9.        Debt

Liability for sale of future royalties

The Company has a royalty purchase agreement, (the “A&R Royalty Purchase Agreement”), with Royalty Pharma. Under the A&R Royalty Purchase Agreement, Royalty Pharma has provided funding to the Company totaling $2.1 billion. In exchange for these fundings, the Company sold Royalty Pharma 100% of the Company's rights to receive sales-based royalty payments on worldwide net sales of Roche’s Evrysdi® (risdiplam) product and any other product developed pursuant to the SMA collaboration with the Company, Roche, and the SMA Foundation. Pursuant to A&R Royalty Purchase Agreement, the Company is entitled to three potential additional purchase price payments of $20.0 million each conditioned upon receipt by Royalty Pharma of more than $347.0 million of Assigned Royalty Payments (as defined in the A&R Royalty Purchase Agreement) in respect of Calendar Year Net Sales (as defined in the A&R Royalty Purchase Agreement) arising in 2027, $363.0 million of Assigned Royalty Payments in respect of Calendar Year Net Sales arising in 2028, and $379.0 million of Assigned Royalty Payments in respect of Calendar Year Net Sales arising in 2029, respectively.

Pursuant to the guidance in ASC 470-10-25-2, the Company determined that these fundings should be classified as debt and are recorded as “liability for sale of future royalties-current” and “liability for sale of future royalties-noncurrent” on the Company’s consolidated balance sheet based on the timing of the expected payments to be made to Royalty Pharma.

The liability is being amortized using the effective interest method over the life of the arrangement, in accordance with the respective guidance, utilizing the prospective method to account for subsequent changes in the estimated future payments to be made to Royalty Pharma and the Company updates the effective interest rate on a quarterly basis.

The following table shows the activity within the “liability for sale of future royalties- current” and “liability for sale of future royalties- noncurrent” accounts for the six months ended June 30, 2026:

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Non-cash interest expense is recorded in the statement of operations within “Interest expense, net”.  

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2031 Convertible Notes

In June 2026, the Company issued, at par value, $550.0 million aggregate principal amount of 0% convertible senior notes due 2031 (the “2031 Convertible Notes”), which reflects the exercise in full by the initial purchasers of their option to purchase up to an additional $50.0 million in aggregate principal amount of the 2031 Convertible Notes. The net proceeds to the Company from the offering were approximately $535.4 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by the Company. The 2031 Convertible Notes do not bear regular interest and the principal amounts of the 2031 Convertible Notes will not accrete.

The 2031 Convertible Notes are governed by an indenture (the “2031 Convertible Notes Indenture”) with U.S Bank Trust Company National Association as trustee (the “2031 Convertible Notes Trustee”).

The 2031 Convertible Notes may bear special interest under specified circumstances relating to the Company’s failure to comply with its reporting obligations under the 2031 Convertible Notes Indenture or if the 2031 Convertible Notes are not freely tradeable as required by the 2031 Convertible Notes Indenture.

Special interest, if any, will be payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2026 (if and to the extent that special interest is payable). The 2031 Convertible Notes will mature on June 15, 2031, unless earlier converted, redeemed or repurchased pursuant to their terms.

The initial conversion rate of the 2031 Convertible Notes is 9.3042 shares of the Company’s common stock, per $1,000 principal amount of 2031 Convertible Notes (which is equivalent to an initial conversion price of approximately $107.48 per share). The conversion rate will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for any accrued and unpaid special interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the 2031 Convertible Notes Indenture) or an issuance of a notice of redemption, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its 2031 Convertible Notes in connection with such make-whole fundamental change or notice of redemption.

Holders may convert all or any portion of their 2031 Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding March 15, 2031 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2026 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2031 Convertible Notes for each trading day of the measurement period was less than 98% of the

product of the last reported sale price of the common stock and the conversion rate on each such trading day; (3) if the Company calls any or all of the 2031 Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the relevant redemption date; or (4) upon the occurrence of specified corporate events. On or after March 15, 2031 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2031 Convertible Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will satisfy its conversion obligation by paying or delivering, as the case may be, cash, shares of Common Stock or a combination of cash and shares of common stock, at the Company’s election.

The Company may not redeem the 2031 Convertible Notes prior to June 20, 2029. The Company may redeem for cash all or any portion of the 2031 Convertible Notes, at the Company’s option, on or after June 20, 2029 if the last reported sale price of the common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides a written notice of redemption at a redemption price equal to 100% of the principal amount of the 2031 Convertible Notes to be redeemed, plus any accrued and unpaid special interest to, but excluding, the redemption date. No “sinking fund” is provided for the 2031 Convertible Notes.

If the Company undergoes a fundamental change (as defined in the 2031 Convertible Notes Indenture) prior to the maturity date, then, subject to certain conditions, holders of 2031 Convertible Notes may require the Company to repurchase for cash all or any portion of their 2031 Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the 2031 Convertible Notes to be repurchased, plus any accrued and unpaid special interest to, but excluding, the fundamental change repurchase date.

The 2031 Convertible Notes are the Company’s general unsecured, senior obligations and will rank senior in right of payment to any of its indebtedness that is expressly subordinated in right of payment to the 2031 Convertible Notes; equal in right of payment with all of the Company’s existing and future unsecured indebtedness that is not so subordinated (including any of the Company’s outstanding 2026 Convertible Notes); effectively junior in right of payment to any of the Company’s senior, secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s current or future subsidiaries.

The 2031 Convertible Notes Indenture contains customary events of default with respect to the 2031 Convertible Notes, including that upon certain events of default (including the Company’s failure to make any payment of principal or any special interest on the Notes when due and payable) occurring and continuing, the 2031 Convertible Notes Trustee by written notice to the Company, or the holders of at least 25% in principal amount of the outstanding 2031 Convertible Notes by notice to the Company and the 2031 Convertible Notes Trustee, may (subject to the provisions of the 2031 Convertible Notes Indenture) declare 100% of the principal of and accrued and unpaid special interest, if any, on all the 2031 Convertible Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, involving the Company or a significant subsidiary, 100% of the principal of and accrued and unpaid special interest, if any, on the 2031 Convertible Notes will automatically become due and payable without any further act or declaration on the part of the holders or the 2031 Convertible Notes Trustee. Upon such a declaration of acceleration, such principal and accrued and unpaid special interest, if any, will be due and payable immediately.

The Company accounted for the 2031 Convertible Notes as a single liability measured at amortized cost. The debt issuance costs were recorded as a direct deduction from the face value of the 2031 Convertible Notes and will be amortized to interest expense over the five-year term of the 2031 Convertible Notes using the effective interest rate method.

The 2031 Convertible Notes consist of the following:

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As of June 30, 2026, the remaining contractual life of the 2031 Convertible Notes is approximately 5.0 years.

The following table sets forth total interest expense recognized related to the 2031 Convertible Notes:

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2026 Convertible Notes

In September 2019, the Company issued, at par value, $287.5 million aggregate principal amount of 1.50% convertible senior notes due 2026, which included an option to purchase up to an additional $37.5 million in aggregate principal amount of the 2026 Convertible Notes, which was exercised in full by the initial purchasers. The net proceeds to the Company from the offering were $279.3 million after deducting the initial purchasers’ discounts and commissions and the offering expenses payable by the Company. The 2026 Convertible Notes bear cash interest at a rate of 1.50% per year, payable semi-annually on March 15 and September 15 of each year, beginning on March 15, 2020. The 2026 Convertible Notes will mature on September 15, 2026, unless earlier repurchased or converted.

The 2026 Convertible Notes are governed by an indenture (the “2026 Convertible Notes Indenture”) with U.S. Bank National Association as trustee (the “2026 Convertible Notes Trustee”).

Beginning March 15, 2026, until the close of business on the business day immediately preceding the maturity date, holders may convert their 2026 Convertible Notes at any time. As of June 30, 2026, the 2026 Convertible Notes are convertible. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or any combination thereof at the Company’s election.

The conversion rate for the 2026 Convertible Notes was initially, and remains, 19.0404 shares of the Company’s common stock per $1,000 principal amount of the 2026 Convertible Notes, which is equivalent to an initial conversion price of approximately $52.52 per share of the Company’s common stock. The conversion rate may be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest.

The Company was not permitted to redeem the 2026 Convertible Notes prior to September 20, 2023. The Company may redeem for cash all or any portion of the 2026 Convertible Notes, at its option, if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect on the last trading day of, and for at least 19 other trading days (whether or not consecutive) during, any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption, at a redemption price equal to 100% of the principal amount of the 2026 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2026 Convertible Notes, which means that the Company is not required to redeem or retire the 2026 Convertible Notes periodically. As of June 30, 2026, the 2026 Convertible Notes were redeemable.

If the Company undergoes a “fundamental change” (as defined in the 2026 Convertible Notes Indenture), subject to certain conditions, holders of the 2026 Convertible Notes may require the Company to repurchase for cash all or part of their 2026 Convertible Notes at a repurchase price equal to 100% of the principal amount of the 2026 Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The 2026 Convertible Notes represent senior unsecured obligations and will rank senior in right of payment to the Company’s future indebtedness that is expressly subordinated in right of payment to the notes, equal in right of payment to the Company’s existing and future unsecured indebtedness that is not so subordinated (including any of the Company’s outstanding 2031 Convertible Notes), effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables) incurred by the Company’s subsidiaries. The 2026 Convertible Notes Indenture contains customary events of default with respect to the 2026 Convertible Notes, including that upon certain events of default (including the Company’s failure to make any payment of principal or interest on the 2026 Convertible Notes when due and payable) occurring and continuing, the 2026 Convertible Notes Trustee by notice to the Company, or the holders of at least 25% in principal amount of the outstanding 2026 Convertible Notes by notice to the Company and the Convertible Notes Trustee, may, and the 2026 Convertible Notes Trustee at the request of such holders (subject to the provisions of the 2026 Convertible Notes Indenture) will, declare 100% of the principal of and accrued and unpaid interest, if any, on all the 2026 Convertible Notes to be due and payable. In case of certain events of bankruptcy, insolvency or reorganization, involving the Company or a significant subsidiary, 100% of the principal of and accrued and unpaid interest on the 2026 Convertible Notes will automatically become due and payable. Upon such a declaration of acceleration, such principal and accrued and unpaid interest, if any, will be due and payable immediately.

Following the issuance of the 2031 Convertible Notes, in June 2026 the Company used approximately $328.8 million of the net proceeds of the 2031 Convertible Notes to repurchase for cash $222.0 million aggregate principal amount of its 2026 Convertible Notes pursuant to privately negotiated transactions with certain holders entered into concurrently with the pricing of the offering of the 2031 Convertible Notes. The repurchase of the 2026 Convertible Notes was accounted for as an induced conversion in accordance with ASC-470-20. The excess of the fair value of the repurchase price over the if-converted value was $3.4 million and was recorded as inducement expense within other expense, net on the consolidated statements of operations. The net carrying amount of the repurchased 2026 Convertible Notes was derecognized, and the difference between the if-converted value and the net carrying amount of $102.7 million was recognized as a reduction in additional paid-in capital within the consolidated statement of stockholders’ deficit.

During the three months ended June 30, 2026, a holder converted a portion of the 2026 Convertible Notes with a principal amount of $10.0 million in exchange for $12.9 million in cash and 3,506 shares of the Company’s common stock. The Company recorded a $10.0 million reduction to the carrying value of the 2026 Convertible Notes, and the excess of $2.9 million was recognized as a reduction in additional paid-in capital within the Company’s statement of stockholders’ deficit.

The 2026 Convertible Notes consist of the following:

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As of June 30, 2026, the remaining contractual life of the 2026 Convertible Notes is approximately 0.2 years.

The following table sets forth total interest expense recognized related to the 2026 Convertible Notes:

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