Zevra Therapeutics, Inc. (ZVRA) Earnings Call Transcript & Summary

Good afternoon, and thank you for joining Zevra's Second 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 Ochsner, Zevra'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 second 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 by any forward-looking statements due to risks and uncertainties associated with Zevra'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 the 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 other filings with the SEC. This call will also reference certain non-GAAP financial measures, including adjusted net income and adjusted net income per share. Quantitative reconciliations of these measures to the most directly comparable GAAP measures as well as information regarding the usefulness of these measures to management and investors are included in the earnings press release issued today, which is available on our website. I am pleased to welcome Zevra's management team members participating in today's call, Neil McFarlane, Zevra's President and Chief Executive Officer; Josh Schafer, our Chief Commercial Officer; and Justin Renz, our Chief Financial Officer. Now it's my pleasure to hand the call over to Neil.

Thank you, Nichol, and welcome to everybody joining our quarterly call this afternoon. At Zevra, our mission is to redefine what is possible in bringing life-changing therapies to people living with rare disease. Our strategy to unlock long-term value through focused execution has translated into measurable results across our business. For the second quarter, our net revenue was $39.7 million, a 53% increase year-over-year. This was driven by $30.2 million in net U.S. revenue for MIPLYFFA. Our commercial progress reflects continued momentum in reaching patients and successfully establishing MIPLYFFA in combination with miglustat as a foundational treatment for Niemann-Pick disease type C, or NPC, in the U.S. As of June 30, we had received a total of 184 prescription enrollment forms, 14 of which were received in the second quarter, bringing the total in the first 6 months of the year to 23. Additionally, we have strengthened our intellectual property position for MIPLYFFA with an Orange Book listing through 2041. We published long-term data from our U.S. Early Access Program and the findings from our pediatric substudy, further demonstrating the efficacy and safety of MIPLYFFA. We requested a reexamination of our arimoclomol Marketing Authorization Application, or MAA, by the Committee for Medicinal Products for Human Use, or CHMP, in the European Union. And we continue to build a strong financial foundation with more than $260 million in cash, cash equivalents and investments. Our strategic focus is reflected in the thoughtful portfolio decisions we are making, while maintaining an unwavering sense of urgency on behalf of patients. Most recently, we announced that following our oral explanation, the CHMP issued a negative opinion regarding the arimoclomol MAA. Subsequently, we are advancing the reexamination process, which will provide the opportunity to address the specific grounds cited in the CHMP opinion and have our comprehensive evidence package reviewed by a new rapporteur and co-rapporteur. This process typically takes 120 days from the submission of a reexamination to the opinion from the CHMP, which is expected in Q4. Importantly, as we advance through the European regulatory process, our commitment to the patient and the NPC community remains steadfast. We will maintain access to arimoclomol for eligible patients through our global Expanded Access Program, or EAP, which is comprised of compassionate use and reimbursed named patient programs that have enrolled 132 patients, with 10 added in the second quarter. As previously guided, we expect reimbursements beyond the French EAP to be highly variable in the first few years until the patient base has stabilized. Ordering patterns for patients outside of Europe remain unpredictable with some territories ordering a full year supply and others ordering on a monthly or quarterly basis. Simultaneously, we are evaluating opportunities to expand access to MIPLYFFA through the global EAP in response to strong interest from additional countries. This reflects our commitment to helping eligible patients outside the U.S. access treatment while building meaningful partnerships across the rare disease community. Additionally, we strengthened our U.S. intellectual property position for MIPLYFFA with an Orange Book listing that provides protection through 2041. We are still awaiting the determination for the separately requested patent term extension through the U.S. Patent Office, which if granted, would fall within the Orange Book coverage period. Together, our IP portfolio provides a strong foundation for the long-term commercial opportunity for MIPLYFFA. And we continue to invest in expanding and strengthening our protection beyond our current portfolio. At the same time, we are advancing celiprolol, a selective adrenoceptor modulator that induces vascular dilation and smooth muscle relaxation for the treatment of Vascular Ehlers-Danlos Syndrome, or VEDS. VEDS is a rare genetic connective tissue disorder caused by changes in the COL3A1 gene, leading to fragile walls in blood vessels and hollow organs, which can cause arterial rupture or dissection among other complications. Celiprolol has been shown to reduce the mechanical stress on these tissues. In our ongoing Phase III DISCOVER trial, we've enrolled a total of 66 patients, including four who were enrolled in the second quarter. As an event-driven study, 28 events are required to trigger the interim analysis, and we have three confirmed events thus far. We are focused on accelerating this program by implementing strategies to drive enrollment, including expanding our network of genetic testing centers and exploring options to advance our clinical development by engaging with the FDA. Following a type C meeting in Q1, we remain on track to reengage with the FDA in the second half of this year. In summary, our priorities remain clear: delivering innovation for people living with rare disease; creating sustainable value for our stakeholders; and fulfilling our commitment to the patients, healthcare providers and communities we serve. I'll now turn the call over to Josh to share more details regarding MIPLYFFA's commercial performance. Josh?

Thank you, Neil, and good afternoon. NPC is an ultra-rare genetic disease that causes significant neurological impairment and places a substantial burden on patients and families. Clinical manifestations can include dysfunction of ambulation, fine motor skills, swallowing and speech. The disease and its symptoms vary significantly across patients, reflecting its complexity and severity. Earlier this year, the NPC clinical practice treatment guidelines were updated to further characterize the disease and reflect new advances in treatment since its last publication in 2018, including the addition of MIPLYFFA. Importantly, the guidelines recommend considering combination therapy for all patients with confirmed NPC. As a reminder, MIPLYFFA is differentiated as the only FDA-approved treatment for NPC with established efficacy and safety indicated for use in combination with miglustat. The randomized controlled pivotal study demonstrated the combination halted NPC disease progression at 12 months, as assessed by the rescored 4-domain NPC Clinical Severity Scale, a validated measurement of NPC progression. The onset of benefit was rapid with clinical effects sustained over the long-term. MIPLYFFA's clinical data, combined with a growing awareness across the NPC community, continues to support its adoption. As Neil mentioned, we have received 184 prescription enrollment forms since launch through June 30. The 14 we received in the second quarter included patients from Puerto Rico, reflecting our reach into U.S. territories. As we have noted previously, an enrollment form is a prescription submitted to our specialty pharmacy, which then begins the benefits investigation process to determine reimbursement eligibility. Notably, patients initiating treatment are being enrolled from centers of excellence and community practices with representation across both newly diagnosed and previously diagnosed patients as well as adult and pediatric populations. This distribution supports our confidence in the estimated prevalence of 900 patients living with NPC in the U.S., of whom 300 to 350 are diagnosed. Our commercial strategy is centered on three key priorities: accelerating diagnosis and treatment; driving demand; and facilitating access to MIPLYFFA. And the progress we are seeing reflects the growing impact of initiatives being implemented across each of these areas. Our disease awareness campaign, Learn NPC, Read Between the Signs, is driving the identification of patients based on symptoms and has led to new patient enrollments for MIPLYFFA. Our genetic testing collaborations and our custom AI-driven targeting model are helping to support the identification and diagnosis of patients with NPC, allowing for earlier intervention. We also launched our Expert Connect program, which has enabled health care professionals who are less familiar with NPC to consult one-on-one with clinical experts to further strengthen knowledge and confidence. Additionally, we expanded and enhanced our digital engagement through the launch of NPC Knowledge Hub, providing resources to help patients and caregivers navigate the treatment journey. From a market access standpoint, payer coverage remained at 69% of covered lives, consistent with our expectations. We continue to share presentations with payers on the recent update to the NPC clinical practice guidelines as well as the growing body of newly published clinical data on MIPLYFFA. Additionally, we convene payer advisory boards with key decision-makers to inform our strategy on how best to support prescribers and patients as they navigate the reimbursement landscape. We maintained strong relationships with the rare disease community and assembled steering committees to gather expert insights and helped shape NPC disease awareness. In the second quarter, we participated in national and regional congresses, including the American Academy of Neurology, the Society of Inborn Metabolic Disorders and Annual Pediatric Neuro Symposium, to enhance scientific visibility and educate clinicians and researchers. This strong engagement has continued into the third quarter with our participation at the National Niemann-Pick Disease Foundation Conference, where the importance and interest in a combination strategy for NPC treatment was highlighted prominently. Before turning the call over to Justin to review the financials, we want to reiterate our deep gratitude for the opportunity to make a meaningful impact in the lives of patients and their loved ones. We remain committed to being a trusted partner in the community by providing compassionate, patient-centered support. Justin?

Thank you, Josh. Underpinning our achievements is a robust cash position, which provides the flexibility to invest in commercial execution, advance our pipeline and pursue future growth opportunities while maintaining financial discipline. 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 later today. In the second quarter of 2026, we generated total net revenue of $39.7 million, which was an increase of $13.8 million or 53% compared to $25.9 million in Q2 2025. As a reminder, we recognize U.S. commercial revenue when MIPLYFFA shipments are received by the specialty pharmacy. Of note, channel inventory has returned to target levels as compared to Q1 when it fell below the low end of our range. The second quarter 2026 total net revenue is comprised of $30.2 million from MIPLYFFA net sales in the U.S., $0.2 million from OLPRUVA, $9.0 million in net reimbursements from the global EAP for arimoclomol and $0.3 million in past due royalty revenue from Commave. Revenue from MIPLYFFA in the U.S. grew 23% compared to the first quarter of this year and 40% compared to the second quarter of last year. During the second quarter of 2026, our operating expenses were $21.0 million, which was a decrease of $3.2 million compared to the same quarter a year ago. R&D expense was $4.5 million for Q2 2026, which was an increase of $1.1 million compared to Q2 2025 due primarily to ongoing arimoclomol efforts. SG&A expense was $16.6 million for Q2 2026, which was a decrease of $4.2 million compared to Q2 2025, primarily due to a decrease in professional fees and third-party spending, partially offset by an increase in personnel-related costs. We allocated $4.0 million for our Q2 2026 income tax provision. Net income for the second quarter of 2026 was $8.8 million or $0.14 per basic and diluted share compared to net income of $74.7 million or $1.24 per basic and $1.21 per diluted share for the same quarter of a year ago. This quarter, we incurred a mark-to-market fair value noncash charge of $6.4 million related to our outstanding common stock warrants. Excluding this adjustment that impacts period comparison, net income for Q2 2026 would have been $15.2 million or $0.25 per share. In Q2 2025, we would have had an adjusted net loss of $2.4 million or $0.04 per share by excluding onetime transactions and other adjustments that contributed a net positive of $77.1 million to Q2 2025's results. As of June 30, 2026, total cash, cash equivalents and investments were $260.2 million, which was an increase of approximately $23.4 million compared to March 31, 2026. In summary, we remain well positioned with the financial capacity to execute on our strategic priorities independent of the capital markets. Now I'll turn the call back to Neil for his closing remarks. Neil?

Thanks, Justin. Our strong second quarter performance demonstrates the strength of our strategy, disciplined execution and continued momentum across the business. We remain steadfast in our commitment to putting patients first, a principle that is reflected in our approach to growing our U.S. commercial business, expanding our global presence and fueling our portfolio to deliver long-term shareholder value. With that, operator, please open the line for questions.

[Operator Instructions] We will take our first question from Kristen Kluska with Cantor Fitzgerald.

I had a couple this afternoon. First, you're sitting on a very robust balance sheet and have a continued line of sight into more revenues as the MIPLYFFA business grows. So curious how you're leveraging this cash and ways you're looking to potentially explore using that? Second, I wanted to talk about the EMA. You mentioned there's a new rapporteur here. Can you tell us a little bit about how that process works when there's really a new team here looking? Is there anything that you can do differently? And we have seen some recent reversals specifically in the rare disease space. So curious about your thoughts there.

Thank you, Kristen. Maybe I'll start with your second question, and then I'll pivot over to Justin to talk a little bit about the strong financial foundation we've got. So you are correct that in our reexamination process we will have the opportunity to bring in new rapporteur and co-rapporteur to further interpret the evidence that we have submitted so far. I can't actually comment on what that process will look like because I have to be thoughtful in the level of details we provide. But our confidence is grounded in the totality of the evidence and the clear unmet patient need. As you saw, we continued in our global EAP to add an additional 10 patients, up to 132 patients. Those are primarily patients that are in Europe. And I think that as we continue to move forward with our reexamination process, we're looking forward to bringing new expert voices into the procedural discussions and allowing for the comprehensive evidence package to shine. On that note, I'll ask Justin to talk a little bit more about our strong financial foundation and what we're doing moving forward.

Thank you, Neil, and thank you, Kristen. Yes, as you noted, we ended Q2 with $260.2 million in cash, cash equivalents and investments, and that really provides us meaningful flexibility. Our priorities are unchanged as we execute against our strategic plan, namely we're driving MIPLYFFA growth, pursue global opportunities for MIPLYFFA, continue to advance celiprolol and again, evaluate, of course, aligned external opportunities. So we're going to maintain that disciplined capital allocation strategy we've always talked about. We're going to be prudent in our investments and really focus on value-creating opportunities when we can find them.

And we will take our next question from Sumant Kulkarni with Canaccord Genuity.

This one is about the EMA process. What exactly could you do to strengthen your -- I guess, the request for reexamination? Is there anything new you can file in terms of the real-world data that you have generated? Or I guess the best way I could ask that is what is going to be new in this request versus what was denied in the prior documents that you sent in?

Thanks, Sumant. So I think it's a really important question. The opinion that the CHMP provided reflects their assessment on the submitted evidence under this European regulatory framework that they have. Under the reexamination process, we'll have the opportunity to focus specifically to address these specific grounds that have been cited for the refusal. We believe strongly that the comprehensive evidence package, I mean, we've got an open-label extension study that goes out 4 years, actually just this week, the Expanded Access Program data that has been published has gone out for 4 years. The pediatric sub-study has been published now, along with a very comprehensive safety database. So this robust and comprehensive package that we've resubmitted as part of this application, we're now going to go into the further interpretation of the evidence that are specific to the questions that they -- or the specific grounds that were cited for the refusal and bring it to light. And that comes with new expert voices into the procedural discussion that will allow us to continue to educate the CHMP on this -- again, I've said it a few times, but robust and comprehensive evidence package.

And we'll take our next question from Eddie Hickman with Guggenheim Securities.

Congrats on all the progress so far. Just two from me. On the U.S. side, can you just give us maybe some directional color on which of the segments you're seeing a rebound in? Is it sort of the GeneDx contributing to more diagnoses? Are you seeing a different level of new versus previously diagnosed, adult versus pediatric? Just help us understand sort of where the biggest opportunity remaining is? And then on the ex U.S. side, can you sort of maybe help us bracket the sort of variable non-French EAP numbers sort of -- I know it's going to be sort of up and down maybe, but can you maybe sort of give us a min-max or some sort of bracketing for the next couple of quarters on how we should model that?

Let me start with your second question in regards to the global EAP. And I think you're specifically asking about the reimbursed section of that. We've said previously that our French program has been very consistent. It's approximately $2.5 million net per quarter or $10 million net per year. And that program has been ongoing for a multitude of years, and we have about 30 patients, plus or minus, that remain very consistent. The variability in ordering patterns that come through other named patient reimbursement programs can come in -- it's one patient at a time, and it can be one patient that orders for an annual basis, one patient that orders for quarterly or a monthly supply. So it's really hard for me to tell you or guide you in regards to the brackets that you're asking for because it remains unpredictable. It's driven by the timing, the order volume, the program type and also the geography. So I can't -- the only thing that I can tell you is that we remain very committed in the French EAP program, which has been consistent at about $10 million net per year or $2.5 million -- approximately $2.5 million per quarter. Let me switch quickly to the U.S. business. Really great questions. The U.S. business we're learning more about every day. We are seeing an equal mix between children and adults. As you know, this has been primarily a child disease for many years and kind of characterizes that. Now we're seeing quite a bit of adult patients. So those learnings are coming through. We don't have a single tactic that is working to uncover the number of patients we have. And remember, we're at 184 enrollment forms now with 14 in the quarter. This is really a integrated strategy, and I'll ask Josh to talk more about some of the things he's seeing on the ground, but an integrated strategy versus a single tactic, that is continuing to drive this and kind of unlocking the TAM that we think is between the 350 and 900. Josh?

Yes. Thanks. Eddie, thanks for the question. As Neil mentioned, I wouldn't attribute the enrollments to any one tactic. In fact, we have a really well-integrated commercial strategy that's focused on accelerating diagnosis and treatment. And we're seeing that really take place with the 23 enrollments that we've seen in the first half of this year. Those enrollments are coming with a mix of newly diagnosed patients as well as previously diagnosed patients. It's a mix of patients in centers of excellence as well as now we're able to reach out into the community and find patients who are in community practices. And we're seeing patients who are young as well as adult patients. So we're really pleased with the diversity and the distribution of enrollments that we're seeing, most notably because it really gives us confidence in the overall addressable market that we've been talking about, which is, we believe, somewhere between 350 and 900 patients.

And we will take our next question from Jason Butler with Citizens.

Just wondering if you could give us some kind of perspective on the age distribution of newly diagnosed patients? And then secondly, when you look at the tools that you're using like the AI targeting and the Expert Connect program, are you seeing any growth in the number of prescribers over the last couple of quarters?

Yes, sure. In terms of the age distribution of newly diagnosed patients, we are seeing patients who are coming in, who are both under the age of 18 as well as some who are over the age of 18. And just within the past -- this first half, we have some very specific instances. There was a newly diagnosed child who is about 2 years old, symptoms have just been presented and the parents had her tested and confirmed with NPC. On the other hand, we have a patient who is in his mid-20s and has been misdiagnosed with epilepsy for 5 or 6 years and was finally tested and confirmed to have NPC. So we're really seeing a diversity of instances and age groups reinforcing the heterogeneity of the disease. And this is largely driven by the tactics that we put in place, the AI targeting, our disease awareness campaign, all of these things are really helping to drive enrollments and again, giving us confidence that there are more patients out there yet to be diagnosed.

Yes. Jason, just to put a little bit of a finer point on this. We've said that the age distribution between adults and kids is about 50-50 in what we see today. So of these 184 enrollment forms, you should think of that as half adults and half children. When it comes to the newly diagnosed patients, it's really difficult for us to be able to say -- and provide that level of guidance. So for us, you should consider to say this is not just a childhood disease as we've been thinking about this for many, many decades. These adult patients that are coming in today have got delayed diagnosis. They've got complex disease histories, and we're starting to unlock that. So the 50-50 ratio remains of our total population.

[Operator Instructions] We will move next to Brandon Folkes with H.C. Wainwright.

Congrats on another good quarter. Neil, maybe just how do you feel about enrollment forms today halfway through 2026 when we think about the full year compared to the enrollment forms you generated in 2025? It does look like things are trending up on an enrollment basis. But do you have better visibility into enrollment trends today? And are you starting to get more comfortable with sort of a quarterly level of enrollment forms you expect going forward?

Thanks, Brandon. So yes, you asked a question in regards to 2025, we had 52 enrollments for the year. And halfway through this year, we're at about 23 enrollments. I think what gives me a lot of confidence is really around the opportunity to unlock newly diagnosed patients. We started seeing that around this time last year. And then in Q3, we saw more newly diagnosed patients, Q4 newly diagnosed patients. And these efforts that Josh just mentioned previously around our bespoke AI model that's getting the EMR data along with the claims data together and helping our reps get to places where they can educate physicians that believe -- that we believe have NPC patients, it's really driving the -- both newly diagnosed as well as the previously diagnosed patients. So I'm pleased with where we are through the year, but I'm even more confident about the TAM being somewhere between that 350 and 900 because we're seeing these newly diagnosed patients earlier in the launch process than we would have expected today. And I'm hopeful that with continued investment on our side and others in the area in NPC, we'll continue to drive that forward.