TALPHERA, INC.
For the period ended Dec 31, 2024. Filed Mar 31, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 31, 2025
TLPH$1.05+4.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-06.
0001437749-24-006849
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001437749-25-010250
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 114 previous paragraphs and 111 current paragraphs.
59 unchanged; 26 reworded; 24 added; 29 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 37 previous and 34 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
Our strategy is focused on developing, obtaining approval, and commercializing Niyad. We intend to expand our portfolio to include additional acute care therapies for use in medically supervised settings.
Current report
DSUVIA Divestment
Current report
In January 2024, we entered into an agreement with XOMA (US) LLC, or XOMA, whereby we have sold our rights to all payments for services performed to support sales of DSUVIA to the DoD by Alora under the Marketing Agreement, and sales milestones we are entitled to under the DSUVIA Agreement with Alora, until XOMA receives a certain specified return on its investment, after which we will share equally in the payments earned on sales to the Department of Defense, milestones and other payments from Alora (see Note 7, “Sale of Future Payments” to the consolidated financial statements to this Annual Report on Form 10-K for additional information). This transaction was consummated to provide further funding for the development of our lead product candidate, Niyad. In October 2024, Alora notified us that they are discontinuing their DSUVIA sales efforts to non-DoD customers. At this time, we are uncertain as to the impact of this decision on sales of DSUVIA to the DoD, but we expect to be able to continue to market DSUVIA to the DoD until all inventory is sold or Alora makes the decision to no longer provide the supply of DSUVIA to the DoD. We are working to attempt to facilitate a longer-term supply arrangement for DSUVIA, but there are no assurances we will be successful.
Current report
Sale of Future Payments
Current report
On January 12, 2024, we entered into the Purchase Agreement with XOMA to monetize a portion of our future payments for services performed to support sales of DSUVIA to the DoD by Alora under the Marketing Agreement, and sales milestones under the DSUVIA Agreement. Refer to Note 7, “Sale of Future Payments” to the consolidated financial statements in this Annual Report on Form 10-K for further details on the Purchase Agreement and to Note 3, “Discontinued Operations” for further details on the Marketing Agreement.
Current report
The liability related to the sale of future payments is recorded as debt and will be amortized under the effective interest rate method over the estimated life of the Purchase Agreement. The amortization of the liability related to the sale of future payments is based on our current estimate of future payments under the Marketing Agreement. The estimate of future payments include payments related to estimated future DoD sales and the probability of meeting and the potential timing of milestone payments are derived using internal management estimates and reflect management’s judgements, current market conditions, and internal forecasts. A significant change in these inputs could result in a material increase or decrease to the effective interest rate of the liability for the sale of future payments.
Current report
We will periodically assess the amount and timing of expected payments using a combination of internal projections and historical data. To the extent our future estimates of future payments are greater or less than previous estimates or the estimated timing of such payments is materially different than previous estimates, we will adjust the amortization of the Sale of Future Payment Liability and prospectively recognize the related non-cash interest expense. In October 2024, Alora notified us that they are discontinuing their DSUVIA sales efforts to non-DoD customers. At this time, we are uncertain as to the impact of this decision on sales of DSUVIA to the DoD. As a result, we estimate that future payments under the Purchase Agreement will be less than the proceeds from the sale of such future payments.
Current report
Non-Cash Interest Expense on Liability Related to the Sale of Future Payments
Current report
Under the relevant accounting guidance, because of our significant continuing involvement, the XOMA Agreement is accounted for as a liability that is amortized using the effective interest method over the life of the arrangement. In order to determine the amortization of the liability related to the sale of future payments, we are required to estimate the total amount of future payments to XOMA over the life of the Purchase Agreement. As mentioned above, in October 2024, Alora notified us that they are discontinuing their DSUVIA sales efforts to non-DoD customers. Accordingly, we estimate that future payments under the Purchase Agreement will be less than the proceeds from the sale of such future payments and we will not recognize any further related non-cash interest expense. When the expected payments under the sale of future payments are lower than the gross proceeds received, we defer recognition of any probable contingent gain until we have met our obligations under the liability related to the sale of future payments.
Current report
In-Process Research and Development
Current report
In accordance with ASC Topic 350,Intangibles - Goodwill and Other, the acquired IPR&D has initially been accounted for as an indefinite-lived intangible asset and, therefore, not amortized. If the IPR&D asset achieves regulatory approval and the asset life is determined to be finite, the asset’s useful life will be estimated, and the asset will be amortized over its remaining useful life.
Current report
The IPR&D asset is reviewed for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. These events and changes can include significant current period operating losses or negative cash flows associated with the use of the IPR&D asset, such as the result of unfavorable data from any ongoing or future clinical trial, changes in assumptions that negatively impact projected cash flows, or because of any other information regarding the prospects of successfully developing or commercializing our programs. When impairment indicators are present, we compare undiscounted future cash flows to the asset’s carrying value to determine if the asset is recoverable. If the carrying values are in excess of undiscounted expected future cash flows, we measure any impairment by comparing the fair value of the asset to its carrying value.
Current report
No impairment losses were recorded on the IPR&D asset during the years ended December 31, 2024 or 2023.
Current report
In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update, or ASU, 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, or ASU 2023-07, which requires all public entities, including public entities with a single reportable segment, to provide in interim and annual periods one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance. Additionally, the standard requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures. We adopted annual requirements under ASU 2023-07 on January 1, 2024, and plan to adopt interim requirements under ASU 2023-07 on January 1, 2025, on a retrospective basis. ASU 2023-07 only impacted the disclosures and did not impact the consolidated financial statements. See Note 16, “Segment Information” to the consolidated financial statements in this Annual Report on Form 10-K for disclosures related to the adoption of ASU 2023-07.
Current report
In November 2024, the FASB issued ASU 2024-03,Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to enhance transparency into the nature and function of expenses, primarily through additional disclosures on certain cost and expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial statements. We are in the process of evaluating the impact of this new guidance on our disclosures.
Current report
Gain on sale of future payments for 2024 consisted of $1.2 million in other income related to the XOMA Purchase Agreement (see Note 7, “Sale of Future Payments” to the consolidated financial statements in this Annual Report on Form 10-K for additional information).
Current report
Change in fair value of warrant liability for 2024 included a $0.7 million decrease in the fair value of our warrant liability as compared to a $5.3 million decrease in the fair value of our warrant liability for 2023 (see Note 2, “Investments and Fair Value Measurements” to the consolidated financial statements in this Annual Report on Form 10-K for additional information).
Current report
The non-cash interest expense on the liability related to the sale of future payments is attributable to the XOMA Purchase Agreement (see Note 7, “Sale of Future Payments” to the consolidated financial statements in this Annual Report on Form 10-K for additional information).
Current report
Discontinued Operations
Current report
For 2024, there were no activities for discontinued operations. For 2023, we recognized a net loss from discontinued operations $8.1 million (see Note 3, “Discontinued Operations” to the consolidated financial statements in this Annual Report on Form 10-K for additional information).
Current report
On September 30, 2024, we amended our securities purchase agreements, dated January 17, 2024, with entities affiliated with Nantahala Management, LLC, or the Nantahala Agreements, to extend to June 30, 2025 the date by which we must achieve the precedent conditions to the second closing thereunder, or the Nantahala Amendments. If prior to the second closing, we consummate an equity financing, then the purchasers shall be released from their obligation to purchase additional shares of our common stock and/or pre-funded warrants pursuant to the Nantahala Agreements, as amended.
Current report
In connection with the January 2024 Private Placement, we agreed to amend and restate a portion of the outstanding warrants issued in connection with the July 2023 Private Placement (see below), representing (i) Series A common stock warrants to purchase up to 2,941,178 shares of our common stock and (ii) Series B common stock warrants to purchase up to 2,941,178 shares of our common stock, to reduce the exercise price thereunder to $0.77 per share.
Current report
As mentioned above, in connection with the January 2024 Private Placement, we agreed to amend and restate a portion of the outstanding Series A and Series B common stock warrants issued under the July 2023 Private Placement to reduce the exercise price thereunder to $0.77 per share.
Current report
During 2024, cash provided by financing activities of $12.0 million was primarily due to net proceeds from the XOMA Purchase Agreement of $6.1 million, and $5.9 million in net proceeds from the January 2024 private placement.
Removed paragraphs (29)
Previous report
In January 2024, we entered into the XOMA Agreement pursuant to which we sold to XOMA our right to amounts payable to us by Alora under the DSUVIA Agreement in exchange for $8.0 million in order to monetize certain future royalties and potential sales-based milestone payments, retaining the right, after XOMA has received a certain minimum amount of payments in respect of such royalties and potential sales-based milestone payments, or the XOMA Threshold, to 50% of the royalties in respect of net sales of DSUVIA to the DoD, 50% of potential sales-based milestones in respect of net sales of DSUVIA and 50% of certain associated license and acquisition payments relating to DSUVIA. Refer to Note 16, “Subsequent Events” to the consolidated financial statements in this Annual Report on Form 10-K for additional information.
Previous report
Global Supply Chain
Previous report
We continue to engage with various elements of our supply chain and distribution channel, including our customers, contract manufacturers, and logistics and transportation providers, to supply our product candidates for development purposes and to remain informed of any challenges within our supply chain. We intend to adapt our plans as needed to continue to drive our product development programs. However, global events have impacted our global supply chain and we may face further disruptions to our supply chain and operations, and associated delays in the manufacturing and supply of our products. Such supply disruptions may adversely impact our ability to continue development of our product candidates and ultimately generate sales of and revenues from any approved products, and our business, financial condition, results of operations and growth prospects could be adversely affected.
Previous report
Revenue from Contracts with Customers
Previous report
We follow the provisions of Accounting Standards Codification, or ASC, Topic 606,Revenue from Contracts with Customers. This guidance provides a unified model to determine how revenue is recognized. We recognize revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Prior to the divestment of DSUVIA to Alora, we sold our products primarily through wholesale and specialty distributors.
Previous report
In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under our agreements, we perform the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) we satisfy each performance obligation.
Previous report
Our revenue relates to our services performed to support sales of DSUVIA to the DoD by Alora under the Marketing Agreement. Our performance obligation is to serve as the exclusive sales agent for selling DSUVIA to the DoD through the term of the Marketing Agreement. The non-creditable and non-refundable revenues are variable consideration based on 75% of net sales of DSUVIA to the DoD during the period subject to certain adjustments. We evaluate if we are a principal or an agent in a transaction to determine whether revenue should be recorded on a gross or net basis depending on if we obtain control over the goods and services before they are transferred to customers. We are acting as an agent in relation to DSUVIA sales to the DoD.
Previous report
The consideration in the Marketing Agreement reflects a variable amount, for which we estimate the amount of consideration to which we will be entitled by using the expected value method. We include in the transaction price the amount for which it is probable that a significant reversal of cumulative revenue recognized will not occur. Revenues are recognized when the DoD obtains control of the product, at which time we have an unconditional right to receive payment for such revenue earned.
Previous report
In January 2024, we entered into an agreement to monetize these and other payments from Alora under the XOMA Agreement until the XOMA Threshold is attained. See Note 16, “Subsequent Events” to the consolidated financial statements in this Annual Report on Form 10-K for additional information.
Previous report
Non-Cash Interest Income on Liability Related to Sale of Future Royalties
Previous report
In September 2015, we sold certain royalty and milestone payment rights from the sales of Zalviso in the European Union by our former commercial partner, Grünenthal GmbH, or Grünenthal, pursuant to the Collaboration and License Agreement, dated as of December 16, 2013, as amended, to PDL BioPharma, Inc., or PDL, for an upfront cash purchase price of $65.0 million, or the Zalviso Royalty Monetization. Under the relevant accounting guidance, because of our significant continuing involvement, the Zalviso Royalty Monetization was accounted for as a liability that was amortized using the effective interest method over the life of the arrangement. In order to determine the amortization of the liability, we were required to estimate the total amount of future royalty and milestone payments to be received by us and paid to PDL, up to a capped amount of $195.0 million, over the life of the arrangement. The aggregate future estimated royalty and milestone payments (subject to the capped amount), less the $61.2 million of net proceeds we received, were to be recorded as interest expense over the life of the liability. Consequently, we imputed interest on the unamortized portion of the liability and recorded interest expense related to the Zalviso Royalty Monetization accordingly.
Previous report
During the three months ended June 30, 2020, Grünenthal notified us that it was terminating the Amended License Agreement, effective November 13, 2020. The terms of the Grünenthal Agreements were extended to May 2021 to enable Grünenthal to sell down its Zalviso inventory, a right it had under the Grünenthal Agreements. The rights to market and sell Zalviso in the Territory reverted back to us in May 2021.
Previous report
There was a continuing obligation on our part, through the term of the Zalviso Royalty Monetization, to use commercially reasonable efforts to negotiate a replacement license agreement, or New Arrangement. However, without a New Arrangement to commercialize Zalviso in Europe, we were unable to reliably estimate the future payments to SWK Funding LLC, or SWK, (assignee of PDL) over the remaining life of the Zalviso Royalty Monetization. Due to the significant judgments and factors related to the estimates of future payments under the Zalviso Royalty Monetization, there were significant uncertainties surrounding the amount and timing of future payments and the probability of realization of any estimated contingent gain. While the expected payments under the Zalviso Royalty Monetization were lower than the gross proceeds of $65.0 million received, we deferred recognition of any probable contingent gain until the Zalviso Royalty Monetization liability expired.
Previous report
On May 31, 2022, we entered into a Termination Agreement with SWK to fully terminate the Zalviso Royalty Monetization for which we paid cash consideration of $0.1 million, and neither PDL nor SWK retained any further interest in the Zalviso Royalty Monetization. Accordingly, effective May 31, 2022, the Zalviso Royalty Monetization was no longer reflected on our financial statements or other records as a sale of assets to PDL or SWK and all security interests and other liens of every type held by the parties to the Zalviso Royalty Monetization have been terminated and automatically released without further action by any party. The $84.1 million gain on extinguishment of the liability related to the sale of future royalties was recognized in the consolidated statements of operations as other income.
Previous report
We recorded non-cash royalty revenues and non-cash interest (income) expense within our consolidated statements of operations over the term of the Zalviso Royalty Monetization.
Previous report
In June 2016, the FASB issued Accounting Standards Update, or ASU, 2016-13,Financial Instruments–* Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments*, which requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. The measurement of expected credit losses is based on historical experience, current conditions, and reasonable and supportable forecasts that affect collectability. ASU 2016-13 also eliminates the concept of “other-than-temporary” impairment when evaluating available-for-sale debt securities and instead focuses on determining whether any impairment is a result of a credit loss or other factors. An entity will recognize an allowance for credit losses on available-for-sale debt securities rather than an other-than-temporary impairment that reduces the cost basis of the investment. We adopted ASU 2016-13 on January 1, 2023, using the modified retrospective approach, and no cumulative effect adjustment to accumulated deficit was needed as of the adoption date. Additionally, no prior period amounts were adjusted. The adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements.
Previous report
Impairment of Property and Equipment
Previous report
We do not have plans to further develop any sufentanil sublingual product candidates. Accordingly, in 2022 we determined that it is no longer probable that we will realize the future economic benefit associated with the costs of the Zalviso-related purchased equipment and manufacturing-related facility improvements we have made at our contract manufacturer and, therefore, recorded a non-cash impairment charge of $4.9 million to the Zalviso-related assets for the year ended December 31, 2022.
Previous report
The non-cash interest income on the liability related to the sale of future royalties is attributable to the Zalviso Royalty Monetization which was fully terminated in May 2022. In May 2022, we entered into a Termination Agreement with SWK Funding LLC, or SWK, (assignee of PDL BioPharma, Inc., or PDL) to fully terminate the Zalviso Royalty Monetization for which we paid cash consideration of $0.1 million, and neither PDL nor SWK retains any further interest in the Zalviso Royalty Monetization. Accordingly, effective May 31, 2022, the Zalviso Royalty Monetization is no longer reflected on our financial statements or other records as a sale of assets to PDL or SWK and all security interests and other liens of every type held by the parties to the Zalviso Royalty Monetization have been terminated and automatically released without further action by any party. The $84.1 million gain on extinguishment of the liability related to the sale of future royalties is recognized in the consolidated statements of operations as other income.
Previous report
In the first tranche of the private placement, we issued pre-funded warrants to purchase up to 7,792,208 shares of common stock. In the second tranche of the private placement, we expect to issue (i) in connection with achieving the Pivotal Trial Milestone, pre-funded warrants to purchase up to 12,987,013 shares of common stock, and (ii) in connection with achieving the Price Milestone, pre-funded warrants to purchase up to 2,597,402 shares of common stock. Any of the conditions in the second tranche can be waived by each purchaser.
Previous report
Refer to Note 9, “Stockholders’ Equity” and Note 10, “Warrants” to the consolidated financial statements in this Annual Report on Form 10-K for additional information.
Previous report
December 2022 Registered Direct Offering
Previous report
In December 2022, we issued and sold in a registered direct offering to institutional investors:
Previous report
The shares of common stock and accompanying common stock warrants were sold at a combined offering price of $2.22625 per share and accompanying common stock warrant, and the pre-funded warrants and accompanying common stock warrants were sold at a combined offering price of $2.22615 per pre-funded warrant and accompanying warrant. The pre-funded warrants were immediately exercisable following the closing of the offering and have an unlimited term. The common stock warrants will not be exercisable until after the six-month anniversary of the closing of the offering and will expire on December 29, 2028. Total net proceeds from the offering were approximately $6.6 million, after deducting fees payable to the placement agent and other estimated offering expenses payable by us, excluding the proceeds, if any, from the exercise of the pre-funded warrants and the common stock warrants. Refer to Note 9, “Stockholders’ Equity” and Note 10, “Warrants” to the consolidated financial statements in this Annual Report on Form 10-K for additional information.
Previous report
August 2022 Private Placement
Previous report
On August 3, 2022, we issued and sold to Lincoln Park Capital Fund, LLC, in a private placement, 3,000 shares of Series A redeemable convertible preferred stock, par value $0.001 per share, with $100 per share stated value, together with a warrant to purchase up to an aggregate of 81,150 shares of common stock for a purchase price of $0.3 million. The warrant had an exercise price of $4.07 per share, was immediately exercisable and has a term ending on February 3, 2028. In 2022, we redeemed the 3,000 shares of Series A redeemable convertible preferred stock for $0.3 million, and retired such shares. Upon the closing of the December 2022 registered direct offering, we modified the previously issued warrant to reduce the exercise price to $2.07 per share in accordance with the warrant terms. Refer to Note 9, “Stockholders’ Equity” and Note 10, “Warrants” to the consolidated financial statements in this Annual Report on Form 10-K for additional information.
Previous report
Cantor Controlled Equity OfferingSM Sales Agreement
Previous report
In June 2016, we entered into a Controlled Equity Offering SMSales Agreement, as amended, the ATM Agreement, with Cantor Fitzgerald & Co., or Cantor, as agent, pursuant to which we may offer and sell, from time to time through Cantor, shares of our common stock. During 2023, there were no sales under the ATM Agreement. During 2022, we issued and sold approximately 0.1 million shares of common stock pursuant to the ATM Agreement and received net proceeds of $0.5 million, after deducting fees and expenses. As of December 31, 2023, we had the ability to sell approximately $35.6 million of our common stock under the ATM Agreement, subject to the filing of a prospectus supplement with the SEC to our registration statement on Form S-3. Our ability to sell such shares will be limited until we are no longer subject to the SEC’s “baby shelf” limitations.
Previous report
During 2022, cash used in financing activities of $0.5 million was primarily due to $8.4 million in long-term debt payments, including $8.3 million under the Loan Agreement with Oxford, partially offset by $7.9 million in net proceeds received in connection with equity financings.
Reworded paragraphs (26)
Previous wording
The following discussion and analysis covers our financial condition and results of operations for the year ended December 31, 2023, including year-over-year comparisons versus the year ended December 31, 2022, as reported in our Annual Report on Form 10-K for the year ended December 31, 2022, which consolidated financial statements were recast to reflect discontinued operations and filed with our Current Report on Form 8-K on August 1, 2023. This discussion and analysis as well as other parts of this Annual Report on Form 10-K contain forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, intentions, and projections. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in“Part I, Item 1A–* Risk Factors*”* of this Annual Report on Form 10-K.*
Current wording
The following discussion and analysis covers our financial condition and results of operations for the year ended December 31, 2024, including year-over-year comparisons versus the year ended December 31, 2023, as reported in our Annual Report on Form 10-K for the year ended December 31, 2023. This discussion and analysis as well as other parts of this Annual Report on Form 10-K contain forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, intentions, and projections. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in“Part I, Item 1A–* Risk Factors*”* of this Annual Report on Form 10-K.*
Previous wording
We are a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for use in medically supervised settings. Our product development portfolio features Niyad (a regional anticoagulant for the dialysis circuit), two ready-to-use pre-filled syringe product candidates (Fedsyra and phenylephrine), and LTX-608 (a nafamostat formulation for direct IV infusion) that we intend to develop for one or more of the following indications: disseminated intravascular coagulation, or DIC, acute respiratory distress syndrome, or ARDS, acute pancreatitis, or as an anti-viral treatment.
Current wording
We are a specialty pharmaceutical company focused on the development and commercialization of innovative therapies for use in medically supervised settings. Our product development portfolio features Niyad (a regional anticoagulant for the dialysis circuit), LTX-608 (a nafamostat formulation for direct IV infusion) that we intend to develop for one or more of the following indications: disseminated intravascular coagulation, or DIC, acute respiratory distress syndrome, or ARDS, acute pancreatitis, or as an anti-viral treatment, and two ready-to-use pre-filled syringe product candidates (Fedsyra and phenylephrine).
Previous wording
We do not believe that inflation has had a material impact on our business or operating results during the periods presented. However, inflation, led by supply chain constraints, federal stimulus funding, increases to household savings, and the sudden macroeconomic shift in activity levels arising from the loosening or removal of many government restrictions, has had, and may continue to have, an impact on overhead costs and transportation costs and may in the future adversely affect our operating results. In addition, increased inflation has had, and may continue to have, an effect on interest rates. Increased interest rates may adversely affect our borrowing rate and our ability to obtain, or the terms under which we can obtain, any potential additional funding.
Current wording
We do not believe that inflation has had a material impact on our business or operating results during the periods presented. However, inflation, led by supply chain constraints, federal stimulus funding, increases to household savings, and the sudden macroeconomic shift in activity levels arising from the loosening or removal of many government restrictions, has had, and may continue to have, an impact on overhead costs and transportation costs and may adversely affect our operating results in the future. In addition, increased inflation has had, and may continue to have, an effect on interest rates. Increased interest rates may adversely affect our borrowing rate and our ability to obtain, or the terms under which we can obtain, any potential additional funding. In addition, in March 2025, the U.S. government imposed tariffs on biopharmaceutical products imported from China, which will increase our cost of doing business until we are able to source such products outside of China and any other jurisdiction subject to such tariffs.
Previous wording
Our strategy is focused on developing, obtaining approval, and commercializing our product candidates, first and foremost, Niyad. Accordingly, we divested DSUVIA to Alora in April 2023, who will continue to commercialize the product and pay us sales-based milestone and other payments, as defined in the DSUVIA Agreement. Further, we will continue marketing DSUVIA to the Department of Defense. We believe this will maximize the value of DSUVIA as Alora has more available resources to invest on DSUVIA commercialization and as a result can execute a more robust commercial plan to support DSUVIA sales expansion. We have no plans on further developing or commercializing any of our other sufentanil sublingual products that were previously our product candidates. As described below, in January 2024, we entered into an agreement with XOMA whereby we have sold our rights to all royalties, milestones and other payments until XOMA receives a certain specified return on its investment, after which we will share equally in the royalties earned on sales to the Department of Defense, milestones and other payments from Alora. This transaction was consummated to provide further funding for the development of our lead product candidate, Niyad. We are focused on beginning enrollment in the Niyad registrational trial in the first quarter of 2024 and anticipate submitting a PMA application for Niyad to the FDA by the end of 2024.
Current wording
We divested DSUVIA to Alora in April 2023, who agreed to continue to commercialize the product and pay us royalties, sales-based milestone and other payments, as defined in the DSUVIA Agreement (see Note 3, “Discontinued Operations” to the consolidated financial statements to this Annual Report on Form 10-K for additional information regarding the DSUVIA Agreement). We will continue marketing DSUVIA to the Department of Defense, or DoD. We have no plans to further develop or commercialize any of our other sufentanil sublingual products that were previously our product candidates.
Previous wording
We have incurred net losses and generated negative cash flows from operations (although the termination of the royalty monetization for Zalviso resulted in net income for 2022) and expect to continue to incur losses in the future as we continue to fund any future research and development activities needed to support the FDA regulatory review of our product candidates.
Current wording
We have incurred net losses and generated negative cash flows from operations and expect to continue to incur losses in the future as we continue to fund any future research and development activities needed to support the FDA regulatory review of our product candidates.
Previous wording
Our net loss for 2023 was $18.4 million, and our net income was $47.8 million for 2022. As of December 31, 2023, we had an accumulated deficit of $444.2 million. As of December 31, 2023, we had cash, cash equivalents, short-term investments and restricted cash totaling $9.4 million compared to $20.8 million as of December 31, 2022.
Current wording
Our net loss for 2024 was $13.0 million and for 2023 it was $18.4 million. As of December 31, 2024, we had an accumulated deficit of $457.2 million. As of December 31, 2024, we had cash, cash equivalents and short-term investments totaling $8.9 million compared to $9.4 million as of December 31, 2023.
Previous wording
We apply thetwo-class method to compute both basic and diluted net income or loss per share. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common stockholders (including pre-funded warrants). Shares of common stock into which the pre-funded warrants may be exercised are considered outstanding for the purposes of computing net loss per share because the shares may be issued for little or no consideration and are exercisable after the original issuance date. In addition, we are required to calculate diluted net income or loss per share under thetwo-class method if the effect is more dilutive than the application of another dilutive method of calculating diluted EPS (i.e., the treasury stock, if-converted, or contingently issuable share method). In periods where there is a net loss,no allocation of undistributed net loss to the participating securities is performed if the holders of these securities are not contractually obligated to participate in our losses. Our participating securities include the November 2021 Financing Warrants, December 2022 Common Stock Warrants, the Series A Redeemable Convertible Preferred Stock, and the Series A and Series B Common Stock Warrants, the placement agent Series A and Series B Common Stock Warrants (see Note 9, “Stockholders’ Equity” and Note 10, “Warrants” to the consolidated financial statements in this Annual Report on Form 10-K for additional information).
Current wording
We apply the two-class method to compute both basic and diluted net income or loss per share. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common stockholders (including pre-funded warrants). Shares of common stock into which the pre-funded warrants may be exercised are considered outstanding for the purposes of computing net loss per share because the shares may be issued for little or no consideration and are exercisable after the original issuance date. In addition, we are required to calculate diluted net income or loss per share under the two-class method if the effect is more dilutive than the application of another dilutive method of calculating diluted EPS (i.e., the treasury stock, if-converted, or contingently issuable share method). In periods where there is a net loss, no allocation of undistributed net loss to the participating securities is performed if the holders of these securities are not contractually obligated to participate in our losses. Our participating securities include the November 2021 Financing Warrants, December 2022 Common Stock Warrants, the Series A and Series B common stock warrants, the placement agent Series A and Series B common stock warrants (see Note 9, “Stockholders’ Equity” and Note 10, “Warrants” to the consolidated financial statements in this Annual Report on Form 10-K for additional information).
Previous wording
For additional information regarding the net income (loss) per share, see Note 12, “Net Income (Loss) per Share of Common Stock” to the consolidated financial statements in this Annual Report on Form 10-K.
Current wording
For additional information regarding the net income (loss) per share, see Note 12, “Net Loss per Share of Common Stock” to the consolidated financial statements in this Annual Report on Form 10-K.
Previous wording
On December 14, 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires companies to disclose additional information about income taxes paid. ASU 2023-09 will be effective for annual periods beginning January 1, 2025 and will be applied on a prospective basis with the option to apply the standard retrospectively. We are evaluating the disclosure impact of ASU 2023-09; however, the adoption of ASU 2023-09 will not have an impact on our consolidated financial statements.
Current wording
In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires companies to disclose additional information about income taxes paid. ASU 2023-09 will be effective for annual periods beginning January 1, 2025, and will be applied on a prospective basis with the option to apply the standard retrospectively. We are evaluating the disclosure impact of ASU 2023-09; however, the adoption of ASU 2023-09 will not have a material impact on our consolidated financial statements.
Previous wording
Our results of operations have fluctuated from period to period and may continue to fluctuate in the future, based upon our research and development efforts, variations in the level of expenditures related to development efforts and debt service obligations during any given period. Certain financial results (revenues and expenses) relating to the divestment of our DSUVIA/DZUVEO business are reflected in discontinued operations. See Note 3, “Discontinued Operations” to the consolidated financial statements in this Annual Report on Form 10-K for additional information. Unless otherwise noted, the discussion below, and the revenue and expense amounts discussed below, are based on and relate to our continuing operations.
Current wording
Our consolidated results of operations are presented for the years ended December 31, 2024 and 2023. Certain financial results (revenues and expenses) relating to the divestment of our DSUVIA/DZUVEO business are reflected in discontinued operations. See Note 3, “Discontinued Operations” to the consolidated financial statements in this Annual Report on Form 10-K for additional information. Unless otherwise noted, the discussion below, and the revenue and expense amounts discussed below, are based on and relate to our continuing operations.
Previous wording
For 2023, we recognized $0.7 million in revenue, related to the DSUVIA Agreement with Alora under the Marketing Agreement executed in April 2023, pursuant to which Talphera has the exclusive right to market and offer DSUVIA for sale to the DoD and for which Alora pays us 75% of net sales of DSUVIA sold to the DoD. In January 2024, we entered into the XOMA Agreement pursuant to which we sold to XOMA our right to future royalties and potential sales-based milestone amounts payable to us by Alora under the DSUVIA Agreement in exchange for $8.0 million until the XOMA Threshold is attained, after which time we may share in certain future payments from Alora. Refer to Note 16, “Subsequent Events” to the consolidated financial statements in this Annual Report on Form 10-K for additional information.
Current wording
There was no revenue recognized in 2024. For 2023, we recognized $0.7 million in revenue related to the DSUVIA Agreement with Alora under the Marketing Agreement executed in April 2023, pursuant to which Talphera has the exclusive right to market and offer DSUVIA for sale to DoD and for which Alora pays us 75% of net sales of DSUVIA sold to DoD.
Previous wording
Research and development expenses during 2023 increased as compared to 2022, primarily due to increased spending on Niyad.
Current wording
Research and development expenses during 2024 increased as compared to 2023, primarily due to an increase in costs associated with Niyad development.
Previous wording
Selling, general and administrative expenses decreased for 2023 as compared to 2022, primarily due to a $2.8 million reduction in employee compensation and related expenses as a result of lower headcount, a $2.0 million reduction in consulting and legal fees, and a net reduction in other selling, general and administrative expenses of $0.2 million in the year ended December 31, 2023.
Current wording
Selling, general and administrative expenses decreased for 2024 as compared to 2023, primarily due to the divestment of DSUVIA. More specifically, the decrease for 2024 compared to 2023 was attributed to a $1.2 million reduction in employee compensation and related expenses due to a reduction in headcount, a $0.7 million reduction in legal fees, a $0.6 million decrease in stock-based compensation expense, a $0.4 million decrease in audit and consulting services, and a net decrease in other selling, general and administrative expenses of $0.6 million.
Previous wording
Interest expense consisted primarily of interest accrued or paid on our debt obligation agreements and amortization of debt discounts. Interest expense decreased for 2023 as compared to 2022, primarily as a result of a lower average outstanding loan balance. In April 2023, in connection with the closing of the DSUVIA Agreement, we fully repaid the Loan Agreement with Oxford. Refer to Note 6, “Long-Term Debt” to the consolidated financial statements in this Annual Report on Form 10-K for additional information.
Current wording
Interest expense consisted primarily of interest accrued or paid on our debt obligation agreements and amortization of debt discounts. In April 2023, in connection with the closing of the DSUVIA Agreement, we fully repaid the Loan Agreement with Oxford. See Note 6, “Long-Term Debt” to the consolidated financial statements in this Annual Report on Form 10-K for additional information.
Previous wording
Interest income and other income, net, for 2023 and 2022 primarily consisted of changes in the fair value of our warrant liability, the Lowell holdback shares and interest earned on our investments. The increase in interest income and other income, net for 2023 as compared to 2022, was primarily due to the $5.3 million decrease in the fair value of our warrant liability and a $0.7 million gain on the satisfaction of the contingency related to the liability for the Lowell holdback shares issued in June 2023.
Current wording
Interest income and other income, net, for 2024 and 2023, consisted of interest earned on our investments and included a $0.7 million gain on the satisfaction of the contingency related to the liability for the Lowell holdback shares issued in June 2023.
Previous wording
As of December 31, 2023, we had cash, cash equivalents and investments totaling $9.4 million, compared to $20.8 million as of December 31, 2022. Our cash and investment balances are held in a variety of interest-bearing instruments, including obligations of commercial paper, corporate debt securities, U.S. government sponsored enterprise debt securities and money market funds. Cash in excess of immediate requirements is invested with a view toward capital preservation and liquidity.
Current wording
As of December 31, 2024, we had cash, cash equivalents and short-term investments totaling $8.9 million, compared to $9.4 million as of December 31, 2023. Our cash and investment balances are held in a variety of interest-bearing instruments, including obligations of commercial paper, U.S. government sponsored enterprise debt securities and money market funds. Cash in excess of immediate requirements is invested with a view toward capital preservation and liquidity.
Previous wording
To date, we have incurred losses and generated negative cash flows from operations (although the termination of the Zalviso Royalty Monetization resulted in net income for 2022) and we expect to incur significant losses in 2024 and may incur significant losses and negative cash flows from operations in the future. Although we raised additional capital in January 2024 as discussed below, considering our current cash resources and current and expected levels of operating expenses for the next twelve months, we expect to need additional capital to fund our planned operations prior to the twelve-month anniversary of the filing date of this Annual Report on Form 10-K.
Current wording
To date, we have incurred losses and generated negative cash flows from operations and we expect to incur significant losses in 2025 and may incur significant losses and negative cash flows from operations in the future. Although we raised additional capital in March 2025 (see Note 17, “Subsequent Event” to the consolidated financial statements in this Annual Report on Form 10-K for additional information), considering our current cash resources and current and expected levels of operating expenses for the next twelve months, we expect to need additional capital to fund our planned operations prior to the twelve-month anniversary of the filing date of this Annual Report on Form 10-K.
Previous wording
While we believe our plans to raise additional funds will alleviate the conditions that raise substantial doubt about our ability to continue as a going concern, these plans are not entirely within our control and cannot be assessed as being probable of occurring. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to further reduce our workforce, reduce the scope of, or cease, the development of our product candidates in advance of the date on which our cash resources are exhausted to ensure that we have sufficient capital to meet our obligations and continue on a path designed to preserve stockholder value. In addition, if we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish rights to our technologies, future revenue streams or product candidates, or to grant licenses on terms that may not be favorable to us.
Current wording
While we believe our plans to raise additional funds will alleviate the conditions that raise substantial doubt about our ability to continue as a going concern, these plans are not entirely within our control and cannot be assessed as being probable of occurring. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available, we may be required to further reduce our workforce, delay, reduce the scope of, or cease, the development of our product candidates in advance of the date on which our cash resources are exhausted to ensure that we have sufficient capital to meet our obligations and continue on a path designed to preserve stockholder value. In addition, if we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish rights to our technologies, future revenue streams or product candidates, or to grant licenses on terms that may not be favorable to us.
Previous wording
In January 2024, we entered into the Purchase Agreement with XOMA in exchange for $8.0 million for the sale of our right, title and interest in and to amounts payable to us pursuant to the DSUVIA Agreement with Alora until the XOMA Threshold is attained, after which time we may share in certain future payments from Alora (see Note 16, “Subsequent Events” to the consolidated financial statements in this Annual Report on Form 10-K for additional information).
Current wording
In January 2024, we entered into the Purchase Agreement with XOMA in exchange for $8.0 million for the sale of our right, title and interest in and to amounts payable to us pursuant to the DSUVIA Agreement with Alora until the XOMA Threshold is attained, after which time we may share in certain future payments from Alora (see Note 7, “Sale of Future Payments” to the consolidated financial statements in this Annual Report on Form 10-K for additional information).
Previous wording
In January 2024, we entered into securities purchase agreements with institutional investors, relating to the issuance and sale of pre-funded warrants to the purchasers in a two-tranche private placement to purchase shares of common stock at a purchase price of $0.769 per share and an exercise price of $0.001 per share. The pre-funded warrants are exercisable immediately and have an unlimited term. The terms of the private placement included:
Current wording
In January 2024, we entered into securities purchase agreements with institutional investors, relating to the issuance and sale of pre-funded warrants, or the January 2024 Pre-Funded Warrants, to the purchasers in a two-tranche private placement to purchase shares of our common stock at a purchase price of $0.769 per share and an exercise price of $0.001 per share, or the January 2024 Private Placement. The January 2024 Pre-Funded Warrants are exercisable immediately and have an unlimited term. The terms of the January 2024 Private Placement included:
Previous wording
In July 2023, we entered into securities purchase agreements with institutional investors and issued and sold in a private placement:
Current wording
In July 2023, we entered into securities purchase agreements with institutional investors and issued and sold in a private placement, or the July 2023 Private Placement:
Previous wording
In May 2019, we entered into a loan agreement with Oxford Finance, LLC, or Oxford. Under the loan agreement, we borrowed an aggregate principal amount of $25.0 million under a term loan. After deducting all loan initiation costs and outstanding interest on the prior loan agreement with Hercules Capital Funding Trust 2014-1 and Hercules Technology II, L.P, we received $15.9 million in net proceeds. In April 2023, in connection with the closing of the divestment of DSUVIA to Alora, we paid Oxford the remaining amount due of approximately $3.4 million including accrued interest and fees under the loan, and the loan agreement was terminated with no further obligations by either party. For more information, see Note 6, “Long-Term Debt” to the consolidated financial statements in this Annual Report on Form 10-K.
Current wording
In May 2019, we entered into a loan agreement with Oxford Finance, LLC, or Oxford. In April 2023, in connection with the closing of the divestment of DSUVIA to Alora, we paid Oxford the remaining amount due of approximately $3.4 million including accrued interest and fees under the loan, and the loan agreement was terminated with no further obligations by either party. For more information, see Note 6, “Long-Term Debt” to the consolidated financial statements in this Annual Report on Form 10-K.
Previous wording
The primary use of cash for our continuing operating activities during these periods was to support our product development efforts for our product candidates while the primary use of cash for discontinued operations was to fund commercial activities for DSUVIA. Our cash used in operating activities also reflected changes in our working capital, net of adjustments for non-cash charges, such as stock-based compensation, depreciation and amortization of our fixed assets, non-cash interest income related to the sale of future royalties and interest expense related to our debt financings.
Current wording
The primary use of cash for our continuing operating activities during these periods was to support our product development efforts for our product candidates while the primary use of cash for discontinued operations was to fund commercial activities for DSUVIA. Our cash used in operating activities also reflected changes in our working capital, net of adjustments for non-cash charges, such as stock-based compensation, depreciation and amortization of our fixed assets, non-cash interest expense related to the sale of future payments and interest expense related to our debt financings.
Previous wording
Cash used in operating activities of $28.3 million during 2022 reflected net income of $47.8 million, offset by aggregate non-cash items of $74.7 million and an approximate $1.4 million net change in our operating assets and liabilities. Non-cash inflows included an $84.2 million gain on the termination of the Zalviso Royalty Monetization, partially offset by a $4.9 million charge for the impairment of Zalviso-related property and equipment, $2.9 million in stock-based compensation expense and $1.7 million in depreciation and amortization expense. The net change in our operating assets and liabilities included a $1.6 million decrease in accrued liabilities.
Current wording
Cash used in operating activities of $12.7 million during 2024, reflected a net loss of $13.0 million, partially offset by aggregate non-cash charges of $0.5 million and included an approximate $0.2 million net change in our operating assets and liabilities. Significant non-cash adjustments included $1.0 million in stock-based compensation expense, $0.4 million in interest expense related to the sale of future payments and a $0.7 million decrease in the fair value of our warrant liability. The net change in our operating assets and liabilities was primarily due to a $1.6 million decrease in prepaid expenses and other current assets, a $0.7 million decrease in accounts payable and a $1.2 million decrease in accrued liabilities.
Previous wording
During 2022, cash provided by investing activities of $36.5 million was primarily the net result $46.4 million in proceeds from maturity of investments partially offset by $7.9 million for purchases of investments and $1.7 million in cash paid for the Lowell asset acquisition, net of cash acquired.
Current wording
During 2024, cash provided by investing activities of $3.8 million was primarily the net result of $8.8 million in proceeds from maturity of investments and $5.0 million in purchases of investments.
Previous wording
During 2023, cash used in investing activities of $0.5 million was primarily the net result of $2.7 million in cash proceeds on the sale of DSUVIA to Alora, $0.5 million in proceeds from the maturities of investments offset by $3.7 million for purchases of investments.
Current wording
During 2023, cash used in investing activities of $0.5 million was primarily the net result of by $3.7 million for purchases of investments, partially offset by $2.7 million in cash proceeds on the sale of DSUVIA to Alora and $0.5 million in proceeds from the maturities of investments.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
See Note 9, “Stockholders’ Equity” and Note 10, “Warrants” to the consolidated financial statements in this Annual Report on Form 10-K for additional information).
Current report — wording carried from elsewhere
See Note 9, “Stockholders’ Equity” and Note 10, “Warrants” to the consolidated financial statements in this Annual Report on Form 10-K for additional information.