Company: ZVRA
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001437749-25-016523
Chunk: 78

Company: ZEVRA THERAPEUTICS, INC.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 78
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 recoverability of capitalized inventory during each reporting period and writes down any excess and obsolete inventory to its net realizable value in the period in which the impairment is first identified. Such impairment charges, should they occur, are recorded as a component of cost of product revenue in the unaudited condensed consolidated statements of operations. The determination of whether inventory costs will be realizable requires the use of estimates by management. If actual market conditions are less favorable than projected by management, additional write downs of inventory  may be required. Additionally, the Company’s product is subject to strict quality control and monitoring, which is performed throughout the manufacturing process. In the event that certain batches or units of product do not meet quality specifications, the Company will record a charge to cost of product revenue, to write down any unsaleable inventory to its estimated net realizable value. 
    
   Cost of Product Revenue
    
   The components of cost of product revenue are royalties and expenses directly attributable to revenue. To date, the Company has generated revenue from product sales of MIPLYFFA and OLPRUVA, reimbursements received under the French AC, royalties or net sales milestone payments generated under the Collaboration and License Agreement with Commave Therapeutics SA (the “AZSTARYS® License Agreement”), and consulting agreements. 
    
   Prior to our acquisition of the assets of Orphazyme A/S (“Orphazyme”) in  May 2022, Orphazyme had entered into an asset purchase agreement with LadRx Corporation, which was assigned to XOMA (US) LLC, a wholly-owned subsidiary of XOMA Corporation (“XOMA”), in  June 2023 (“XOMA License Agreement”), as well as a license agreement with Kansas University (“KU”) and UCLB Business, PLC (“UCLB”) (the “KU/UCLB License Agreement”). Under the XOMA License Agreement, XOMA is entitled to a mid-single digit percentage royalty with respect to net sales of MIPLYFFA. In addition, the Company also pays a low-single digit percentage royalty to KU and UCLB with respect to net sales of MIPLYFFA.

                             In connection with the AZSTARYS License Agreement, the Company pays Aquestive Therapeutics, Inc. (“Aquestive”) a royalty equal to 
                            10% of all regulatory milestone and