zvra20230630

zvra20230630_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2023

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

For the Transition Period From to

Commission File No. 001-36913

Zevra Therapeutics, Inc.

(Exact Name of Registrant as Specified in Its Charter)

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

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

(321) 939-3416

(Registrant’s Telephone Number, Including Area Code)

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

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

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

ZVRA

The Nasdaq Stock Market LLC

(Nasdaq Global Select Market)

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

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

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

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

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

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

As of August 11, 2023, the registrant had 33,932,639 shares of common stock outstanding.

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INDEX

ZEVRA THERAPEUTICS, INC.

FORM 10-Q

		Page

	PART I — FINANCIAL INFORMATION

Item 1.	unaudited CondeNSed CONSOLIDaTED Financial Statements
	UNAUDITED Condensed CONSOLIDATED Balance Sheets as of JUNE 30, 2023, and December 31, 2022	4
	UNAUDITED Condensed CONSOLIDATED Statements of Operations for the three AND SIX Months ended JUNE 30, 2023, and 2022	5
	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023, and 2022	6
	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023, AND 2022	7
	Unaudited condensed CONSOLIDATED Statements of Cash Flows for the SIX months ended JUNE 30, 2023, and 2022	9
	Notes to unaudited Condensed CONSOLIDATED Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33

	PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, AND ISSUER PURCHASES OF EQUITY SECURITIES	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36

	Signatures	37

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “would,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “assume,” “intend,” “potential,” “continue” or other similar words or the negative of these terms. We have based these forward-looking statements largely on our current expectations about future events and financial trends that we believe may affect our business, financial condition and results of operations. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in Part II, Item 1A. "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q and Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 7, 2023. Accordingly, you should not place undue reliance upon these forward-looking statements. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur, the timing of events and circumstances and actual results could differ materially from those anticipated in the forward-looking statements. Forward-looking statements contained in this report include, but are not limited to, statements about:

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

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

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

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

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

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

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

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

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

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

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

	●	senior leadership and board member transitions and refreshments; and

	●	other factors discussed elsewhere in this report.

The forward-looking statements made in this report relate only to events as of the date on which the statements are made. We have included or made reference to important factors in the cautionary statements included in this report, particularly in the section entitled "Risk Factors" where we make reference to Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 7, 2023, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make. Except as required by law, we do not assume any intent to update any forward-looking statements after the date on which the statement is made, whether as a result of new information, future events or circumstances or otherwise.

Note Regarding Company Reference

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

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PART I — FINANCIAL INFORMATION

Item 1.

unaudited condensed CONSOLIDATED Financial Statements

ZEVRA THERAPEUTICS, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and par value amounts)

	*June 30,*			*December 31,*
	*2023*			*2022*
Assets
Current assets:
Cash and cash equivalents	$	66,196		$	65,466
Securities at fair value		20,696			16,900
Short-term investments - other		479			481
Accounts and other receivables		14,033			8,299
Prepaid expenses and other current assets		2,023			1,877
Total current assets		103,427			93,023
Inventories		546			671
Property and equipment, net		689			794
Operating lease right-of-use assets		803			988
Long-term investments - other		—			20,000
Other long-term assets		53			53
Total assets	$	105,518		$	115,529

Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses	$	10,510		$	6,169
Current portion of operating lease liabilities		456			480
Current portion of discount and rebate liabilities		6,965			4,655
Other current liabilities		321			422
Total current liabilities		18,252			11,726
Line of credit payable		12,709			12,800
Operating lease liabilities, less current portion		627			843
Discount and rebate liabilities, less current portion		5,114			4,327
Other long-term liabilities		317			26
Total liabilities		37,019			29,722

Commitments and contingencies (Note D)

Stockholders’ equity:
Preferred stock:
Undesignated preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares issued or outstanding as of June 30, 2023 or December 31, 2022		—			—
Common stock, $0.0001 par value, 250,000,000 shares authorized, 35,503,697 shares issued and 33,928,005 shares outstanding as of June 30, 2023; 35,450,257 shares issued and 34,540,304 shares outstanding as of December 31, 2022		3			3
Additional paid-in capital		405,127			401,799
Treasury stock, at cost		(10,983	)		(7,536	)
Accumulated deficit		(325,423	)		(308,572	)
Accumulated other comprehensive (loss) income		(225	)		113
Total stockholders' equity		68,499			85,807
Total liabilities and stockholders' equity	$	105,518		$	115,529

See accompanying notes to unaudited condensed consolidated financial statements.

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ZEVRA THERAPEUTICS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

	*Three months ended June 30,*						*Six months ended June 30,*
	*2023*			*2022*			*2023*			*2022*
Revenue, net	$	8,470		$	1,300		$	11,349		$	5,265
Operating expenses:
Cost of revenue		677			51			802			59
Research and development		7,433			4,795			16,277			7,877
Selling, general and administrative		7,005			3,558			13,839			6,292
Acquired in-process research and development		—			17,663			—			17,663
Total operating expenses		15,115			26,067			30,918			31,891
Loss from operations		(6,645	)		(24,767	)		(19,569	)		(26,626	)
Other (expense) income:
Interest expense		(197	)		(36	)		(379	)		(41	)
Fair value adjustment related to derivative and warrant liability		—			32			—			273
Fair value adjustment related to investments		131			(352	)		327			(495	)
Interest and other income, net		1,553			366			2,593			264
Total other income		1,487			10			2,541			1
Loss before income taxes		(5,158	)		(24,757	)		(17,028	)		(26,625	)
Income tax benefit		74			715			177			719
Net loss	$	(5,084	)	$	(24,042	)	$	(16,851	)	$	(25,906	)

Basic and diluted net loss per share of common stock:
Net loss	$	(0.15	)	$	(0.70	)	$	(0.49	)	$	(0.75	)
Weighted average number of shares of common stock outstanding:
Basic and diluted		33,898,233			34,447,206			34,180,818			34,476,737

See accompanying notes to unaudited condensed consolidated financial statements.

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ZEVRA THERAPEUTICS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

	*Three months ended June 30,*						*Six months ended June 30,*
	*2023*			*2022*			*2023*			*2022*
Net loss	$	(5,084	)	$	(24,042	)	$	(16,851	)	$	(25,906	)
Other comprehensive loss:
Foreign currency translation adjustment		(162	)		—			(338	)		—
Other comprehensive loss:		(162	)		—			(338	)		—
Comprehensive loss	$	(5,246	)	$	(24,042	)	$	(17,189	)	$	(25,906	)

See accompanying notes to unaudited condensed consolidated financial statements.

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ZEVRA THERAPEUTICS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands)

			*Additional*		*Treasury*						*Other*			*Total*
	*Common*		*Paid-in*		*Stock,*			*Accumulated*			*Comprehensive*			*Stockholders'*
	*Stock*		*Capital*		*at cost*			*Deficit*			*Income (loss)*			*Equity*
Balance as of January 1, 2023	$	3	$	401,799	$	(7,536	)	$	(308,572	)	$	113		$	85,807
Net loss		—		—		—			(11,767	)		—			(11,767	)
Stock-based compensation expense		—		591		—			—			—			591
Shares repurchased as part of the Share Repurchase Program		—		—		(3,447	)		—			—			(3,447	)
Issuance of common stock in exchange for consulting services		—		42		—			—			—			42
Severance expense		—		354		—			—			—			354
Other comprehensive loss		—		—		—			—			(176	)		(176	)
Balance as of March 31, 2023	$	3	$	402,786	$	(10,983	)	$	(320,339	)	$	(63	)	$	71,404
Net loss		—		—		—			(5,084	)		—			(5,084	)
Stock-based compensation expense		—		1,103		—			—			—			1,103
Issuance of common stock in exchange for consulting services		—		25		—			—			—			25
Severance expense		—		1,048		—			—			—			1,048
Issuance of common stock as part of the Employee Stock Purchase Plan		—		165		—			—			—			165
Other comprehensive loss		—		—		—			—			(162	)		(162	)
Balance as of June 30, 2023	$	3	$	405,127	$	(10,983	)	$	(325,423	)	$	(225	)	$	68,499

See accompanying notes to unaudited condensed consolidated financial statements.

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ZEVRA THERAPEUTICS, INC.

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

(in thousands)

				*Additional*								*Total*
	*Common*			*Paid-in*		*Treasury*			*Accumulated*			*Stockholders'*
	*Stock*			*Capital*		*Stock, at cost*			*Deficit*			*Equity*
Balance as of January 1, 2022	$	4		$	396,957	$	(2,814	)	$	(267,029	)	$	127,118
Net loss		—			—		—			(1,864	)		(1,864	)
Stock-based compensation expense		—			918		—			—			918
Shares repurchased as part of the Share Repurchase Program		(1	)		—		(4,722	)		—			(4,723	)
Issuance of common stock in exchange for consulting services		—			50		—			—			50
Balance as of March 31, 2022	$	3		$	397,925	$	(7,536	)	$	(268,893	)	$	121,499
Net income		—			—		—			(24,042	)		(24,042	)
Stock-based compensation expense		—			1,510		—			—			1,510
Issuance of common stock in exchange for consulting services		—			50		—			—			50
Issuance of common stock as part of the Employee Stock Purchase Plan		—			216		—			—			216
Balance as of June 30, 2022	$	3		$	399,701	$	(7,536	)	$	(292,935	)	$	99,233

See accompanying notes to unaudited condensed consolidated financial statements.

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ZEVRA THERAPEUTICS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	*Six months ended June 30,*
	*2023*			*2022*
Cash flows from operating activities:
Net loss	$	(16,851	)	$	(25,906	)
Adjustments to reconcile net loss to net cash used in operating activities:

SEC Form 10-Q filed by KemPharm Inc.