10. Organizational Restructuring

On March 3, 2026, the Company announced that its ampreloxetine Phase 3 clinical study (CYPRESS) in development for the treatment of symptomatic neurogenic orthostatic hypotension in patients with multiple system atrophy did not meet its primary endpoint in the Orthostatic Hypotension Symptom Assessment composite score. As a result of this outcome, the Company is winding down the CYPRESS program, subject to certain restrictions set forth in the Merger Agreement between the Company and Zymeworks, while continuing certain targeted regulatory, scientific and intellectual property R&D activities to evaluate potential future regulatory and strategic opportunities and maximize the value of the program and related assets.

To align its resources with its commercial focus on YUPELRI, the Company initiated the Restructuring to streamline costs. As part of the Restructuring, the Company is reducing its headcount of 90 employees by approximately 50% through a reduction in its workforce. This reduction includes the wind-down of the R&D function and a decrease of approximately 50% in G&A employees. The Company estimates that it will incur approximately $6.0 million to $7.0 million in one-time total cash severance costs and approximately $4.5 million to $5.5 million in one-time total non-cash costs primarily related to the modification of equity-based awards for employees affected by the Restructuring.

Certain employees have departed the Company as of June 30, 2026, and the remainder of the impacted employees are expected to depart the Company over the second half of 2026. For the three months ended June 30, 2026, the Company incurred a total of $4.0 million in Restructuring expenses, consisting of $2.6 million in R&D expenses and $1.4 million in SG&A expenses, which is included on the condensed consolidated statements of operations within “Restructuring expenses”. For the six months ended June 30, 2026, the Company incurred a total of $7.7 million in Restructuring expenses, consisting of $4.3 million in R&D expenses and $3.4 million in SG&A expenses. Cash-related and non-cash related Restructuring expenses were $2.2 million and $1.8 million, respectively, for the three months ended June 30, 2026 and $4.8 million and $2.9 million, respectively, for the six months ended June 30, 2026.

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Selected information related to accrued cash-related Restructuring expenses (excluding share-based compensation expenses) was as follows and included in the condensed consolidated balance sheets within “Accrued personnel-related expenses”:

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As of June 30, 2026, the Company did not recognize any material impairment charges associated with its property and equipment or operating lease assets as a result of the Restructuring.