ZEVRA THERAPEUTICS INC
For the period ended Dec 31, 2024. Filed Mar 12, 2025.
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FY2024 · Filed Mar 12, 2025
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Report of EY US LLP
To the Stockholders and the Board of Directors of Zevra Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Zevra Therapeutics, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, changes in stockholders' equity and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
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 Public Company Accounting Oversight Board (United States) (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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
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 the critical audit matter does not alter in any way our opinion on the consolidated 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 account or disclosures to which it relates.
| Intangible Assets | |
| Description of the Matter | At December 31, 2024, the Company had a definite-lived intangible asset related to the acquisition of OLPRUVA of $61.3 million. As discussed in Notes B and S to the consolidated financial statements, the Company periodically evaluates whether events and circumstances have occurred that may affect the recoverability of the remaining balance of such asset. During the year ended December 31, 2024, management considered events or circumstances that would indicate that the carrying amount of this asset may not be recoverable, and prepared an estimate of the future cash flows expected to result from the use of the asset and their eventual disposition. This analysis yielded a conclusion that the asset was recoverable as of December 31, 2024 and no impairment was recorded as of and for the year then ended. Auditing the Company's recoverability analysis for its definite-lived intangible asset related to the acquisition of OLPRUVA was complex due to the significant estimation uncertainty pertaining to the significant assumption of forecasted revenues used in management’s analysis. The significant estimation uncertainty was primarily due to the lack of historical revenue experience observed during the course of the year ended December 31, 2024. This significant assumption is forward-looking and could be affected by future economic and market conditions. |
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| How We Addressed the Matter in Our Audit | To test the recoverability analysis for its definite-lived intangible asset related to the acquisition of OLPRUVA, our audit procedures included, among others, evaluating the prospective financial information (“PFI”) used in management’s analysis, testing the completeness and accuracy of the underlying data and evaluating the Company’s use of appropriate impairment evaluation methodologies. Our procedures to assess the PFI used in the analysis, included, among others, evaluating the significant assumption discussed above, by comparing it to industry and economic publications and trends, analyst reports, and other objective sources. |
/s/Ernst & Young LLP
We have served as the Company’s auditor since 2022.
Orlando, Florida
March 12, 2025
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