zvra20240331

zvra20240331_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From to

Commission File Number: 001-36913

Zevra Therapeutics, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		20-5894398
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1180 Celebration Boulevard, Suite 103, Celebration, FL		34747
(Address of Principal Executive Offices)		(Zip Code)

(321) 939-3416

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address, and Former Fiscal Year if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

ZVRA

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 3, 2024, the registrant had 41,853,494 shares of common stock outstanding.

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INDEX

ZEVRA THERAPEUTICS, INC.

FORM 10-Q

		Page

	PART I — FINANCIAL INFORMATION

Item 1.	unaudited CondeNSed CONSOLIDaTED Financial Statements
	UNAUDITED Condensed CONSOLIDATED Balance Sheets as of MARCH 31, 2024, and December 31, 2023	4
	UNAUDITED Condensed CONSOLIDATED Statements of Operations for the three Months ended MARCH 31, 2024, and 2023	5
	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS FOR THE THREE MONTHS ENDED MARCH 31, 2024, AND 2023	6
	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 2024, AND 2023	7
	Unaudited condensed CONSOLIDATED Statements of Cash Flows for the THREE months ended MARCH 31, 2024, and 2023	9
	Notes to unaudited Condensed CONSOLIDATED Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40

	PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities AND Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43

	Signatures	44

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “would,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “assume,” “intend,” “potential,” “continue” or other similar words or the negative of these terms. We have based these forward-looking statements largely on our current expectations about future events and financial trends that we believe may affect our business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in Part II, Item 1A. "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q and Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024. Accordingly, you should not place undue reliance upon these forward-looking statements. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur, the timing of events and circumstances and actual results could differ materially from those anticipated in the forward-looking statements. Forward-looking statements contained in this report include, but are not limited to, statements about:

	●	our ability to integrate Acer (as defined below) into our business successfully or realize the anticipated synergies and related benefits of the Merger (as defined below);

	●	the progress of, outcome or and timing of any regulatory approval for any of our product candidates and the expected amount or timing of any payment related thereto under any of our collaboration agreements;

	●	our ability to remediate the material weakness we have identified and the timing thereof;

	●	our ability to continue as a going concern;

	●	the progress of, timing of and expected amount of expenses associated with our research, development and commercialization activities;

	●	our ability to raise additional funds on commercially reasonable terms, or at all, in order to support our continued operations;

	●	the sufficiency of our cash resources to fund our operating expenses and capital investment requirements for any period;

	●	the expected timing of our clinical trials for our product candidates and the availability of data and results of those trials;

	●	our expectations regarding federal, state and foreign regulatory requirements;

	●	the potential therapeutic benefits and effectiveness of our products and product candidates;

	●	the size and characteristics of the markets that may be addressed by our products and product candidates;

	●	our intention to seek to establish, and the potential benefits to us from, any strategic collaborations or partnerships for the development or sale of our products and product candidates; if approved;

	●	our expectations as to future financial performance, expense levels and liquidity sources;

	●	the timing of commercializing our products and product candidates, if approved;

	●	senior leadership and board member transitions and refreshments; and

	●	other factors discussed elsewhere in this report.

The forward-looking statements made in this report relate only to events as of the date on which the statements are made. We have included or made reference to important factors in the cautionary statements included in this report, particularly in the section entitled "Risk Factors" where we make reference to Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. Except as required by law, we do not assume any intent to update any forward-looking statements after the date on which the statement is made, whether as a result of new information, future events or circumstances or otherwise.

Note Regarding Company Reference

Unless the context otherwise requires, we use the terms “Zevra,” “Company,” “we,” “us” and “our” in this Quarterly Report on Form 10-Q to refer to Zevra Therapeutics, Inc., formerly known as KemPharm, Inc. prior to February 21, 2023. We have proprietary rights to a number of trademarks used in this Quarterly Report on Form 10-Q that are important to our business, including LAT® and the Zevra logo. All other trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, the trademarks and trade names in this Quarterly Report on Form 10-Q are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

On August 30, 2023, the Company and Aspen Z Merger Sub, Inc., an indirect wholly-owned subsidiary of Zevra (“Merger Sub”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Acer Therapeutics Inc. ("Acer"). On November 17, 2023 (the "Closing Date"), we completed the acquisition of Acer. Pursuant to the Merger Agreement, on the Closing Date, Merger Sub was merged with and into Acer (the "Merger"), with Acer continuing as the surviving entity and as a wholly-owned subsidiary of Zevra.

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PART I — FINANCIAL INFORMATION

Item 1.

unaudited condensed CONSOLIDATED Financial Statements

ZEVRA THERAPEUTICS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and par value amounts)

	*March 31,*			*December 31,*
	*2024*			*2023*
Assets
Current assets:
Cash and cash equivalents	$	42,849		$	43,049
Securities at fair value		9,868			24,688
Accounts and other receivables		8,305			17,377
Prepaid expenses and other current assets		1,868			1,824
Total current assets		62,890			86,938
Inventories		12,426			9,841
Property and equipment, net		695			736
Operating lease right-of-use assets		1,086			790
Goodwill		4,701			4,701
Intangible assets, net		67,699			69,227
Other long-term assets		1,786			94
Total assets	$	151,283		$	172,327

Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses	$	22,785		$	28,403
Line of credit payable		—			37,700
Current portion of operating lease liabilities		583			543
Current portion of discount and rebate liabilities		4,452			4,550
Other current liabilities		2,089			2,524
Total current liabilities		29,909			73,720
Secured promissory note		5,059			5,066
Line of credit payable		37,939			—
Warrant liability		11,535			16,100
Operating lease liabilities, less current portion		705			456
Discount and rebate liabilities, less current portion		8,781			7,663
Other long-term liabilities		8,537			7,458
Total liabilities		102,465			110,463

Commitments and contingencies (Note D)

Stockholders’ equity:
Preferred stock:
Undesignated preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of March 31, 2024 or December 31, 2023		—			—
Common stock, $0.0001 par value, 250,000,000 shares authorized, 43,426,186 shares issued and 41,850,494 shares outstanding as of March 31, 2024; 43,110,360 shares issued and 41,534,668 shares outstanding as of December 31, 2023		4			4
Additional paid-in capital		476,056			472,664
Treasury stock, at cost		(10,983	)		(10,983	)
Accumulated deficit		(416,400	)		(399,778	)
Accumulated other comprehensive income (loss)		141			(43	)
Total stockholders' equity		48,818			61,864
Total liabilities and stockholders' equity	$	151,283		$	172,327

See accompanying notes to unaudited condensed consolidated financial statements.

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ZEVRA THERAPEUTICS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

	*Three months ended March 31,*
	*2024*			*2023*
Revenue, net	$	3,425		$	3,176
Cost of product revenue (excluding $1,528 in intangible asset amortization for the three months ended March 31, 2024, shown separately below)		175			125
Intangible asset amortization		1,528			—
Operating expenses:
Research and development		12,277			8,655
Selling, general and administrative		9,931			7,227
Total operating expenses		22,208			15,882
Loss from operations		(20,486	)		(12,831	)
Other income (expense):
Interest expense		(735	)		(182	)
Fair value adjustment related to warrant and CVR liability		3,627			(1,545	)
Fair value adjustment related to investments		(27	)		196
Interest and other income, net		929			1,042
Total other income (expense)		3,794			(489	)
Loss before income taxes		(16,692	)		(13,320	)
Income tax benefit		70			103
Net loss	$	(16,622	)	$	(13,217	)

Basic and diluted net loss per share of common stock:
Net loss	$	(0.40	)	$	(0.38	)
Weighted average number of shares of common stock outstanding:
Basic and diluted		41,778,774			34,466,542

See accompanying notes to unaudited condensed consolidated financial statements.

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ZEVRA THERAPEUTICS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

	*Three months ended March 31,*
	*2024*			*2023*
Net loss	$	(16,622	)	$	(13,217	)
Other comprehensive loss:
Foreign currency translation adjustment		184			(176	)
Other comprehensive loss:		184		$	(176	)
Comprehensive loss	$	(16,438	)	$	(13,393	)

See accompanying notes to unaudited condensed consolidated financial statements.

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ZEVRA THERAPEUTICS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands)

			*Additional*		*Treasury*						*Other*			*Total*
	*Common*		*Paid-in*		*Stock,*			*Accumulated*			*Comprehensive*			*Stockholders'*
	*Stock*		*Capital*		*at cost*			*Deficit*			*Income (loss)*			*Equity*
Balance as of January 1, 2024	$	4	$	472,664	$	(10,983	)	$	(399,778	)	$	(43	)	$	61,864
Net loss		—		—		—			(16,622	)		—			(16,622	)
Stock-based compensation expense		—		2,119		—			—			—			2,119
Issuance of common stock in exchange for consulting services		—		56		—			—			—			56
Issuance of common stock as part of the Employee Stock Purchase Plan		—		71		—			—			—			71
Issuance of common stock for options exercised		—		1,146		—			—			—			1,146
Other comprehensive loss		—		—		—			—			184			184
Balance as of March 31, 2024	$	4	$	476,056	$	(10,983	)	$	(416,400	)	$	141		$	48,818

See accompanying notes to unaudited condensed consolidated financial statements.

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ZEVRA THERAPEUTICS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY, CONTINUED

(in thousands)

			*Additional*								*Other*			*Total*
	*Common*		*Paid-in*		*Treasury*			*Accumulated*			*Comprehensive*			*Stockholders'*
	*Stock*		*Capital*		*Stock, at cost*			*Deficit*			*Income*			*Equity*
Balance as of January 1, 2023	$	3	$	436,269	$	(7,536	)	$	(353,729	)	$	113		$	75,120
Net loss		—		—		—			(13,217	)		—			(13,217	)
Stock-based compensation expense		—		945		—			—			—			945
Shares repurchased as part of the Share Repurchase Program		—		—		(3,447	)		—			—			(3,447	)
Issuance of common stock in exchange for consulting services		—		42		—			—			—			42
Other comprehensive loss		—		—		—			—			(176	)		(176	)
Balance as of March 31, 2023	$	3	$	437,256	$	(10,983	)	$	(366,946	)	$	(63	)	$	59,267

See accompanying notes to unaudited condensed consolidated financial statements.

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ZEVRA THERAPEUTICS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	*Three months ended March 31,*
	*2024*			*2023*
Cash flows from operating activities:
Net loss	$	(16,622	)	$	(13,217	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		2,119			945
Non-cash interest expense		239			—
Depreciation and amortization expense		1,562			79
Fair value adjustment related to warrant and CVR liability		(3,627	)		1,545
Fair value adjustment related to investments		27			(196	)
Consulting fees paid in common stock		56			42
Loss (gain) on foreign currency exchange		229			(240	)
Change in assets and liabilities:
Accounts and other receivables		9,072			477

SEC Form 10-Q filed by Zevra Therapeutics Inc.