Overview Vanda Pharmaceuticals Inc. (we, our, us or Vanda) is a leading global biopharmaceutical company focused on the development and commercialization of innovative therapies to address high unmet medical needs and improve the lives of patients. We strive to advance novel approaches to bring important new medicines to market through responsible innovation. We are committed to the use of technologies that support sound science, including genetics and genomics, in drug discovery, clinical trials and the commercial positioning of our products. Our commercial portfolio is currently comprised of five products: Fanapt® (iloperidone) and BYSANTITM (milsaperidone) for the acute treatment of manic or mixed episodes associated with bipolar I disorder and the treatment of schizophrenia, HETLIOZ® (tasimelteon) for the treatment of Non-24-Hour Sleep-Wake Disorder (Non-24) and for the treatment of nighttime sleep disturbances in Smith-Magenis syndrome (SMS), PONVORY® (ponesimod) for the treatment of relapsing forms of multiple sclerosis (RMS) including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease and NEREUSTM (tradipitant) for the prevention of vomiting induced by motion (collectively, our commercial products). In addition, we have a number of drugs and/or additional indications for current products in development, including: •Fanapt® long acting injectable (LAI) formulation for the treatment of schizophrenia and hypertension; •BYSANTITM for major depressive disorder (MDD); •HETLIOZ® for the treatment of jet lag disorder, insomnia, pediatric insomnia, delayed sleep phase disorder (DSPD) and pediatric Non-24; •PONVORY® for the treatment of ulcerative colitis and psoriasis; •QuimilzaTM (imsidolimab), an IL-36R antagonist, for the treatment of generalized pustular psoriasis (GPP); •NEREUSTM for the prevention of vomiting induced by GLP-1 receptor agonists and the treatment of gastroparesis; •VQW-765, a small molecule alpha-7 nicotinic acetylcholine receptor partial agonist, for the treatment of social/performance anxiety and psychiatric disorders; •Portfolio of Cystic Fibrosis Transmembrane Conductance Regulator (CFTR) activators and inhibitors, including VSJ-110 for the treatment of dry eye and ocular inflammation and VPO-227 for the treatment of secretory diarrhea disorders, including cholera; •VTR-297, a small molecule histone deacetylase (HDAC) inhibitor, for the treatment of hematologic malignancies and onychomycosis and with potential use as a treatment for several oncology indications; and •Antisense oligonucleotide (ASO) molecules, including VGA-157A for Parkinson’s disease, VCA-894A for the treatment of Charcot-Marie-Tooth Disease, Type 2S (CMT2S), caused by cryptic slice site variants within the IGHMBP2 gene and VGT-1849A for the treatment of polycythemia vera (PV), a form of a rare hematologic malignancy. Operational Highlights Key Commercial Highlights •Fanapt® saw continued strong momentum in Q2 2026, with total prescriptions (TRx) up 31% and new-to-brand prescriptions (NBRx) up 32% versus Q2 2025. Since commercial expansion following the approval of bipolar disorder, Fanapt® has seen significant growth, with TRx up 62% and NBRx up 300% versus Q2 2024. •BYSANTITM received FDA approval for the treatment of bipolar I disorder and schizophrenia in Q1 2026 and is expected to launch in the second half of 2026. BYSANTITM is protected by data exclusivity through February 20, 2031 and multiple patents, the latest of which expires on May 31, 2044. •In May 2026, the early commercial launch of NEREUSTM was initiated with a direct-to-consumer offering via the web portal nereus.us. Personal promotion is expected to commence later in 2026. 27 Table of Contents Key Regulatory & Clinical Development Highlights Upcoming Clinical Milestones •Our ongoing late-stage clinical studies are progressing rapidly and are expected to generate topline results in 2026 or early 2027, including: ◦The Thetis Phase III study of NEREUSTM for the prevention of vomiting in patients receiving GLP-1 receptor agonist therapies, with results expected in 2026. ◦The Phase III study of VQW-765 in the treatment of adults with social anxiety disorder, with results expected in 2026. ◦The Phase III study of HETLIOZ® in the treatment of delayed sleep phase disorder (DSPD) with results expected in 2026. ◦The Phase III study of BYSANTITM as a once-daily adjunctive treatment for major depressive disorder (MDD), with results expected in the first half of 2027. Other Updates •The Biologics License Application (BLA) for QuimilzaTM in GPP is under review by the FDA with a Prescription Drug User Fee Act (PDUFA) target action date of December 12, 2026. The results of the pivotal clinical study were published in the April 28, 2026 issue of the New England Journal of Medicine (NEJM) Evidence. •In May 2026, Vanda announced that Japan’s Ministry of Health, Labour and Welfare (MHLW) granted orphan drug designation to QuimilzaTM for the treatment of GPP. In July 2026, we announced that the Committee for Orphan Medicinal Products at the European Medicines Agency (EMA) had adopted a positive opinion recommending orphan drug designation for QuimilzaTM for the treatment of GPP. •In July 2026, we announced that the FDA had granted Rare Pediatric Disease Designation to VCA-894A, Vanda's investigational antisense oligonucleotide therapy for the treatment of Charcot-Marie-Tooth disease, axonal, type 2S (CMT2S), a rare, serious, and progressive inherited neurological disorder. •We continue to progress the FDA formal hearing regarding HETLIOZ® for the treatment of jet lag disorder. The proceeding, a rare administrative hearing process granted after the D.C. Circuit set aside the FDA’s prior refusal to approve the application, is advancing according to schedule and is expected to culminate in a five-day hearing before the Administrative Law Judge in December 2026. Since we began operations, we have devoted substantially all of our resources to the in-licensing, clinical development and commercialization of our products. Our ability to generate meaningful product sales and achieve profitability largely depends on our ability, alone or with others, to complete the development of, obtain regulatory approvals for and manufacture, market and sell our products. The results of our operations will vary significantly from year-to-year and quarter-to-quarter and depend on a number of factors, including risks related to our business, risks related to our industry and other risks that are detailed in Part I, Item 1A, Risk Factors, of our annual report on Form 10-K (Annual Report) for the year ended December 31, 2025 and Item 1A, Risk Factors, of any Quarterly Report filed subsequent to our Annual Report. Critical Accounting Policies and Estimates The preparation of our condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements, as well as the reported revenues and expenses during the reported periods. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no significant changes in our critical accounting policies, including estimates, assumptions and judgments, from those described in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Annual Report. A summary of our significant accounting policies appears in the notes to our audited consolidated financial statements included in the Annual Report. However, we believe that the following accounting policies are important to understanding and evaluating our reported financial results as they involve the most significant judgments and estimates used in the preparation of our condensed consolidated financial statements, and we have accordingly included them in this discussion. 28 Table of Contents Revenue from net product sales. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. We recognize revenue when control of the product is transferred to the customer in an amount that reflects the consideration we expect to be entitled to in exchange for those product sales, which is typically once the product physically arrives at the customer. Sales taxes, value-added taxes and usage-based taxes are excluded from revenues. Fanapt® and NEREUSTM are available in the U.S. for distribution through a limited number of wholesalers and are also available in retail pharmacies. In addition, NEREUSTM is available by prescription directly through the nereus.us website. HETLIOZ® is available in the U.S. for distribution through a limited number of specialty pharmacies and is not available in retail pharmacies. PONVORY® is available in the U.S. for distribution primarily through a limited number of specialty distributors and specialty pharmacies. We invoice and record revenue when our customers, wholesalers, specialty pharmacies and specialty distributors, receive product from the third-party logistics warehouse, which is the point at which control is transferred to the customer. Revenues and accounts receivable are concentrated with these customers. Outside the U.S., we have a distribution agreement for the commercialization of Fanapt® in Israel and sell HETLIOZ® in Germany. Receivables are carried at transaction price paid by the wholesalers, specialty pharmacies and specialty distributors, net of estimated prompt-pay discounts and allowance for credit losses. Payment terms differ by customer, but are based on customary commercial terms and typically range between thirty and sixty days. Allowance for credit losses is measured using historical loss rates based on the aging of receivables and incorporating current conditions and forward-looking estimates. The transaction price is determined based upon the consideration to which we will be entitled in exchange for transferring product to the customer. Our product sales are recorded net of applicable product revenue allowances for which reserves are established and include discounts, rebates, chargebacks, service fees, co-pay assistance and product returns that are applicable for various government and commercial payors. Where appropriate, our estimates of variable consideration included in the transaction price consider a range of possible outcomes. Allowances for rebates, chargebacks and co-pay assistance are based upon the insurance benefits of the end customer, if any, which are estimated using historical activity and, where available, actual and pending prescriptions for which we have validated the insurance benefits. Variable consideration may be constrained and is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the respective underlying contracts. If actual results in the future vary from our estimates, we adjust our estimate in the period identified, which would affect net product sales in the period such variances become known. During the six months ended June 30, 2026, we constrained NEREUSTM net product sales. The constrained revenue relates to the uncertainties of patient demand and product returns related to the elevated levels of inventory on hand at wholesalers. Net product sales of NEREUSTM made directly to patients through the nereus.us website are cash-pay transactions that are not subject to commercial or government payor insurance benefits and, accordingly, are not subject to the rebate, chargeback, Medicare Part D and co-pay assistance allowances described above. Reserves for variable consideration are classified as product revenue allowances on the Condensed Consolidated Balance Sheets, with the exception of prompt-pay discounts, which are classified as reductions of accounts receivable. The reserve for product returns for which the product may not be returned for a period of greater than one year from the balance sheet date is included as a component of other non-current liabilities in the Condensed Consolidated Balance Sheets. Uncertainties related to variable consideration are generally resolved in the quarter subsequent to period end, with the exception of Medicaid rebates, which are dependent upon the timing of when states submit reimbursement claims, Medicare inflationary rebates, which are billed on an annual basis beginning in 2025, and product returns that are resolved during the product expiry period specified in the customer contract. Furthermore, inventory stocking of HETLIOZ® at specialty pharmacy customers since the entrance of generic competition in early 2023 has resulted in longer periods to resolve these uncertainties related to variable consideration. We currently record sales allowances for the following: •Prompt-pay: Wholesalers, specialty pharmacies and specialty distributors, our direct customers, are generally offered discounts for prompt payment. We expect that these direct customers will earn prompt payment discounts and, therefore, we deduct the full amount of these discounts from total product sales when revenues are recognized. •Rebates: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program as well as contracted rebate programs with other payors, including the Medicare Part D inflationary rebate. Rebate amounts owed after the final dispensing of the product to a benefit plan participant are based upon contractual agreements or legal requirements with public sector benefit providers, such as Medicaid and Medicare. The allowances for rebates are based on statutory or contracted discount rates and estimated patient utilization. •Chargebacks: Chargebacks are discounts that occur when contracted indirect customers purchase directly from wholesalers, specialty pharmacies and specialty distributors. Contracted indirect customers, which currently consist 29 Table of Contents primarily of Public Health Service institutions and federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The wholesaler, specialty pharmacy or specialty distributor, in turn, charges back the difference between the price initially paid by the wholesaler, specialty pharmacy or specialty distributor and the discounted price paid to the wholesaler, specialty pharmacy or specialty distributor by the contracted customer. •Medicare Part D rebates: Prior to January 1, 2025, the Medicare Part D prescription drug benefit required manufacturers to fund approximately 70% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients for applicable drugs. We accounted for the Medicare Part D coverage gap using a point of sale model. Beginning January 1, 2025, the Medicare Part D coverage gap discount program was replaced with a new discounting program under the Inflation Reduction Act of 2022. The Medicare Part D benefit redesign has resulted in overall higher discounts for our Medicare payor segment relative to the previous Medicare Part D prescription drug coverage gap discount program. Under the redesigned Medicare Part D program, applicable drugs dispensed to applicable beneficiaries are subject to manufacturer discounts of 10% during the initial coverage phase and 20% during the catastrophic coverage phase. Under the Medicare Part D benefit redesign, we are a specified manufacturer whose applicable drugs for applicable beneficiaries who are Low Income Subsidy eligible under section 1860D-14(a) of the Social Security Act are subject to lower applicable discounts during the phase-in period. Estimates for expected Medicare Part D rebates are based, in part, on historical activity and, where available, actual and pending prescriptions when we have validated the insurance benefits. •Service fees: We receive sales order management, data and distribution services from certain customers, for which we are assessed fees. These fees are based on contracted terms and are known amounts. We accrue service fees at the time of revenue recognition, resulting in a reduction of product sales and the recognition of an accrued liability, unless it is a payment for a distinct good or service from the customer in which case the fair value of those distinct goods or services are recorded as selling, general and administrative expense. •Co-pay assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-pay assistance. Co-pay assistance utilization is based on information provided by our third-party administrator. •Product returns: We generally offer direct customers a limited right to return, as contractually defined with our customers. We consider several factors in the estimation process, including expiration dates of product shipped to customers, inventory levels within the distribution channel, product shelf life, historical return activity, including activity for product sold for which the return period has passed, prescription trends and other relevant factors. We do not expect returned products to be resalable. There was no right of return asset as of June 30, 2026 or December 31, 2025. The following table summarizes sales discounts and allowance activity as of and for the six months ended June 30, 2026: (in thousands) Rebates & Chargebacks Discounts, Returns and Other Total Balances at December 31, 2025 $ 63,356 $ 14,709 $ 78,065 Provision related to current period sales 64,116 36,072 100,188 Adjustments for prior period sales (2,880) (39) (2,919) Credits/payments made (58,228) (21,764) (79,992) Balances at June 30, 2026 $ 66,364 $ 28,978 $ 95,342 The provision of $64.1 million for rebates and chargebacks for the six months ended June 30, 2026 and its ending balance at June 30, 2026 primarily represent Medicaid rebates. The provision of $36.1 million for discounts, returns and other for the six months ended June 30, 2026 and its ending balance at June 30, 2026 primarily represents service fees, estimated product returns, co-pay assistance costs and prompt-pay discounts. NEREUSTM became commercially available in the U.S. in May 2026. The increase in the balance of discounts, returns and other as of June 30, 2026 relative to December 31, 2025 was primarily due to provisions for constrained revenue for the initial stocking of NEREUSTM by wholesalers. Stock-based compensation. Compensation costs for all stock-based awards to employees and directors are measured based on the grant date fair value of those awards and recognized over the period during which the employee or director is required to perform service in exchange for the award. We use the Black-Scholes-Merton option pricing model to determine the fair value of stock options. We use the Monte Carlo model to determine the fair value of performance restricted share units (PSUs). The determination of the fair value of stock options and PSUs on the date of grant using a valuation model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the expected stock price volatility over the expected term (stock options) or remaining performance period (PSUs) of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. Expected volatility rates are 30 Table of Contents based on the historical volatility of our publicly traded common stock and other factors. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. We have never paid cash dividends to our stockholders and do not plan to pay dividends in the foreseeable future. As stock-based compensation expense recognized in the Condensed Consolidated Statements of Operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Research and development expenses. Research and development expenses consist primarily of fees for services provided by third parties in connection with the clinical trials, costs of contract manufacturing services for clinical trial use, milestone payments made under licensing agreements prior to regulatory approval, costs of materials used in clinical trials and research and development, costs for regulatory consultants and filings, depreciation of capital resources used to develop products, related facilities costs and salaries, other employee-related costs and stock-based compensation for research and development personnel. We generally expense research and development costs as they are incurred for products in the development stage, including manufacturing costs and milestone payments made under license agreements prior to FDA approval. Upon and subsequent to FDA approval, manufacturing and milestone payments made under license agreements are capitalized. Milestone payments are accrued when it is deemed probable that the milestone event will be achieved. Costs related to the acquisition of intellectual property are expensed as incurred if the underlying technology is developed in connection with our research and development efforts and has no alternative future use. Clinical trials are inherently complex, often involve multiple service providers and can include payments made to investigator physicians at study sites. Because billing for services often lags delivery of service by a substantial amount of time, we are often required to estimate a significant portion of our accrued clinical expenses. Our assessments include, but are not limited to: (i) an evaluation by the project manager of the work that has been completed during the period, (ii) measurement of progress prepared internally and/or provided by the third-party service provider, (iii) analyses of data that justify the progress, and (iv) management’s judgment. In the event that we do not identify certain costs that have begun to be incurred or we under- or over-estimate the level of services performed or the costs of such services, our reported expenses for such period would be too low or too high. Intangible assets and impairment of long-lived assets. Our intangible assets consist of capitalized license costs for products approved by the FDA or costs to acquire already commercialized products. We amortize our intangible assets on a straight-line basis over the estimated useful economic life of the related product patents. We assess the impairment of intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors we consider important that could trigger an impairment review include significant underperformance relative to expected, historical or projected future operating results, a significant adverse change in legal or regulatory factors that could affect the value or patent life, including our ability to defend and enforce patent claims and other intellectual property rights, and significant negative industry or economic trends. When we determine that the carrying value of our intangible assets may not be recoverable based upon the existence of one or more of the indicators of impairment, we measure any impairment based on the amount that carrying value exceeds fair value. Income taxes. We assess the need for a valuation allowance against our deferred tax assets each quarter through the review of all available positive and negative evidence. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of the deferred tax assets will not be realized. The analysis is highly dependent upon historical and projected pretax income. Projected pretax income includes significant assumptions related to revenue, which could be affected by the success of the commercial launches of Fanapt® in bipolar I disorder, PONVORY® in RMS, NEREUSTM in the prevention of vomiting induced by motion, which became commercially available in the U.S. in May 2026, and BYSANTITM for the acute treatment of manic or mixed episodes associated with bipolar I disorder and for the treatment of schizophrenia, which was approved in February 2026, and HETLIOZ® generic competition, as well as commercial and research and development activities, including spend on our commercial launches and late-stage clinical activities and our ability to obtain regulatory approval from the FDA for products or new indications in development, among other factors. After considering all available positive and negative evidence, including but not limited to historical, current and future projected results and significant risks and uncertainties related to forecasts, we have concluded that it is not more likely than not that substantially all of our deferred tax assets are realizable in future periods and maintained a valuation allowance against all net deferred tax assets as of June 30, 2026 and December 31, 2025. The valuation allowance was recorded in the fourth quarter of 2025, resulting in a non-cash income tax expense of $113.7 million for the year ended December 31, 2025. If we have cumulative pretax income in future periods and if our projections indicate pretax income in future periods or if there are meaningful changes to our business operations, the conclusion about the appropriateness of the valuation allowance could change in a future period. A future reduction of the valuation allowance, in whole or in part, would result in a non-cash income tax benefit during the period of reduction. The potential timing and amount of any future valuation allowance release has yet to 31 Table of Contents be determined and requires an analysis that is highly dependent upon historical and future projected earnings, among other factors. Any such adjustment could have a material impact on our financial position and results of operations. Tax benefits are recognized from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. Recent Accounting Pronouncements See Note 2, Summary of Significant Accounting Policies, to the condensed consolidated financial statements included in Part I of this Quarterly Report for information on recent accounting pronouncements. Results of Operations We anticipate that our results of operations will fluctuate for the foreseeable future due to several factors, including our and our partners’ ability to continue to successfully commercialize our products, including our newest products, NEREUSTM for the prevention of vomiting induced by motion, which was approved in December 2025 and became commercially available in the U.S. in May 2026, and BYSANTITM for the acute treatment of manic or mixed episodes associated with bipolar I disorder and for the treatment of schizophrenia, which was approved in February 2026, the impact of regulatory changes to the pharmaceutical industry such as the Medicare Part D provisions of the Inflation Reduction Act of 2022, any possible payments made or received pursuant to license agreements, progress of our research and development efforts, the timing and outcome of clinical trials and related possible regulatory approvals and the status of existing and future potential litigation involving our products and intellectual property. See Note 14, Legal Matters, to the condensed consolidated financial statements included in Part I of this Quarterly Report for information on material legal matters. Three months ended June 30, 2026 compared to three months ended June 30, 2025 Revenues. Total revenues decreased by $2.1 million, or 4%, to $50.5 million for the three months ended June 30, 2026 compared to $52.6 million for the three months ended June 30, 2025. Revenue from net product sales was as follows: Three Months Ended (in thousands) June 30, 2026 June 30, 2025 Net Change Percent Fanapt® net product sales $ 35,989 $ 29,294 $ 6,695 23 % HETLIOZ® net product sales 5,576 16,192 (10,616) (66) % PONVORY® net product sales 7,935 7,104 831 12 % NEREUSTM net product sales 1,029 — 1,029 N/A Total net product sales $ 50,529 $ 52,590 $ (2,061) (4) % Fanapt® net product sales increased by $6.7 million, or 23%, to $36.0 million for the three months ended June 30, 2026 compared to $29.3 million for the three months ended June 30, 2025. The increase to net product sales was primarily attributable to an increase in volume. An amount of variable consideration related to Fanapt® net product sales is subject to dispute, of which approximately $3.0 million was recognized for the three months ended December 31, 2025. HETLIOZ® net product sales decreased by $10.6 million, or 66%, to $5.6 million for the three months ended June 30, 2026 compared to $16.2 million for the three months ended June 30, 2025. The decrease to net product sales was attributable to a decrease in volume. Since the entrance of generic competition in the first quarter of 2023, HETLIOZ® dispenses have decreased. Additionally, inventory levels at our specialty pharmacy customers have been elevated relative to inventory levels prior to the entrance of generic competition. The elevated levels of inventory have resulted in longer periods to resolve uncertainties related to variable consideration. HETLIOZ® net product sales have been and may continue to fluctuate from quarter to quarter depending on when specialty pharmacy customers purchase again. During the second quarter of 2026, there was destocking of inventory by certain of our specialty pharmacy customers, as well as orders, totaling approximately $7.0 million in revenue, that were shipped on June 29, 2026 and arrived on July 1, 2026, both resulting in a decline in volume. These orders that did not arrive by quarter end will be recognized as revenue in the third quarter of 2026. HETLIOZ® net product sales may decline in future periods, potentially significantly, related to continued generic competition in the U.S. PONVORY® net product sales increased by $0.8 million, or 12%, to $7.9 million for the three months ended June 30, 2026 compared to $7.1 million for the three months ended June 30, 2025. An amount of variable consideration related to 32 Table of Contents PONVORY® net product sales is subject to dispute, of which approximately $3.0 million was recognized for the three months ended December 31, 2024. NEREUSTM became commercially available in the U.S. in May 2026. NEREUSTM net product sales were $1.0 million for the three months ended June 30, 2026. During the three months ended June 30, 2026, there was an initial stocking of NEREUSTM by wholesalers and we constrained NEREUSTM net product sales. The constrained revenue relates to the uncertainties of patient demand and product returns related to the elevated levels of inventory on hand at wholesalers. Cost of goods sold. Cost of goods sold increased by $0.8 million, or 30%, to $3.6 million for the three months ended June 30, 2026 compared to $2.7 million for the three months ended June 30, 2025. Cost of goods sold includes third-party manufacturing costs of product sold, third-party royalty costs and distribution and other costs. Third-party royalty costs were 6% of Fanapt® net product sales and 5% of HETLIOZ® net product sales in Germany. Third-party royalty costs on HETLIOZ® net product sales in Germany will end in October 2026 and third-party royalty costs on Fanapt® net product sales in the U.S. will end in November 2026. There are no third-party royalty costs on net sales of PONVORY®. Third-party royalty costs on NEREUSTM net product sales in the U.S. are tiered, up to the low double digits, and began with the U.S. commercial launch of NEREUSTM in May 2026. We evaluate the risk of excess inventory and product expiry by evaluating current and future product demand relative to product shelf life and build demand forecasts by considering factors such as, but not limited to, overall market potential, market share, market acceptance, patient usage and generic competition. Our inventory balance consisted of $7.1 million of HETLIOZ® product and $3.1 million of other products as of June 30, 2026. Our inventory balance consisted of $7.8 million of HETLIOZ® product and $3.2 million of other products as of December 31, 2025. Net product sales during the three months ended June 30, 2026 was derived from zero-cost inventory related to inventory manufactured prior to when FDA approval of NEREUSTM was determined to be probable, which was previously expensed as research and development expense. For the three months ended June 30, 2026, the increase to cost of goods sold would not have been material if we included zero-cost inventory. As of June 30, 2026, the remaining zero-cost inventory that was previously expensed was $5.0 million, which consisted of work-in-process. Research and development expenses. Research and development expenses increased by $15.0 million, or 68%, to $37.0 million for the three months ended June 30, 2026 compared to $22.0 million for the three months ended June 30, 2025. The increase was primarily due to higher expenses on our VQW-765 and various of our other development programs. The following table summarizes the costs of our product development initiatives for the three months ended June 30, 2026 and 2025: Three Months Ended (in thousands) June 30, 2026 June 30, 2025 Direct project costs (1) Fanapt® $ 5,900 $ 3,485 BYSANTITM 5,068 3,709 HETLIOZ® 5,288 3,774 PONVORY® 2,436 1,548 NEREUSTM 6,994 3,918 VQW-765 4,888 413 CFTR 882 1,932 VTR-297 1,321 808 Other 2,161 386 Total direct project costs 34,938 19,973 Indirect project costs (1) Stock-based compensation 583 596 Other indirect overhead 1,432 1,421 Total indirect project costs 2,015 2,017 Total research and development expense $ 36,953 $ 21,990 33 Table of Contents (1)We record direct costs, including personnel costs and related benefits, on a project-by-project basis. Many of our research and development costs are not attributable to any individual project because we share resources across several development projects. We record indirect costs that support a number of our research and development activities in the aggregate, including stock-based compensation. We expect to incur significant research and development expenses as we continue to develop our products and continue our efforts to expand our product pipeline. Selling, general and administrative expenses. Selling, general and administrative expenses increased by $7.2 million, or 11%, to $71.8 million for the three months ended June 30, 2026 compared to $64.6 million for the three months ended June 30, 2025. The increase in selling, general and administrative expenses was primarily the result of an increase in spending on our continued commercialization efforts for our products, including the U.S. commercial launch of NEREUSTM initiated in May 2026 and the expansion of our sales force during 2025. Intangible asset amortization. Intangible asset amortization was $2.0 million for the three months ended June 30, 2026 compared to $1.8 million for the three months ended June 30, 2025. Intangible asset amortization increased in 2026 due to the amortization of the NEREUSTM intangible asset, which was capitalized in December 2025. Other income, net. Other income, net was $1.4 million for the three months ended June 30, 2026 compared to $3.6 million for the three months ended June 30, 2025. Other income primarily consists of investment income on our marketable securities. Provision (benefit) for income taxes. We recorded an income tax provision of $0.1 million and a benefit for income taxes of $7.7 million for the three months ended June 30, 2026 and 2025, respectively. The income tax provision for the three months ended June 30, 2026 was driven by discrete income tax expense of $0.1 million. The income tax benefit for the three months ended June 30, 2025 was primarily driven by the estimated effective tax rate for the year as well as discrete income tax expense of $0.4 million. Six months ended June 30, 2026 compared to six months ended June 30, 2025 Revenues. Total revenues decreased by $0.4 million to $102.2 million for the six months ended June 30, 2026 compared to $102.6 million for the six months ended June 30, 2025. Revenues were as follows: Six Months Ended (in thousands) June 30, 2026 June 30, 2025 Net Change Percent Fanapt® net product sales $ 65,549 $ 52,839 $ 12,710 24 % HETLIOZ® net product sales 21,523 37,064 (15,541) (42) % PONVORY® net product sales 14,146 12,728 1,418 11 % NEREUSTM net product sales 1,029 — 1,029 N/A Total net product sales $ 102,247 $ 102,631 $ (384) — % Fanapt® net product sales increased by $12.7 million, or 24%, to $65.5 million for the six months ended June 30, 2026 compared to $52.8 million for the six months ended June 30, 2025. The increase to net product sales was primarily attributable to an increase in volume, partially offset by a decrease in price net of deductions. An amount of variable consideration related to Fanapt® net product sales is subject to dispute, of which approximately $3.0 million was recognized for the three months ended December 31, 2025. HETLIOZ® net product sales decreased by $15.5 million, or 42%, to $21.5 million for the six months ended June 30, 2026 compared to $37.1 million for the six months ended June 30, 2025. The decrease to net product sales was attributable to a decrease in volume. Since the entrance of generic competition in the first quarter of 2023, HETLIOZ® dispenses have decreased. Additionally, inventory levels at our specialty pharmacy customers have been elevated relative to inventory levels prior to the entrance of generic competition. The elevated levels of inventory have resulted in longer periods to resolve uncertainties related to variable consideration. HETLIOZ® net product sales have been and may continue to fluctuate from quarter to quarter depending on when specialty pharmacy customers purchase again. During the second quarter of 2026, there was destocking of inventory by certain of our specialty pharmacy customers, as well as orders, totaling approximately $7.0 million in revenue, that were shipped on June 29, 2026 and arrived on July 1, 2026, both resulting in a decline in volume. These orders that did not arrive by quarter end will be recognized as revenue in the third quarter of 2026. HETLIOZ® net product sales may decline in future periods, potentially significantly, related to continued generic competition in the U.S. 34 Table of Contents PONVORY® net product sales increased by $1.4 million, or 11%, to $14.1 million for the six months ended June 30, 2026 compared to $12.7 million for the six months ended June 30, 2025. An amount of variable consideration related to PONVORY® net product sales is subject to dispute, of which approximately $3.0 million was recognized for the three months ended December 31, 2024. NEREUSTM became commercially available in the U.S. in May 2026. NEREUSTM net product sales were $1.0 million for the six months ended June 30, 2026. During the six months ended June 30, 2026, there was an initial stocking of NEREUSTM by wholesalers and we constrained NEREUSTM net product sales. The constrained revenue relates to the uncertainties of patient demand and product returns related to the elevated levels of inventory on hand at wholesalers. Cost of goods sold. Cost of goods sold increased by $0.5 million, or 7%, to $6.7 million for the six months ended June 30, 2026 compared to $6.3 million for the six months ended June 30, 2025. Cost of goods sold includes third-party manufacturing costs of product sold, third-party royalty costs and distribution and other costs. Third-party royalty costs were 6% of Fanapt® net product sales and 5% of HETLIOZ® net product sales in Germany. Third-party royalty costs on HETLIOZ® net product sales in Germany will end in October 2026 and third-party royalty costs on Fanapt® net product sales in the U.S. will end in November 2026. There are no third-party royalty costs on net sales of PONVORY®. Third-party royalty costs on NEREUSTM net product sales in the U.S. are tiered up to the low double digits, and began with the U.S. commercial launch of NEREUSTM in May 2026. We evaluate the risk of excess inventory and product expiry by evaluating current and future product demand relative to product shelf life and build demand forecasts by considering factors such as, but not limited to, overall market potential, market share, market acceptance, patient usage, and generic competition. Our inventory balance consisted of $7.1 million of HETLIOZ® product and $3.1 million of other products as of June 30, 2026. Our inventory balance consisted of $7.8 million of HETLIOZ® product and $3.2 million of other products as of December 31, 2025. Net product sales during the six months ended June 30, 2026 was derived from zero-cost inventory related to inventory manufactured prior to when FDA approval of NEREUSTM was determined to be probable, which was previously expensed as research and development expense. For the six months ended June 30, 2026, the increase to cost of goods sold would not have been material if we included zero-cost inventory. As of June 30, 2026, the remaining zero-cost inventory that was previously expensed was $5.0 million, which consisted of work-in-process. Research and development expenses. Research and development expenses increased by $7.7 million, or 13%, to $65.4 million for the six months ended June 30, 2026 compared to $57.7 million for the six months ended June 30, 2025. The increase was primarily due to an increase in expenses for our VQW-765, Fanapt® and various of our other development programs, partially offset by lower expenses on our QuimilzaTM program. Research and development expenses for the six months ended June 30, 2025 included an upfront payment to AnaptysBio, Inc. for the exclusive, global license to develop, manufacture, and commercialize QuimilzaTM and drug supply. 35 Table of Contents The following table summarizes the costs of our product development initiatives for the six months ended June 30, 2026 and 2025: Six Months Ended (in thousands) June 30, 2026 June 30, 2025 Direct project costs (1) Fanapt® $ 10,859 $ 7,235 BYSANTITM 9,318 6,399 HETLIOZ® 8,061 6,914 PONVORY® 5,285 3,890 NEREUSTM 9,805 8,015 QuimilzaTM 2,974 14,370 VQW-765 8,209 650 CFTR 2,866 3,387 VTR-297 2,763 1,583 Other 1,231 850 Total direct project costs 61,371 53,293 Indirect project costs (1) Stock-based compensation 1,184 1,361 Other indirect overhead 2,833 3,048 Total indirect project costs 4,017 4,409 Total research and development expense $ 65,388 $ 57,702 (1)We record direct costs, including personnel costs and related benefits, on a project-by-project basis. Many of our research and development costs are not attributable to any individual project because we share resources across several development projects. We record indirect costs that support a number of our research and development activities in the aggregate, including stock-based compensation. We expect to incur significant research and development expenses as we continue to develop our products and continue our efforts to expand our product pipeline. Selling, general and administrative expenses. Selling, general and administrative expenses increased by $25.5 million, or 22%, to $140.2 million for the six months ended June 30, 2026 compared to $114.7 million for the six months ended June 30, 2025. The increase in selling, general and administrative expenses was primarily the result of an increase in spending on our continued commercialization efforts for our commercial launches of our products, including the U.S. commercial launch of NEREUSTM initiated in May 2026 and the expansion of our sales force during 2025. Intangible asset amortization. Intangible asset amortization was $4.0 million and $3.5 million for the six months ended June 30, 2026 and 2025, respectively. Intangible asset amortization increased in 2026 due to the amortization of the NEREUSTM intangible asset, which was capitalized in December 2025. Other income, net. Other income, net was $3.2 million for the six months ended June 30, 2026 compared to $7.3 million for the six months ended June 30, 2025. Other income primarily consists of investment income on our marketable securities. Provision (benefit) for income taxes. We recorded an income tax provision of $0.3 million and a benefit for income taxes of $15.6 million for the six months ended June 30, 2026 and 2025, respectively. The income tax provision for the six months ended June 30, 2026 was driven by discrete income tax expense of $0.2 million. The income tax benefit for the six months ended June 30, 2025 was primarily driven by the estimated effective tax rate for the year as well as discrete income tax expense of $0.8 million. Liquidity and Capital Resources As of June 30, 2026, our total cash and cash equivalents and marketable securities were $170.0 million compared to $263.8 million at December 31, 2025. Our cash and cash equivalents are deposits in operating accounts and highly liquid investments with an original maturity of 90 days or less at date of purchase and consist of investments in money market funds with 36 Table of Contents commercial banks and financial institutions and commercial paper of high-quality corporate issuers. Our marketable securities consist of investments in government-sponsored and corporate enterprises and commercial paper. Our liquidity resources as of June 30, 2026 and December 31, 2025 are summarized as follows: (in thousands) June 30, 2026 December 31, 2025 Cash and cash equivalents $ 55,882 $ 84,851 Marketable securities: U.S. Treasury and government agencies 97,804 153,735 Corporate debt 16,343 25,261 Total marketable securities 114,147 178,996 Total cash, cash equivalents and marketable securities $ 170,029 $ 263,847 As of June 30, 2026, we maintained all of our cash, cash equivalents and marketable securities in two financial institutions. Deposits held with these institutions may exceed the amount of insurance provided on such deposits, but we do not anticipate any losses with respect to such deposits. In the normal course of our business, we regularly enter into agreements with third-party vendors under fee service arrangements which generally may be terminated on 90 days’ notice without incurring additional charges, other than charges for work completed or materials procured but not paid for through the effective date of termination and other costs incurred by our contractors in closing out work in progress as of the effective date of termination. Occasionally, we enter into short- and long-term agreements with third-party vendors that are non-cancellable. Our short-term non-cancellable purchase commitments primarily relate to inventory and clinical manufacturing purchase commitments, for which the production is expected to be completed within a one-year period, and certain marketing activities. Our non-cancellable purchase commitments for agreements with a remaining non-cancellable term longer than one year from June 30, 2026 primarily relate to commitments for marketing activities, inventory purchase commitments for certain of our commercial products and data services. Various other long-term agreements entered into for services with other third-party vendors are cancellable in nature or contain variable commitment terms within the agreement that are within our control. We also have long-term contractual obligations related to our leases and license agreements. See Note 8, Commitments and Contingencies, to the condensed consolidated financial statements included in Part I of this Quarterly Report for more information about these commitments. Other than as disclosed in Note 8, Commitments and Contingencies, to the condensed consolidated financial statements included in Part I of this Quarterly Report, there have been no material changes to our long-term contractual obligations as disclosed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report. For further information regarding our long-term non-cancellable purchase commitments, leases and license agreements, see Note 8, Commitments and Contingencies. We do not have any off-balance sheet arrangements. Based on our current operating plans, which include continued investment in support of our commercial products, including the ongoing commercial launch of NEREUSTM for the prevention of vomiting induced by motion, which became commercially available in the U.S. in May 2026, and the upcoming commercial launch of BYSANTITM for the acute treatment of manic or mixed episodes associated with bipolar I disorder and for the treatment of schizophrenia, continued clinical development of our commercial and other products, pursuit of regulatory approval of QuimilzaTM, pursuit of further regulatory approvals for our currently approved products and payments due upon achievement of milestones under our license agreements, we believe that our cash, cash equivalents and marketable securities and cash received from product sales will be sufficient for at least the next 12 months as of the date the financial statements were issued. Our activities will necessitate significant working capital through 2026 and beyond, and future cash requirements and the adequacy of our available funds will depend on many factors, primarily including our ability to generate revenue, the scope and costs of our commercial, manufacturing and process development activities, including the commercial launches of NEREUSTM and BYSANTITM, a regulatory approval of QuimilzaTM, the magnitude of our discovery, preclinical and clinical development programs and potential costs to acquire or license the rights to additional products. We may need or desire to obtain additional capital to finance our operations through debt, equity or alternative financing arrangements. We may also seek capital through collaborations or partnerships with other companies. The issuance of debt could require us to grant liens on certain of our assets that may limit our flexibility and debt securities may be convertible into common stock. If we raise additional capital by issuing equity securities, the terms and prices for these financings may be much more favorable to the new investors than the terms obtained by our existing stockholders. These financings may also 37 Table of Contents significantly dilute the ownership of our existing stockholders. If we are unable to obtain additional financing, we may be required to reduce the scope of our future activities, which could harm our business, financial condition and operating results. There can be no assurance that any additional financing required in the future will be available on acceptable terms, if at all. Cash Flow The following table summarizes our net cash flows from operating, investing and financing activities for the six months ended June 30, 2026 and 2025: Six Months Ended (in thousands) June 30, 2026 June 30, 2025 Net Change Net cash provided by (used in): Operating activities: Net loss $ (111,080) $ (56,701) $ (54,379) Non-cash charges 12,496 (5,106) 17,602 Net change in operating assets and liabilities 17,296 13,408 3,888 Operating activities (81,288) (48,399) (32,889) Investing activities: Acquisition of intangible asset (10,000) — (10,000) Purchases of property and equipment (411) (735) 324 Net purchases, sales and maturities of marketable securities 64,455 29,367 35,088 Investing activities 54,044 28,632 25,412 Financing activities: Principal payments on finance leases (1,632) (834) (798) Tax obligations paid in connection with settlement of restricted stock units — (915) 915 Financing activities (1,632) (1,749) 117 Effect of exchange rate changes on cash, cash equivalents and restricted cash (93) 183 (276) Net change in cash, cash equivalents and restricted cash $ (28,969) $ (21,333) $ (7,636) Operating Activities. Cash flows used in operating activities during the six months ended June 30, 2026 were $81.3 million, an increase of $32.9 million compared to $48.4 million during the six months ended June 30, 2025. The increase reflects an increase in net loss of $54.4 million, $3.9 million from the net change in operating assets and liabilities and $17.6 million in non-cash charges primarily due to a valuation allowance against all of our deferred tax assets in 2026. The increase from net change in operating assets and liabilities was due to timing for our accounts receivable including NEREUSTM inventory stocking by wholesaler customers and HETLIOZ® destocking by certain specialty pharmacy customers during the second quarter of 2026, and product revenue allowances, including the impact of constraining NEREUSTM revenue in the second quarter of 2026. Investing Activities. Cash flows provided by investing activities during the six months ended June 30, 2026 were $54.0 million, an increase of $25.4 million compared to $28.6 million during the six months ended June 30, 2025. The change in investing activities primarily reflects the net use of cash and cash equivalents and maturities of the investments in our portfolio of marketable securities. The $10.0 million milestone payment owed to Eli Lilly and Company for the FDA’s approval of NEREUSTM for the prevention of vomiting induced by motion was accrued as of December 31, 2025 and paid in 2026. Financing Activities. Cash flows used in financing activities during the six months ended June 30, 2026 were $1.6 million, a decrease of $0.1 million compared to $1.7 million during the six months ended June 30, 2025. Financing activities include principal payments for our finance lease liabilities and tax obligations paid in connection with settlement of restricted stock units. 38 Table of Contents