Sale of Future Royalties	6 Months Ended
Jun. 30, 2026
Sale Of Future Royalties [Abstract]
Sale of Future Royalties	NOTE 5 — SALE OF FUTURE ROYALTIES The Company had previously co-developed seltorexant with Janssen for the treatment of insomnia disorder and adjunctive treatment of MDD. During 2020, the Company exercised its right to opt out of the co-development and license agreement (the “Janssen Agreement”) with Janssen for the future development of seltorexant and, as a result, the Company was entitled to collect royalties in the mid-single digits on potential future sales of seltorexant worldwide in certain indications, with no further financial obligations to Janssen. On January 19, 2021, the Company entered into an agreement with Royalty Pharma under which Royalty Pharma acquired the Company’s royalty interest in seltorexant for an upfront payment of $60 million and up to an additional $95 million in potential milestone payments. These milestone payments are contingent upon the achievement of certain clinical, regulatory and commercial milestones for seltorexant by Janssen or any other party in the event that Janssen sells seltorexant. Under the terms of the agreement, Royalty Pharma has recourse against the Company relating to payments due from Janssen and therefore, the Company is deemed to have significant continuing involvement. The Company has applied the debt recognition guidance under ASC 470, Debt, and recorded the upfront payment of $60 million on the balance sheet as a liability related to the sale of future royalties (the “Royalty Obligation”) and will record any amortized interest expense and future milestone payments received from Royalty Pharma as well. No amounts received, including the initial upfront payment, amortized interest expense or potential milestone payments, are repayable to Royalty Pharma if Janssen discontinues the clinical development of seltorexant or ceases to pursue its commercialization at a future date for any reason. In accordance with ASC 470, the Company will account for any royalties received in the future as non-cash royalty revenue. As royalties are remitted from Janssen to Royalty Pharma, the balance of the Royalty Obligation will be effectively repaid over the expected life of the Janssen Agreement. The $60 million payment received from Royalty Pharma and any potential future milestone payments from Royalty Pharma are recorded as part of the Royalty Obligation. The difference between the total expected royalties receivable from Janssen and the upfront and milestone payments potentially receivable from Royalty Pharma is being amortized as non-cash interest expense over the estimated remaining life of the Janssen Agreement. To determine the amount of non-cash interest to be amortized, the Company is required to make assumptions for the total amount of future royalty payments to be received from Janssen. At execution, the Company’s estimate of this total non-cash interest expense resulted in an effective annual interest rate of approximately 10.5%. The Company regularly evaluates the assumptions supporting future royalty estimates and, during the third quarter of 2024, noted that Janssen announced on clinicaltrials.gov a further Phase 3 study with seltorexant (MDD3003) that had an estimated study completion date in November 2027, later updated to December 2026, which is a modification of the assumption used in the Company’s original estimates. Study MDD3001, which evaluated the efficacy and safety of seltorexant as an adjunctive treatment to baseline antidepressants in adult and elderly patients with MDD with insomnia symptoms, met all primary and secondary endpoints. MDD3002 was stopped based on the interim analysis results as recommended by the Independent Data Monitoring Committee. Janssen reported on September 22, 2025 that the MDD3005 study, in which seltorexant was evaluated against quetiapine, did not show statistical significance on the primary endpoint. MDD3003 is a study of adjunctive treatment with seltorexant in adult and elderly participants with MDD and insomnia symptoms and is currently recruiting. As a result, the Company revised its estimates for the timing and amount of future royalty payments to be earned over the life of the Janssen Agreement, which is less than the original carrying value of the upfront payment received. Therefore, under the retrospective interest model, during the third quarter of 2024 the Company adjusted the Royalty Obligation to the initial upfront payment received of $60 million and recognized $26.6 million as a component of Other Income, representing the amount of amortized non-cash interest expense through June 30, 2024. In addition, the Company does not expect to recognize non-cash interest expense in the future related to the Royalty Obligation, as the effective annual interest rate is negative. The Company has recently noted that, during the second quarter of 2026, Janssen announced on clinicaltrials.gov a new Phase 3 study with seltorexant (MDD3011) that had an estimated study completion date in May 2029. MDD3011 is a study of monotherapy treatment with seltorexant in adult and elderly participants with MDD.

Sale of Future Royalties

6 Months Ended

Jun. 30, 2026

NOTE 5 — SALE OF FUTURE ROYALTIES

The Company had previously co-developed seltorexant with Janssen for the treatment of insomnia disorder and adjunctive treatment of MDD. During 2020, the Company exercised its right to opt out of the co-development and license agreement (the “Janssen Agreement”) with Janssen for the future development of seltorexant and, as a result, the Company was entitled to collect royalties in the mid-single digits on potential future sales of seltorexant worldwide in certain indications, with no further financial obligations to Janssen.

On January 19, 2021, the Company entered into an agreement with Royalty Pharma under which Royalty Pharma acquired the Company’s royalty interest in seltorexant for an upfront payment of $60 million and up to an additional $95 million in potential milestone payments. These milestone payments are contingent upon the achievement of certain clinical, regulatory and commercial milestones for seltorexant by Janssen or any other party in the event that Janssen sells seltorexant. Under the terms of the agreement,

Royalty Pharma has recourse against the Company relating to payments due from Janssen and therefore, the Company is deemed to have significant continuing involvement. The Company has applied the debt recognition guidance under ASC 470, Debt, and recorded the upfront payment of $60 million on the balance sheet as a liability related to the sale of future royalties (the “Royalty Obligation”) and will record any amortized interest expense and future milestone payments received from Royalty Pharma as well. No amounts received, including the initial upfront payment, amortized interest expense or potential milestone payments, are repayable to Royalty Pharma if Janssen discontinues the clinical development of seltorexant or ceases to pursue its commercialization at a future date for any reason. In accordance with ASC 470, the Company will account for any royalties received in the future as non-cash royalty revenue.

As royalties are remitted from Janssen to Royalty Pharma, the balance of the Royalty Obligation will be effectively repaid over the expected life of the Janssen Agreement. The $60 million payment received from Royalty Pharma and any potential future milestone payments from Royalty Pharma are recorded as part of the Royalty Obligation. The difference between the total expected royalties receivable from Janssen and the upfront and milestone payments potentially receivable from Royalty Pharma is being amortized as non-cash interest expense over the estimated remaining life of the Janssen Agreement. To determine the amount of non-cash interest to be amortized, the Company is required to make assumptions for the total amount of future royalty payments to be received from Janssen. At execution, the Company’s estimate of this total non-cash interest expense resulted in an effective annual interest rate of approximately 10.5%.

The Company regularly evaluates the assumptions supporting future royalty estimates and, during the third quarter of 2024, noted that Janssen announced on clinicaltrials.gov a further Phase 3 study with seltorexant (MDD3003) that had an estimated study completion date in November 2027, later updated to December 2026, which is a modification of the assumption used in the Company’s original estimates. Study MDD3001, which evaluated the efficacy and safety of seltorexant as an adjunctive treatment to baseline antidepressants in adult and elderly patients with MDD with insomnia symptoms, met all primary and secondary endpoints. MDD3002 was stopped based on the interim analysis results as recommended by the Independent Data Monitoring Committee. Janssen reported on September 22, 2025 that the MDD3005 study, in which seltorexant was evaluated against quetiapine, did not show statistical significance on the primary endpoint. MDD3003 is a study of adjunctive treatment with seltorexant in adult and elderly participants with MDD and insomnia symptoms and is currently recruiting.

As a result, the Company revised its estimates for the timing and amount of future royalty payments to be earned over the life of the Janssen Agreement, which is less than the original carrying value of the upfront payment received. Therefore, under the retrospective interest model, during the third quarter of 2024 the Company adjusted the Royalty Obligation to the initial upfront payment received of $60 million and recognized $26.6 million as a component of Other Income, representing the amount of amortized non-cash interest expense through June 30, 2024. In addition, the Company does not expect to recognize non-cash interest expense in the future related to the Royalty Obligation, as the effective annual interest rate is negative.

The Company has recently noted that, during the second quarter of 2026, Janssen announced on clinicaltrials.gov a new Phase 3 study with seltorexant (MDD3011) that had an estimated study completion date in May 2029. MDD3011 is a study of monotherapy treatment with seltorexant in adult and elderly participants with MDD.