to RPI and OMERS, third-party audits of royalties paid under the Royalty Purchase Agreements, and restrictions on the ability of the Company or any of its subsidiaries to incur indebtedness other than certain royalty sales and as was permitted to be incurred under the terms of the Athyrium Credit Agreement (as defined in Note 10 herein) through its payoff and termination on April 17, 2023 or, subsequent to that date, the Pharmakon Loan Agreement (as defined in Note 10 herein), as applicable. See “Note 10—Debt” for further details on the Athyrium Credit Agreement and the Pharmakon Loan Agreement. The restrictions under the Royalty Purchase Agreements on the ability of the Company or any of its subsidiaries to incur indebtedness are eliminated after the achievement of certain specified milestones in the Royalty Purchase Agreements.
In connection with the Stock Purchase Agreement, RPI and OMERS provided their written consent of the consummation of the sale of the Company’s European ORLADEYO business. Concurrent with the Closing, Neopharmed paid a $15,000 royalty release fee to RPI on behalf of the Company, which is included in “License and other revenues” in the Consolidated Statements of Comprehensive Income (Loss), and the Company paid a $500 royalty release fee to OMERS. The payments were accounted for as a debt modification and the royalty release fees, totaling $15,500, were capitalized as a reduction to “Royalty financing obligations” in the Consolidated Balance Sheets and are being amortized as interest expense using the effective interest rate method. In accordance with the Stock Purchase Agreement, the Company will receive quarterly royalty payments from BioCryst Ireland equal to amounts owed under its Royalty Purchase Agreements with RPI and OMERS for the sale of ORLADEYO products in the Territory, which are recognized as “License and other revenues” in the Consolidated Statements of Comprehensive Income (Loss). See “Note 2—Divestiture of BioCryst Ireland Limited” for additional information on the sale of the Company’s European ORLADEYO business.
The cash consideration obtained pursuant to the Royalty Purchase Agreements is recorded in “Royalty financing obligations” in the Company’s Consolidated Balance Sheets. Deferred financing costs, which consisted primarily of advisory and legal fees, were capitalized as a reduction to “Royalty financing obligations” and are being amortized using the effective interest method over the terms of the arrangements. The fair values of the royalty financing obligations at the time of the transactions were based on the Company’s estimates of future royalties expected to be paid to the counterparties over the terms of the arrangements. The Company subsequently records the obligations at their carrying values using the effective interest method. As of December 31, 2025 and 2024, the carrying values of the royalty financing obligations under the Royalty Purchase Agreements approximated their fair values and were measured based on the Company’s current estimates of future payments to RPI and OMERS over the lives of the agreements, which are considered Level 3 inputs. The Company utilizes the prospective method to account for subsequent changes in the estimated future royalties to be paid by the Company to the counterparties over the lives of the arrangements. Under the prospective method, new effective interest rates are determined based on the revised estimates of future cash flows. The new effective interest rates are the discount rates that equate the present value of the revised estimates of remaining cash flows with the carrying amounts of the royalty financing obligations and will be used to recognize interest expense for the remaining periods. The Company periodically assesses the amount and timing of expected royalty payments using internal projections of future net product sales, which are based on key assumptions, including paid patients and price. To the extent such payments are greater or less than the Company’s initial estimates or the timing of such payments is materially different than its original estimates, the Company will prospectively adjust the amortization of the royalty financing obligations and the effective interest rates. On a quarterly basis, the Company assesses the projected royalty payments relative to the projected interest accretion for the next twelve months to determine if the royalty liability balances are reduced relative to the current outstanding liabilities. In such case of excess payments relative to interest accretion for the next twelve months, the excess payments are considered to be a short-term liability and classified within current liabilities in the Company’s Consolidated Balance Sheets.
During the year ended December 31, 2025, there were no significant changes to the amount and timing of expected royalties under the Royalty Purchase Agreements based on the Company’s latest forecasts related to ORLADEYO sales.
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The following table shows the royalty financing obligations activity for the years ended December 31, 2025, 2024, and 2023 (in thousands) as well as the effective interest rate as of December 31, 2025:
Effective interest rate 23.4 % — % 10.3 %
Cash paid for interest on the royalty financing obligations was $68,428, $77,155, and $29,337 for the years ended December 31, 2025, 2024, and 2023, respectively.
Note 10—Debt
Pharmakon Loan Agreement
On April 17, 2023, the Company entered into a $450,000 Loan Agreement (the “Pharmakon Loan Agreement”) with BioPharma Credit Investments V (Master) LP and BPCR Limited Partnership, as lenders, and BioPharma Credit PLC, as collateral agent for the lenders. Certain of the Company’s wholly-owned subsidiaries were guarantors to the Pharmakon Loan Agreement. The Pharmakon Loan Agreement provided for an initial term loan in the principal amount of $300,000 (the “Tranche A Loan”) funded on April 17, 2023 (the “Tranche A Closing Date”). The Company used a portion of the proceeds from the Tranche A Loan to repay the $241,787 of outstanding indebtedness (principal and interest due as of April 17, 2023) under the then-existing Athyrium Credit Agreement (defined below) and to pay associated transaction costs and fees, and used the remaining net proceeds of $25,805 for other general corporate purposes.
The Pharmakon Loan Agreement also provided for three additional term loan tranches, at the Company’s option, in principal amounts of $50,000 each (each a “Subsequent Tranche Loan” and, collectively with the Tranche A Loan, the “Pharmakon Term Loans” and each, a “Pharmakon Term Loan”). The Company chose not to request any Subsequent Tranche Loans and the options have since expired. The maturity date of the Pharmakon Loan Agreement was April 17, 2028 (the “Maturity Date”), the fifth anniversary of the Tranche A Closing Date.
The Pharmakon Loan Agreement provided for quarterly interest-only payments until the Maturity Date, with the unpaid principal amount of the outstanding Pharmakon Term Loans due and payable on the Maturity Date. During the first 18 months following the Tranche A Closing Date, the Company had the option to make a portion of the applicable interest payment on the Tranche A Loan in-kind (a “Pharmakon PIK Interest Payment”) by capitalizing as principal up to 50% of the amount of interest accrued on the Tranche A Loan during the applicable interest period. The Pharmakon Term Loans bore interest at a rate equal to the three-month Secured Overnight Financing Rate (“SOFR”), which could be no less than 1.75%, plus 7.00%, per annum or, for each interest period in which a Pharmakon PIK Interest Payment was made, with respect to the Tranche A Loan, SOFR plus 7.25%, per annum.
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The Tranche A Loan accrued interest at an effective interest rate of 12.27% during the period in which the debt was outstanding for the year ended December 31, 2025, compared to 13.14% and 13.30% for the years ended December 31, 2024 and 2023, respectively.
The Pharmakon Loan Agreement also contained representations and warranties and affirmative and negative covenants customary for financings of this type, as well as customary events of default.
In 2025, the Company paid off in full the outstanding principal balance on the Pharmakon Term Loan in three separate prepayments totaling $323,704. In accordance with the Pharmakon Loan Agreement, the voluntary prepayments were subject to a prepayment premium equal to 3.00% of the principal amount of the Pharmakon Term Loan being prepaid. As a result, the Company incurred $9,711 and $173 in prepayment premiums and fees, respectively. Additionally, unamortized deferred financing costs of $7,448 associated with the Pharmakon Term Loan were written-off at the time of the repayments. Collectively, the prepayment premiums, fees, and unamortized deferred financing costs totaled $17,332 and are reflected as a one-time loss on extinguishment of debt in the Consolidated Statements of Comprehensive Income (Loss) for the year ended December 31, 2025.
Interest expense and on the Tranche A Loan for the year ended December 31, 2025 was $23,274 and quarterly interest payments were paid at the end of each quarterly period.
As of December 31, 2024, the Company had total borrowings of $300,000 under the Pharmakon Loan Agreement. Interest expense on the Tranche A Loan for the year ended December 31, 2024 was $39,874. As allowable under the Pharmakon Loan Agreement, the Company designated and accounted for 50% of the quarterly interest payments for each of the three months ended March 31, 2024 and June 30, 2024 as a Pharmakon PIK Interest Payment and the total amount of $10,041 was added to the outstanding principal balance of the borrowing. The remaining 50% of the total quarterly interest payments for the three months ended March 31, 2024 and June 30, 2024 and the full quarterly interest payments for the three months ended September 30, 2024 and December 31, 2024 totaling $29,833 in aggregate was paid at the end of each quarterly period. As of December 31, 2024, borrowings, including the Pharmakon PIK Interest Payments, totaled $323,704.
As of December 31, 2023, the Company had total borrowings of $300,000 under the Pharmakon Loan Agreement. Interest expense on the Tranche A Loan for the year ended December 31, 2023 was $27,326. As allowable under the Pharmakon Loan Agreement, the Company designated and accounted for 50% of the quarterly interest payments for the year ended December 31, 2023 as a Pharmakon PIK Interest Payment and the total amount of $13,663 was added to the outstanding principal balance of the borrowing. The remaining 50% of the total quarterly interest payments of $13,663 was paid at the end of each quarterly period. As of December 31, 2023, borrowings, including the Pharmakon PIK Interest Payments, totaled $313,663.
The fair value of the debt approximated its carrying value based on prevailing interest rates as of the balance sheet date and was considered as Level 2 in the fair value hierarchy.
Debt fees and issuance costs incurred with the Tranche A Loan under the Pharmakon Loan Agreement totaled $11,147 and were deferred and amortized as interest expense on an effective interest rate method over the term of the Tranche A Loan. Deferred financing amortization of $1,387, $1,597, and $715 was recognized for the years ended December 31, 2025, 2024, and 2023, respectively.
Athyrium Credit Agreement
On December 7, 2020, the Company entered into a $200,000 Credit Agreement (the “Athyrium Credit Agreement”) with Athyrium Opportunities III Co-Invest 1 LP (“Athyrium”), as lender and as administrative agent for the lenders. Certain of the Company’s direct and indirect subsidiaries were guarantors to the Athyrium Credit Agreement. The Athyrium Credit Agreement provided for an initial term loan in the principal amount of $125,000 (the “Term A Loan”), which was received by the Company on December 7, 2020.
The Athyrium Credit Agreement also provided for two additional term loans, at the Company’s option, in the respective principal amounts of $25,000 (the “Term B Loan”) and $50,000 (the “Term C Loan” and, collectively with the Term A Loan and the Term B Loan, the “Athyrium Term Loans”). Having achieved all required revenue-based milestones, the Company exercised its option to draw upon the additional funding available under the Athyrium Credit Agreement, borrowing the principal amounts of $25,000 under the Term B Loan and $50,000 under the Term C Loan. Both the Term B Loan and the Term C Loan were funded on July 29, 2022 in the aggregate principal amount of $75,000. The Company
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incurred deferred debt fees and issuance costs associated with the Term B and Term C Loans of $3,428. The Term B Loan and the Term C Loan were subject to all the provisions under the Athyrium Credit Agreement.
The Athyrium Term Loans accrued interest at an effective interest rate of 13.71% during the period in which the debt was outstanding for the year ended December 31, 2023.
Quarterly interest payments under the Athyrium Credit Agreement for the year ended December 31, 2023 totaled $8,476. Deferred financing amortization of $1,069 was recognized for the year ended December 31, 2023.
On April 17, 2023, the outstanding principal of the Athyrium Term Loans, including the Athyrium PIK Interest Payments of $240,452 along with interest accrued of $1,335 for the first 17 days of the quarterly interest period ended June 30, 2023, was repaid with the funding received through the Pharmakon Loan Agreement.
In accordance with the Athyrium Credit Agreement, upon the prepayment or repayment of all or any of the Athyrium Term Loans, the Company was obligated to pay an exit fee in an amount equal to 2.00% of the principal amount of the Athyrium Term Loans prepaid or repaid. In addition, each Athyrium Term Loan was subject to a 1.00% commitment fee at its respective borrowing date. As a result, the Company incurred prepayment and final payment fees of $17,261 upon repayment of the Athyrium Term Loans. Additionally, unamortized deferred financing costs of $11,758 associated with the Athyrium Term Loans were written off at the time of repayment. Collectively, the prepayment and final payment fees and unamortized deferred financing costs totaled $29,019 and are reflected as a one-time loss on extinguishment of debt in the Consolidated Statements of Comprehensive Income (Loss) for the year ended December 31, 2023.
Note 11—Lease Obligations
The Company leases certain assets under operating leases, which primarily consist of real estate leases, and finance leases, which generally consist of laboratory equipment leases and office equipment leases. The Company’s real estate agreements expire at various times between 2026 through 2033 and include renewal options that range from three to five years in length.
Lease expense under operating and finance leases was as follows (in thousands):
Years Ended December 31,
Finance lease expense:
Other supplemental information related to leases was as follows:
As of December 31,
Weighted average remaining lease term:
Operating leases 9.4 years 9.0 years
Finance leases 2.3 years 2.6 years
Weighted average discount rate:
The following table summarizes the presentation in the Consolidated Balance Sheets of the Company’s operating leases (in thousands):
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As of December 31,
Operating lease assets:
Operating lease assets, net Right of use assets $ 7,548 $ 8,061
Operating lease liabilities:
Total operating lease liabilities $ 8,888 $ 8,861
The following table summarizes the presentation in the Consolidated Balance Sheets of the Company’s finance leases (in thousands):
As of December 31,
Finance lease assets:
Finance lease assets, net Right of use assets $ 2,655 $ 3,947
Finance lease liabilities:
Total finance lease liabilities $ 2,753 $ 3,959
Operating lease assets are recorded net of accumulated amortization of $2,305 and $6,065 as of December 31, 2025 and 2024, respectively. Finance lease assets are recorded net of accumulated amortization of $3,798 and $4,059 as of December 31, 2025 and 2024, respectively.
Maturities of lease liabilities as of December 31, 2025 are as follows (in thousands):
Operating Leases Finance Leases
Supplemental cash flow information related to leases was as follows (in thousands):
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