Zevra Therapeutics, Inc. Q1 FY2026 Earnings Call

Good afternoon, and thank you for joining Zevra Therapeutics, Inc.'s First Quarter 2026 Financial Results and Corporate Update Conference Call. Today's call is being recorded and will be available via the Investor Relations section of the company's website later today. The host for today's call is Nichol L. Ochsner, Zevra Therapeutics, Inc.'s Vice President of Investor Relations and Corporate Communications. Thank you, and welcome to those who are joining us. Today, we will provide an overview of our recent accomplishments, followed by a review of our first quarter 2026 financial results. I encourage you to read our financial results news release, which was distributed this afternoon and is available in the Investors section of our website. Before we begin the call, please note that certain information shared today will include forward-looking statements. Actual results may differ materially from those stated or implied in any forward-looking statements due to risks and uncertainties associated with Zevra Therapeutics, Inc.'s business. Forward-looking statements are not promises or guarantees and are inherently subject to risks, uncertainties, and other important factors that may lead to actual results differing materially from projections made, and should be evaluated together with the Risk Factors section in our most recent quarterly report on Form 10-Q, our annual report on Form 10-K, and our filings with the SEC. I am pleased to welcome Zevra Therapeutics, Inc.'s management team members participating in today's call: Neil F. McFarlane, Zevra Therapeutics, Inc.'s President and Chief Executive Officer; Joshua M. Schafer, our Chief Commercial Officer; and Justin Renz, our Chief Financial Officer. Our Chief Medical Officer, Adrian Quartel, will also be available for today's question and answer session. Now it is my pleasure to hand the call over to Neil.

Thank you. And welcome to everyone joining our quarterly call this afternoon. We are building a durable rare disease company grounded in disciplined execution, financial strength and a commitment to patients. We continue to advance our strategic plan, delivering strong performance and positioning ourselves for long-term growth. We made substantial progress in establishing MyPlifer as a foundational treatment for Niemann-Pick disease type C, or NPC, in the U.S. by delivering meaningful clinical impact to patients and pursuing multiple pathways to expand patient access globally. We are also advancing our late-stage asset, celiprolol, through a Phase III study for the treatment of vascular Ehlers-Danlos syndrome, or VEDS, and executing several approaches to accelerate its development. To sharpen our focus on high-impact activities and remove operational distractions, we optimized the portfolio by divesting non-core assets with the sale of the SDX portfolio to CAMAi Therapeutics for $50 million and concurrently resolved the legal dispute. Our balance sheet is strong, with a cash position of $236.8 million and no outstanding debt, providing financial flexibility to drive growth. In the first quarter, total net revenue was $36.2 million, which is a 78% increase over Q1 2025. We have now reached a total of 170 prescription enrollment forms for MyPlifer from launch through March 31, nine of which were received in the first quarter. Recall, the estimated prevalence of NPC patients in the U.S. is approximately 900, of whom 300 to 350 are currently diagnosed. Thus, we have successfully reached roughly half of this patient population and continue to have traction with newly diagnosed patients. This is a significant early launch achievement and remains consistent with the meaningful opportunity ahead for continued growth. As a reminder, we have established a solid patent position for MyPlifer. It received orphan drug designation in the U.S., enabling marketing exclusivity through 2031. Consistent with our strategy to maximize the potential growth drivers for our business, we are pursuing a patent term extension through the U.S. Patent Office and await their decision, which could provide coverage beyond 2031. Through our Global Expanded Access Program, or EAP, we are able to deliver a much-needed treatment to patients with NPC in certain European countries and select territories outside of Europe, including the U.K. As of the end of the quarter, we have a total of 122 patients enrolled in the EAP across geographies. Our global EAP is comprised of multiple access programs, including compassionate use and named patient reimbursement. Within each, we expect variability in enrollment and reimbursement over the first few years until the patient base has stabilized, consistent with our experience in the French EAP program. In Europe, there are an estimated 1,100 individuals with NPC. Diagnosis rates exceed those in the U.S., largely because the earlier approval of miglustat established physician awareness and enabled patient identification. To support the geographic expansion, with a potential approval of aramcholamol in Europe, we have a marketing authorization application under review by the European Medicines Agency, or EMA. We submitted our responses to the EMA's 120-day list of questions within the 90-day clock stop period and are progressing along the standard review process to make aramcholamol available to the European NPC community. As a reminder, we have also received orphan medicinal product designation in Europe for the treatment of NPC. Turning to our late-stage pipeline, our Phase III DISCOVER trial is evaluating celiprolol for the treatment of VEDS, a rare inherited connective tissue disorder caused by COL3A1 gene mutations that weaken the walls of blood vessels and hollow organs, and can cause arterial rupture or dissection, among other complications. Approximately 90% of patients experience an event by the age of 40. There are roughly 7,500 individuals living with VEDS in the U.S. Celiprolol is a selective beta-adrenoceptor modulator that works by inducing vascular dilation and smooth muscle relaxation, and thereby reducing mechanical stress on tissues of the arterial wall and hollow organs. Currently, there are no approved therapies for VEDS. Our commercialization strategy for celiprolol is focused exclusively in the U.S.; there is a clear opportunity to fill an unmet need. While not approved in Europe for VEDS, celiprolol is the primary off-label treatment in several European countries. This use is supported by the results of several studies, including long-term European cohorts. We have enrolled a total of 62 patients in the DISCOVER trial, with 10 patients enrolled in the first quarter. This is an event-driven study, and we have two confirmed events out of the 28 events required to trigger the interim analysis. We continue to implement activities aimed at driving enrollment, including building a network of genetic testing centers to improve diagnosis, as well as strengthening connections with key specialists who manage these patients. In parallel, following the FDA Type C meeting we had in the first quarter, we are preparing for a follow-up meeting in the second half of the year to explore pathways to accelerate its clinical development. In summary, we have a clear vision to become a leading rare disease therapeutics company, and we are motivated by the momentum and the opportunity that this phase of growth brings. I will now turn the call over to Josh to review our commercial performance in more detail. Josh?

Thank you, Neil, and good afternoon. Before reviewing the quarterly progress with MyPlifer, I will provide a quick background on NPC. NPC is a rare lysosomal storage disorder caused by mutations in genes that impair intracellular cholesterol and lipid trafficking, leading to the abnormal lipid accumulation in the brain, liver, spleen, and other organs. The onset and course of disease are heterogeneous, ranging from infancy to adulthood, with progressive neurodegeneration that can vary in both speed of onset and clinical presentation. The extensive data generated for MyPlifer in NPC has shown long-term meaningful patient outcomes through the most expansive clinical development program in NPC to date. We have more than five years of data across more than 270 NPC patients worldwide through clinical studies, including our pivotal trial, open-label extension study, global EAP, and pediatric sub-study, all demonstrating MyPlifer's efficacy and safety. Notably, MyPlifer in combination with miglustat is the first and only disease-modifying therapy shown to halt disease progression at 12 months in a randomized controlled trial based on the validated NPC Clinical Severity Scale. The onset of benefit is rapid, with improvements noted at the first clinical evaluation time point of 12 weeks, and has durable efficacy with treatment effects sustained for over five years. We are pleased to announce that MyPlifer was added to the NPC clinical practice guidelines, which were recently published in the Journal of Inherited Metabolic Disease, marking the first update to the guidelines since initial publication in 2018. These guidelines discuss the heterogeneity of the disease and reinforce that the NPC Clinical Severity Scale and genetic testing are the most reliable clinical endpoints in confirmation of diagnosis. The guidelines also point out, consistent with our messaging, that early detection is critical to delay disease progression. MyPlifer's mechanistic and clinical differentiation is resonating with prescribers and patients and is driving adoption. As Neil shared, we have received a total of 170 prescription enrollment forms since launch, with nine enrollment forms coming in Q1. Our commercial strategy is focused on three key priorities: accelerating time to diagnosis and treatment, driving demand, and facilitating access to MyPlifer. NPC remains significantly underdiagnosed and often diagnosed late due to heterogeneous symptoms. To enable earlier diagnosis, we have focused on education and engagement within the medical community through a strong presence at medical conferences where we regularly present data, and through our ongoing disease awareness campaign called Learn NPC, Read Between the Signs. Additionally, we have built a custom AI-driven targeting model to find likely NPC patients and have collaborations with providers of genetic testing to accelerate their diagnosis. As a result, we continue to see new enrollments from previously diagnosed as well as newly diagnosed patients. We are also finding patients and seeing demand for MyPlifer increase outside of the centers of excellence. Our prescriber base is expanding to include community-based prescribers, which we believe reflects the success of our targeting and education efforts. Many of these new prescribers did not know that they had NPC patients in their practice and were previously unfamiliar with the disease and treatment options. We help facilitate medical education efforts through various initiatives such as the recently launched Expert Connect, which connects HCPs unfamiliar with NPC to experts who can address questions regarding disease state and available treatment options. Our patient mix has grown to include adults and children equally. These trends give us confidence in the estimated prevalence of 900 people in the U.S. living with NPC. We remain focused on reaching as many patients as possible and expanding the total addressable market. From a market access standpoint, we have stable coverage of 69% and continue to achieve reimbursement through the medical exception pathway. Payer engagement continues to be focused on emphasizing robust clinical safety and efficacy data and the extensive real-world evidence seen in clinical practice that supports MyPlifer's value. We believe we are differentiating MyPlifer through its clinical benefit, support services, and broad patient access. Independent market research suggests MyPlifer is the preferred NPC therapy most trusted by clinicians and shown to improve balance, swallowing, cognition, and speech, and reduce falls. We receive heartwarming letters from families noting how positively impacted they have been by MyPlifer and the support of our Amplify Assist patient services program. Together, this feedback reflects the impact of our commercial activities and sets the stage for continued growth. With that, I will turn the call over to Justin to review our financial results.

Thank you, Josh. In addition to the financial details included in today's call, we encourage you to refer to our quarterly report on Form 10-Q for more detailed information, which we intend to file shortly. As Neil mentioned, in Q1 2026 we generated net revenue of $36.2 million, which was an increase in total net revenue of $15.8 million compared to $20.4 million in Q1 2025. This is comprised of $24.6 million from MyPlifer net sales in the United States, $300 thousand from OLPUVA, $10.2 million in net reimbursements from the global EAP for aramcholamol, and $1.1 million in royalty revenue. It is worth noting that we had one less shipment week of MyPlifer in the U.S. due to the first quarter delivery calendar, and as a result, channel inventory fell below the low end of our targeted range. Turning to recent business transactions, in March, we executed an agreement with CAMAi Therapeutics for the sale of the SDX portfolio for $50 million, monetizing assets that were not central to our core investment thesis. Per our contractual obligations, Aquestive Therapeutics received 10%, or $5 million, of gross proceeds. In the first quarter, we received $40.5 million of the $45 million in net proceeds. We received a final payment of $4.5 million in April. In connection with this transaction, we reviewed our capital allocation strategy and retired our debt early, saving on average approximately $8 million a year in future interest expense. We are now debt free, strategically positioned for growth, supported by a clean balance sheet. These one-time transactions impacted our first quarter financials. Accordingly, we recorded a one-time gain of approximately $43.3 million, partially offset by an approximately $10 million expense associated with the early extinguishment of debt, which is noted in the other income and expense section of our financial statements. Pivoting back to normal operations, during Q1 2026 our operating expenses were $25.2 million, which was an increase of $2.4 million compared to the same quarter a year ago. R&D expense was $4.4 million for Q1 2026, which was an increase of $1.1 million compared to Q1 2025, due primarily to increases in third-party costs and professional fees. SG&A expense was $20.8 million for Q1 2026, which was an increase of $1.2 million compared to Q1 2025, primarily due to an increase in professional fees, partially offset by a decrease in third-party spending. We utilized the vast majority of our usable net operating loss carryforwards, and as a result of the multiple one-time transactions that we recorded in the first quarter, we incurred an estimated tax provision of $6.9 million. Net income for Q1 2026 was $37.9 million, or $0.62 per basic and $0.60 per diluted share, compared to a net loss of $3.1 million, or $0.06 per basic and diluted share, for the same quarter a year ago. Excluding the one-time transactions as well as the related tax provision, for clear comparability across periods the estimated quarterly net income reported would be $11.5 million, or $0.18 per diluted share. As of March 31, 2026, total cash, cash equivalents, and investments were $236.8 million, which was a decrease of $2.1 million compared to December 31, 2025. As mentioned earlier, this decrease is attributable to deleveraging driven by our debt payoff, partially offset by the non-dilutive capital proceeds from the sale of the SDX portfolio and supported by our operating income. Collectively, these factors have further fortified our balance sheet. We remain well positioned with the financial capacity to execute on our strategic priorities independent of the capital markets. And now I will turn the call back to Neil for his closing remarks. Neil?

Thanks, Justin. Our corporate profile has evolved significantly with the execution against the strategic pillars we introduced a little over a year ago. We are delivering strong commercial execution while thoughtfully monetizing the assets that are not core to our business. We relocated our corporate headquarters to Boston, a hub of biotech innovation, and we strengthened our leadership by attracting seasoned professionals to our executive management team and board of directors, bringing valuable experience and perspective. These efforts, combined with prudent financial stewardship, are positioning us to deliver on our vision. As we advance through 2026, we are anchored by a clinically meaningful commercial product with multiple opportunities for global growth, a late-stage pipeline, and a strong financial position. Our collective team at Zevra Therapeutics, Inc. is energized by the numerous opportunities we have to expand our impact for people living with rare diseases. Operator? Please open the line for questions.

Thank you. And our first question today comes from Kristen Kluska with Cantor Fitzgerald. Your line is now open.

This is Iain on Kristen's line. Congrats on the quarter updates here, and thank you for taking our questions. First, now that MyPlifer has been added to the NPC clinical practice guidelines, we are just wondering what this means for physician adoption. Are these doctors now formally advised to consider MyPlifer when treating these patients?

Thank you for the question. We are really pleased that, as we have been previously communicating, these guidelines were in process and really came out quite fast after the introduction of new products that were approved in the U.S. It really reinforces the NPC Clinical Severity Scale as the tool that shows disease progression, genetic testing as a key endpoint and diagnostic tool, and the complexity of the disease. When we think about the heterogeneity of both infantile versions and adult versions of the disease, it is really important to detect early in order to be able to delay progression. But really importantly, the combination therapy being considered for NPC was one of the major takeaways. I will ask Josh to talk a little bit about some of the impacts that we see and, quite frankly, hurdles that are lowered with these guidelines that have been published.

Yes. Thanks, Neil. Just to add to what Neil said, we are also really pleased that the guidelines addressed the need for early detection and that early treatment helps delay progression. It also went on to talk about the importance of using combination therapy in patients who have been diagnosed with NPC. This is really important because these are the opinions of a select group of key opinion leaders that we are now able to use, communicate, and help build confidence and consistency in the way that some HCPs who might not be as familiar with NPC can now use this as a consistent guide for their treatment.

Thank you for that color. And then second, do you have a sense of the proportion of the patients that are identified through the genetic testing that you are conducting and the AI-driven predictive model that ultimately convert onto the drug? I guess, and just related to that, I was wondering what feedback you hear from the physicians that are managing these patients in terms of how they are reacting to these data-driven identification approaches that you are using? Thank you so much.

Wonderful question, and thanks for outlining our commercial strategy really clearly for us. Let me ask Josh to touch on some of the key priorities we are executing against and some of the feedback that we are getting.

Yes. We mentioned in the prepared remarks, we have three key priorities from a commercial perspective. The first is to accelerate the time to diagnosis and treatment, and we are seeing that through our disease awareness campaign, as well as some of the collaborations with the genetic testing companies. Our second priority is to really drive demand, and you are seeing that in the enrollments that we have been able to get over the past quarter and more. And then facilitate access, with 69% of covered lives currently able to access MyPlifer and the others we are able to do through medical exception pathways. So we feel really confident in our line of sight for more patients given what we are seeing today, which is a nice mix of newly diagnosed as well as previously diagnosed patients.

Thank you. And our next question comes from Kambi Ziyazi with BTIG. Your line is now open.

Hi, team. EAP revenue growth was quite robust. Is France driving that growth or other countries? And how should we think about geographic composition of the EAP as a leading indicator where commercial demand may concentrate post EU approval?

Thank you for the question. Welcome to the analyst coverage. As we reported, 122 patients enrolled in Q1 2026. This really encompasses multiple access programs we have and multiple territories. In Europe, we have had outstanding, for quite some time, our French EAP experience, which we have previously guided and consistently receive about $10 million net per year now that our patient base has stabilized in that territory. That is on an annual basis. Today, we have new markets that are coming on, and that variability in ordering pattern and the rates of new enrollments is expected. We have both compassionate use as well as named patient reimbursement ability that we continuously guide towards. It is early. We have new distributors. We are really pleased with the continued inbound interest in these markets. And our goal is to really expand access to as many markets as we can while still focusing on our key territories in the U.S. and expanding the diagnosis and treatment, along with our global expansion, i.e., Europe and the EMA as well.

Any quantitative milestones or leading indicators you are tracking internally around your bespoke AI-driven patient identification and genetic testing efforts and identifying newly diagnosed NPC patients?

Let me ask Josh to talk about some of those strategies that are starting to really give us confidence in the total addressable market.

Yes. We monitor and measure a number of metrics internally. We are measuring how many patients we find that are newly diagnosed. We are looking at how many new prescribers we are able to bring into the mix as well. And then other interesting dynamics, such as whether patients were in specialty centers versus community practices, to really understand as much as we can about these patients. This program is working extremely well and is helping clinicians who we know are diagnosing NPC to accelerate their diagnosis and transition patients to treatment.

Good afternoon. What does your competitive intelligence tell you about your share versus the competitor in the market? And do you know of any cases where payers are allowing competitor products?

Thanks, Sumant. To double click on this a little, you are correct that competition exists because of the complexity of the disease as well as differing physician practice patterns. We are actually seeing success in getting those patients covered from a commercial perspective. These guidelines, I think, are going to continue to help. We believe that bodes really well for us given our label for disease modification, halting the progression of the disease, and the durable effects that we see.

A little bit more in practice, clinicians want to be able to treat patients from as many different angles as possible. We have seen that treatment guidelines support combination approaches. The patients that we are treating now, some of them very likely would have been treated in the marketplace in different ways, and so we can see coverage is continuing to be achieved through formulary processes. We are also able to secure coverage for combination therapy via medical exception pathways when needed.

On celiprolol, we know you plan to meet with the FDA again in the second half of the year to move faster to bring this product to VEDS patients.

Last call, we had a Type C meeting in Q1, and the conversation was constructive and informative. We are now, in the early part of 2026, continuing to focus on enrollment activities and preparing for a follow-up discussion with the FDA in the second half of the year to explore potential pathways to accelerate development. It is a bit early to provide more detail, but we remain focused on boosting enrollment and engaging regulators.

Our next question comes from Lynn with Guggenheim Securities. Your line is now open.

Apologies if this has already been asked. I am jumping between a few calls. Do you have any update from the 120-day—day 120—on the updated CHMP opinion? Thanks.

Within the responses that are there, I will not get into the specifics. I would continue to say that we have not seen any new questions that we were unable to address. The EMA review is progressing along the standard timeline. As a reminder, the totality of the data includes over five years of open-label extension data, our EAP experience, and the pivotal study, and we look forward to our next engagement with the European regulators.

Thank you.

And again, speaking to the HCP community here, how heterogeneous are they? Diagnosis is delayed, and then channel inventory was below the lower end of the preferred range at the end of the quarter—any additional context?

Thank you, Jason. Let me start with the clinical heterogeneity. When you know one patient, you really know one patient: one patient may present with a primary symptom that is epilepsy, another may present with organomegaly or psychiatric symptoms. Because of that, as Josh talked about, the predictive modeling, claims data, and targeted outreach are important ways we are identifying patients and expanding diagnosis. As I mentioned, we have discussed the prevalence estimates; we believe we are making progress in identifying patients across the spectrum. Let me ask Josh to talk a little bit about some of the characteristics we're seeing in newly diagnosed patients.

Yes. Just to bring an example, there was a case of a toddler who had an enlarged spleen, and that is what we are seeing in some pediatric presentations. On the other end of the spectrum, there was an adult who had been misdiagnosed with multiple sclerosis for years, and then underwent genetic testing and confirmed that it was NPC. So it really runs the gamut, but there are some similarities and some patterns that we are able to identify, and we are continuing to educate physicians. We have a strong presence at medical conferences, and we publish data and provide resources to help clinicians recognize the signs.

And Jason, let me hand off to Justin to comment on the channel inventory situation. As we mentioned earlier, the inventory at quarter-end was below our target primarily because we had one less shipment week in the quarter. We expect channel inventory to normalize and return to our targeted range by the end of the second quarter.

Next question will come from Brandon Folkes with H.C. Wainwright. Your line is now open.

Maybe just two from me. Any color on the time from submitting an enrollment form to getting on product and how that is trending at this stage of the launch? And then secondly, is there a difference in net revenue realized per patient if it goes through a medical exception versus a patient whose insurance falls into the 69% of covered lives currently? Thank you.

Thanks, Brandon. Let me ask Josh to talk a little bit about the enrollment timelines that we are seeing now.

Yes. I think your question was really around the time from when an enrollment form comes in to when a patient receives therapy, and it is varied. It is largely dependent on the payer type, whether it is government or commercial. We are seeing in Q1 we had a number of patients who went through a reauthorization process, which is very typical at the beginning of the year, as patients might either change plans or plans might change their policies. And so that had an impact on the first quarter, and we are working through those reauthorizations. So it is a little difficult to give you an average because of the reauthorizations that took place in the first quarter. For most commercial plans, the pathway can be relatively quick once authorizations are obtained, and for government plans the timelines can be more variable because of the specifics of the plan and required documentation.

Your second question might have to—this is about, I guess, like, what is the priority to grow the 69% of covered lives given your market? And, I guess, is there any difference in revenue per patient that goes through insurance versus medical exception?

I will ask Josh to opine. But the 69% of covered lives allows you to be on a formulary. It does not necessarily guarantee a preferred position on the formulary, and it does speed up the process. A lot of our education that has gone to payers so far has really allowed us to educate on the clinical benefits with the medical directors of the plan and achieve what we believe is a strong covered life metric. The important component of your question, which is maybe getting into potential gross-to-net, is that we do not have broad contracting today. So it is standard governmental discounts along with distribution margins and the like. So the net price has not really changed except for typical variability in gross-to-net on a quarter-over-quarter basis.

Yes, and to build on that, the 69% is meaningful and we do intend to grow that. We are making steady progress in that area, largely by discussing the clinical differentiation of MyPlifer. The guidelines certainly will help those payer discussions as well. But as you point out, having coverage on a formulary does not change the fact that the medical exception pathway exists for nearly every plan, so it does not prevent patients from receiving therapy. What formulary coverage does is reduce time to therapy and administrative burden. We have robust patient services resources that help patients and offices navigate this process, and our goal is to make MyPlifer as accessible to patients as possible through both increasing covered lives and providing these patient services.

Great. Thank you very much. And congrats again on all the success.

Thank you. This concludes the Q&A portion of today's call. I will now turn the call back to Neil for any additional or closing remarks.

Thank you for joining our call today. We look forward to keeping you apprised of our future progress. Have a wonderful evening.

This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.