10-K – 2026-02-23 – axsm-20251231.htm

PART III
ITEM 10. DIRECTORS, EXECUTIVE OFF ICERS AND CORPORATE GOVERNANCE.
The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2026 Annual Meeting of Stockholders or will be included in an amendment to this Annual Report on Form 10-K.
ITEM 11. EXECUTIV E COMPENSATION.
The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2026 Annual Meeting of Stockholders or will be included in an amendment to this Annual Report on Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWN ERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2026 Annual Meeting of Stockholders or will be included in an amendment to this Annual Report on Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATE D TRANSACTIONS AND DIRECTOR INDEPENDENCE.
The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2026 Annual Meeting of Stockholders or will be included in an amendment to this Annual Report on Form 10-K.
ITEM 14. PRINCIPAL ACCOUN TANT FEES AND SERVICES.
The information required by this Item is incorporated herein by reference from our Proxy Statement for our 2026 Annual Meeting of Stockholders or will be included in an amendment to this Annual Report on Form 10-K.

127

Table of Contents

 

PART IV
ITEM 15. EXHIBITS and FINA NCIAL STATEMENT SCHEDULES.
(a) 1.	Consolidated Financial Statements

The following consolidated financial statements of Axsome Therapeutics, Inc. are filed as part of this report.
 

 

 

Contents

Page

 

 

Reports of Independent Registered Public Accounting Firm (PCAOB ID: 34 )

F- 1

 

 

Consolidated Balance Sheets as of December 31, 2025 and 2024

F- 4

 

 

Consolidated Statements of Operations for the Years Ended December 31, 2025, 2024, and 2023

F- 5

 

 

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024, and 2023

F- 6

 

 

Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024, and 2023

F- 7

 

 

Notes to the Consolidated Financial Statements

F- 8

 
2.	Consolidated Financial Statement Schedules
The financial statement schedule entitled “Schedule II – Valuation and Qualifying Accounts” has been omitted since the information required is included in the consolidated financial statements and notes thereto. Other schedules are omitted because they are not applicable, or the required information is shown in the Financial Statements or notes thereto.
3.	Exhibits
The list of exhibits filed with this report is set forth in the Exhibit Index following the signature page and is incorporated herein by reference.

128

Table of Contents

 

Axsome Therapeutics, Inc.
Index to Consolidated Financial Statement s

 

 

 

Page

Reports of Independent Registered Public Accounting Firm

F- 1

Consolidated Balance Sheets as of December 31, 2025 and 2024

F- 4

Consolidated Statements of Operations for the years ended December 31, 2025, 2024, and 2023

F- 5

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024, and 2023

F- 6

Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024, and 2023

F- 7

Notes to Consolidated Financial Statements

F- 8

 

129

Table of Contents

 

REPORT OF I NDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Axsome Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Axsome Therapeutics, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Reserves for Variable Consideration - Commercial Managed Care — Refer to Note 2 to the financial statements
Critical Audit Matter Description
As more fully disclosed in Note 2 to the financial statements, the Company records revenues net of provisions for rebates, discounts, and other incentives and returns, which are established at the time of sale. These reductions are attributed to various commercial arrangements, managed healthcare organizations, and government programs that mandate various reductions from list price. Chargebacks and cash discounts are reflected as a reduction to receivables and settled through the issuance of credits to the customer. All other rebates, discounts and adjustments, are reflected as a liability and settled through cash payments.

F- 1

Table of Contents

 

The provision related to Commercial Managed Care rebate programs (the “Commercial rebate accruals”) involves the use of assumptions and judgments in its calculation. These include consideration of prior payment history, customer utilization mix data, changes to product price, expected patient usage, claims timing lags, and inventory levels in the distribution channel.
Given the complexity involved in determining the assumptions used in calculating the Commercial rebate accruals, auditing these estimates involved especially subjective judgment.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to Commercial rebate accruals included the following, among others:
• We evaluated the appropriateness and consistency of the Company’s methods and assumptions used to calculate Commercial rebate accruals.

• We tested the effectiveness of internal controls over the review of the Company’s estimation model, including underlying assumptions and key inputs into the Company’s process to calculate Commercial rebate accruals.

• We tested the mathematical accuracy of Commercial rebate accruals.

• We tested the assumptions and key inputs used to calculate Commercial rebate accruals.

• We evaluated the Company’s ability to estimate Commercial rebate accruals accurately by comparing actual amounts incurred for Commercial rebate accruals

• We tested the overall reasonableness of the Commercial rebate accruals recorded at period end by developing an expectation for comparison to actual recorded balances.

• We involved audit professionals with industry and quantitative analytics experience to assist us in performing our auditing procedures.

 
/s/ Deloitte & Touche LLP
Morristown, New Jersey
February 23, 2026
We have served as the Company's auditor since 2023.

F- 2

Table of Contents

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Axsome Therapeutics, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Axsome Therapeutics, Inc. and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 23, 2026, expressed an unqualified opinion on those financial statements.

Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Controls over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Morristown, New Jersey
February 23, 2026

F- 3

Table of Contents

 

Axsome Therapeutics, Inc.
Consolidated B alance Sheet s
(In thousands, except share and per share amounts)
 

 

 

December 31,
2025

 

 

December 31,
2024

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

322,933

 

 

$

315,353

 

Accounts receivable, net

 

 

224,464

 

 

 

142,001

 

Inventories, net

 

 

27,938

 

 

 

15,732

 

Prepaid and other current assets

 

 

13,651

 

 

 

11,978

 

Total current assets

 

 

588,986

 

 

 

485,064

 

Equipment, net

 

 

562

 

 

 

584

 

Right-of-use asset - operating lease

 

 

20,858

 

 

 

5,383

 

Goodwill

 

 

12,042

 

 

 

12,042

 

Intangible asset, net

 

 

40,519

 

 

 

46,894

 

Non-current inventory and other assets

 

 

26,838

 

 

 

18,531

 

Total assets

 

$

689,805

 

 

$

568,498

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

65,537

 

 

$

71,997

 

Accrued expenses and other current liabilities

 

 

232,853

 

 

 

147,987

 

Operating lease liability, current portion

 

 

434

 

 

 

1,835

 

Contingent consideration, current

 

 

10,012

 

 

 

8,285

 

Short-term borrowings

 

 

70,000

 

 

 

—

 

Total current liabilities

 

 

378,836

 

 

 

230,104

 

Contingent consideration, non-current

 

 

77,540

 

 

 

91,680

 

Loan payable, long-term

 

 

117,746

 

 

 

180,710

 

Operating lease liability, long-term

 

 

23,182

 

 

 

6,046

 

Finance lease liability, long-term

 

 

4,206

 

 

 

2,943

 

Total liabilities

 

 

601,510

 

 

 

511,483

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $ 0.0001  par value per share ( 10,000,000  shares authorized, none  issued and outstanding)

 

 

—

 

 

 

—

 

Common stock, $ 0.0001  par value per share ( 150,000,000  shares authorized, 50,882,766  and 48,667,587  shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively)

 

 

5

 

 

 

5

 

Additional paid-in capital

 

 

1,394,251

 

 

 

1,179,797

 

Accumulated deficit

 

 

( 1,305,961

)

 

 

( 1,122,787

)

Total stockholders’ equity

 

 

88,295

 

 

 

57,015

 

Total liabilities and stockholders’ equity

 

$

689,805

 

 

$

568,498

 

 
The accompanying notes are an integral part of the consolidated financial statements.

F- 4

Table of Contents

 

Axsome Therapeutics, Inc.
Consolidated Statem ents of Operation s
(In thousands, except share and per share amounts)
 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Revenues:

 

 

 

 

 

 

 

 

 

Product sales, net

 

$

633,796

 

 

$

381,677

 

 

$

202,460

 

License revenue

 

 

—

 

 

 

—

 

 

 

65,735

 

Royalty revenue and milestone revenue

 

 

4,700

 

 

 

4,016

 

 

 

2,405

 

Total revenues

 

 

638,496

 

 

 

385,693

 

 

 

270,600

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Cost of revenue (excluding amortization and depreciation)

 

 

47,478

 

 

 

33,303

 

 

 

26,065

 

Research and development

 

 

183,279

 

 

 

187,077

 

 

 

97,944

 

Selling, general and administrative

 

 

570,599

 

 

 

411,359

 

 

 

323,123

 

Loss (Gain) in fair value of contingent consideration

 

 

( 2,473

)

 

 

28,124

 

 

 

48,918

 

Intangible asset amortization

 

 

6,375

 

 

 

6,392

 

 

 

6,375

 

Total operating expenses

 

 

805,258

 

 

 

666,255

 

 

 

502,425

 

Loss from operations

 

 

( 166,762

)

 

 

( 280,562

)

 

 

( 231,825

)

Interest expense, net

 

 

( 6,557

)

 

 

( 6,569

)

 

 

( 6,453

)

Loss on debt extinguishment

 

 

( 10,385

)

 

 

—

 

 

 

—

 

Loss before income taxes

 

 

( 183,704

)

 

 

( 287,131

)

 

 

( 238,278

)

Income tax benefit (expense)

 

 

530

 

 

 

( 85

)

 

 

( 960

)

Net loss

 

$

( 183,174

)

 

$

( 287,216

)

 

$

( 239,238

)

Net loss per common share, basic and diluted

 

$

( 3.68

)

 

$

( 5.99

)

 

$

( 5.27

)

Weighted average common shares outstanding, basic and diluted

 

 

49,747,178

 

 

 

47,914,253

 

 

 

45,425,212

 

The accompanying notes are an integral part of the consolidated financial statements.

F- 5

Table of Contents

 

Axsome Therapeutics, Inc.
Consolidated Statements of Stockholders’ Equity
(In thousands, except share amounts)
 

 

 

Common stock

 

 

Additional paid-in

 

 

Accumulated

 

 

Total
stockholders’

 

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

equity

 

Balance at December 31, 2022

 

 

43,498,617

 

 

$

4

 

 

$

705,885

 

 

$

( 596,333

)

 

$

109,556

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

65,357

 

 

 

—

 

 

 

65,357

 

Issuance of common stock upon exercise of options

 

 

358,760

 

 

 

—

 

 

 

12,419

 

 

 

—

 

 

 

12,419

 

Issuance of common stock upon vesting of RSUs

 

 

43,986

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Issuance of common stock upon financing

 

 

3,450,000

 

 

 

1

 

 

 

243,082

 

 

 

—

 

 

 

243,083

 

Issuance of warrants

 

 

—

 

 

 

—

 

 

 

1,635

 

 

 

—

 

 

 

1,635

 

Shares tendered for withholding taxes

 

 

—

 

 

 

—

 

 

 

( 1,835

)

 

 

—

 

 

 

( 1,835

)

Net loss

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 239,238

)

 

 

( 239,238

)

Balance at December 31, 2023

 

 

47,351,363

 

 

$

5

 

 

$

1,026,543

 

 

$

( 835,571

)

 

$

190,977

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

86,558

 

 

 

—

 

 

 

86,558

 

Issuance of common stock upon exercise of options and under employee stock purchase plan

 

 

770,531

 

 

 

—

 

 

 

30,680

 

 

 

—

 

 

 

30,680

 

Issuance of common stock upon vesting of RSUs

 

 

79,585

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Issuance of common stock upon financing

 

 

466,108

 

 

 

—

 

 

 

39,968

 

 

 

—

 

 

 

39,968

 

Shares tendered for withholding taxes

 

 

—

 

 

 

—

 

 

 

( 3,952

)

 

 

—

 

 

 

( 3,952

)

Net loss

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 287,216

)

 

 

( 287,216

)

Balance at December 31, 2024

 

 

48,667,587

 

 

$

5

 

 

$

1,179,797

 

 

$

( 1,122,787

)

 

$

57,015

 

Stock-based compensation

 

 

—

 

 

 

—

 

 

 

95,299

 

 

 

—

 

 

 

95,299

 

Issuance of common stock upon exercise of options and under employee stock purchase plan

 

 

1,520,390

 

 

 

—

 

 

 

59,558

 

 

 

—

 

 

 

59,558

 

Issuance of common stock upon vesting of RSUs

 

 

103,613

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Issuance of common stock upon financing

 

 

591,176

 

 

 

—

 

 

 

66,707

 

 

 

—

 

 

 

66,707

 

Shares tendered for withholding taxes

 

 

—

 

 

 

—

 

 

 

( 7,110

)

 

 

—

 

 

 

( 7,110

)

Net loss

 

 

—

 

 

 

—

 

 

 

—

 

 

 

( 183,174

)

 

 

( 183,174

)

Balance at December 31, 2025

 

 

50,882,766

 

 

$

5

 

 

$

1,394,251

 

 

$

( 1,305,961

)

 

$

88,295

 

The accompanying notes are an integral part of the consolidated financial statements.

F- 6

Table of Contents

 

Axsome Therapeutics, Inc.
Consolidated Statem ents of Cash Flows
(In thousands)
 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

Net loss

 

$

( 183,174

)

 

$

( 287,216

)

 

$

( 239,238

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

93,752

 

 

 

85,218

 

 

 

62,620

 

Amortization of intangible asset

 

 

6,375

 

 

 

6,392

 

 

 

6,375

 

Amortization of debt discount

 

 

1,303

 

 

 

2,640

 

 

 

2,574

 

Loss on debt extinguishment

 

 

10,385

 

 

 

—

 

 

 

—

 

Depreciation

 

 

503

 

 

 

532

 

 

 

459

 

Loss (Gain) in fair value of contingent consideration

 

 

( 2,473

)

 

 

28,124

 

 

 

48,918

 

Gain from lease modification

 

 

( 2,250

)

 

 

—

 

 

 

—

 

Non-cash lease expense

 

 

3,046

 

 

 

1,388

 

 

 

1,450

 

Right-of-use asset amortization for finance lease

 

 

2,186

 

 

 

1,034

 

 

 

—

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

( 82,463

)

 

 

( 47,181

)

 

 

( 57,121

)

Inventories, net

 

 

( 10,660

)

 

 

744

 

 

 

( 8,156

)

Prepaid expenses and other current assets

 

 

( 1,673

)

 

 

( 3,863

)

 

 

( 5,335

)

Non-current inventory and other assets

 

 

( 5,010

)

 

 

( 3,183

)

 

 

3,694

 

Accounts payable

 

 

( 6,460

)

 

 

31,318

 

 

 

2,074

 

Accrued expenses and other current liabilities

 

 

83,743

 

 

 

56,065

 

 

 

36,452

 

Operating lease liability

 

 

( 535

)

 

 

( 422

)

 

 

154

 

Net cash used in operating activities

 

 

( 93,405

)

 

 

( 128,410

)

 

 

( 145,080

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

Purchases of equipment

 

 

( 480

)

 

 

( 270

)

 

 

( 582

)

Net cash used in investing activities

 

 

( 480

)

 

 

( 270

)

 

 

( 582

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

Proceeds from draw down of debt

 

 

330,000

 

 

 

—

 

 

 

85,000

 

Payment of debt issuance costs

 

 

( 3,638

)

 

 

—

 

 

 

( 1,442

)

Repayment of debt

 

 

( 331,988

)

 

 

—

 

 

 

—

 

Payments on principal portion of finance lease obligation

 

 

( 2,124

)

 

 

( 990

)

 

 

—

 

Proceeds from issuance of common stock upon financing

 

 

67,904

 

 

 

40,784

 

 

 

258,750

 

Cash paid for common stock issuance costs

 

 

( 1,197

)

 

 

( 816

)

 

 

( 15,668

)

Proceeds from issuance of common stock upon exercise of options and under employee stock purchase plan

 

 

59,558

 

 

 

30,680

 

 

 

12,419

 

Payment of contingent consideration

 

 

( 9,940

)

 

 

( 7,866

)

 

 

( 6,211

)

Payments of tax withholdings on stock awards

 

 

( 7,110

)

 

 

( 3,952

)

 

 

( 1,835

)

Net cash provided by financing activities

 

 

101,465

 

 

 

57,840

 

 

 

331,013

 

Net increase (decrease) in cash

 

 

7,580

 

 

 

( 70,840

)

 

 

185,351

 

Cash at beginning of period

 

 

315,353

 

 

 

386,193

 

 

 

200,842

 

Cash at end of period

 

$

322,933

 

 

$

315,353

 

 

$

386,193

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

 

Interest paid

 

$

14,626

 

 

$

19,690

 

 

$

16,730

 

Operating lease right-of-use asset obtained in exchange for operating lease liability

 

 

23,869

 

 

 

—

 

 

 

7,802

 

Finance lease right-of-use asset obtained in exchange for finance lease liability

 

 

4,510

 

 

 

5,355

 

 

 

—

 

Decrease in operating lease right-of-use asset due to lease modification

 

 

5,349

 

 

 

—

 

 

 

—

 

Decrease in operating lease liability due to lease modification

 

 

7,599

 

 

 

—

 

 

 

—

 

Supplemental disclosures of non-cash financing activity:

 

 

 

 

 

 

 

 

 

Issuance of warrants in connection with debt financing

 

 

—

 

 

 

—

 

 

 

1,635

 

The accompanying notes are an integral part of the consolidated financial statements.

F- 7

Table of Contents

 

Axsome Therapeutics, Inc.
Notes to Consolidated Financial Statements
(In thousands, except share and per share amounts)
Note 1. Nature of Business and Basis of Presentation
Axsome Therapeutics, Inc. (“Axsome” or the “Company”), based in New York, New York, is a biopharmaceutical company dedicated to the development and commercialization of innovative medicines for people living with central nervous system (“CNS”) conditions. Axsome has a diverse portfolio of U.S. Food and Drug Administration (“FDA”) approved treatments for major depressive disorder, excessive daytime sleepiness associated with narcolepsy or obstructive sleep apnea, and migraine, and an expansive pipeline comprised of multiple late-stage development programs addressing a broad range of serious neurological and psychiatric conditions that collectively impact over 150 million people in the United States.
In May 2022, the Company acquired the U.S. rights to SUNOSI ® (solriamfetol) from Jazz Pharmaceuticals plc (“Jazz”), and in November 2022, the Company acquired worldwide ex-U.S. rights (excluding certain Asian markets) from Jazz (collectively, the “Acquisition”). SUNOSI was approved for the treatment of excessive daytime sleepiness (EDS) in adult patients with narcolepsy or obstructive sleep apnea by the FDA in March 2019 and by the European Commission in January 2020. In February 2023, the Company announced a licensing transaction with Atnahs Pharma UK Limited (“Pharmanovia”) to market SUNOSI in Europe and certain countries in the Middle East / North Africa.
In August 2022, AUVELITY ® (dextromethorphan-bupropion) was approved by the FDA for the treatment of major depressive disorder in adults. The Company announced the commercial availability of AUVELITY in the U.S. in October 2022.
In January 2025, SYMBRAVO ® (MoSEIC TM meloxicam-rizatriptan) was approved by the FDA for the acute treatment of migraine with or without aura in adults. The Company announced the commercial availability of SYMBRAVO in the U.S. in June 2025.
In November 2025, the Company acquired the global rights to AZD7325 (AXS-17), a novel oral GABAA receptor α2,3 subtype-selective positive allosteric modulator (PAM), effectuated through the acquisition of all of the outstanding shares of Baergic Bio, Inc., a clinical-stage biopharmaceutical company and subsidiary of Avenue Therapeutics (Baergic). AZD7325 was originally licensed by Baergic from AstraZeneca AB. Axsome intends to evaluate AZD7325 as a potential treatment for epilepsy and plans to begin Phase 2 trial-enabling activities in 2026.
In December 2025, the Company acquired the global rights to deuterium-stabilized S-bupropion from DeuteRx, LLC, a privately held biopharmaceutical company (DeuteRx).
The Company refers herein to AUVELITY, SUNOSI, SYMBRAVO (also referred to as “AXS-07”), AXS-12, AXS-14, and its programs to develop additional indications for AXS-05 and solriamfetol as the Company’s products.
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All material intercompany accounts and transactions have been eliminated during the consolidation process.
Liquidity and Capital Resources
The Company has incurred operating losses since its inception and expects to continue to incur operating losses and may never become profitable. As of December 31, 2025, the Company had an accumulated deficit of $ 1,306.0 million.

F- 8

Table of Contents

 

The Company’s primary sources of cash have been proceeds from the sales of AUVELITY, SUNOSI, and SYMBRAVO, the issuance and sale of its common stock in public offerings, and the issuance of debt. The Company’s ability to achieve profitability depends on a number of factors, including its ability to obtain regulatory approval for its product candidates, successfully complete any post-approval regulatory obligations and successfully commercialize its product candidates alone or in partnership with third parties. The Company may continue to incur substantial operating losses even as it continues to generate revenues from its products.
The Company believes its existing cash will be sufficient to fund its anticipated operating cash requirements for at least twelve months following the date of this filing. During that time, the Company expects that its expenses will increase primarily due to the commercialization of AUVELITY, SUNOSI, and SYMBRAVO while continuing to further develop the Company’s pipeline assets. The Company may use a combination of public and private equity offerings, debt financings, other third-party funding, strategic alliances, licensing arrangements or marketing and distribution arrangements if market conditions are favorable or as a result of other strategic considerations to finance its future cash needs.
The Company’s common stock is listed on The Nasdaq Global Market and trades under the symbol “AXSM.”

Note 2. Summary of Significant Accounting Policies
Significant Risks and Uncertainties
The Company’s operations are subject to a number of factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s product candidates; the Company’s ability to obtain regulatory approval to market its products; competition from products manufactured and sold or being developed by other companies; the price of, and demand for, the Company’s products; the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products; and the Company’s ability to raise additional capital. If the Company’s commercialization of its products is not financially successful, it will be unable to generate sufficient recurring product revenue to achieve and maintain profitability.
The Company currently has three commercial products, AUVELITY, SUNOSI, and SYMBRAVO. There can be no assurance that the Company’s research and development efforts will result in additional successfully commercialized products. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property.

Use of Estimates
Management considers many factors in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. This process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements if these results differ from historical experience, or other assumptions do not turn out to be substantially accurate, even if such assumptions are reasonable when made. In preparing these financial statements, management used significant estimates in the following areas, among others: stock-based compensation expense; determination of fair value of warrants; accounting for research and development costs; accounting for acquisitions; impairments of goodwill and the intangible asset; determination of fair value of contingent consideration; chargebacks, cash discounts, sales rebates, returns and other adjustments; and the recoverability of the Company’s net deferred tax assets and related valuation allowance.

F- 9

Table of Contents

 

Revenue Recognition
In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”) the Company recognizes revenue when the customer obtains control of a promised good or service, in an amount that reflects the consideration that the Company expects to receive in exchange for the good or service. Transfer of control is based on contractual performance obligations, which occurs upon transfer of the title along with the physical transfer of the Company’s goods to the customer, as that is when the customer has obtained control of significantly all of the economic benefits and the Company obtains a right of payment.
To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to arrangements that meet the definition of a contract under ASC 606, including when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. For a complete discussion of accounting for product sales, see Product Sales, net and Note 14. Revenues .

License Agreements
The Company generates revenue from license or similar agreements with pharmaceutical companies for the development and commercialization of certain products. Such agreements may include the transfer of intellectual property rights in the form of licenses. Payments made by the customer may include non-refundable upfront fees, payments based upon the achievement of defined milestones and royalties on sales of products.
If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes the transaction price allocated to the license as revenue upon transfer of control of the license. All other promised goods or services in the agreement are evaluated to determine if they are distinct. If they are not distinct, they are combined with other promised goods or services to create a bundle of promised goods or services that is distinct. Optional future services where any additional consideration paid to the Company reflects their standalone selling prices do not provide the customer with a material right, and, therefore, are not considered performance obligations. If optional future services are priced in a manner which provides the customer with a significant or incremental discount, they are material rights and are accounted for as separate performance obligations.
Contingent milestones at contract inception are estimated to the extent that it is probable that a significant revenue reversal would not occur and are included in the transaction price using the most likely amount method. Milestone payments that are not within the Company’s control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received, and, therefore, the variable consideration is constrained. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under the contract are satisfied. At the end of each reporting period, the Company re-evaluates the probability of achieving development or sales-based milestone payments that a significant revenue reversal would not occur and, if necessary, adjusts the estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license and other revenue, as well as earnings, in the period of adjustment.
For arrangements that include sales-based royalties, including sales-based milestone payments, and a license of intellectual property that is deemed to be the predominant item to which the royalties relate, revenue is recognized at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalties have been allocated has been satisfied (or partially satisfied).

F- 10

Table of Contents

 

Product Sales, net
Revenues from product sales are recorded net of reserves for variable consideration. These reserves reflect the Company’s best estimate of the amount of consideration to which the Company is entitled based on the terms of the contracts. The Company sells AUVELITY, SUNOSI, and SYMBRAVO in the United States to wholesale distributors with whom the Company has entered into formal agreements (collectively, the “Distributors”). These Distributors subsequently resell the Company’s products to retail pharmacies. The Company also sells SUNOSI to Distributors in Canada and on a product supply basis to Pharmanovia. SUNOSI is subsequently sold by Pharmanovia in certain ex-U.S. markets. The Company does not sell products under consignment arrangements, and the collection of proceeds from product sales is not contingent upon customers’ sale of the goods to third parties. The Company received FDA approval for SYMBRAVO in January 2025. See Note 14. Revenues for a further breakout of product sales, net.
Reserves for Variable Consideration
The Company’s estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of its anticipated performance and all information (historical, current and forecasted) that is reasonably available. These reserves reflect the Company’s best estimate of the amount of consideration to which the Company is entitled based on the terms of the contracts and are classified as reductions to accounts receivable, net if payable to a customer or accrued expenses and other current liabilities if payable to a third-party. The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that is considered probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the estimates. If actual results in the future vary from our estimates, the Company will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known.
The provision for rebates, discounts, and other incentives is based on expected patient usage, as well as inventory levels in the distribution channel to determine the contractual obligation to the benefit providers. Additionally, sales are generally made with a limited right of return under certain conditions. Revenues are recorded net of provisions for rebates, discounts, and other incentives and returns, which are established at the time of sale. The Company uses customer segment utilization mix data, changes to product price, government pricing calculations and prior payment history in order to estimate the variable consideration. Amounts accrued for rebates, discounts, and other incentives are adjusted when trends indicate that adjustment is appropriate and to reflect actual experience.
Trade Discounts and Allowances - The Company generally provides discounts which include incentive fees that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. In addition, the Company compensates (through trade discounts and allowances) its distributors for distribution services and data. These payments have been recorded as a reduction to product sales as well as a reduction to accounts receivable, net on the consolidated balance sheets.
Product Returns - The Company generally offers a limited right of return for product that has been purchased from the Company based on the product’s expiration date. The Company estimates the amount of its product sales that may be returned and records this estimate as a reduction of revenue in the period the related product sale is recognized, as well as a component of accrued expense and other current liabilities. The Company currently estimates product return liabilities using available industry data, historical product sales information, and actual returns experience.
Chargebacks and Discounts - Chargebacks for fees and discounts to providers represent the estimated obligations resulting from contractual commitments to sell products at prices lower than the list prices charged to distributors. Distributors charge the Company for the difference between what they pay for the product and the ultimate selling price. These reserves are established in the same period that the related product sales are recognized, resulting in a reduction to product sales and accounts receivable, net.

F- 11

Table of Contents

 

Rebates - Rebates apply to: Medicaid, managed care, and supplemental rebates to all applicable states as defined by the statutory government pricing calculation requirements under the Medicaid Drug Rebate Program. Tricare rebates to the TRICARE third-party administrator are based on the statutory calculation defined in the agreement with the Defense Health Agency. Part D and Commercial Managed Care rebates are paid based on the contracts with Pharmacy Benefit Managers (“PBMs”) and Managed Care Organizations. Rebates are paid to these entities upon receipt of an invoice from the contracted entity which is based on the utilization of the product by the members of the contracted entity. Allowances for rebates also include amounts due for Medicare Inflation Based Rebates resulting from the Inflation Reduction Act of 2022, which includes measures requiring manufacturers to pay rebates where price increases exceed the rate of inflation. The Company estimates these rebates and records such estimates in the same period the related product sales are recognized, resulting in a reduction to product sales as well as a component of accrued expenses and other current liabilities.
Coverage Gap - The Medicare Part D coverage gap is a period of consumer payment for prescription medication costs which lies between the initial coverage limit and the catastrophic-coverage threshold, when the patient is a member of a Medicare Part D prescription-drug program administered by the Centers for Medicare & Medicaid Services. The Company estimates the percentage of goods sold to patients in the Coverage Gap and adjusts the transaction price for such discount at the time of sale resulting in a reduction to product sales as well as a component of accrued expenses and other current liabilities.
Medicare Part D Program Redesign - Effective January 1, 2025, the Medicare Part D coverage gap program was replaced with a redesigned program under the Inflation Reduction Act of 2022. The standard Part D benefit now comprises three phases: the deductible phase, the initial coverage phase and the catastrophic coverage phase. Applicable dispensed drugs will be subject to manufacturer discounts of 10 % during the initial coverage phase and 20 % during the catastrophic coverage phase. The Company estimates the percentage of goods sold to patients in the initial coverage and catastrophic coverage phases and adjusts the transaction price for such discount at the time of sale resulting in a reduction to product sales as well as a component of accrued expenses and other current liabilities.
Other Incentives - Other incentives which the Company offers include voluntary patient assistance programs, such as the co-pay assistance program, which are intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by payers. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that the Company expects to receive associated with product that has been recognized as revenue. The reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product sales as well as a component of accrued expenses and other current liabilities.
The Company makes significant estimates and judgments that materially affect its recognition of net product revenue. Claims by third-party payors for rebates, chargebacks and discounts frequently are submitted to the Company significantly after the related sales, potentially resulting in adjustments in the period in which the new information becomes known. The Company will adjust its estimates based on new information, including information regarding actual rebates, chargebacks and discounts for its products, as it becomes available.

Cost of Revenue
The Company’s cost of revenue consists of cost of product sales, fee sharing expense related to the upfront license revenue received, and expense related to a sales-based milestone. Cost of product sales primarily include direct costs (inclusive of material, shipping, handling, and manufacturing costs), overhead and product royalties. Cost of product sales excludes depreciation and amortization. In the fourth quarter of 2024, the Company recorded a $ 2.5 million expense for the achievement of a sales-based milestone related to world-wide SUNOSI sales. In the first quarter of 2023, the Company recorded a $ 5.0 million fee sharing expense related to the upfront license revenue received.

F- 12

Table of Contents

 

The Company assumed royalty and sales-based milestone commitments of Jazz to SK Biopharmaceuticals Co. Ltd. (“SK”) and Aerial Biopharma, LLC (“Aerial”). SK is the originator of SUNOSI and retains rights in 12 Asian markets, including China, Korea and Japan. In 2014, Jazz acquired from Aerial worldwide rights to SUNOSI excluding those Asian markets stated previously. The assumed commitments to SK and Aerial include single-digit tiered royalties based on the Company’s sales of SUNOSI, and the Company is committed to pay up to $ 162.5 million based on revenue milestones and $ 1.0 million based on development milestones. Additionally, the Company pays a royalty to Antecip Bioventures II LLC (“Antecip”), an entity owned by Axsome’s Chief Executive Officer and Chairman of the Board of Directors (the “Board”), Herriot Tabuteau, M.D., equal to 3.0 % of AUVELITY net sales.

Foreign Currency Translation
Revenues and expenses denominated in foreign currency are translated into U.S. dollars at the exchange rate on the date they are incurred. Assets and liabilities of foreign operations are translated at period-end exchange rates. The effect of exchange rate fluctuations on translating foreign currency into U.S. dollars is included in the statements of operations and is not material to the Company’s consolidated financial statements.

Segment Information
Operating segments are defined as components of an enterprise for which separate discrete information is available for evaluation by the chief operating decision maker or decision-making group in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business as one operating and reporting segment, which is the business of developing and delivering novel therapies for the management of CNS disorders. See Note 20. Segment Information for further information.

Cash and Cash Equivalents
The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. The Company’s cash and cash equivalents include holdings in checking and overnight sweep accounts. The Company’s cash equivalents, which are money market funds held in a sweep account, are measured at fair value on a recurring basis. As of December 31, 2025, the balance of cash and cash equivalents was $ 322.9 million, which approximates fair value and was determined based upon Level 1 inputs. The sweep account is valued using quoted market prices with no valuation adjustments applied. Accordingly, these securities are categorized as Level 1 on the fair value hierarchy.

Concentration of Risk
Concentration of Credit Risk - Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company maintains its cash deposits at financial institutions, which cash deposits exceed insured limits. At December 31, 2025 , the majority of the Company’s cash was held by two financial institutions, and amounts on deposit were in excess of government-provided insurance limits. The Company places its cash and cash equivalents in what it believes to be high credit quality banks and money market funds and has not recognized any losses from credit risks on such accounts since inception. See Accounts Receivable, net below for further information.
Concentration of Risk, Other - The Company has a limited number of contract manufacturers for its products. At times, the Company may have only one manufacturer or supplier for its products.

Business Combination
The Company accounted for the acquisition of SUNOSI (the “Acquisition”) as a business combination using the acquisition method of accounting, which requires that all identifiable assets acquired, and liabilities assumed be recorded at their estimated fair values. The excess of the fair value of purchase consideration over the fair values of identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions. Critical estimates in valuing the intangible asset include but are not limited to future expected cash flows from acquired patented technology. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

F- 13

Table of Contents

 

As a result of the Acquisition, the Company recorded goodwill and an intangible asset.
Goodwill
Goodwill is deemed to have an indefinite life and therefore not amortized. The Company tests the carrying amounts of goodwill for recoverability on an annual basis or more frequently if events or changes in circumstances indicate that the asset might be impaired. When reviewing goodwill for impairment, the Company first evaluates the qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative factors determine it is necessary to complete a goodwill impairment test, the fair value of the relevant reporting unit is determined and compared to its carrying value. If the fair value is greater than the carrying value, then the carrying value is deemed to be recoverable, and no further action is required. If the fair value estimate is less than the carrying value, goodwill is considered impaired for the amount by which the carrying amount exceeds the reporting unit’s fair value, and a charge is reported in impairment of goodwill in the Company’s consolidated statements of operations. The Company completes its annual goodwill assessment as of December 31. As of December 31, 2025 , the Company has determined that it has one reporting unit. The Company has not identified any events or changes in circumstances that indicate the existence of potential impairment of goodwill during the fiscal year ended December 31, 2025 . The balance of goodwill was $ 12.0 million at both December 31, 2025 and 2024.
Intangible Asset
The Company’s intangible asset is amortized using the straight-line method over its estimated period of benefit of ten years. The Company evaluates recoverability of the intangible asset periodically by considering events or changes in circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. The Company has not identified any events or changes in circumstances that indicate the existence of potential impairment of the intangible asset during the year ended December 31, 2025.
Asset Acquisition
Acquisitions that do not qualify as a business combination are accounted for as an acquisition of an asset. The cost of the acquisition is allocated to the assets acquired and liabilities assumed. At acquisition, in process research and development projects with no alternative future use are recorded as research and development expense. Direct and incremental transaction costs are included in the cost of the acquisition. Contingent consideration obligations relating to development, regulatory and commercial milestones are not recognized at the acquisition date and instead are recorded when it is probable they will occur and can be reasonably estimated.

Contingent Consideration
Consideration paid in a business combination may include potential future payments that are contingent upon the acquired business achieving certain milestones in the future (“contingent consideration”). The royalty payments due to Jazz are a high single-digit royalty on the Company’s U.S. net sales of SUNOSI in the current indication and a mid-single-digit royalty on the Company’s U.S. net sales of SUNOSI for future indications. Contingent consideration liabilities are measured at their estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in the consolidated statements of operations during such period a change is recognized. The Company estimates the fair value of the contingent consideration as of the acquisition date and reporting periods thereafter using the probability weighted income approach and makes significant assumptions, including estimated future sales of SUNOSI in current and future indications, timing of regulatory and commercial milestone achievements, probability of technical and regulatory success rates, and discount rates. Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities, with the non-current portion recorded within total liabilities in the consolidated balance sheets.

F- 14

Table of Contents

 

Fair Value Measurements
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 at the measurement date. Assets and liabilities that are measured at fair value are reported using a three‑level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Level 1—Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2—Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly.
Level 3—Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
The Company’s financial instruments are cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities, contingent warrant liability, short-term and long-term debt, and current and non-current contingent consideration. The Company’s Level 1 financial instruments include cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses and other liabilities. They are considered Level 1 as the carrying values reported in the accompanying consolidated financial statements approximate their respective fair values due to their short-term maturities. The carrying value of debt on the Company’s balance sheet is estimated to approximate its fair value. The Company’s Level 3 financial instruments include contingent warrant liability and current and non-current contingent consideration due to the significant unobservable inputs required in determining their respective fair values.
The Company categorized the fair value of contingent consideration liabilities as Level 3 within the fair value hierarchy as the estimate is based on significant unobservable inputs requiring management judgment. The fair value of contingent consideration liabilities is estimated by using the probability weighted income approach using significant assumptions, including estimated future sales of SUNOSI in current and future indications, timing of regulatory and commercial milestone achievements, probability of technical and regulatory success and discount rates. Contingent consideration liabilities are subject to remeasurement at each prospective balance sheet date, with any changes in the fair value recorded in the consolidated statements of operations. See Note 7. Fair Value of Financial Instruments for further detail.
The Company estimated the fair value of contingent warrant liability using the Black-Scholes model based on key assumption and inputs. The Company utilized a probability assessment to estimate the likelihood of vesting for the remaining Hercules Loan Agreement (as defined below) warrants and allocated the probability of occurrence percentage to the fair values calculated, and, therefore, was considered Level 3 within the fair value hierarchy. The Company accounted for warrants anticipated to be issued in the future under the Hercules Loan Agreement as liabilities and measured them at fair value using the Black-Scholes valuation model. In the second quarter of 2025, the Company derecognized the fair value of contingent warrant liability upon extinguishment of the Hercules Loan Agreement .

Accounts Receivable, net
The Company’s accounts receivable, net, arise from product sales and represent amounts due from its customers. They are generally stated at the gross sales amount, less reserves resulting from trade discounts and allowances and chargebacks. Accounts receivable typically has a standard payment term of 60 days or less and does not bear interest.

F- 15

Table of Contents

 

The Company monitors the financial performance and creditworthiness of its customers so that it can properly assess and respond to changes in the customers’ credit profiles. The Company estimates expected credit losses of its accounts receivable by assessing the risk of loss and available relevant information about collectability, including historical credit losses, existing contractual payment terms, actual payment patterns of its customers, individual customer circumstances, and reasonable and supportable forecast of economic conditions expected to exist throughout the contractual life of the receivable. The Company has not historically experienced significant credit losses. As of December 31, 2025, t he Company did no t have an allowance for doubtful accounts balance and did not experience any significant credit losses. For further information about accounts receivable, see Note 3. Accounts Receivable, net .

Debt Issuance Costs
Debt issuance costs consist of costs incurred in obtaining long-term financing. These costs are classified on the consolidated balance sheet as a direct deduction from the carrying amount of the related debt liability and subsequently amortized as interest expense in the consolidated statement of operations using the effective interest rate method. Costs that are directly attributable to the issuance of revolving credit facilities are capitalized and ratably amortized over the term of the revolving credit facility.
The Company evaluates amendments to its debt instruments in accordance with ASC 470-50, Debt – Modifications and Extinguishments (“ASC 470”) to determine whether the amendment should be accounted for as a modification or an extinguishment. An amendment may be considered modified when the terms of the new debt and original instrument are not “substantially different” (as defined in the debt modification guidance in ASC 470). Amendments that are considered modifications are accounted for prospectively as yield adjustments, based on the revised terms, and lender fees and costs directly incurred with third parties, to the extent material, are recorded as debt discount and amortized to interest expense using the effective interest rate method.

Inventory
The Company values its inventories at the lower of cost or estimated net realizable value. The remaining inventory associated with the Acquisition is stated at fair value due to purchase accounting. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and it writes down any excess and obsolete inventories to their estimated net realizable value in the period in which the impairment is first identified. Such impairment charges, if they occur, are recorded within the cost of revenue.
The Company capitalizes inventory costs associated with the Company’s products after regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized. Inventory acquired and manufactured prior to receipt of regulatory approval of a product candidate is expensed as research and development expense as incurred. Inventory that can be used in either the production of clinical or commercial product is expensed as research and development expense when selected for use in a clinical manufacturing campaign.
Inventory levels are evaluated for amounts that would be sold within one year. If the level of inventory exceeds the estimated amount that would be sold after the next 12 months, the Company classifies the estimate of such inventory as non-current.

Equipment, net
Equipment consists primarily of computer equipment and is recorded at cost. Equipment is depreciated on a straight‑line basis over its estimated useful life, which the Company estimates to be three years . When equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss is included in operating expenses.

F- 16

Table of Contents

 

Research and Development Costs
Research and development costs are expensed as incurred. Research and development expenses consist primarily of employee-related expenses, including salaries, benefits, travel and stock-based compensation expense, contract services, costs incurred to third-party service providers for conducting research, preclinical and clinical studies, laboratory supplies, product license fees, consulting and other related expenses. In addition, research and development costs also include costs related to asset acquisitions involving clinical development programs that have not yet received regulatory approval. Research, preclinical and clinical study expenses are estimated based on services performed, pursuant to contracts with third-party research and development organizations that conduct and manage research, preclinical and clinical activities on the Company’s behalf, including discussions with internal management personnel and external service providers as to the progress or stage of completion of services and the contracted fees to be paid for such services. If the actual timing of the performance of services or the level of effort varies from the original estimates, accruals are adjusted accordingly. Payments associated with licensing agreements to acquire licenses to develop, use, manufacture and commercialize products that have not reached technological feasibility and do not have alternative future use are expensed as incurred.

Advertising Costs
Advertising costs are included in selling, general and administrative expenses and are expensed as incurred. The Company considers advertising costs as expenses related to the promotion of the Company’s commercial products. For the years ended December 31, 2025, 2024, and 2023 , advertising costs were $ 167.1 million, $ 101.2 million, and $ 100.3 million, respectively.

Income Taxes
Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, operating losses, and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position as well as consideration of the available facts and circumstances. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. As of December 31, 2025 , the Company recognized gross uncertain tax positions which have been recognized as a reduction to deferred tax assets. In the event the Company determines that accrual of interest or penalties are necessary in the future, the amount will be presented as a component of income tax expense.

Stock-Based Compensation
For stock options issued, the Company estimates the grant date fair value of each option using the Black‑Scholes option pricing model. The Black-Scholes model takes into account the expected volatility of the Company’s common stock, the risk-free interest rate, the estimated life of the option, the closing market price of the Company’s common stock and the exercise price. The estimates utilized in the Black-Scholes calculation involve inherent uncertainties and the application of management’s judgment.
For restricted stock units (“RSUs”) and performance stock units (“PSUs”), the Company issues them in the form of Company common stock. The fair market value of these awards is based on the market closing price per share on the grant date and for certain awards that are subject to a post-vesting holding period, an illiquidity discount is also applied.

F- 17

Table of Contents

 

The Company recognizes the grant date fair value of the stock options and RSUs over the requisite service period, which is generally the vesting term. For awards only subject to service-based vesting conditions, the Company elected to recognize stock-based compensation expense on a straight-line basis. For PSUs, the Company recognizes stock-based compensation expense when the achievement of the performance condition becomes probable. Stock-based compensation expense for PSUs with cliff-vesting terms is recognized on a straight-line basis. At the end of each reporting period, the Company reassesses the probability of achieving the performance condition and adjusts the stock-based compensation expense accordingly.
The expense related to the stock-based compensation is recorded within the same financial statement line item as the grantee’s cash compensation. The Company’s policy upon exercise of stock options, vesting of RSUs and PSUs is that the Company will issue shares as new shares drawing on the Company’s 2025 Long-Term Incentive Plan share pool that the Board adopted in April 2025 and the stockholders approved in June 2025. In addition, the Company accounts for equity award forfeitures as they occur .

Basic and Diluted Net Loss per Common Share
Basic net loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities, such as warrants, stock options, RSUs, PSUs, and/or common stock pursuant to the 2023 Employee Stock Purchase Plan (the “ESPP”), which would result in the issuance of incremental shares of common stock. As the impact of these items is anti-dilutive during periods of net loss, there was no difference between basic and diluted net loss per share of common stock for the years ended December 31, 2025 and 2024 .

Leases
The Company determines if an arrangement is a lease at contract inception. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. When evaluating whether a contract contains a lease, the Company considers whether (1) the contract explicitly or implicitly identifies assets that are contractually defined and (2) the Company obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract.
The Company’s lease agreements contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. The Company has applied the practical expedient to combine fixed payments for non-lease components with lease payments and account for them together as a single lease component, which increases the amount of lease assets and corresponding liabilities. Payments under the Company’s lease arrangements are primarily fixed, however, variable payments are expensed as incurred and not included in the operating lease asset and liability.
Lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company uses the interest rate implicit in the contract when such rate is readily determinable and uses the Company’s incremental borrowing rate when the rate implicit in the contract is not readily determinable based upon the information available at the commencement date in determining the present value of the lease payments.
Leases are accounted for under ASC 842, Leases (“ASC 842”). The Company made an accounting policy election not to apply the recognition requirements to short-term leases. The Company recognizes the lease payments for short-term leases in the consolidated statements of operations on a straight-line basis over the lease term, and variable lease payments in the period in which the obligation for those payments is incurred. Therefore, the Company is not recognizing a lease liability or right-of-use asset for any lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to extend the term or purchase the underlying asset that the Company is reasonably certain to exercise. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company evaluates amendments to its lease arrangements in accordance with ASC 842.

F- 18

Table of Contents

 

The Company’s operating leases are reflected in the right-of-use operating asset; operating lease liability, current portion; and operating lease liability, long-term portion in the Company’s consolidated balance sheets. Operating lease expense is recognized on a straight-line basis over the lease term and included in selling, general and administrative expenses. Finance leases are included in the non-current inventory and other assets; accrued expenses and other current liabilities; and finance lease liability, long-term in the Company’s consolidated balance sheets. Assets under the finance leases are amortized on a straight-line basis over the lease term and included in selling, general and administrative expenses. Short-term leases, defined as leases that have a lease term of 12 months or less at the commencement date, and do not include an option to extend the term or purchase the underlying asset that the Company is reasonably certain to exercise, are excluded from this treatment and are recognized on a straight-line basis over the term of the lease.

Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid by jurisdiction, enhances disclosures in the effective tax rate reconciliation, and modifies other income tax-related disclosures. The amendments are effective for annual periods beginning after December 15, 2024. The Company adopted this standard as of January 1, 2025 . See Note 18. Income Taxes for further information.
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. This ASU requires additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the income statement. The guidance is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect of adopting this guidance on its consolidated financial statements.

Note 3. Accounts Receivable, net
Accounts receivable, net, consisted of the following:
 

 

 

December 31,
2025

 

 

December 31,
2024

 

Trade receivables

 

$

246,674

 

 

$

155,505

 

Less: Reserves for variable consideration

 

 

( 22,210

)

 

 

( 13,504

)

Accounts receivable, net

 

$

224,464

 

 

$

142,001

 

 
Note 4. Inventory
Inventory consisted of the following:
 

 

 

December 31,
2025

 

 

December 31,
2024

 

Raw materials

 

$

10,377

 

 

$

9,541

 

Work in process

 

 

17,836

 

 

 

7,723

 

Finished goods

 

 

11,280

 

 

 

8,986

 

Total

 

$

39,493

 

 

$

26,250

 

There were no material inventory reserves or write downs of any excess and obsolete inventory as of December 31, 2025. Non-current inventory, which consists of raw materials and work in process inventory, is included in non-current inventory and other assets on the accompanying consolidated balance sheets. Non-current inventory is estimated to be consumed beyond the next 12 months.

F- 19

Table of Contents

 

The following table summarizes the balance sheet classification of the Company’s inventory for each of the periods indicated:
 

 

 

December 31,
2025

 

 

December 31,
2024

 

Balance sheet classification

 

 

 

 

 

 

Inventories, net

 

$

27,938

 

 

$

15,732

 

Non-current inventory and other assets

 

 

11,555

 

 

 

10,518

 

Total

 

$

39,493

 

 

$

26,250

 

 
Note 5. Goodwill
The following table provides the Company’s carrying amount of goodwill as of December 31, 2025.
 

 

 

Goodwill

 

Balance at December 31, 2024

 

$

12,042

 

Additions/adjustments

 

 

—

 

Balance at December 31, 2025

 

$

12,042

 

 
Note 6. Intangible Asset
The following table provides the Company’s carrying amount of the intangible asset for each of the periods indicated.
 

 

 

Gross carrying amount

 

 

Accumulated amortization

 

 

Net carrying amount

 

 

Remaining weighted-average useful life

Balance at December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

Finite-lived intangible asset

 

$

63,800

 

 

$

16,906

 

 

$

46,894

 

 

8 -years

Balance at December 31, 2025

 

 

 

 

 

 

 

 

 

 

 

Finite-lived intangible asset

 

$

63,800

 

 

$

23,281

 

 

$

40,519

 

 

7 -years

Based on the finite-lived intangible asset recorded as of December 31, 2025, and assuming the underlying asset will not be impaired and that the Company will not change the expected life of the asset, future amortization expense over the next five years and periods thereafter are estimated to be as follows:
 

 

 

Estimated amortization expense

 

2026

 

$

6,375

 

2027

 

 

6,375

 

2028

 

 

6,392

 

2029

 

 

6,375

 

2030

 

 

6,375

 

Thereafter

 

 

8,627

 

Total

 

$

40,519

 

 
Note 7. Fair Value of Financial Instruments
In connection with the Acquisition, the Company pays royalty on U.S. net sales of SUNOSI to Jazz. The discounted cash flow method used to value this contingent consideration includes inputs of not readily observable market data, which are Level 3 inputs. The fair value of the contingent consideration is reflected as current accrued contingent consideration of $ 10.0 million and non-current contingent consideration liability of $ 77.5 million in the consolidated balance sheet as of December 31, 2025.

F- 20

Table of Contents

 

The fair value of financial instruments measured on a recurring basis is as follows:
 

 

 

December 31, 2025

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - money market funds

 

$

173,111

 

 

$

—

 

 

$

—

 

 

$

173,111

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration

 

$

—

 

 

$

—

 

 

$

87,552

 

 

$

87,552

 

 

 

 

December 31, 2024

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents - money market funds

 

$

244,097

 

 

$

—

 

 

$

—

 

 

$

244,097

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration

 

$

—

 

 

$

—

 

 

$

99,965

 

 

$

99,965

 

Contingent Consideration Liabilities
The fair value of the contingent consideration liabilities is marked-to-market at each reporting period and was remeasured at December 31, 2025. Changes in fair value of the contingent consideration liabilities as of December 31, 2025 are as follows:
 

 

 

Contingent consideration

 

Balance at December 31, 2024

 

$

99,965

 

Adjustment to fair value

 

 

( 2,473

)

Payments

 

 

( 9,940

)

Balance at December 31, 2025 (Level 3)

 

$

87,552

 

The recurring Level 3 fair value measurements of contingent consideration for which a liability is recorded include the following significant unobservable inputs:
 

 

 

 

 

 

 

As of December 31, 2025

 

As of December 31, 2024

 

 

Valuation methodology

 

Significant unobservable input

 

Weighted average (range, if applicable)

 

Weighted average (range, if applicable)

Contingent consideration

 

Probability weighted income approach

 

Discount rate

 

14.9 %

 

12.0 %

 

 

 

 

Revenue discount rate

 

17.2 % - 20.2 %

 

17.6 % - 20.6 %

The Company’s fair value measurement of contingent consideration liabilities has been classified as Level 3 as its valuation requires substantial judgment and estimation of factors which requires use of unobservable inputs. The fair value of contingent consideration liabilities is estimated by using the probability weighted income approach using significant assumptions including estimated future sales of SUNOSI in current and future indications, timing of regulatory and commercial milestone achievements, probability of technical and regulatory success rates, and discount rates. If significant changes are made to one or more of these assumptions, the estimated fair value of contingent consideration liabilities may result in a significantly higher or lower fair value measurement.

F- 21

Table of Contents

 

Note 8. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
 

 

 

December 31,
2025

 

 

December 31,
2024

 

Accrued research and development

 

$

8,654

 

 

$

14,431

 

Accrued compensation

 

 

36,938

 

 

 

28,225

 

Accrued selling, general, and administrative

 

 

26,423

 

 

 

17,498

 

Accrued sales discounts, rebates, and allowances

 

 

150,247

 

 

 

73,952

 

Accrued royalties

 

 

7,902

 

 

 

9,958

 

Accrued interest

 

 

43

 

 

 

1,542

 

Accrued taxes

 

 

101

 

 

 

960

 

Finance lease liability, current

 

 

2,545

 

 

 

1,421

 

Total

 

$

232,853

 

 

$

147,987

 

 
Note 9. Loan and Security Agreement
Blackstone Alternative Credit Advisors LP and Blackstone Life Sciences Advisors L.L.C.
For the purposes of this Note 9, capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Blackstone Loan Agreement (as defined below).
On May 8, 2025 (the “Closing Date”), the Company entered into a loan agreement (the “Blackstone Loan Agreement”) with Blackstone Alternative Credit Advisors LP and Blackstone Life Sciences Advisors L.L.C. (collectively, the “Blackstone Representative” and referred to herein as “Blackstone”), certain subsidiaries of the Company party thereto as guarantors, Wilmington Trust, National Association, in its capacity as administrative agent, collateral agent and security trustee (“Wilmington Trust”), and the lenders from time to time party thereto (collectively, the “Lenders”). The Blackstone Loan Agreement provides for loans in an aggregate principal amount of up to $ 570.0 million, consisting of (i) a first lien senior secured term loan in an aggregate principal amount of $ 120.0 million funded to the Company on the Closing Date, (ii) a $ 180.0 million senior secured term loan available to the Company at its option, of which $ 90.0 million is available until May 31, 2026, and the remaining $ 90.0 million is available until May 31, 2027 (the “Term Loans”), and (iii) a super senior revolving credit facility in an aggregate principal amount of up to $ 70.0 million available at the Company’s option (the “Revolver” and, together with the Term Loans, the “Loans”). The Blackstone Loan Agreement also permits the Company, subject to the consent of the Lenders, to request incremental term loans in an aggregate principal amount of up to $ 200.0 million at any time and on the same terms as the initial Term Loans, except that any call protection will be determined at the time the incremental term loans are incurred. The proceeds of the Term Loans were used, together with cash on hand, to repay in full the Company’s obligations under the Hercules Loan Agreement (as defined below). As of December 31, 2025 , there were $ 120.0 million and $ 70.0 million of outstanding principal amounts under the Term Loans and Revolver facilities, respectively. The outstanding balance under the Revolver was classified as short-term based on the Company’s intent and ability to repay this amount in the next twelve months, and included in short-term borrowings on the accompanying consolidated balance sheets. In January 2026, the Company repaid the entire outstanding balance as of December 31, 2025, under the Revolver.
The Term Loans bear interest at a rate equal to the Term SOFR (“Secured Overnight Financing Rate”) plus a margin of 4.75 %. The effective interest rate on the Term Loans was 9.58 % for the year ended December 31, 2025 . The Revolver bears interest at SOFR plus a margin of 4.00 %. If an Event of Default occurs and is continuing, all amounts outstanding under the Blackstone Loan Agreement will bear an additional 2.00 % interest. The weighted-average interest rate on the Revolver was 7.67 % as of December 31, 2025. The Loans mature and the principal amount (including any interest and fees) must be repaid on the date that is five years from the Closing Date. Fees and costs that were directly attributable to the Revolver have been capitalized as deferred assets and will be ratably expensed over the life of the Revolver. Deferred assets are included in non-current inventory and other assets on the accompanying consolidated balance sheets. As of December 31, 2025 , the remaining unamortized balance of deferred assets was $ 1.0 million.

F- 22

Table of Contents

 

The Loans are subject to mandatory prepayment provisions that may require prepayment upon a change of control, the incurrence of certain additional indebtedness, certain asset sales, or an event of loss, subject to certain conditions set forth in the Blackstone Loan Agreement. The Company may prepay the Loans in whole at its option at any time, subject to certain yield protection premiums. The obligations under the Blackstone Loan Agreement are guaranteed by the Company’s subsidiaries party thereto as guarantors and are secured by a first lien security interest in certain assets of the Company and the guarantors.
The Blackstone Loan Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default applicable to the Company and the guarantors. The Blackstone Loan Agreement also contains a minimum liquidity covenant of $ 30.0 million, tested quarterly. If an event of default occurs and is continuing, the Lenders may declare all amounts outstanding under the Blackstone Loan Agreement to be immediately due and payable.
Concurrent with the closing of the Blackstone Loan Agreement, Blackstone purchased $ 15.0 million of the Company’s common stock at a purchase price of $ 107.14 per share in a private placement transaction. The purchase agreement for the private placement contains customary representations, warranties, and covenants, and includes a lock-up period that generally prohibits, without the prior written consent of the Company, the sale, transfer, pledge, or other disposition of the securities through the period ending 120 days from the Closing Date.
In connection with the Blackstone Loan Agreement, Antecip consented to the collateral assignment of one of the license agreements, among other things, under a direct agreement among the Company, Antecip, a related party, and Blackstone. This new direct agreement superseded the prior direct agreement among us, Antecip, a related party, and Hercules Capital, Inc. (“Hercules”) that had been entered into in connection with the Hercules Loan Agreement, which terminated automatically upon repayment of our Hercules loan obligations in full on May 8, 2025.
Hercules Capital, Inc.
In September 2020, the Company entered into a Loan and Security Agreement for a term loan with Hercules, a Maryland corporation, in its capacity as administrative agent and collateral agent, and as a lender, and the other financial institutions that from time to time act as lenders (the “Hercules Loan Agreement”, as amended).
Borrowings under the Hercules Loan Agreement bore interest at a rate equal to: (a) if the prime rate was greater than or equal to 7.00 %, the greater of either (i) the prime rate plus 2.20 %, and (ii) 9.95 %, but in no event greater than 10.70 %, and (b) if the prime rate was less than 7.00 %, 9.70 %. In addition, the Company was required to pay certain end of term charges, including (A) an initial end of term charge of $ 4.45 million and (B) a subsequent end of term charge of (i) 1.10 % of the aggregate amount of all Tranche 1A Advances plus (ii) 4.95 % of the aggregate amount of all term loan advances (other than Tranche 1A Advances) funded minus (iii) any charges paid by the Borrower to Hercules related to partial prepayments of the outstanding Secured Obligations. The end of term charges were accreted into interest expense using the effective interest rate method over the term of the loan. If certain maturity extension conditions were satisfied, the Company was required to pay an extension end of term charge equal to 1.00 % of the aggregate amount of all Term Loan Advances outstanding as of the date on which the maturity extension conditions were satisfied, in addition to the end of term charges described above. The Company could, at its option, prepay the term loans in full or in part, subject to a prepayment penalty equal to (i) 2.0 % of the Advance amount prepaid if the prepayment occurred prior to February 1, 2024, (ii) 1.5 % of the Advance amount prepaid if the prepayment occurred on or after February 1, 2024 but prior to February 1, 2025, and (iii) 1.0 % of the Advance amount prepaid if the prepayment occurred on or after February 1, 2025 but prior to February 1, 2026.
Debt issuance costs and the value of warrants issued in connection with the Hercules Loan Agreement were recorded as a debt discount and amortized to interest expense using the effective interest method over the expected term of the borrowing.
On May 8, 2025, the Company repaid in full its obligations under the Hercules Loan Agreement using proceeds from the Blackstone Loan Agreement. Upon repayment, the Company recorded a loss on debt extinguishment of approximately $ 10.4 million in the Company’s consolidated statement of operations. As of December 31, 2025 , there are no outstanding obligations under the Hercules Loan Agreement.

F- 23

Table of Contents

 

Loan Interest Expense and Amortization
Long-term debt and unamortized debt discount balances are as follows:
 

 

 

December 31,
2025

 

 

December 31,
2024

 

Total outstanding debt, long-term

 

$

120,000

 

 

$

180,000

 

Add: accreted final payment fee

 

 

—

 

 

 

4,085

 

Less: unamortized debt discount, long-term

 

 

( 2,254

)

 

 

( 3,375

)

Loan payable, long-term

 

$

117,746

 

 

$

180,710

 

The book value of debt approximates its fair value given its variable interest rate.
Interest expense, amortization of the final payment fee, and amortization of the debt discount related to the issuance costs and warrants for the Company’s debt are as follows:
 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Interest expense

 

$

14,058

 

 

$

19,254

 

 

$

17,514

 

Amortization of final payment fee

 

 

527

 

 

 

1,475

 

 

 

1,197

 

Amortization of debt discount related issuance costs and warrants

 

 

776

 

 

 

1,165

 

 

 

1,324

 

Scheduled principal payments on outstanding debt, long-term, as of December 31, 2025, are as follows:
 

2026

 

$

—

 

2027

 

 

—

 

2028

 

 

—

 

2029

 

 

—

 

2030

 

 

120,000

 

Thereafter

 

 

—

 

Total principal payments outstanding

 

$

120,000

 

 
Note 10. Commitments and Contingencies
Leases
In February 2023, the Company entered into a Sublease for the previous office space located at One World Trade Center.
In January 2025 , the Company entered into an amended sublease agreement (the “First Amendment”) to terminate the existing space in its corporate office and commence occupancy of different space within the same building. The First Amendment was treated as a lease modification to the Sublease which resulted in the recognition of a gain on modification of $ 2.3 million which is included in selling, general and administrative expenses. The Company also recorded a right-of-use asset and corresponding lease liability of $ 23.9 million during the first quarter of fiscal year 2025. Based on the Company’s past experience and current expectations for administrative office needs, the Company determined the lease term to be approximately six years. As of December 31, 2025 , the remaining lease term for the Company’s operating lease was 5.3 years with the discount rate of 7.12 %. The interest rate implicit in lease contracts is typically not readily determinable and as such, the Company uses its incremental borrowing rate based on the information available at the lease commencement date, which represents an internally developed rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment .

F- 24

Table of Contents

 

The Company entered into a fleet lease program beginning the first quarter of 2024. The lease agreement includes an initial 12 -month noncancelable period with monthly renewal options thereafter. Lease terms range from approximately 40 to 50 months and are classified as finance leases. During the year ended December 31, 2025 , the Company recognized a right-of-use asset and lease liability, both, of $ 4.5 million in connection to this lease. As of December 31, 2025 , right-of-use asset and lease liability related to the finance lease were $ 6.6 million and $ 6.8 million, respectively, and the weighted average remaining lease term was 2.8 years, with a weighted average discount rate of 9.6 %.
Lease expenses recognized were as follows:
 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Operating lease expense

 

$

4,740

 

 

$

2,331

 

 

$

2,173

 

Finance lease expense:

 

 

 

 

 

 

 

 

 

Amortization of right-of-use assets

 

 

2,186

 

 

 

1,034

 

 

 

—

 

Interest on lease liabilities

 

 

568

 

 

 

320

 

 

 

—

 

Future minimum lease payments of the Company’s leases as of December 31, 2025, were as follows:
 

 

 

Operating lease

 

 

Finance lease

 

2026

 

$

2,028

 

 

$

3,056

 

2027

 

 

4,791

 

 

 

2,557

 

2028

 

 

4,807

 

 

 

1,726

 

2029

 

 

11,284

 

 

 

294

 

2030

 

 

5,032

 

 

 

—

 

Thereafter

 

 

1,285

 

 

 

—

 

Total lease payments

 

 

29,227

 

 

 

7,633

 

Less: imputed interest

 

 

( 5,611

)

 

 

( 882

)

Present value of lease liabilities

 

$

23,616

 

 

$

6,751

 

Legal Proceedings
The Company may be involved in various claims, litigation and legal proceedings from time to time. On a quarterly basis, the Company reviews the status of each significant matter and assesses its potential financial exposure. Because of uncertainties related to claims, litigation and legal proceedings, accruals are based on the Company’s best estimates based on available information. The Company records accruals for outstanding legal matters if a matter is both probable to result in material liability and the amount of loss or a range of possible loss can be reasonably estimated. If a loss contingency is not both probable and reasonably estimable, the Company does not establish an accrued liability.
Securities Class Action
On May 13, 2022, Evy Gru filed a putative class action complaint captioned Gru v. Axsome Therapeutics, Inc., et al. in the U.S. District Court for the Southern District of New York, or the SDNY District Court, against the Company and certain of its current and former officers and one director, which the Company refers to as the Securities Class Action. The complaint asserts claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, and alleges, among other things, that the defendants made false statements and omissions concerning the Company’s chemistry manufacturing and controls practices, and its NDA with the FDA, with respect to one of its then product candidates, AXS-07, now SYMBRAVO. The named plaintiff sought unspecified damages, fees, interest, and costs. On August 11, 2022, the SDNY District Court appointed co-lead plaintiffs in the Securities Class Action, one of whom later withdrew. On October 7, 2022, the Securities Class Action plaintiffs filed an amended complaint, which contained substantially similar allegations as in the initial complaint. On September 25, 2023, the SDNY District Court granted defendants’ motion to dismiss the amended complaint.

F- 25

Table of Contents

 

On October 13, 2023, plaintiffs’ counsel filed a letter seeking leave to file an amended complaint and to substitute new plaintiffs. On January 22, 2024, the SDNY District Court granted that motion and ordered that the case name be changed to In re Axsome Therapeutics, Inc. Securities Litigation. On January 26, 2024, the replacement plaintiffs renewed their request for leave to file a proposed second amended complaint, and, on February 6, 2024, the SDNY District Court granted that request. Plaintiffs filed the second amended complaint on February 7, 2024. On March 11, 2024, the defendants moved to dismiss the second amended complaint. On March 31, 2025, the SDNY District Court entered an order granting in part and denying in part defendants’ motions to dismiss, dismissing plaintiffs’ claims against three of Axsome’s current and former officers and allowing the claims against the Company and two current officers to proceed. On October 27, 2025, the SDNY District Court preliminarily approved the terms of a settlement resolving the Securities Class Action. On February 10, 2026, the SDNY District Court conducted a hearing on plaintiffs’ motion for final approval of the settlement and the parties are awaiting the Court’s decision.
Stockholder Derivative Action
On July 21, 2022, Daniel Engel filed a stockholder derivative complaint captioned Engel v. Herriot Tabuteau, et al. in the SDNY District Court against the Company’s then-current directors, certain of the Company’s current and former officers, and the Company (as nominal defendant). On January 27, 2023, Kyle Guterba filed a stockholder derivative complaint captioned Guterba v. Tabuteau, et al. in the SDNY District Court against the Company’s then-current directors, certain of the Company’s current and former officers, and the Company (as nominal defendant). The SDNY derivative complaints arise out of similar allegations as those made in the Securities Class Action. The plaintiffs assert claims for breach of fiduciary duties against all of the defendants and for contribution for violations of Section 10(b) and 21D of the Exchange Act. The plaintiffs seek unspecified damages, fees, interest, and costs, as well as corporate governance changes. The Engel and Guterba matters were consolidated on February 28, 2023 and were stayed pending further proceedings in the Securities Class Action. On November 25, 2025, the plaintiffs filed an amended complaint. On February 13, 2026, the defendants moved to dismiss the amended complaint. The plaintiffs’ deadline to respond to the motion to dismiss is March 9, 2026.
On September 23, 2025, John Wickstrom filed a stockholder derivative complaint captioned Wickstrom v. Herriot Tabuteau, et al. in the Court of Chancery of the State of Delaware against the Company’s current directors, certain of the Company’s current and former officers, and the Company (as nominal defendant). On September 29, 2025, John Gildea filed a stockholder derivative complaint captioned Gildea v. Herriot Tabuteau, et al. in the Court of Chancery of the State of Delaware against the Company’s current directors, certain of the Company’s current and former officers, and the Company (as nominal defendant). The Delaware derivative complaints arise out of similar allegations as those made in the Securities Class Action and the SDNY derivative action. The plaintiffs assert claims for breach of fiduciary duties, unjust enrichment, and corporate waste against all of the defendants. The plaintiffs seek unspecified damages, fees, interest, and costs, as well as corporate governance changes. On November 6, 2025, the court consolidated the actions and designated the complaint in the Wickstrom action as the operative complaint. On February 2, 2026, the defendants moved to dismiss the complaint. The plaintiffs’ deadline to respond to the motion to dismiss is March 19, 2026.

F- 26

Table of Contents

 

SUNOSI Paragraph IV Litigation
On September 13, 2023, the Company commenced a patent infringement action against Hikma Pharmaceuticals USA, Inc. (“Hikma”) and five other drug companies relating to each defendant’s ANDA for SUNOSI. This action is captioned Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Alkem Laboratories Ltd., et al . No. 2:23-cv-20354 in the U.S. District Court for the District of New Jersey, or the NJ District Court. The Company commenced related patent infringement actions against the defendants relating to their ANDAs on December 20, 2023, January 11, 2024, January 18, 2024, February 14, 2024, March 19, 2024 (2 actions filed), April 5, 2024, July 2, 2024, August 8, 2024, August 21, 2024, September 16, 2024, November 20, 2024 (4 actions filed), January 21, 2025, January 29, 2025, May 1, 2025, August 15, 2025, November 12, 2025, and November 14, 2025. Those actions are captioned Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Unichem Laboratories Ltd . No. 2:23-cv-23255; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Hetero USA, Inc. et al . No. 2:24-cv-00196; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Aurobindo Pharma USA, Inc. et al . No. 2:24-cv-00309; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Sandoz, Inc . No. 2:24-cv-00860; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Hetero USA, Inc. et al . No. 2:24-cv-03999; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Aurobindo Pharma USA, Inc. et al . No. 2:24-cv-04002; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Alkem Laboratories Ltd., et al . No. 2:24-cv-04608; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Aurobindo Pharma USA, Inc. et al . No. 2-24-cv-07511; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Alkem Laboratories Ltd. No. 2-24-cv-08365; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Aurobindo Pharma USA, Inc. et al. No. 2-24-cv-08624; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Alkem Laboratories Ltd. et al. No. 2-24-cv-09209; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Alkem Laboratories Ltd. No. 2-24-cv-10617; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Hetero USA, Inc. et al . No. 2:24-cv-10618; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Aurobindo Pharma USA, Inc. et al . No. 2:24-cv-10619; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Hikma Pharmaceuticals USA Inc . No. 2:24-cv-10620; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Aurobindo Pharma USA, Inc. et al . No. 2:25-cv-00643; Axsome Malta Ltd. et al v. Hetero USA Inc. et al . No. 2-25-cv-00801; Axsome Malta Ltd. & Axsome Therapeutics, Inc. v. Aurobindo Pharma USA, Inc. et al . No. 2-25-cv-03721; Axsome Malta Ltd. et al v. Alkem Laboratories Ltd . No. 2-25-cv-14694; Axsome Malta Ltd. et al v. Alkem Laboratories Ltd . No. 2-25-cv-17395; and Axsome Malta Ltd. et al. v. Aurobindo Pharma USA, Inc. et al . 2-25-cv-17592, respectively, all of which were filed in the NJ District Court.
On June 4, 2024, Axsome and Axsome Malta Ltd. (the “Malta Subsidiary”) entered into a settlement agreement with Unichem Laboratories Ltd. (“Unichem”) under which agreement Unichem agreed not to launch its generic solriamfetol product until June 30, 2042, or earlier under certain circumstances. On August 21, 2024, Axsome and the Malta Subsidiary reached an agreement to dismiss the actions pending against Sandoz Inc. On September 25, 2024, Hikma filed a petition for Inter Partes Review of U.S. Patent No. 11,560,354 before the United States Patent and Trademark Office’s Patent Trial and Appeal Board. That petition was captioned Hikma Pharmaceuticals USA Inc. f/k/a West-Ward Pharmaceuticals Corp. v. Axsome Malta Ltd . IPR2024-01418. On March 2, 2025, Axsome and the Malta Subsidiary entered into a settlement agreement with Hikma under which agreement Hikma agreed not to launch its generic solriamfetol product until September 1, 2040, if pediatric exclusivity is granted for SUNOSI, or on or after March 1, 2040, if no pediatric exclusivity is granted, or earlier under certain circumstances. On March 6, 2025 the Malta Subsidiary and Hikma jointly requested that the PTAB dismiss IPR2024-01418. That request was granted on March 12, 2025. On May 21, 2025, Axsome and the Malta Subsidiary entered into a settlement with Hetero USA, Inc., Hetero Labs Limited Unit-V, and Hetero Labs Ltd. (collectively, “Hetero”) under which agreement Hetero agreed not to launch its generic solriamfetol product until September 1, 2040, if pediatric exclusivity is granted for SUNOSI, or on or after March 1, 2040, if no pediatric exclusivity is granted, or earlier under certain circumstances. On February 13, 2026, Axsome and the Malta Subsidiary entered into a settlement with Alkem Laboratories Ltd. (“Alkem”) under which agreement Alkem agreed not to launch its generic solriamfetol product until September 1, 2040, if pediatric exclusivity is granted for SUNOSI, or on or after March 1, 2040, if no pediatric exclusivity is granted, or earlier under certain circumstances. All other actions remain pending and are in fact discovery.
SYMBRAVO Paragraph IV Litigation
On September 26, 2025, the Company commenced a patent infringement action against Apotex Inc. relating to Apotex’s ANDA for SYMBRAVO. This action is captioned Axsome Therapeutics, Inc. v. Apotex, Inc., No. 1:25-cv-16038 in the NJ District Court. The Court has not yet set a schedule for the action.

F- 27

Table of Contents

 

The Company believes that its assertions in pending legal proceedings have merit and does not believe that any of these matters, individually or in the aggregate, will have a material adverse effect on its financial position. As of December 31, 2025, there were no potential material losses from claims, asserted or unasserted, or legal proceedings that the Company determined were both probable and reasonably estimable.

Note 11. Stockholders’ Equity
Public Offerings
At-the-Market Offerings
In March 2022, the Company entered into a sales agreement (the “March 2022 Sales Agreement”) with Leerink Partners LLC (“Leerink”) and filed a prospectus supplement. The March 2022 Sales Agreement supersedes the sales agreement, dated December 5, 2019, by and between the Company and Leerink. The Company exhausted sales of shares of the Company’s common stock under its prior at-the-market offering program.
Under the March 2022 Sales Agreement, for the three months ended December 31, 2025 , the Company received approximately $ 5.7 million in gross proceeds through the sale of 39,694 shares, of which net proceeds were approximately $ 5.6 million. For the year ended December 31, 2025 , the Company received approximately $ 52.9 million in gross proceeds through the sale of 451,176 shares, of which net proceeds were approximately $ 51.9 million under the March 2022 Sales Agreement.
June 2023 Public Offering
In June 2023, the Company completed an underwritten public offering of its common stock (the “June 2023 Public Offering”). The Company sold 3.0 million shares of its common stock at a public offering price of $ 75.00 per share. The net proceeds were $ 211.3 million, net of underwriting discounts and commissions of $ 13.5 million and other offering costs of $ 0.2 million. Additionally, in connection with this public offering, in July 2023, the underwriters fully exercised their option to purchase 450,000 additional shares of the Company’s common stock at a public offering price of $ 75.00 per share. The net proceeds from the exercise of the option were $ 31.7 million, net of underwriting discounts and commissions of $ 2.0 million and other minimal offering costs.
Blackstone Securities Purchase Agreement
In May 2025, the Company entered into a securities purchase agreement with Blackstone, and its affiliates, for the private placement (the “Private Placement”) of an aggregate of 140,000 shares of the Company’s common stock, at a purchase price of $ 107.14 per share. Gross proceeds from the Private Placement were approximately $ 15.0 million. The closing of the Private Placement occurred contemporaneously with the closing of the Blackstone Loan Agreement.
Shelf Registration Statement
On November 3, 2025, the Company filed an automatic shelf registration statement (the “2025 Shelf Registration Statement”) with the SEC for the issuance of common stock, preferred stock, warrants, rights, debt securities and units. It became effective upon filing with the SEC and is currently the Company’s only active shelf registration.
Under SEC rules, the 2025 Shelf Registration Statement allows for the potential future offer and sale by the Company, from time to time, in one or more public offerings of an unlimited amount of the Company’s common stock, preferred stock, debt securities, and units at indeterminate prices. At the time any of the securities covered by the 2025 Shelf Registration Statement are offered for sale, a prospectus supplement will be prepared and filed with the SEC containing specific information about the terms of any such offering.

F- 28

Table of Contents

 

Equity Incentive Plan
In October 2015, the Board adopted the 2015 Omnibus Incentive Compensation Plan (the “2015 Plan”) and the Company’s stockholders approved the 2015 Plan in November 2015. In April 2025, the Board adopted the Company’s 2025 Long-Term Incentive Plan (“2025 Plan”) and the Company’s stockholders approved the 2025 Plan in June 2025. The Company will make all future equity awards from the 2025 Plan and the Company does not intend to grant any future equity awards from the 2015 Plan. As of December 31, 2025, there were 2,560,212 shares available for future grant under the 2025 Plan.
Stock Options
The following table sets forth stock option activity as of December 31, 2025:
 

 

 

Number
of shares

 

 

Weighted
average
exercise price

 

 

Weighted
average
contractual
term (years)

 

 

Aggregate
intrinsic
value

 

Outstanding at December 31, 2024

 

 

8,439,121

 

 

$

46.72

 

 

 

 

 

 

 

Granted

 

 

390,395

 

 

 

125.20

 

 

 

 

 

 

 

Exercised

 

 

( 1,498,360

)

 

 

37.40

 

 

 

 

 

 

 

Forfeited/Canceled

 

 

( 296,878

)

 

 

72.49

 

 

 

 

 

 

 

Outstanding at December 31, 2025

 

 

7,034,278

 

 

$

51.98

 

 

 

5.9

 

 

$

919,114

 

Vested and expected to vest at December 31, 2025

 

 

7,034,278

 

 

$

51.98

 

 

 

5.9

 

 

$

919,114

 

Exercisable at December 31, 2025

 

 

5,310,522

 

 

$

42.30

 

 

 

5.2

 

 

$

745,283

 

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The expected term of the Company’s stock options has been determined utilizing the “simplified” method as described in the SEC’s Staff Accounting Bulletin No. 107 relating to stock-based compensation. The simplified method was chosen because the Company has limited option exercise history due to its short operating history. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant for a period approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does no t expect to pay any cash dividends in the foreseeable future. In prior years, expected volatility was based on historical volatilities of similar entities within the Company’s industry which were commensurate with the Company’s expected term assumption. Currently, expected volatility is based on historical volatility information of the Company’s common stock since the Company’s initial public offering in 2015.
The relevant data used to determine the value of the stock option grants is as follows:
 

Black-Scholes option valuation assumptions

 

2025

 

 

2024

 

 

2023

 

Risk-free interest rates

 

3.65  - 4.61 %

 

 

3.51  - 4.62 %

 

 

3.34  - 4.88 %

 

Dividend yield

 

 

—

 

 

 

—

 

 

 

—

 

Volatility

 

75  - 90 %

 

 

81  - 93 %

 

 

93  - 99 %

 

Weighted average expected term

 

5.0 - 6.11 years

 

 

5.0 - 6.11 years

 

 

5.0  - 6.11  years

 

The weighted average grant date fair value of options granted was $ 89.06 , $ 64.88 , and $ 53.07 per option for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025 , there was $ 99.1 million of total unrecognized compensation cost related to unvested stock options which is expected to be recognized over a weighted average period of 1.9 years.
Restricted Stock Units
The fair value of the RSUs is recognized as an expense ratably over the vesting period of four years . As of December 31, 2025 , total compensation cost not yet recognized related to nonvested RSUs was $ 71.4 million, which is expected to be recognized over a weighted-average period of 2.4 years. The intrinsic value of RSUs lapsed during the years ended December 31, 2025, 2024 and 2023 was $ 20.0 million, $ 10.3 million, and $ 4.9 million, respectively.

F- 29

Table of Contents

 

The following table sets forth the RSU activity for the year ended December 31, 2025:
 

 

 

Number
of shares

 

 

Weighted
average
grant date
fair value

 

Nonvested at December 31, 2024

 

 

906,944

 

 

$

59.48

 

Granted

 

 

512,767

 

 

 

122.68

 

Vested

 

 

( 321,470

)

 

 

52.23

 

Forfeited

 

 

( 85,432

)

 

 

93.20

 

Nonvested at December 31, 2025

 

 

1,012,809

 

 

$

90.93

 

Performance Stock Units
In February 2025, the Company granted PSUs to the executive officers. Vesting of the PSUs is subject to achievement of specified performance goals, which include achieving revenue, clinical, and regulatory targets. The actual number of common shares that would ultimately be issued is calculated by multiplying the number of PSUs granted by a payout multiplier ranging from 0 to 2 . Achievement of the performance goals will ultimately be determined by the Compensation Committee or the Board at the end of the vesting term, which is approximately 3 years from the grant date. As of December 31, 2025 , total compensation cost not yet recognized related to nonvested PSUs was $ 4.4 million, which is expected to be recognized over a weighted-average period of 2.2 years.
The following table sets forth the PSU activity for the year ended December 31, 2025:

 

 

Number
of shares

 

 

Weighted
average
grant date
fair value

 

Nonvested at December 31, 2024

 

 

—

 

 

$

—

 

Granted

 

 

64,281

 

 

 

94.39

 

Vested

 

 

—

 

 

 

—

 

Forfeited

 

 

—

 

 

 

—

 

Nonvested at December 31, 2025

 

 

64,281

 

 

$

94.39

 

Employee Stock Purchase Plan
The ESPP allows eligible employees to purchase shares of the Company’s common stock. The purchase price is equal to 85 % of the lower of the closing price of the Company’s common stock on (1) the first day of the offering period or (2) the last day of the offering period. The ESPP has consecutive offering periods that begin on or about June 1st of each year with a duration of 12 months. The Company commenced the second offering period pursuant to the ESPP on June 1, 2024, and such offering ended on May 31, 2025.
During the year ended December 31, 2025, 59,607 common shares have been purchased and issued pursuant to the ESPP, and $ 2.2 million of expense was recorded. During the year ended December 31, 2024, 52,368 common shares have been purchased and issued pursuant to the ESPP, and $ 1.6 million of expense was recorded. During the year ended December 31, 2023, no shares of common stock were purchased pursuant to the ESPP, and $ 1.1 million of expense was recorded.
Stock-based Compensation Expense
Stock‑based compensation expense recognized was as follows:
 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Research and development

 

$

26,828

 

 

$

21,417

 

 

$

14,080

 

Selling, general and administrative

 

 

66,924

 

 

 

63,801

 

 

 

48,540

 

Total

 

$

93,752

 

 

$

85,218

 

 

$

62,620

 

 

F- 30

Table of Contents

 

Stock-based compensation expense capitalized into inventory totaled $ 1.5 million, $ 1.3 million, and $ 2.7 million for the years ended December 31, 2025, 2024 and 2023 , respectively. Capitalized stock-based compensation is recognized as an expense in cost of product sales when the related product is sold or in selling, general and administrative expense when the related product is dispensed as a physician sample.

Note 12. Warrants
The following table summarizes warrant activity for the years ended December 31, 2025, 2024, and 2023:
 

 

 

Warrants

 

 

Weighted average
exercise price

 

Outstanding at December 31, 2022

 

 

50,796

 

 

$

46.75

 

Issued

 

 

28,424

 

 

 

74.75

 

Exercised

 

 

—

 

 

 

—

 

Outstanding at December 31, 2023

 

 

79,220

 

 

$

56.80

 

Issued

 

 

—

 

 

 

—

 

Exercised

 

 

—

 

 

 

—

 

Outstanding at December 31, 2024

 

 

79,220

 

 

$

56.80

 

Issued

 

 

—

 

 

 

—

 

Exercised

 

 

—

 

 

 

—

 

Outstanding at December 31, 2025

 

 

79,220

 

 

$

56.80

 

Outstanding Warrants
In connection with the entry into the Third Amendment to the Hercules Loan Agreement, which the Company entered into in January 2023, Hercules received warrants to purchase an aggregate of 18,724 shares of the Company’s common stock at an exercise price of $ 55.01 per share, and in connection with the draw down of the Tranche 1C Advance, Hercules received warrants to purchase 9,700 shares of the Company’s common stock at an exercise price of $ 77.31 per share (collectively, the “2023 warrants”). In connection with the entry into the Second Amendment, Hercules received warrants to purchase an aggregate of 35,255 shares of the Company’s common stock at an exercise price of $ 31.91 per share (the “2022 warrants”), and in connection with the first advance of the 2020 Term Loan, Hercules received warrants to purchase an aggregate of 15,541 shares of the Company’s common stock at an exercise price of $ 80.43 per share (the “2020 warrants”).
The 2023 warrants, 2022 warrants and 2020 warrants were priced using the volume weighted average price of the Company’s common stock over the ten -day trading period immediately preceding the initial closing, subject to certain limited adjustments as specified in the warrant. The warrants are exercisable for seven years from the date of issuance. The warrants were classified as a component of stockholders’ equity. The relative fair value of the warrants of approximately $ 1.6 million for the 2023 warrants, $ 0.8 million for the 2022 warrants and $ 0.9 million for the 2020 warrants at the time of issuance, which was determined using the Black-Scholes option-pricing model, was recorded as additional paid-in capital and reduced the carrying value of the debt. Upon full repayment of the Company’s obligations under the Hercules Loan Agreement, no additional warrants are issuable under the Hercules Loan Agreement.

The initial fair value of warrants outstanding was estimated using the Black‑Scholes option pricing model with the following assumptions:
 

Black-Scholes option valuation assumptions

 

2023
warrants

 

 

2022
warrants

 

 

2020
warrants

 

Risk-free interest rate

 

3.6  - 3.9 %

 

 

 

3.1

%

 

 

0.5

%

Dividend yield

 

 

—

 

 

 

—

 

 

 

—

 

Volatility

 

92  - 95 %

 

 

 

94

%

 

 

88

%

Weighted average contractual term

 

7 years

 

 

7 years

 

 

7 years

 

 

F- 31

Table of Contents

 

Note 13. Net Loss per Common Share
The following table sets forth the computation of basic and diluted net loss per common share:
 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Basic and diluted net loss per common share:

 

 

 

 

 

 

 

 

 

Net loss

 

$

( 183,174

)

 

$

( 287,216

)

 

$

( 239,238

)

Weighted average common shares outstanding—basic and diluted

 

 

49,747,178

 

 

 

47,914,253

 

 

 

45,425,212

 

Net loss per common share—basic and diluted

 

$

( 3.68

)

 

$

( 5.99

)

 

$

( 5.27

)

The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive:
 

 

 

December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Stock options

 

 

7,034,278

 

 

 

8,439,121

 

 

 

8,462,294

 

Restricted stock units

 

 

1,507,374

 

 

 

906,944

 

 

 

804,150

 

Performance stock units

 

 

64,281

 

 

 

—

 

 

 

—

 

Warrants

 

 

79,220

 

 

 

79,220

 

 

 

79,220

 

ESPP

 

 

79,525

 

 

 

64,886

 

 

 

56,760

 

Total

 

 

8,764,678

 

 

 

9,490,171

 

 

 

9,402,424

 

 
Note 14. Revenues
The Company sells AUVELITY, SUNOSI, and SYMBRAVO in the United States through the Distributors. The Company also sells SUNOSI to Distributors in Canada and on a product supply basis to Pharmanovia. SUNOSI is subsequently sold by Pharmanovia in certain ex-U.S. markets. For the year ended December 31, 2025 , the Company’s three largest customers represented approximately 35 %, 31 %, and 25 % of the Company’s gross product sales.
License revenue consists of the recognition of the upfront payment the Company received from Pharmanovia in February 2023, royalty revenue related to the sales of SUNOSI by Pharmanovia in certain ex-U.S. markets, and a milestone revenue of $ 0.5 million related to an achievement of a regulatory milestone in China for SUNOSI from SK recorded in the fourth quarter of 2024.
The following table presents a summary of total revenues by product:
 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Product sales, net

 

 

 

 

 

 

 

 

 

Auvelity

 

$

507,093

 

 

$

291,378

 

 

$

130,072

 

Sunosi

 

 

120,093

 

 

 

90,299

 

 

 

72,388

 

Symbravo

 

 

6,610

 

 

 

—

 

 

 

—

 

Total product sales, net

 

 

633,796

 

 

 

381,677

 

 

 

202,460

 

Sunosi license revenue

 

 

—

 

 

 

—

 

 

 

65,735

 

Sunosi royalty and milestone revenue

 

 

4,700

 

 

 

4,016

 

 

 

2,405

 

Total revenues

 

$

638,496

 

 

$

385,693

 

 

$

270,600

 

 

F- 32

Table of Contents

 

The following table presents a summary of total revenues by geographic location:
 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Product sales, net

 

 

 

 

 

 

 

 

 

United States

 

$

628,617

 

 

$

378,159

 

 

$

197,224

 

Outside of the United States

 

 

5,179

 

 

 

3,518

 

 

 

5,236

 

Total product sales, net

 

 

633,796

 

 

 

381,677

 

 

 

202,460

 

License revenue

 

 

 

 

 

 

 

 

 

Outside of the United States

 

 

—

 

 

 

—

 

 

 

65,735

 

Royalty and milestone revenue

 

 

 

 

 

 

 

 

 

Outside of the United States

 

 

4,700

 

 

 

4,016

 

 

 

2,405

 

Total revenues

 

$

638,496

 

 

$

385,693

 

 

$

270,600

 

For the year ended December 31, 2025, product sales, net, include adjustments for provisions for product sales made in previous fiscal years resulting from changes in estimates of $ 1.0 million for AUVELITY and $ 0.9 million for SUNOSI. For the year ended December 31, 2024, product sales, net, include adjustments for provisions for product sales made in previous fiscal years resulting from changes in estimates of $ 0.8 million for AUVELITY and $ 0.6 million for SUNOSI.

Note 15. License Agreements
License Agreement with Pharmanovia
In February 2023, Axsome Malta, a Malta limited company and a wholly owned subsidiary of the Company, entered into an exclusive license agreement with Pharmanovia (the “Pharmanovia License Agreement”) to commercialize and further develop SUNOSI in Europe and certain countries in the Middle East and North Africa (the “Territory”). Under the terms of the Pharmanovia License Agreement, the Company retains its existing interest in SUNOSI intellectual property and licenses those rights in the Territory to Pharmanovia. Pharmanovia is solely responsible for the clinical development and commercialization of SUNOSI in the Territory. The Company will continue to manufacture SUNOSI and provide product supply to Pharmanovia for an indefinite period of time, and the Company will recognize revenue as a component of product sales, net, when product is supplied to Pharmanovia.
In consideration for entering the Pharmanovia License Agreement, the Company received a non-refundable upfront payment of € 62.0 million ($ 65.7 million). The Company also will receive a royalty percentage in the mid-twenties on SUNOSI net sales in the Territory and is eligible to receive sales-based milestone payments totaling up to € 94.5 million.
The Company evaluated the Pharmanovia License Agreement under ASC 606 and concluded that Pharmanovia represents a customer in the transaction. The initial transaction price consisted of the non-refundable upfront payment, which was recognized as License Revenue in the first quarter of 2023 upon transfer of the license to Pharmanovia, as the requirement for revenue recognition under ASC 606 were met. The remaining forms of consideration are variable because they are dependent on the achievement of sales-based or other milestones. The Company evaluated the constraint on variable consideration and concluded that the milestone payments are dependent on regulatory approvals and actions of third parties, and thus are highly susceptible to factors outside the Company’s influence. Therefore, at contract inception, the milestones are not included in the transaction price as it is not probable that a significant reversal of revenue would not occur. Sales-based milestones will be recognized as revenue in the period when the related sales threshold is met. All other development or regulatory milestones will be recognized as revenue immediately in the period the underlying milestone is achieved. Any consideration related to sales-based royalties will be recognized when the related sales occur. For the year ended December 31, 2025 , the Company recognized royalty revenue of $ 4.7 million related to Pharmanovia’s sales of SUNOSI. For the year ended December 31, 2024 , the Company recognized royalty revenue of $ 3.5 million related to Pharmanovia’s sales of SUNOSI, and $ 0.5 million related to an achievement of a regulatory milestone in China for SUNOSI from SK in the fourth quarter of 2024. No other development or sales-based milestones were recognized during the year ended December 31, 2025.

F- 33

Table of Contents

 

Exclusive License Agreement with Pfizer
In January 2020, the Company entered into an exclusive license agreement with Pfizer Inc. (“Pfizer”) for Pfizer’s clinical and non-clinical data, and intellectual property for reboxetine, the active pharmaceutical ingredient in AXS-12 which the Company is developing for the treatment of narcolepsy. The agreement also provides the Company exclusive rights to develop and commercialize esreboxetine, a new late-stage product candidate referred to as AXS-14, in the U.S. for the treatment of fibromyalgia.
Under the terms of the agreement, Pfizer received 82,019 shares of the Company’s common stock having a stated value of $ 8.0 million, based on the average closing price of the Company’s common stock for the ten prior trading days of $ 97.54 , in consideration for the license and rights and also received an upfront cash payment of $ 3.0 million. The Company determined that the fair value of each share of common stock granted to Pfizer on the closing date of January 9, 2020 was $ 87.24 , based on the closing price of the Company’s stock on that date. As a result, the fair value of the stock issued was $ 7.2 million and, therefore, the total research and development expense recognized was $ 10.2 million related to the Pfizer license agreement during the year ended December 31, 2020.
Pfizer can also receive up to $ 323 million in regulatory and sales milestones, and tiered mid-single to low double-digit royalties on future sales related to the licensed products. Pfizer will also have a right of first negotiation on any potential future strategic transactions involving AXS-12 and AXS-14. During the years ended December 31, 2025 and 2024 , no milestone payments or royalties were paid to Pfizer by the Company.
Exclusive License Agreements with Antecip
In 2012, the Company entered into three exclusive license agreements with Antecip, an entity owned by the Company’s Chief Executive Officer and Chairman of the Board, Herriot Tabuteau, M.D., in which the Company was granted exclusive licenses to develop, manufacture and commercialize Antecip’s patents and applications related to the development of AXS-05 (now marketed as AUVELITY) and two product candidates no longer under active development, anywhere in the world for human therapeutic, veterinary, and diagnostic use. Pursuant to the agreements, the Company is required to use commercially reasonable efforts to develop, obtain regulatory approval for and commercialize these product candidates. Under the terms of the agreements, the Company is required to pay to Antecip a royalty equal to 3.0 % for AXS-05 (and 1.5 % or 4.5 % for the other two product candidates no longer under active development), of net sales of products containing the licensed technology by the Company, its affiliates, or permitted sublicensees. These royalty payments are subject to reduction by an amount up to 50.0 % of any required payments to third parties. Unless earlier terminated by a party for cause or by the Company for convenience, the agreements shall remain in effect on a product-by-product and country-by-country basis until the later to occur of (i) the applicable product is no longer covered by a valid claim in that country or (ii) 10 years from the first commercial sale of the applicable product in that country. Upon expiration of the agreements with respect to a product in a country, the Company’s license grant for that product in that country will become a fully paid-up, royalty-free, perpetual non-exclusive license. If Antecip terminates any of the agreements for cause, or if the Company exercises its right to terminate any of the agreements for convenience, the rights granted to the Company under such terminated agreement will revert to Antecip. The Company began recording royalty payments to Antecip along with the initiation of sales of AUVELITY (the components of which are referred to as “AXS-05”) in the fourth quarter of 2022. The Company recorded royalty expense of $ 15.2 million and $ 8.7 million for the years ended December 31, 2025 and 2024, respectively, which equal 3.0 % of net sales of AUVELITY for those respective years. This is considered to be a related party transaction.
In connection with the Blackstone Loan Agreement, Antecip consented to the collateral assignment of one of the license agreements, among other things, under a direct agreement among the Company, Antecip, a related party, and Blackstone. This new direct agreement superseded the prior direct agreement among us, Antecip, a related party, and Hercules that had been entered into in connection with the Hercules Loan Agreement, which terminated automatically upon repayment of our Hercules loan obligations in full on May 8, 2025.

F- 34

Table of Contents

 

Note 16. Acquisitions
In November 2025, the Company acquired all the outstanding shares of Baergic. The acquisition provided the Company with global rights to AZD7325 (AXS-17), an oral GABA A receptor α2,3 subtype-selective PAM, originally licensed from AstraZeneca AB (AZ), for the potential treatment of epilepsy. The Company also assumed the AZD7325 license agreement between Baergic and AZ. The former Baergic shareholders and AZ are also eligible to receive contingent development, regulatory and sales-based milestone payments of up to $ 159.5 million and tiered low double-digit to mid-teen royalties on potential global net sales of AZD7325.
The Company accounted for the transaction as an acquisition of an asset, as substantially all the fair value of the assets acquired were concentrated in AZD7325. The Company recorded a charge of $ 2.3 million in research and development expense, inclusive of the shares acquired, license amendment costs, and direct transaction costs.
In December 2025, the Company acquired the global rights to deuterium-stabilized S-bupropion from DeuteRx. DeuteRx is eligible to receive contingent development, regulatory and sales-based milestones of up to $ 523 million and a tiered low single-digit royalty on potential global net sales .
The Company accounted for the transaction as an acquisition of an asset, as substantially all the fair value of the assets acquired were concentrated in deuterium-stabilized S-bupropion. The Company recorded a charge of $ 2.6 million in research and development expense, inclusive of the upfront payment and direct transaction costs.

Note 17. Royalty Agreements
On March 25, 2022, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Jazz, pursuant to which the Company was to acquire commercial and development rights with respect to SUNOSI from Jazz in certain U.S. and ex-U.S. markets. The Acquisition occurred in two separate closings. The sale and purchase of specified initial assets contemplated by the Purchase Agreement occurred on May 9, 2022 (the “Initial Closing”), following the satisfaction or waiver of the closing conditions under the Purchase Agreement. The sale and purchase of specified ex-U.S. assets contemplated by the Purchase Agreement occurred on November 14, 2022, following the satisfaction or waiver of the closing conditions under the Purchase Agreement (the “Final Closing”). The Company accounted for the Initial Closing as a business combination using the acquisition method of accounting, and the Company accounted for the Final Closing as an asset acquisition.
Pursuant to the Purchase Agreement, the Company agreed to make non-refundable, non-creditable royalty payments to Jazz equal to a (A) high single-digit royalty for any current indication, or (B) mid single-digit royalty for any future indication of net sales in the U.S. Territory made during the applicable royalty term. There are no royalty payments due to Jazz for net sales outside of the U.S. Territory.

At the Initial Closing, the Company assumed all of the commitments of Jazz to SK and Aerial. SK is the originator of SUNOSI and retains rights in 12 Asian markets, including China, Korea and Japan. In 2014, Jazz acquired from Aerial worldwide rights to SUNOSI excluding those Asian markets stated previously. The assumed commitments to SK and Aerial include single-digit tiered royalties based on the Company’s sales of SUNOSI, and additionally, the Company is committed to pay up to $ 162.5 million based on revenue milestones and $ 1.0 million based on development milestones. In the fourth quarter of 2024, the Company recorded a $ 2.5 million expense for the achievement of a sales-based milestone related to world-wide SUNOSI sales. No other development or sales-based milestones were recognized during the year ended December 31, 2025.

F- 35

Table of Contents

 

Note 18. Income Taxes
The Company has elected to prospectively adopt the guidance in ASU 2023-09. A reconciliation of the U.S. federal statutory rate of 21 % to the Company’s effective tax rate for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09 is as follows:
 

 

 

Year ended December 31, 2025

 

 

 

Amount

 

 

Percentage

 

U.S. federal statutory tax rate

 

$

( 38,479

)

 

 

21.0

%

State and local income tax, net of federal income tax effect (a)

 

 

3,810

 

 

 

( 2.1

)

Foreign tax effects

 

 

 

 

 

 

Other adjustments

 

 

( 79

)

 

 

0.0

 

Malta

 

 

 

 

 

 

Other adjustments

 

 

( 7,024

)

 

 

3.8

 

Changes in valuation allowances

 

 

9,505

 

 

 

( 5.2

)

Effect of rates different than statutory

 

 

11,009

 

 

 

( 6.0

)

Tax credits

 

 

 

 

 

 

Other

 

 

589

 

 

 

( 0.3

)

R&D tax credit

 

 

2,030

 

 

 

( 1.1

)

Changes in valuation allowances

 

 

17,941

 

 

 

( 9.8

)

Nontaxable or nondeductible items

 

 

 

 

 

 

Other

 

 

( 364

)

 

 

0.2

 

Meals & entertainment expense

 

 

2,098

 

 

 

( 1.1

)

162(m) Limitation

 

 

16,714

 

 

 

( 9.1

)

Debt extinguishment loss

 

 

2,181

 

 

 

( 1.2

)

Stock based compensation

 

 

( 19,963

)

 

 

10.9

 

Other

 

 

( 498

)

 

 

0.3

 

Total tax benefit

 

$

( 530

)

 

 

0.3

%

(a) Texas make up the majority (more than 50 percent) of the tax effect in this category.

A reconciliation of the U.S. federal statutory rate of 21 % to the Company’s effective rate for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 is as follows:
 

 

 

December 31, 2024

 

 

December 31, 2023

 

U.S. federal statutory income tax rate

 

 

21.0

%

 

 

21.0

%

State taxes, net of federal benefit

 

 

2.2

 

 

 

2.6

 

Foreign Rate Differential

 

 

( 6.3

)

 

 

( 1.8

)

Stock based compensation - Excess tax benefit

 

 

1.3

 

 

 

0.7

 

162(m) Limitation

 

 

( 1.1

)

 

 

( 1.4

)

Other permanent differences

 

 

( 0.6

)

 

 

( 0.4

)

Tax credit

 

 

2.8

 

 

 

1.9

 

Deferred tax adjustment

 

 

0.5

 

 

 

0.0

 

GILTI

 

 

—

 

 

 

( 2.0

)

Change in valuation allowance

 

 

( 19.8

)

 

 

( 21.0

)

Effective tax rate

 

 

—

%

 

 

( 0.4

)%

 

F- 36

Table of Contents

 

Income taxes paid (net of refunds received) for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09 are as follows:
 

 

 

Year ended December 31, 2025

 

Federal

 

$

—

 

State

 

 

( 180

)

Foreign

 

 

—

 

Total

 

$

( 180

)

The components of the Company’s deferred tax assets and deferred tax liabilities are as follows:
 

 

 

December 31, 2025

 

 

December 31, 2024

 

Deferred tax assets:

 

 

 

 

 

 

Net federal operating loss carryforward

 

$

121,365

 

 

$

120,149

 

Net foreign operating loss carryforward

 

 

14,064

 

 

 

4,830

 

Net state operating loss carryforward

 

 

38,770

 

 

 

37,828

 

Non-cash compensation

 

 

35,682

 

 

 

30,734

 

Research and development credits

 

 

24,717

 

 

 

27,409

 

Interest expense

 

 

5,692

 

 

 

3,458

 

Charitable contribution

 

 

4

 

 

 

4

 

COGS: Additional Section 263A costs

 

 

899

 

 

 

—

 

471 adjustment

 

 

317

 

 

 

—

 

Intangible asset

 

 

5,349

 

 

 

5,547

 

Accrued expenses

 

 

8,676

 

 

 

9,180

 

Section 174 capitalization

 

 

60,203

 

 

 

42,343

 

Fixed assets

 

 

65

 

 

 

43

 

Lease liability

 

 

7,443

 

 

 

3,045

 

Deferred tax asset, excluding valuation allowance

 

 

323,246

 

 

 

284,570

 

Deferred tax liabilities:

 

 

 

 

 

 

481(a) adjustment

 

 

( 361

)

 

 

—

 

Lease asset

 

 

( 6,741

)

 

 

( 2,413

)

Deferred tax liability, excluding valuation allowance

 

 

( 7,102

)

 

 

( 2,413

)

 

 

 

 

 

 

Less valuation allowance

 

 

( 316,110

)

 

 

( 282,157

)

Net deferred tax assets

 

$

34

 

 

$

—

 

A valuation allowance is provided for deferred tax assets where the recoverability of the assets is uncertain. The determination to provide a valuation allowance is dependent upon the assessment of whether it is more likely than not that sufficient future taxable income will be generated to utilize the deferred tax assets. Based on the weight of the available evidence, which includes the Company’s historical operating losses and forecast of future losses, the Company provided a valuation allowance against substantially all of the deferred tax assets in the U.S. and Malta . The valuation allowance increased by $ 34.0 million, $ 58.7 million and $ 39.0 million, in 2025, 2024 and 2023, respectively, as a result of the increase of the deferred tax assets.
As of December 31, 2025, the Company has U.S. federal net operating loss (“NOL”) carryforwards of approximately $ 577.9 million and foreign NOL carryforwards of $ 281.3 million. U.S. federal NOLs amounting to $ 59.8 million generated before the 2018 tax year will start expiring beginning 2032 , and the NOLs of approximately $ 518.1 million generated in 2018 and later have an indefinite carryforward period. The NOL carryforwards are subject to review and possible adjustment by the Internal Revenue Service (“IRS”) and state tax authorities. NOL carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, as well as similar state tax provisions. This could limit the amount of NOLs that the Company can utilize annually to offset future taxable income or tax liabilities.

F- 37

Table of Contents

 

For the year ended December 31, 2025, the Company recorded $ 0.5 million of income tax benefit due to favorable return-to-provision adjustments attributable to certain foreign tax returns filed during the year. For the year ended December 31, 2024, the Company recorded $ 0.1 million of income tax expense due to state taxes. There was no income tax expense or benefit recorded by the Company in any other jurisdiction due to its net loss tax position and the valuation allowance recorded against its deferred tax assets during the years ended December 31, 2025, 2024, and 2023.
The Company files U.S. federal income tax returns as well as various state, local, and foreign jurisdictions. The Company is currently under examination by the IRS for the Company’s 2021 U.S. income tax return. The audit is nearing completion, and the Company expects a resolution in the near term. As a result of the audit, the Company recorded gross uncertain tax positions totaling $ 3.3 million, which have been recognized as a reduction of deferred tax assets. The Company is not currently under examination at the state level. The Company’s U.S. federal and state net operating losses have occurred since its inception in 2012 and as such, tax years subject to potential tax examination could apply from that date because the utilization of net operating losses from prior years opens the relevant year to audit by the IRS and/or state taxing authorities .
ASC 740 clarifies the accounting and reporting for uncertainties in income tax law and prescribes a comprehensive model for financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. ASC 740 requires that tax effects of an uncertain tax position be recognized only if it is “more likely than not” to be sustained by the taxing authority as of the reporting date.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Balance of unrecognized tax benefits at beginning of year

 

$

—

 

 

$

—

 

 

$

—

 

Additions based on tax positions related to the current period

 

 

—

 

 

 

—

 

 

 

—

 

Additions for tax positions of prior periods

 

 

3,267

 

 

 

—

 

 

 

—

 

Reductions for tax positions of prior periods

 

 

—

 

 

 

—

 

 

 

—

 

Release due to expiration of statute of limitations

 

 

—

 

 

 

—

 

 

 

—

 

Balance of unrecognized tax benefits at end of year

 

$

3,267

 

 

$

—

 

 

$

—

 

Amounts included in the balance of unrecognized tax benefits as of December 31, 2025, if recognized, would not affect the effective tax rate upon recognition.
The Company has elected to account for Global Intangible Low-Taxed Income (GILTI) in the period in which it is incurred, and therefore has not provided deferred tax impacts of GILTI in its consolidated financial statements.
On July 4, 2025, the OBBBA was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company did not record material tax impacts from the legislation on its consolidated financial statements.

Note 19. Related Party Transactions
From the Company’s inception, Herriot Tabuteau, M.D. has been the Company’s founder, Chief Executive Officer, Chairman of the Company’s Board, and the beneficial owner of more than 5 % of the outstanding shares of the Company’s common stock. In connection with the formation of the Company, in January 2012, the Company issued to Antecip Bioventures II LLC, an entity controlled by Dr. Tabuteau, an aggregate of 7,344,500 shares of the Company’s common stock for nominal consideration. The Company recorded royalty expense of $ 15.2 million and $ 8.7 million for the years ended December 31, 2025 and 2024 , respectively, which equal 3.0 % of net sales for those respective years.
The Company is a party to three exclusive license agreements with Antecip Bioventures II LLC, an entity owned by Dr. Tabuteau. See Note 15. License Agreements for further information regarding the license agreements.

F- 38

Table of Contents

 

Note 20. Segment Information
The Company views its operations and manages its business as one operating and reportable segment, which is the business of developing and delivering novel therapies for the management of CNS disorders. The Company’s focus centers around the CNS disorders market as its primary operating environment. Consistent with the operational structure, the Chief Executive Officer , as the chief operating decision maker (“CODM”), manages and allocates resources on a consolidated basis. This decision-making process reflects the way in which the financial information is regularly reviewed and used by the CODM to evaluate performance, set operational targets, forecast future financial results, and allocate resources.
The Company’s CODM assesses financial performance and allocates resources based on consolidated net loss that also is reported on the consolidated statements of operations. The measure of segment assets is reported on the balance sheet as total consolidated assets. The CODM utilizes consolidated net loss by comparing actual results against budgeted amounts on a quarterly basis. As part of this process, consolidated net loss is a critical performance measure used to evaluate the Company’s operating performance and guide strategic decisions and resource allocations, including additional investments in research and development and commercialization activities.
The following table provides information about the Company’s one reportable segment and includes the reconciliation to consolidated net loss.
 

 

 

Year ended December 31,

 

 

 

2025

 

 

2024

 

 

2023

 

Total revenues

 

$

638,496

 

 

$

385,693

 

 

$

270,600

 

Less:

 

 

 

 

 

 

 

 

 

Cost of revenue (excluding amortization and depreciation)

 

 

47,478

 

 

 

33,303

 

 

 

26,065

 

Research and development expense (excluding stock-based compensation expense):

 

 

 

 

 

 

 

 

 

Solriamfetol

 

 

42,106

 

 

 

53,678

 

 

 

18,232

 

AXS-05

 

 

55,312

 

 

 

62,877

 

 

 

34,011

 

AXS-07

 

 

21,421

 

 

 

15,587

 

 

 

8,101

 

AXS-12

 

 

8,482

 

 

 

9,362

 

 

 

10,431

 

AXS-14

 

 

8,485

 

 

 

11,881

 

 

 

7,091

 

Other research and development (a)

 

 

20,645

 

 

 

12,274

 

 

 

5,998

 

General and administrative expense (excluding stock-based compensation expense)

 

 

63,273

 

 

 

54,204

 

 

 

37,355

 

Selling and marketing expense (excluding stock-based compensation expense)

 

 

440,402

 

 

 

293,355

 

 

 

237,228

 

Stock based compensation expense

 

 

93,752

 

 

 

85,218

 

 

 

62,620

 

Loss (Gain) in fair value of contingent consideration

 

 

( 2,473

)

 

 

28,124

 

 

 

48,918

 

Interest expense, net (b)

 

 

6,557

 

 

 

6,569

 

 

 

6,453

 

Other segment items (c)

 

 

16,230

 

 

 

6,477

 

 

 

7,335

 

Segment net loss

 

$

( 183,174

)

 

$

( 287,216

)

 

$

( 239,238

)

 

 

 

 

 

 

 

 

 

Reconciliation of net loss

 

 

 

 

 

 

 

 

 

Adjustments and reconciling items

 

 

—

 

 

 

—

 

 

 

—

 

Consolidated net loss

 

$

( 183,174

)

 

$

( 287,216

)

 

$

( 239,238

)

(a) Other research and development expenses primarily consist of facilities charges, third party consultant costs, costs related to other product candidates, and other unallocated costs .

(b) Interest expense, net of $ 6,557 for the year ended December 31, 2025 comprises (i) consolidated interest expense of $ 15,928 and (ii) consolidated interest income of $ 9,371 . Interest expense, net of $ 6,569 for the year ended December 31, 2024 comprises (i) consolidated interest expense of $ 21,581 and (ii) consolidated interest income of $ 15,012 . Interest expense, net of $ 6,453 for the year ended December 31, 2023 comprises (i) consolidated interest expense of $ 20,034 and (ii) consolidated interest income of $ 13,581 .

(c) Other segment items included in Segment net loss include intangible asset amortization, loss on debt extinguishment, costs related to asset acquisitions, and other miscellaneous items.

See Note 2. Summary of Significant Accounting Policies for further details on the products from which the Company derives its revenues.

F- 39

Table of Contents

 

See Note 14. Revenues for details of revenue from external customers by geography.

Note 21. Subsequent Events
On February 17, 2026, the Company announced that it had entered into a settlement agreement with Alkem Laboratories Ltd. (Alkem) to resolve the outstanding litigation between the parties relating to SUNOSI. Under the terms of the settlement agreement, the Company will grant Alkem a license to sell its generic version of SUNOSI beginning on or after September 1, 2040, if pediatric exclusivity is granted for SUNOSI, or on or after March 1, 2040, if no pediatric exclusivity is granted, subject to FDA approval and conditions and exceptions customary for agreements of this type.

F- 40

Table of Contents

 

INDEX OF EX HIBITS
 

Exhibit
Number

 

Description

 

 

 

    3.1

 

Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference, Exhibit 3.1 to the Company’s Current Report on Form 8-K (No. 001-37635), filed November 24, 2015).

 

 

 

    3.2

 

Amended and Restated Bylaws of the Company (Incorporated by reference, Exhibit 3.2 to the Company’s Current Report on Form 8-K (No. 001-37635), filed November 24, 2015).

 

 

 

    4.1

 

Specimen Certificate evidencing shares of Company’s common stock (Incorporated by reference, Exhibit 4.1 to Amendment No. 1 to the Company’s Registration Statement on Form S-1 (No. 333‑207393), filed October 30, 2015).

 

 

 

    4.2

 

Warrant Agreement, dated September 25, 2020, by and between Axsome Therapeutics, Inc. and Hercules Capital, Inc. (Incorporated by reference, Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed November 5, 2020).

 

 

 

    4.3

 

Description of Securities (Incorporated by reference, Exhibit 4.13 to the Company’s Annual Report on Form 10-K, filed March 12, 2020).

 

 

 

    4.4

 

Form of Warrant Agreement, dated May 9, 2022, between Axsome Therapeutics, Inc. and Hercules Capital, Inc. (Incorporated by reference, Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed August 9, 2022).

 

 

 

    4.5

 

Form of Indenture (Incorporated by reference, Exhibit 4.7 to the Company's Registration Statement on Form S-3 (No. 333-291228), filed November 3, 2025).

 

 

 

  10.1+

 

Axsome Therapeutics, Inc. Amended and Restated 2015 Omnibus Incentive Compensation Plan (Incorporated by reference, Exhibit 10.2 to the Company’s Annual Report on Form 10-K, filed February 23, 2024).

 

 

 

  10.2+

 

Axsome Therapeutics, Inc. Form of Stock Option Agreement pursuant to the Amended and Restated 2015 Omnibus Incentive Compensation Plan (Incorporated by reference, Exhibit 99.2 to the Company’s Registration Statement on Form S-8 (No. 333-208579) filed December 16, 2015).

 

 

 

  10.3+

 

Axsome Therapeutics, Inc. Form of Restricted Stock Unit Agreement (Non-Executives) pursuant to the Amended and Restated 2015 Omnibus Incentive Compensation Plan (Incorporated by reference, Exhibit 99.3 to the Company’s Registration Statement on Form S-8 (File No. 333-238174), filed May 11, 2020).

 

 

 

  10.4+

 

Axsome Therapeutics, Inc. Form of Restricted Stock Unit Agreement (Executives and Non-Employee Directors) pursuant to the Amended and Restated 2015 Omnibus Incentive Compensation Plan (Incorporated by reference, Exhibit 99.4 to the Company’s Registration Statement on Form S-8 (File No. 333-238174), filed May 11, 2020).

 

 

 

  10.5+

 

Axsome Therapeutics, Inc. 2025 Long-Term Incentive Plan (Incorporated by reference, Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q, filed August 4, 2025).

 

 

 

  10.6+

 

Axsome Therapeutics, Inc. Form of Standard Restricted Stock Units Agreement pursuant to the 2025 Long-Term Incentive Plan (Incorporated by reference, Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q, filed August 4, 2025).

 

 

 

  10.7+

 

Axsome Therapeutics, Inc. Form of Director Restricted Stock Units Agreement pursuant to the 2025 Long-Term Incentive Plan (Incorporated by reference, Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q, filed August 4, 2025).

 

 

 

  10.8+

 

Axsome Therapeutics, Inc. Form of Executive Deferral Restricted Stock Units Agreement pursuant to the 2025 Long-Term Incentive Plan (Incorporated by reference, Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q, filed August 4, 2025).

 

 

 

  10.9+

 

Axsome Therapeutics, Inc. Form of Standard Nonstatutory Stock Option Agreement pursuant to the 2025 Long-Term Incentive Plan (Incorporated by reference, Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q, filed August 4, 2025).

 

 

 

132

Table of Contents

 

  10.10+

 

Axsome Therapeutics, Inc. Form of Director Nonstatutory Stock Option Agreement pursuant to the 2025 Long-Term Incentive Plan (Incorporated by reference, Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q, filed August 4, 2025).

 

 

 

  10.11+

 

Axsome Therapeutics, Inc. Form of Performance-Based Restricted Stock Unit Agreement pursuant to the 2025 Long-Term Incentive Plan (Incorporated by reference, Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q, filed August 4, 2025).

 

 

 

  10.12+

 

Axsome Therapeutics, Inc. 2023 Employee Stock Purchase Plan (Incorporated by reference, Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on June 8, 2023).

 

 

 

  10.13++

 

License Agreement, dated January 12, 2012, by and between the Company and Antecip Bioventures II LLC, as modified by the First Amendment to License Agreement, dated August 21, 2015, by and between the Company and Antecip Bioventures II LLC (Incorporated by reference, Exhibit 10.2 to the Company’s Registration Statement on Form S-1 (No. 333-207393), filed October 13, 2015).

 

 

 

  10.14++

 

License Agreement, dated April 17, 2012, by and between the Company and Antecip Bioventures II LLC, as modified by the First Amendment to License Agreement, dated August 21, 2015, by and between the Company and Antecip Bioventures II LLC (Incorporated by reference, Exhibit 10.3 to the Company’s Registration Statement on Form S-1 (No. 333-207393), filed October 13, 2015).

 

 

 

  10.15++

 

License Agreement, dated June 6, 2012, by and between the Company and Antecip Bioventures II LLC, as modified by the First Amendment to License Agreement, dated August 21, 2015, by and between the Company and Antecip Bioventures II LLC (Incorporated by reference, Exhibit 10.4 to the Company’s Registration Statement on Form S-1 (No. 333-207393), filed October 13, 2015).

 

 

 

  10.16+

 

Consulting Agreement, dated April 13, 2012, by and between the Company and Mark Coleman, M.D., as modified by the First Amendment to Consulting Agreement, dated June 2, 2014, by and between the Company and Mark Coleman, M.D (Incorporated by reference, Exhibit 10.5 to the Company’s Registration Statement on Form S-1 (No. 333-207393), filed October 13, 2015).

 

 

 

  10.17

 

Form of Purchase Agreement, dated November 30, 2017, among Axsome Therapeutics, Inc. and the purchasers thereunder (Incorporated by reference, Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed December 4, 2017).

 

 

 

  10.18+

 

Nick Pizzie Offer Letter, dated April 16, 2018 (Incorporated by reference, Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed May 8, 2018).

 

 

 

  10.19

 

Form of Purchase Agreement, dated September 27, 2018, by and among the Company and the investors party thereto (Incorporated by reference, Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed September 28, 2018).

 

 

 

  10.20+++

 

License Agreement, dated January 10, 2020, by and between the Company and Pfizer Inc. (Incorporated by reference, Exhibit 10.15 to the Company’s Annual Report on Form 10-K, filed March 12 2020).

 

 

 

  10.21

 

Share Transfer Agreement by and between the Company and Pfizer Inc. (Incorporated by reference, Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed January 13, 2020).

 

 

 

  10.22+++

 

Loan Agreement, dated May 8, 2025, by and among Axsome Therapeutics, Inc., certain subsidiaries of Axsome Therapeutics, Inc. from time to time party thereto, Wilmington Trust, National Association, as agent, Blackstone Alternative Credit Advisors LP and Blackstone Life Sciences Advisors L.L.C., as Blackstone Representative, and the lenders from time to time party thereto (Incorporated by reference, Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q, filed August 4, 2025).

 

 

 

  10.23+++

 

Securities Purchase Agreement, dated May 8, 2025, by and among Axsome Therapeutics, Inc., Axis Aggregator, L.P., Blackstone Private Credit Fund and Blackstone Secured Lending Fund (Incorporated by reference, Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q, filed August 4, 2025).

 

 

 

  10.24+++

 

Direct Agreement, dated May 8, 2025, by and among Axsome Therapeutics, Inc., Antecip Bioventures II LLC, and Wilmington Trust, National Association (Incorporated by reference, Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed August 4, 2025).

 

 

 

  10.25+++

 

Asset Purchase Agreement, dated March 25, 2022, between Jazz Pharmaceuticals plc and Axsome Therapeutics, Inc. (Incorporated by reference, Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on March 31, 2022).

133

Table of Contents

 

 

 

 

  10.26+++

 

License Agreement, dated February 21, 2023, by and between Axsome Malta Ltd. and Atnahs Pharma UK Limited (Incorporated by reference, Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed May 9, 2023).

 

 

 

  10.27+++

 

Sublease, dated February 21, 2023, between Advance Magazine Publishers d/b/a Condé Nast and Axsome Therapeutics, Inc. (Incorporated by reference, Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, filed May 9, 2023).

 

 

 

  10.28+++

 

Amendment to Sublease, dated January 17, 2025, between Advance Magazine Publishers Inc. d/b/a Condé Nast and Axsome Therapeutics, Inc. (Incorporated by reference, Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed May 5, 2025).

 

 

 

  19.1

 

Axsome Therapeutics, Inc. Insider Trading Policy (Incorporated by reference, Exhibit 19.1 to the Company’s Annual Report on Form 10-K, filed February 18, 2025).

 

 

 

  21.1**

 

Subsidiaries of the Company.

 

 

 

  23.1**

 

Consent of Deloitte & Touche LLP.

 

 

 

  31.1**

 

Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

  31.2**

 

Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

 

  32.1**

 

Certification of Principal Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

 

 

 

  32.2**

 

Certification of Principal Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

 

 

 

  97.1

 

Axsome Therapeutics, Inc. Dodd-Frank Clawback Policy (Incorporated by reference, Exhibit 97.1 to the Company’s Annual Report on Form 10-K, filed February 23, 2024).

 

 

 

101.INS

 

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

 

 

 

101.SCH

 

Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.

 

 

 

104

 

Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.).

 
+	Indicates management contract or compensatory plan.
++	Confidential treatment has been granted with respect to certain portions of this exhibit. Omitted portions have been filed separately with the U.S. Securities and Exchange Commission.
+++	Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
**	Filed herewith.

134

Table of Contents

 

ITEM 16. FORM 10-K SUMMARY
We may voluntarily include a summary of information required by Form 10-K under this Item 16. We have elected not to include such summary information.

135

Table of Contents

 

SIGNA TURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 23rd day of February 2026.
 

 

 

 

 

AXSOME THERAPEUTICS, INC.

 

 

 

By

/s/ Herriot Tabuteau, M.D.

 

 

Herriot Tabuteau, M.D.

 

 

Chief Executive Officer

 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated:
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature

 

Title

 

Date

 

 

 

 

 

/s/ Herriot Tabuteau, M.D.
Herriot Tabuteau, M.D.

 

Chief Executive Officer and Chairman of the Board (Principal Executive Officer)

 

February 23, 2026

 

 

 

 

 

/s/ Nick Pizzie
Nick Pizzie

 

Chief Financial Officer
(Principal Financial and Accounting Officer)

 

February 23, 2026

 

 

 

 

 

/s/ Roger Jeffs, Ph.D.
Roger Jeffs, Ph.D.

 

Director

 

February 23, 2026

 

 

 

 

 

/s/ Mark Coleman, M.D.
Mark Coleman, M.D.

 

Director

 

February 23, 2026

 

 

 

 

 

/s/ Mark Saad
Mark Saad

 

Director

 

February 23, 2026

 

 

 

 

 

/s/ Susan Mahony, Ph.D., M.B.A.
Susan Mahony, Ph.D., M.B.A.

 

Director

 

February 23, 2026

 

136