10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

COMMISSION FILE NUMBER 001-36576

MARINUS PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-0198082
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5 Radnor Corporate Center, Suite 500

100 Matsonford Rd

Radnor, PA 19087

(Address of registrant’s principal executive offices, including zip code)

Registrant’s telephone number, including area code: (484) 801-4670

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	MRNS	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  ⌧ Yes☐ No.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐  No.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer	☐
Non-accelerated filer ☒	Smaller reporting company	☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐Yes ☒ No.

The number of outstanding shares of the registrant’s common stock, par value $0.001 per share, as of October 31, 2021, was: 36,766,355.

Risk Factor Summary

The following summarizes the principal factors that make an investment in us speculative or risky, all of which are more fully described in the Risk Factors section below. This summary should be read in conjunction with the Risk Factors section and should not be relied upon as an exhaustive summary of the material risks facing our business.

Risks Related to our Financial Position and Need for Additional Capital

● We have incurred significant losses since our inception and anticipate that we will continue to incur losses in the future.

● We have not generated any revenue to date from product sales. We may never achieve or sustain profitability, which could depress the market price of our common stock, and could cause you to lose all or a part of your investment.

● We will require additional capital to fund our operations and if we fail to obtain necessary financing, we may be unable to complete the development and commercialization of ganaxolone.

● Our failure to comply with the covenants or other terms of the Credit Agreement, including as a result of events beyond our control, could result in a default under the Credit Agreement that could materially and adversely affect the ongoing viability of our business.

● If we are unable to satisfy certain conditions in our Credit Agreement, we will be unable to draw down the remaining amount of the term loan facility.

● Our Credit Agreement contains restrictions that limit our flexibility in operating our business.

● Raising additional capital could dilute our stockholders, restrict our operations or require us to relinquish rights to ganaxolone or any other future product candidates.

● We intend to expend our limited resources to pursue our sole product candidate, ganaxolone, and may fail to capitalize on other technologies or product candidates that may be more profitable or for which there may be a greater likelihood of success.

● We could be required to repay a portion of the upfront fee to Orion Corporation depending on the results of our planned genotoxicity study.

● We have a limited operating history, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

Risks Related to Clinical Development and Regulatory Approval of Our Product Candidates

● Our future success is dependent on the successful clinical development, regulatory approval and commercialization of ganaxolone, which is being studied in several indications and will require significant capital resources and years of additional clinical development effort.

● While our New Drug Application (NDA) for ganaxolone for the treatment of CDKL5 deficiency disorder (CDD) was accepted by the Food and Drug Administration (FDA) for filing in September 2021, we may not receive regulatory approval of our application.

● We are conducting clinical development activities for ganaxolone across multiple indications, and such clinical development activities may not produce favorable results, which could adversely impact our ability to achieve regulatory approval for ganaxolone in such indications.

● Ganaxolone may cause undesirable side effects, or have other properties, such as abuse potential, that could delay or prevent its regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following any marketing approval.

● The therapeutic efficacy and safety of ganaxolone have not been established by regulatory authorities, and we may not be able to successfully develop and commercialize ganaxolone in the future.

● Clinical development of product candidates involves a lengthy and expensive process with an uncertain outcome.

● Enrollment of our clinical trials may take longer than anticipated

● Even if ganaxolone receives regulatory approval, we will have to comply with current and future regulatory requirements and may face regulatory difficulties.

● We may not be able to obtain or maintain orphan drug exclusivity for ganaxolone across all indications and markets, which could limit the potential profitability of ganaxolone.

● Even though we have received a Rare Pediatric Disease Designation (RPD Designation) from the FDA for ganaxolone for the treatment of CDD, we may not receive a rare pediatric disease priority review voucher.

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● Failure to obtain regulatory approval in international jurisdictions would prevent ganaxolone from being marketed in these jurisdictions.

Risks Related to the Commercialization of Our Product

●Our commercial success depends upon attaining significant market access and acceptance of ganaxolone, if approved, among physicians, patients, government and private payers and others in the medical community and attaining sufficient reimbursement for ganaxolone.

●We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

●If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell ganaxolone, we may be unable to generate any revenue.

●Even if we are able to commercialize ganaxolone, it may not receive coverage and adequate reimbursement from third-party payers, which could harm our business.

●If the market opportunities for ganaxolone are smaller than we believe they are, our results of operations may be adversely affected and our business may suffer.

Risks Related to Our Dependence on Third Parties

● We rely on third parties to conduct our preclinical studies and clinical trials. If these third parties do not successfully carry out their duties in compliance with contractual terms and/or regulatory requirements or meet expected timelines, our development plans may be adversely affected and we may not be able to obtain regulatory approval for or commercialize ganaxolone.

● Our experience manufacturing ganaxolone is limited to the needs of our preclinical studies and clinical trials. We have no experience manufacturing ganaxolone on a commercial scale and have no manufacturing facility. We are dependent on third-party manufacturers for the manufacture of ganaxolone as well as on third parties for our supply chain, and if we experience problems with any such third parties, the manufacturing of ganaxolone could be delayed.

●We will depend on Orion for the commercialization of ganaxolone in Europe, and if they terminate the collaboration agreement, we would not have a European commercial presence.

● Government funding for certain aspects of our programs adds uncertainty to our research efforts with respect to those programs and may impose requirements that increase the costs of commercialization and production of product candidates developed under those government-funded programs.

Risks Related to Regulatory Compliance

●Currently enacted and future legislation, including potentially unfavorable pricing regulations or other healthcare reform initiatives, may increase the difficulty and cost for us to obtain marketing approval of and commercialize ganaxolone and affect the prices we may obtain.

Risks Related to Intellectual Property

●If we are unable to protect our intellectual property rights or if our intellectual property rights are inadequate for our technology and product candidates, our competitive position could be harmed.

●Third parties, such as Ovid Therapeutics, Inc., may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could harm our business.

●We may not be able to protect our intellectual property rights throughout the world.

●Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time.

●We rely on government funding for certain aspects of our research and development activities and we may develop intellectual property through such activities and therefore may be subject to federal regulations such as “march-in” rights, certain reporting requirements and a preference for U.S. based companies. Compliance with such regulations may limit our exclusive rights, and limit our ability to contract with non-U.S. manufacturers.

Risks Related to Our Business Operations

●The COVID-19 pandemic could continue to adversely affect our business and our ability to conduct and complete clinical trials.

Risks Related to Ownership of Our Common Stock

● The market price of our stock has been, and may continue to be, highly volatile, and you could lose all or part of your investment.

● Insiders have substantial influence over us and could delay or prevent a change in corporate control.

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MARINUS PHARMACEUTICALS, INC. AND SUBSIDIARY

INDEX TO FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2021

PART I – FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (unaudited)
	Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	5
	Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2021 and 2020	6
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	7
	Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2021 and 2020	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	38
Item 4.	Controls and Procedures	38
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	84
Item 3.	Defaults Upon Senior Securities	84
Item 4.	Mine Safety Disclosures	84
Item 5.	Other Information	84
Item 6.	Exhibits	85
	Signatures	86

Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to the “Company,” “Marinus,” “we,” “us,” and “our” include Marinus Pharmaceuticals, Inc. and its wholly owned subsidiary, Marinus Pharmaceuticals Emerald Limited, an Ireland company.

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PART I

FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

MARINUS PHARMACEUTICALS, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)

	September 30,		December 31,
	2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	145,101	$	138,509
Short-term investments		—		1,474
Accounts receivable		2,473		1,646
Contract asset		1,059		—
Prepaid expenses and other current assets		4,858		4,638
Total current assets		153,491		146,267
Property and equipment, net		2,650		1,945
Other assets		2,732		2,250
Total assets	$	158,873	$	150,462
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	693	$	2,211
Refund liability		21,828		—
Accrued expenses		15,155		8,518
Total current liabilities		37,676		10,729
Notes payable, net of deferred financing costs		40,579		—
Other long-term liabilities		2,124		2,534
Total liabilities		80,379		13,263
Stockholders’ equity:
Series A convertible preferred stock, $0.001 par value; 25,000,000 shares authorized, 4,575 shares issued and outstanding at September 30, 2021 and 4,753 issued and outstanding at December 31, 2020		4,302		4,469
Common stock, $0.001 par value; 150,000,000 shares authorized, 36,758,508 issued and 36,751,201 outstanding at September 30, 2021 and 36,585,767 issued and 36,578,460 outstanding at December 31, 2020		37		37
Additional paid-in capital		456,555		444,622
Treasury stock at cost, 7,307 shares at September 30, 2021 and December 31, 2020		—		—
Accumulated deficit		(382,400)		(311,929)
Total stockholders’ equity		78,494		137,199
Total liabilities and stockholders’ equity	$	158,873	$	150,462

See accompanying notes to consolidated financial statements.

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MARINUS PHARMACEUTICALS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenue:
Federal contract revenue	$	1,127	$	171	$	4,838	$	171
Collaboration revenue		8,987		—		8,987		—
Total revenue		10,114		171		13,825		171
Expenses:
Research and development		18,353		11,306		55,506		38,062
General and administrative		9,452		4,564		26,656		12,543
Cost of collaboration revenue		1,478		—		1,478		—
Loss from operations		(19,169)		(15,699)		(69,815)		(50,434)
Interest income		17		79		57		459
Interest expense		(678)		—		(1,029)		—
Other income (expense), net		323		(39)		316		(31)
Net loss and comprehensive loss	$	(19,507)	$	(15,659)	$	(70,471)	$	(50,006)
Deemed dividends on convertible preferred stock		—		—		—		(8,880)
Net loss applicable to common shareholders	$	(19,507)	$	(15,659)	$	(70,471)	$	(58,886)
Per share information:
Net loss per share of common stock—basic and diluted	$	(0.53)	$	(0.51)	$	(1.92)	$	(2.29)
Basic and diluted weighted average shares outstanding		36,744,591		30,552,947		36,667,472		25,737,981
Net loss	$	(19,507)	$	(15,659)	$	(70,471)	$	(50,006)
Other comprehensive (loss) income:
Unrealized (loss) gain on available-for-sale securities		—		(15)		—		11
Total comprehensive loss	$	(19,507)	$	(15,674)	$	(70,471)	$	(49,995)

See accompanying notes to consolidated financial statements.

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MARINUS PHARMACEUTICALS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities
Net loss	$	(70,471)	$	(50,006)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		262		243
Amortization of debt issuance costs		319		—
Stock-based compensation expense		10,867		5,521
Noncash contract asset		(41)		—
Noncash lease expense		232		194
Noncash lease liability		237		276
Changes in operating assets and liabilities:
Refund liability		21,828		—
Contract asset		(1,018)		—
Prepaid expenses and other current assets, non-current assets, and accounts receivable		(453)		(1,496)
Accounts payable, accrued expenses and other long term-liabilities		4,511		754
Net cash used in operating activities		(33,727)		(44,514)
Cash flows from investing activities
Maturities of short-term investments		1,474		5,711
Purchases of short-term investments		—		(8,931)
Deposit on property and equipment		(1,329)		—
Purchases of property and equipment		(839)		—
Net cash used in investing activities		(694)		(3,220)
Cash flows from financing activities
Proceeds from exercise of stock options		902		616
Proceeds from notes payable, net of issuance costs		40,259		—
Financing costs, paid		(148)		—
Proceeds from equity offerings, net of offering costs		—		43,512
Net cash provided by financing activities		41,013		44,128
Net increase (decrease) in cash and cash equivalents		6,592		(3,606)
Cash and cash equivalents—beginning of period		138,509		90,943
Cash and cash equivalents—end of period	$	145,101	$	87,337
Supplemental disclosure of cash flow information
Contractual exit fee included in notes payable	$	900	$	—
Property and equipment in accrued expenses	$	107	$	—
Conversion of preferred stock to common stock	$	—	$	17

See accompanying notes to consolidated financial statements.

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MARINUS PHARMACEUTICALS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(unaudited)

												Accumulated
	Series A						Additional					Other				Total
	Convertible Preferred Stock			Common Stock			Paid-in		Treasury Stock			Comprehensive		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Shares	Amount		Income		Deficit		Equity
Balance, December 31, 2019	—	$	—	21,625,088	$	22	$	295,121	7,307	$	—	$	—	$	(235,574)	$	59,569
Stock-Based Compensation Expense	—		—	—		—		1,876	—		—		—		—		1,876
Exercise of stock options	—		—	59,978		—		312	—		—		—		—		312
Issuance of restricted stock	—		—	5,250		—		—	—		—		—		—		—
Unrealized gain on investments	—		—	—		—		—	—		—		27		—		27
Deemed dividend on beneficial conversion feature - Series A convertible preferred stock	—		—	—		—		8,880	—		—		—		(8,880)		—
Net Loss	—		—	—		—		—	—		—		—		(18,672)		(18,672)
Balance, March 31, 2020	—		—	21,690,316		22		306,189	7,307		—		27		(263,126)		43,112
Stock-based compensation expense	—		—	—		—		1,796	—		—		—		—		1,796
Exercise of stock options	—		—	47,455		—		200	—		—		—		—		200
Conversion of convertible preferred stock into common	—		—	4,139,400		4		19,451	—		—		—		—		19,455
Issuance of common stock under equity distribution agreement, net of expenses of $68	—		—	78,807		—		602	—		—		—		—		602
Issuance of common stock in connection with follow-on public offering ($2.50 per share), net of expenses of $3,090	—		—	4,600,000		5		42,905	—		—		—		—		42,910
Transfer of convertible preferred stock into permanent equity	9,303		8,745	—		—			—		—		—		—		8,745
Net loss	—		—	—		—		—	—		—		—		(15,675)		(15,675)
Balance, June 30, 2020	9,303		8,745	30,555,978		31		371,143	7,307		—		27		(278,801)		101,145
Stock-based compensation expense	—		—	—		—		1,849	—		—		—		—		1,849
Exercise of stock options	—		—	16,647		—		104	—		—		—		—		104
Conversion of convertible preferred stock into common	(50)		(47)	10,000		—		47	—		—		—		—		—
Unrealized loss on investments	—		—	—		—		—	—		—		(16)		—		(16)
Net loss	—		—	—		—		—	—		—		—		(15,659)		(15,659)
Balance, September 30, 2020	9,253	$	8,698	30,582,625	$	31	$	373,143	7,307		—	$	11		(294,461)		87,423
Balance, December 31, 2020	4,753	$	4,469	36,585,767	$	37	$	444,622	7,307	$	—	$	—	$	(311,929)	$	137,199
Stock-Based Compensation Expense	—		—	—		—		5,035	—		—		—		—		5,035
Exercise of stock options	—		—	55,030		—		244	—		—		—		—		244
Financing Costs	—		—	—		—		(3)	—		—		—		—		(3)
Net Loss	—		—	—		—		—	—		—		—		(27,141)		(27,141)
Balance, March 31, 2021	4,753	$	4,469	36,640,797	$	37	$	449,898	7,307	$	—	$	—	$	(339,070)	$	115,334
Stock-based compensation expense	—		—	—		—		2,991	—		—		—		—		2,991
Exercise of stock options	—		—	63,312		—		557	—		—		—		—		557
Conversion of convertible preferred stock into common	(178)		(167)	35,600		—		167	—		—		—		—		—
Net loss	—		—	—		—		—	—		—		—		(23,823)		(23,823)
Balance, June 30, 2021	4,575		4,302	36,739,709		37		453,613	7,307		—		—		(362,893)		95,059
Stock-based compensation expense	—		—	—		—		2,841	—		—		—		—		2,841
Exercise of stock options	—		—	18,799		—		101	—		—		—		—		101
Net loss	—		—	—		—		—	—		—		—		(19,507)		(19,507)
Balance, September 30, 2021	4,575	$	4,302	36,758,508	$	37	$	456,555	7,307		—	$	—		(382,400)		78,494

See accompanying notes to consolidated financial statements.

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MARINUS PHARMACEUTICALS, INC. AND SUBSIDIARY

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

1. Description of the Business and Liquidity

We are a clinical stage pharmaceutical company focused on developing and commercializing innovative therapeutics to treat patients suffering from seizure disorders. Our clinical stage product candidate, ganaxolone, is a positive allosteric modulator of GABA_A receptors that is being developed in formulations for two different routes of administration: intravenous (IV) and oral. Ganaxolone is a synthetic analog of allopregnanolone, an endogenous neurosteroid. The different formulations are intended to maximize potential therapeutic applications of ganaxolone for adult and pediatric patient populations, in both acute and chronic care, and for both in-patient and self-administered settings. Ganaxolone acts at both synaptic and extrasynaptic GABA_A receptors, a target known for its anti-seizure, antidepressant and anxiolytic potential.

In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) was identified in Wuhan, China. This virus was declared a pandemic by the World Health Organization in March 2020 and has spread to nearly every country in the world, including the United States (U.S.). Efforts to contain the spread of COVID-19 have intensified and many countries, including the U.S., have implemented travel restrictions, business shutdowns and social distancing measures that have impacted clinical development through supply chain shortages and clinical trial enrollment difficulties as hospitals reduce and redeploy staff, divert resources to patients suffering from COVID-19 and limit hospital access for non-patients. The pandemic poses the risk that we, our employees, contractors, suppliers, or other partners may be prevented from conducting normal business activities for an indefinite period of time, including those due to restrictions that may be requested or mandated by governmental authorities.

The continued global spread of COVID-19 has not materially adversely impacted our operating results, financial condition or cash flows as of and for the nine months ended September 30, 2021. However, COVID-19 has impacted our clinical operations and timelines. In response to COVID-19, for our ongoing clinical trials, we have implemented multiple measures consistent with the U.S. Food and Drug Administration’s guidance on the conduct of clinical trials of medical products during the COVID-19 pandemic, including implementing remote site monitoring and remote visits using telemedicine where needed. However, COVID-19 may still adversely impact our clinical trials. For example, our Phase 3 clinical trial in refractory status epilepticus (RSE) is conducted in hospitals, including academic medical centers, which have experienced high rates of COVID-19 admissions. Due to COVID-19, priorities in several academic medical centers participating in the RAISE Trial, including staff turnover and the need for clinical sites to devote significant resources to patients with COVID-19, the trial has experienced site initiation and enrollment delays. Given these challenges, we previously updated our expectation of top-line data readout for the RAISE Trial to be available in the second half of 2022. In addition, our ganaxolone clinical trials in the outpatient setting may be negatively impacted if patients and their caregivers do not want to participate while COVID-19 outbreaks continue. We are unable to predict the impact that COVID-19 will have in the future on our business, operating results, financial condition and cash flows. The duration and severity of the pandemic and its long-term impact on our business are uncertain at this time, and our ability to raise sufficient additional financing depends on many factors beyond our control, including the current volatility in the capital markets as a result of the COVID-19 pandemic.

Liquidity

We have not generated any product revenues and have incurred operating losses since inception, including losses of $70.5 million for the nine months ended September 30, 2021. There is no assurance that profitable operations will ever be achieved, and if achieved, could be sustained on a continuing basis. In addition, development activities, clinical and preclinical testing, if approved, and commercialization of our product candidates will require significant additional financing. Our accumulated deficit as of September 30, 2021 was $382.4 million and we expect to incur substantial losses in future periods. We plan to finance our future operations with a combination of proceeds from the issuance of equity securities, the issuance of debt, government funding, collaborations, licensing transactions, other transactions, including the sale of priority review vouchers if awarded, and revenues from future product sales, if any. We have not generated positive cash flows from operations, and there are no assurances that we will be successful in

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MARINUS PHARMACEUTICALS, INC. AND SUBSIDIARY

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (Continued)

obtaining an adequate level of financing for the development and, if approved, commercialization of our product candidates.

On July 30, 2021, we entered into a collaboration agreement (the Collaboration Agreement) with Orion Corporation (Orion), whereby Orion received exclusive rights to commercialize the oral and IV dose formulations of ganaxolone in the European Economic Area, United Kingdom and Switzerland in multiple seizure disorders, including CDD, tuberous sclerosis complex (TSC) and RSE. Under the agreement, we received a €25 million ($29.6 million) upfront fee and are eligible to receive up to an additional €97 million in R&D reimbursement and cash milestone payments based on specific clinical and commercial achievements, as well as tiered royalty payments based on net sales ranging from the low double digits to the high teens for the oral programs and the low double-digits to the low twenties for the IV programs. In connection with the upfront fee, we agreed to provide Orion with the results of an ongoing genotoxicity study on the M2 metabolite of ganaxolone, a “Combined Micronucleus & Comet study in vivo.” In the event that the results of such study are positive, based on the criteria set forth in the study’s protocol, Orion will have the right to terminate the Collaboration Agreement within ninety (90) days after its receipt of the final report of such study, in which case we must refund Orion seventy-five percent (75%) of the upfront fee. In the event of such termination and refund, Orion shall have no further rights pursuant to the oral and IV dose formulations of ganaxolone and the Collaboration Agreement shall terminate and be of no further force or effect.

On May 11, 2021 (the Closing Date), we entered into a Credit Agreement and Guaranty (as amended by that certain letter agreement on May 17, 2021, the Credit Agreement) with Oaktree Fund Administration, LLC, as administrative agent and the lenders party thereto that provides for a five-year senior secured term loan facility in an aggregate original principal amount of up to $125.0 million available to us in five tranches (collectively, the Term Loans). Refer to Note 9. Notes Payable for additional information.

In September 2020, we entered into a contract (BARDA Contract) with the Biomedical Advanced Research and Development Authority (BARDA), a division of the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response. Under the BARDA Contract, we received an award of up to an estimated $51 million for development of IV-administered ganaxolone for the treatment of RSE. The BARDA Contract provides for funding to support, on a cost-sharing basis, the completion of a Phase 3 clinical trial of IV-administered ganaxolone in patients with RSE, which covers the RAISE Trial, funding of pre-clinical studies to evaluate IV-administered ganaxolone as an effective treatment for RSE due to chemical nerve gas agent exposure, and funding of certain ganaxolone manufacturing scale-up and regulatory activities.

The BARDA Contract consists of an approximately two-year base period during which BARDA will provide up to approximately $21 million of funding for the RAISE Trial on a cost share basis and funding of additional preclinical studies of ganaxolone in nerve agent exposure models. Following successful completion of the RAISE Trial and preclinical studies in the base period, the BARDA Contract provides for approximately $30 million of additional BARDA funding for three options in support of manufacturing, supply chain, clinical, regulatory and toxicology activities. Under the BARDA Contract, we will be responsible for cost sharing in the amount of approximately $33 million and BARDA will be responsible for approximately $51 million, if all development options are completed. The contract period-of-performance (base period plus option exercises) is up to approximately five years.

In connection with the closing of an equity financing in December 2020, we issued a total of 5,000,000 shares of common stock in an underwritten public offering resulting in aggregate net proceeds, after underwriting discounts and commissions in the public offering and other estimated offering expenses, of $64.9 million.

In connection with the closing of an equity financing in June 2020, we issued a total of 4,600,000 shares of common stock in an underwritten public offering resulting in aggregate net proceeds, after underwriting discounts and commissions in the public offering and other estimated offering expenses, of $42.9 million.

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We believe that our cash and cash equivalents balance as of September 30, 2021 will be sufficient to maintain the minimum cash balance required under our debt facility and to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of this filing.

Reverse stock split

On September 23, 2020, we effected a 1-for-4 reverse split of shares of our common stock (Reverse Split), as approved by our board of directors and stockholders. The par value per share of our common stock was not adjusted as a result of the Reverse Split, and our authorized shares of common stock was reduced to 150,000,000. All of the share and per share amounts included in the accompanying financial statements and these notes have been adjusted to reflect the Reverse Split.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of Marinus Pharmaceuticals, Inc. (a Delaware corporation) as well as the accounts of Marinus Pharmaceuticals Emerald Limited (an Ireland company incorporated in February 2021), a wholly owned subsidiary requiring consolidation. Marinus Pharmaceuticals Emerald Limited serves as a corporate presence in the European Union for regulatory purposes. The unaudited interim consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all information and disclosures necessary for a presentation of our financial position, results of operations and cash flows in conformity with generally accepted accounting principles in the U.S. (GAAP) for annual financial statements. In the opinion of management, these unaudited interim consolidated financial statements reflect all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of our financial position and results of operations and cash flows for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for the full year. These unaudited interim consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2020 and accompanying notes thereto included in our annual report on Form 10-K filed with the SEC on March 9, 2021.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from such estimates.

Federal Contract Revenue

We recognize federal contract revenue from the BARDA Contract in the period in which the allowable research and development expenses are incurred, and receivables associated with this revenue are recorded as federal contract revenue receivable on our interim consolidated balance sheets. This revenue is not within the scope of Accounting Standards Codification (ASC) 606 – Revenue from contracts with customers.

Debt Issuance Costs

Debt issuance costs incurred in connection with Note payable (Note 9) are amortized to interest expense over the term of the respective financing arrangement using the effective-interest method. Debt issuance costs, net of related amortization are deducted from the carrying value of the related debt.

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Contract Liability

When consideration is received, or such consideration is unconditionally due, from a customer prior to completing our performance obligation to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities expected to be recognized as revenue or a reduction of expense within the 12 months following the balance sheet date are classified as current liabilities. Contract liabilities not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as long-term liabilities. In accordance with ASC 210-20, our contract liability is offset by a contract asset as further discussed in Note 10.

Collaboration and Licensing Revenue

We may enter into collaboration and licensing arrangements for research and development, manufacturing, and commercialization activities with counterparties for the development and commercialization of our product candidates. These arrangements may contain multiple components, such as (i) licenses, (ii) research and development activities, and (iii) the manufacturing of certain material. Payments pursuant to these arrangements may include non-refundable and refundable payments, payments upon the achievement of significant regulatory, development and commercial milestones, sales of product at certain agreed-upon amounts, and royalties on product sales. The amount of variable consideration is constrained until it is probable that the revenue is not at a significant risk of reversal in a future period.

In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under a collaboration agreement, the Company performs 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 capable of being distinct; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue as we satisfy each performance obligation.

We must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation, which determines how the transaction price is allocated among the performance obligations. The estimation of the stand-alone selling price may include such estimates as forecasted revenues and costs, development timelines, discount rates and probabilities of regulatory and commercial success. We also apply significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, assessing the recognition and future reversal of variable consideration and determining and applying appropriate methods of measuring progress for performance obligations satisfied over time.

3. Fair Value Measurements

FASB accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The accounting guidance outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, we use quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources.

The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

● Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

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● Level 2 — Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities.

● Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement.

If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.

The following fair value hierarchy table presents information about each major category of our financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	Level 1		Level 2		Level 3		Total
September 30, 2021
Assets
Money market funds (cash equivalents)	$	113,340	$	—	$	—	$	113,340
Total assets	$	113,340	$	—	$	—	$	113,340
December 31, 2020
Assets
Money market funds (cash equivalents)	$	138,509	$	—	$	—	$	138,509
Certificates of deposit		1,474		—		—		1,474
Total assets	$	139,983	$	—	$	—	$	139,983

4. Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	September 30,		December 31,
	2021		2020
Payroll and related costs	$	4,755	$	4,097
Clinical trials and drug development		8,388		2,452
Professional fees		1,178		927
Short-term lease liabilities		540		510
Other		294		532
Total accrued expenses	$	15,155	$	8,518

5. Investments

We did not have any investments as of September 30, 2021. As of December 31, 2020, our investments consisted of certificates of deposit with various financial institutions with original maturities of six to nine months.  Investments are classified as short- or long-term investments on our balance sheets based on original maturity. Certificates of deposits were classified as held-to-maturity and were recorded at amortized cost, which approximated fair value.  We have never experienced a credit loss on the principal or interest receivable of our cash equivalents or short-term investments.  Our certificates of deposit are each individually and fully insured by the Federal Deposit Insurance Company (FDIC). Accordingly, we did not record any allowance for potential credit losses as of December 31, 2020.

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6. Loss Per Share of Common Stock

Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock, convertible notes payable, warrants, stock options, and unvested restricted stock, which would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation. These potentially dilutive securities are more fully described in Note 7, and summarized in the table below:

	September 30,
	2021	2020
Convertible preferred stock	915,000	1,850,600
Restricted stock	37,000	5,250
Stock options	4,625,768	3,344,885
	5,577,768	5,200,735

7. Stockholders’ Equity

In 2005, we adopted the 2005 Stock Option and Incentive Plan (2005 Plan) that authorizes us to grant stock options, restricted stock and other equity-based awards. As of September 30, 2021, 6,565 options to purchase shares of common stock were outstanding pursuant to grants in connection with the 2005 Plan. No additional shares are available for issuance under the 2005 Plan.

In August 2014, we adopted our 2014 Equity Incentive Plan, most recently amended in May 2020 (2014 Plan), that authorizes us to grant stock options, restricted stock, and other equity-based awards, subject to adjustment in accordance with the 2014 Plan. The amount, terms of grants, and exercisability provisions are determined and set by our board of directors. As of September 30, 2021, 3,291,558 options to purchase shares of common stock were outstanding pursuant to grants in connection with the 2014 Plan, and 1,017,372 shares of common stock were available for future issuance. The amount, terms of grants, and exercisability provisions are determined and set by our board of directors.

Stock Options

There were 4,625,768 stock options outstanding as of September 30, 2021 at a weighted-average exercise price of $12.20 per share, including 1,327,645 stock options outstanding outside of the 2014 Plan, granted as inducements to new employees. During the nine months ended September 30, 2021, 1,701,258 options were granted to employees and directors at a weighted-average exercise price of $13.64 per share. Of the options granted, 1,082,324 options were granted pursuant to the 2014 Plan and 618,934 were granted outside of the 2014 Plan as inducements for new employees.

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Total compensation cost recognized for all stock option awards in the statements of operations is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Research and development	$	1,060	$	701	$	3,333	$	2,108
General and administrative		1,700		1,145		7,317		3,405
Total	$	2,760	$	1,846	$	10,650	$	5,513

Restricted Stock

All issued and outstanding restricted shares of common stock are time-based, and become vested between one and three years after the grant date. Compensation expense is recorded ratably over the requisite service period. Compensation expense related to restricted stock is measured based on the fair value using the closing market price of our common stock on the date of the grant.

We issued 15,000 and 5,250 restricted shares of common stock during the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021 there were 37,000 restricted shares of common stock outstanding.

Total compensation cost recognized for all restricted stock awards in the statements of operations is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
General and administrative		81		3		217		8
Total	$	81	$	3	$	217	$	8

Preferred Stock

As of September 30, 2021, 4,575 shares of our Series A Convertible Preferred Stock (Preferred Stock) remained outstanding, convertible into 915,000 shares of our common stock. In the second quarter of 2021, 178 shares of our Preferred Stock were converted into 35,600 shares of common stock. In May 2020, a registration statement covering the resale of shares of our common stock underlying our Preferred Stock was declared effective by the SEC. In accordance with the securities purchase agreements underlying the Preferred Stock, the liquidation preference was terminated, and we reclassified the Preferred Stock into permanent equity.

Deemed Dividends

On March 31, 2020, our stockholders approved an amendment to our company charter, which was filed with the Secretary of State of the State of Delaware to increase the number of authorized shares of common stock, which resulted in the recognition of a beneficial conversion feature on our Preferred Stock. Accordingly, we recorded $8.9 million in deemed dividends in the three months ended March 31, 2020, which was calculated as the difference between the conversion price and the fair value of our common stock on the commitment date (transaction date) in connection with the closing of concurrent equity financings during the fourth quarter of 2019.

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8. Leases

We have entered into operating leases for real estate. These leases have terms which range from 36 to 78 months, and include renewal terms which can extend the lease terms by 24 to 60 months, which are included in the lease term when it is reasonably certain that we will exercise the option.  As of September 30, 2021, our operating leases had a weighted average remaining lease term of 48 months.  These right-of-use (ROU) assets are included in "Other assets" on our interim consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively, and represent our right to use the underlying asset for the lease term. Our obligations to make lease payments are included in "Accrued expenses" and "Other long-term liabilities" on our interim consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively.  The ROU assets were initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred, less any lease incentives received.  The ROU assets are subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received.  

As of September 30, 2021 and December 31, 2020, ROU assets were $1.7 million and $2.0 million, respectively, and operating lease liabilities were $2.7 million and $3.0 million, respectively. We have entered into various short-term operating leases, primarily for clinical trial equipment, with an initial term of twelve months or less. These leases are not recorded on our balance sheets. All operating lease expense is recognized on a straight-line basis over the lease term. During each of the three months ended September 30, 2021 and 2020, we recognized $0.2 million in total lease costs. During each of the nine months ended September 30, 2021 and 2020, we recognized $0.5 million in total lease costs. In all periods, we recognized less than $0.1 million in short-term lease costs related to short-term operating leases.

Because the rate implicit in each lease is not readily determinable, we use our incremental borrowing rate to determine the present value of the lease payments. The weighted average incremental borrowing rate used to determine the initial value of ROU assets and lease liabilities was 11.0%, derived from a corporate yield curve based on a synthetic credit rating model using a market signal analysis. We have certain contracts for real estate which may contain lease and non-lease components which we have elected to treat as a single lease component.

ROU assets for operating leases are periodically reduced by impairment losses. We use the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant, and Equipment – Overall, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.  As of September 30, 2021 and December 31, 2020, we have not recognized any impairment losses for our ROU assets.

We monitor for events or changes in circumstances that require a reassessment of one of our leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in our interim consolidated statements of operations and comprehensive loss.

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Maturities of operating lease liabilities as of September 30, 2021 were as follows (in thousands):

Remaining three months of 2021		202
2022		807
2023		823
2024		840
Thereafter		642
		3,314
Less: imputed interest		(650)
Total lease liabilities	$	2,664
Current operating lease liabilities	$	540
Non-current operating lease liabilities		2,124
Total lease liabilities	$	2,664

9. Notes Payable

On May 11, 2021 (the Closing Date) and as amended on May 17, 2021, the Company entered into the Credit Agreement with Oaktree Fund Administration, LLC as administrative agent (Oaktree) and the lenders party thereto (collectively, the Lenders) that provides for a five-year senior secured term loan facility in an aggregate original principal amount of up to $125.0 million, available to the Company in five tranches (collectively, the Term Loans).

Upon entering into the Credit Agreement in May 2021, the Company borrowed $15.0 million in term loans from the Lenders (the Tranche A-1 Term Loan) and upon receipt of written acceptance by the FDA of our NDA filing relating to the use of ganaxolone in CDD in September 2021, the Company borrowed $30.0 million of tranche A-2 term loans from the Lenders (the Tranche A-2 Term Loan). Under the terms of the Credit Agreement, the Company may, at its sole discretion, borrow from the Lenders up to an additional $80.0 million in term loans subject to certain milestone events, as follows:

● Through December 31, 2022, $30.0 million of tranche B term loans will be available for draw if the Company receives written approval from the FDA of an NDA permitting the marketing of ganaxolone in the U.S. to treat CDD (FDA Approval).

● Through June 30, 2023, $25.0 million of tranche C term loans will be available for draw if the Company receives FDA Approval and completes one or more financings (including through the issuance of common stock, convertible debt, subordinated debt, a synthetic royalty, or a sublicense) resulting in gross proceeds to the Company of at least $40.0 million and net proceeds to the Company of at least $36.0 million. In addition, the availability of this tranche is subject to certain clinical outcomes.

● Through December 31, 2023, $25.0 million of tranche D term loans will be available for draw if the Company receives FDA Approval and earns an aggregate of at least $50 million in net product revenue in the U.S. for a trailing six consecutive months.

In addition, the Credit Agreement contains a minimum liquidity covenant that requires the Company to maintain cash and cash equivalents of at least $20.0 million from the funding of the tranche A- 2 term loans until the funding of the tranche B term loans, and at least $15.0 million from the funding date of the tranche B term loans until the maturity of the Term Loans.

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The Term Loans will be guaranteed by certain of the Company’s future subsidiaries (Guarantors). The Company’s obligations under the Credit Agreement are secured by a pledge of substantially all of the Company’s assets and will be secured by a pledge of substantially all of the assets of the Guarantors.

The Term Loans mature on May 11, 2026 (Maturity Date). The Term Loans bear interest at a fixed per annum rate (subject to increase during an event of default) of 11.50%, and the Company is required to make quarterly interest payments until the Maturity Date. The Company is also required to make quarterly principal payments beginning on June 30, 2024 in an amount equal to 5.0% of the aggregate amount of the Term Loans outstanding on June 30, 2024, and continuing until the Maturity Date. On the Maturity Date, the Company is required to pay in full all outstanding Term Loans and other amounts owed under the Credit Agreement.

At the time of borrowing any tranche of the Term Loans, the Company is required to pay an upfront fee of 2.0% of the aggregate principal amount borrowed at that time. In addition, a commitment fee of 75 basis points per annum will accrue on each of the tranche B, C, and D commitments for the period beginning 120 days after the funding date of the tranche A-2 term loans until the applicable tranche is either funded or terminated.

The Company may prepay all or any portion of the Term Loans, and is required to make mandatory prepayments of the Term Loans from the proceeds of asset sales, casualty and condemnation events, and prohibited debt issuances, subject to certain exceptions. All mandatory and voluntary prepayments of the Term Loans are subject to prepayment premiums equal to (i) 4% of the principal prepaid plus a “make-whole” amount equal to the interest that would have accrued through May 11, 2023 if prepayment occurs on or before May 11, 2023, (ii) 4% of the principal prepaid if prepayment occurs after May 11, 2023 but on or before May 11, 2024, or (iii) 2% of the principal prepaid if prepayment occurs after May 11, 2024 but on or before May 11, 2025. If prepayment occurs after May 11, 2025, no prepayment premium is due.

The Company is also required to make mandatory prepayments of the Term Loans upon an event of default under the Credit Agreement resulting from the occurrence of a change of control. These mandatory prepayments are subject to a prepayment premium equal to (i) 12.5% of the principal prepaid if such prepayment occurs on or before May 11, 2022 or (ii) 10.0% of the principal prepaid if the prepayment occurs after May 11, 2022 but on or before May 11, 2023.

In addition, the Company is required to pay an exit fee in an amount equal to 2.0% of all principal repaid, whether as a mandatory prepayment, voluntary prepayment, or a scheduled repayment.

In addition to the minimum liquidity covenant, the Company is subject to a number of affirmative and restrictive covenants under the Credit Agreement, including limitations on its ability and its subsidiaries’ abilities, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, and enter into affiliate transactions, subject to certain exceptions. As of September 30, 2021 the Company was in compliance with all covenants.

Upon the occurrence of certain events, including but not limited to the Company’s failure to satisfy its payment obligations under the Credit Agreement, the breach of certain of its other covenants under the Credit Agreement, the occurrence of cross defaults to other indebtedness, or defaults related to enforcement action by the FDA or other Regulatory Authority or recall of ganaxolone, Oaktree and the Lenders will have the right, among other remedies, to accelerate all amounts outstanding under the Term Loans and declare all principal, interest, and outstanding fees immediately due and payable.

In September 2021, the Company borrowed $30.0 million upon receipt of written acceptance by the FDA of our NDA filing relating to the use of ganaxolone in the treatment of CDD and incurred debt issuance costs of $1.2 million,

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including the exit fee of $0.6 million, that are classified as contra-liability on our consolidated balance sheets and are being recognized as interest expense over the term of the loan using the effective-interest method.

In May 2021, the Company borrowed $15.0 million upon entering into the Credit Agreement and incurred debt issuance costs of $4.4 million, including the exit fee of $0.3 million, that are classified as a contra-liability on the consolidated balance sheet and are being recognized as interest expense over the term of the loan using the effective-interest method.

For the nine months ended September 30, 2021, the Company recognized interest expense of $1.0 million, of which $0.7 million was interest on the Term Loans and $0.3 million was non-cash interest expense related to the amortization of debt issuance costs.

The following table summarizes the composition of Notes payable as reflected on the consolidated balance sheet as of September 30, 2021 (in thousands):

Gross proceeds	$	45,000
Contractual exit fee		900
Unamortized debt discount and issuance costs		(5,321)
Total	$	40,579

The aggregate maturities of Notes payable as of September 30, 2021 are as follows (in thousands):

Remainder of 2021	$	—
2022		—
2023		—
2024		6,825
2025 and thereafter		38,175
Total	$	45,000

10. License and Collaboration Revenue

In July 2021, the Company entered into a collaboration agreement (Orion Collaboration Agreement”) with Orion Corporation (Orion). The Orion Collaboration Agreement falls under the scope of ASC Topic 808, Collaborative Arrangements (ASC 808) as both parties are active participants in the arrangement that are exposed to significant risks and rewards. While this arrangement is in the scope of ASC 808, the Company analogizes to ASC 606 for some aspects of this arrangement, including for the delivery of a good or service (i.e., a unit of account). Revenue recognized by analogizing to ASC 606 is recorded as collaboration revenue on the condensed statements of operations.

Under the terms of the Orion Collaboration Agreement, the Company granted Orion an exclusive, royalty-bearing, sublicensable license to certain of the Company’s intellectual property rights with respect to commercializing biopharmaceutical products incorporating the Company’s product candidate ganaxolone (Licensed Products) in the European Economic Area, the United Kingdom and Switzerland (collectively, the Territory) for the diagnosis, prevention and treatment of certain human diseases, disorders or conditions (the Field), initially in the indications of CDKL5 deficiency disorder (CDD), tuberous sclerosis complex (TSC) and refractory status epilepticus (“RSE”). The Company will be responsible for the continued development of Licensed Products and regulatory interactions related thereto, including conducting and sponsoring all clinical trials, provided that Orion may conduct certain post-approval studies in the Territory. Orion will be responsible, at Orion’s sole cost and expense, for the commercialization of any Licensed Product in the Field in the Territory.

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Under the terms of the Orion Collaboration Agreement, the Company received a €25.0 million ($29.6 million) upfront payment from Orion in July 2021. In connection with the upfront fee, the Company agreed to provide Orion with the results of a planned genotoxicity study on the M2 metabolite of ganaxolone, a “Combined Micronucleus & Comet study in vivo.” In the event that the results of such study are positive, based on the criteria set forth in the study’s protocol, Orion will have the right to terminate the Collaboration Agreement within ninety (90) days after its receipt of the final report of such study, in which case we must refund Orion seventy-five percent (75%) of the upfront fee. In the event of such termination and refund, Orion shall have no further rights pursuant to the oral and IV dose formulations of ganaxolone and the Collaboration Agreement shall terminate and be of no further force or effect.

The Company will also be reimbursed for up to €7.0 million for research and development costs incurred. The Company is eligible to receive up to €90.0 million upon the achievement of specific clinical and commercial achievements, as well as tiered royalty payments based on net sales ranging from the low double-digits to high teens for the oral programs and the low double-digits to low 20s for the IV program. Also, as part of the overall arrangement, the Company has agreed to supply the Licensed Products to Orion at an agreed upon price.

The Orion Collaboration Agreement shall remain effective until the date of expiration of the last to expire Royalty Term, which is defined as the period beginning on the date of the first commercial sale Licensed Product in such country and ending on the latest to occur of (a) the tenth (10th) anniversary of the first commercial sale of Licensed Product in such country, (b) the expiration of the last-to-expire licensed patent covering the manufacture, use or sale of such Licensed Product in such country, and (c) the expiration of regulatory exclusivity period, if any, for such Licensed Product in such country. The Orion Collaboration Agreement has a term of at least ten (10) years since a commercial sale has yet to occur. The Orion Collaboration Agreement allows for termination in certain specific events, such as material breach, in the event Orion challenges the validity, enforceability or scope of the licensed patent rights, termination for forecast failure, insolvency and force majeure, none of which are probable at contract inception.

In accordance with the guidance, the Company identified the following commitments under the arrangement: (i) exclusive rights to develop, use, sell, have sold, offer for sale and import any product comprised of Licensed Product (the License) (ii) development and regulatory activities (Development and Regulatory Activities), and (iii) requirement to supply Orion with the Licensed Product at an agreed upon price (the Supply of Licensed Product). The Company determined that these three commitments represent distinct performance obligations for purposes of recognizing revenue or reducing expense, which it will recognize such revenue or expense, as applicable, as it fulfills these performance obligations.

The Company determined that the non-refundable portion of the upfront payment plus the research and development reimbursement constitutes the transaction price as of the outset of the Orion Collaboration Agreement. The refundable portion of the upfront payment and the future potential regulatory and development milestone payments were fully constrained at contract inception as the risk of significant revenue reversal related to these amounts has not yet been resolved. The achievement of the future potential milestones is not within the Company’s control and is subject to certain research and development success and therefore carry significant uncertainty. The Company will reevaluate the likelihood of achieving these milestones at the end of each reporting period and adjust the transaction price in the period the risk is resolved. In addition, the Company will recognize any consideration related to sales-based milestones and royalties when the subsequent sales occur since those payments relate primarily to the License, which was delivered by the Company to Orion upon entering into the Orion Collaboration Agreement. The €18.8 million ($21.8 million) refundable portion of the upfront payment is recorded as a Refund liability as of September 30, 2021.

The transaction price was allocated to the three performance obligations based on the estimated stand-alone selling prices at contract inception. The stand-alone selling price of the License was based on a discounted cash flow approach and considered several factors including, but not limited to, discount rate, development timeline, regulatory risks, estimated market demand and future revenue potential using an adjusted market approach. The stand-alone selling price of the Development and Regulatory Activities and the Supply of Licensed Product was estimated using the

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MARINUS PHARMACEUTICALS, INC. AND SUBSIDIARY

CONSOLIDATED NOTES TO FINANCIAL STATEMENTS (Continued)

expected cost-plus margin approach. The Company allocated the transaction price to the performance obligations as of September 30, 2021 as follows (in thousands):

			Cumulative
	Transaction		Collaboration		Contract
	Price		Recognized		Liability
License	$	8,987	$	8,987	$	-
Development and Regulatory Services		2,787		41		2,746
Supply of License Product		3,943		-		3,943
	$	15,717	$	9,028		6,689
Less current portion of contract liability						(910)
Total long-term contract liability					$	5,779

In accordance with ASC 210-20, the above contract liability of $6.7 million is offset by a contract asset of $7.8 million related to the reimbursement of research and development costs, resulting in a net Contract asset of $1.1 million.

License is recognized as revenue. Development and regulatory services are recognized as a reduction of research and development costs.

The Company incurred $2.0 million of incremental costs in obtaining the Orion Collaboration Agreement. These contract acquisition costs were allocated consistent with the transaction price, resulting in $1.1 million of expense recorded to General and administrative expense commensurate with the recognition of the License performance obligation and $0.9 million recorded as capitalized contract costs, included in Other current assets and Other assets, which will be amortized as Development and Regulatory Services and Supply of License Product obligations are met. Cost of collaboration revenue of $1.5 million represents a one-time fee paid to Purdue Neuroscience Company related to our license agreement and was paid in conjunction with the €25.0 million upfront fees received from Orion.

The Company reevaluates the transaction price and the total estimated costs expected to be incurred to satisfy the performance obligations and adjusts the deferred revenue at the end of each reporting period. Such changes will result in a change to the amount of collaboration revenue recognized and deferred revenue.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” “will,” or “would,” and or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we caution you that these statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain.

The forward-looking statements in this Quarterly Report on Form 10-Q include, among other things, statements about:

● our ability to develop and commercialize ganaxolone;

● status, timing and results of preclinical studies and clinical trials;

● design of and enrollment in clinical trials, availability of data from ongoing clinical trials, expectations for regulatory approvals, or the attainment of clinical trial results that will be supportive of regulatory approvals;

● the potential benefits of ganaxolone;

● the timing of seeking marketing approval of ganaxolone in specific indications;

● our ability to obtain and maintain marketing approval for ganaxolone;

● our estimates of expenses and future revenue and profitability;

● our estimates regarding our capital requirements and our needs for additional financing;

● our plans to develop and market ganaxolone and the timing of our development programs;

● our estimates of the size of the potential markets for ganaxolone;

● our expectations regarding our collaboration with Orion Corporation (Orion), including the expected amount and timing of R&D reimbursement, milestone, royalty and other payments pursuant thereto;

● our ability to attract collaborators with acceptable development, regulatory and commercial expertise;

● the benefits to be derived from corporate collaborations, license agreements, and other collaborative or acquisition efforts, including those relating to the development and commercialization of ganaxolone;

● sources of revenue, including contributions from our contract (BARDA Contract) with the Biomedical Advanced Research and Development Authority (BARDA), corporate collaborations, license agreements, and other collaborative efforts for the development and commercialization of ganaxolone and our product candidates;

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● our eligibility to receive funding under the debt tranches available under the Credit Agreement with Oaktree;

● our ability to create an effective sales and marketing infrastructure if we elect to market and sell ganaxolone directly;

● the rate and degree of market acceptance of ganaxolone;

● the timing and amount of reimbursement for ganaxolone;

● the success of other competing therapies that may become available;

● the manufacturing capacity for ganaxolone;

● the extent to which our ability to market and sell ganaxolone may be negatively impacted by third party patents;

● our ability to maintain and protect our intellectual property rights;

● our results of operations, financial condition, liquidity, prospects, and growth strategies;

● the industry in which we operate;

● the extent to which our business may be adversely impacted by the effects of the COVID-19 coronavirus pandemic or by other pandemics, epidemics or outbreaks;

● the enforceability of the exclusive forum provisions in our fourth amended and restated certificate of incorporation; and

● the trends that may affect the industry or us.

You should refer to Part II Item 1A. “Risk Factors” of this Quarterly Report on this Form 10-Q for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with: (i) the interim consolidated financial statements and related notes thereto which are included in this Quarterly Report on Form 10-Q; and (ii) our annual financial statements for the year ended December 31, 2020 which are included in our Annual Report on Form 10-K filed with the SEC on March 9, 2021.

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Overview

We are a clinical stage pharmaceutical company focused on developing and commercializing innovative therapeutics to treat patients suffering from seizure disorders. Our clinical stage product candidate, ganaxolone, is a positive allosteric modulator of GABA_A receptors that is being developed in formulations for two different routes of administration: intravenous (IV) and oral. Ganaxolone is a synthetic analog of allopregnanolone, an endogenous neurosteroid. The different formulations are intended to maximize potential therapeutic applications of ganaxolone for adult and pediatric patient populations, in both acute and chronic care, and for both in-patient and self-administered settings. Ganaxolone acts at both synaptic and extrasynaptic GABA_A receptors, a target known for its anti-seizure, antidepressant and anxiolytic potential.

COVID-19

In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) was identified in Wuhan, China. This virus was declared a pandemic by the World Health Organization in March 2020 and has spread to nearly every country in the world, including the U.S. Efforts to contain the spread of COVID-19 have intensified and many countries, including the U.S., have implemented travel restrictions, business shutdowns and social distancing measures that have impacted clinical development through supply chain shortages and clinical trial enrollment difficulties as hospitals reduce and redeploy staff, divert resources to patients suffering from COVID-19 and limit hospital access for non-patients. The pandemic poses the risk that we, our contractors, suppliers, or other partners may be prevented from conducting normal business activities for an indefinite period of time, including those due to restrictions that may be requested or mandated by governmental authorities.

The continued global spread of COVID-19 has not materially adversely impacted our operating results, financial condition or cash flows as of and for the nine months ended September 30, 2021. However, COVID-19 has impacted our clinical operations and timelines. In response to COVID-19, for our ongoing clinical trials, we have implemented multiple measures consistent with the U.S. Food and Drug Administration’s (FDA) guidance on the conduct of clinical trials of medical products during the COVID-19 pandemic, including implementing remote site monitoring and remote visits using telemedicine where needed. However, COVID-19 may still adversely impact our clinical trials. For example, our Phase 3 clinical trial in refractory status epilepticus (RSE) is conducted in hospitals, including academic medical centers, which have experienced high rates of COVID-19 admissions. Due to COVID-19, priorities in several academic medical centers participating in the RAISE Trial, including staff turnover and the need for clinical sites to devote significant resources to patients with COVID-19, the trial has experienced site initiation and enrollment delays. Given these challenges, we previously updated our expectation of top-line data readout for the RAISE Trial to be available in the second half of 2022. In addition, our ganaxolone clinical trials in the outpatient setting may be negatively impacted if patients and their caregivers do not want to participate while COVID-19 outbreaks continue. We are unable to predict the impact that COVID-19 will have in the future on our business, operating results, financial condition and cash flows. The duration and severity of the pandemic and its long-term impact on our business are uncertain at this time, and our ability to raise sufficient additional financing depends on many factors beyond our control, including the current volatility in the capital markets as a result of the COVID-19 pandemic.

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Our Pipeline

We are developing ganaxolone in indications where there is a mechanistic rationale for ganaxolone to provide a benefit, including the following indications:

Status Epilepticus (SE)

Status epilepticus (SE) is a life-threatening condition characterized by continuous, prolonged seizures or rapidly recurring seizures without intervening recovery of consciousness. If SE is not treated urgently, permanent neuronal damage may occur, which contributes to high rates of morbidity and mortality. Patients with SE who do not respond to first-line benzodiazepine treatment are classified as having established SE (ESE) and those who then progress to and then fail at least one second-line antiepileptic drug (AED) are classified as having refractory status epilepticus (RSE). In RSE, synaptic GABA_A receptors are internalized into the neuron, resulting in decreased responsiveness to drugs such as benzodiazepines. Treatment for RSE unresponsive to one or more second-line AEDs is IV anesthesia to terminate seizures and prevent neuronal injury and other complications. The IV anesthetic is increased to a level that induces deep coma and is maintained at that rate for 24 hours or more. SE that recurs following an attempted wean of IV anesthesia is classified as super refractory status epilepticus (SRSE). In April 2016, we were granted FDA orphan drug designation for IV formulation of ganaxolone for the treatment of SE, which includes RSE. 

We own a family of pending patent applications that claim certain therapeutic regimens for the treatment of SE, including RSE, using intravenous ganaxolone. In September 2021, the United States Patent Office granted us a patent on a method of treating status epilepticus, including dosing regimens. This issued patent expires in 2040.

In January 2021, we enrolled the first patient in a Phase 3 pivotal trial (the Randomized Therapy In Status Epilepticus trial or the RAISE Trial). The RAISE Trial is a randomized, double-blind, placebo-controlled clinical trial in patients with RSE. We expect approximately 80 trial sites in hospitals across the U.S. to participate in the RAISE Trial. The RAISE Trial is designed to enroll approximately 124 patients, who will be randomized to receive ganaxolone or placebo added to standard of care second-line AED. With this number of patients, the trial is designed to provide over 90% power to detect a 30% efficacy difference between ganaxolone and placebo.

The co-primary endpoints for the RAISE Trial are (1) proportion of patients with RSE who experience seizure cessation within 30 minutes of treatment initiation without other medications for RSE treatment, and (2) proportion of patients with no progression to IV anesthesia for 36 hours following initiation of the study drug. Due to COVID-19, priorities in several academic medical centers participating in the RAISE Trial, including staff turnover and the need for

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clinical sites to devote significant resources to patients with COVID-19, the trial has experienced site initiation and enrollment delays. Given these most recent challenges, we expect our top-line data readout for the RAISE Trial to be available in the second half of 2022.

Planning continues for a separate RSE trial to support a European marketing authorization (the RAISE II Trial). Following a meeting with the EMA in the first quarter of 2021, at which we discussed trial design, trial initiation is planned for the first half of 2022. The RAISE II Trial will be a double blind, placebo-controlled pivotal registration trial expected to enroll 70 patients who have failed first-line benzodiazepine treatment and at least one prior second-line AED. Patients will receive either ganaxolone or placebo, administered in combination with a standard-of-care second-line AED. The RAISE II Trial in Europe differs from the RAISE Trial in the U.S., with the RAISE II Trial using adjunctive ganaxolone that can be initiated earlier in the course of RSE.

The FDA has indicated alignment on the overall trial design for Established Status Epilepticus (ESE) (the Researching Established Status Epileptics Treatment trial or RESET Trial), and we are making preparations to begin U.S. enrollment of this Phase 2 clinical trial in the first half of 2022. The RESET Trial is expected to be conducted in emergency rooms under exception from informed consent guidelines and is expected to enroll patients with convulsive SE. We expect that the RESET Trial will be composed of two stages, the initial open-label, dose optimization stage and subsequent double-blind placebo-controlled stage. We anticipate that during the open-label portion of the trial, multiple sequential cohorts of patients will be assessed to determine the bolus dose and subsequent IV infusion rate and infusion duration to be used in the double-blind second stage of the trial. We expect that this double-blind placebo-controlled phase will enroll approximately 80 ESE patients equally distributed among two arms of the trial who, in addition to standard of care, will receive either IV ganaxolone or placebo. We also expect that the primary efficacy endpoint of the RESET Trial will be the absence of electrographic (rapid EEG) evidence of SE or recurrence of generalized convulsions at 1 hour after the initiation of treatment. We plan to announce top-line data from the RESET trial in the middle of 2023.

CDKL5 Deficiency Disorder (CDD)

CDD is a serious and rare genetic disorder that is caused by a mutation of the cyclin-dependent kinase-like 5 (CDKL5) gene, located on the X chromosome. It predominantly affects females and is characterized by early-onset, difficult-to-control seizures and severe neuro-developmental impairment. The CDKL5 gene encodes proteins essential for normal brain function. Most children affected by CDD have difficulty walking, talking and taking care of themselves. Many also suffer from scoliosis, visual impairment, gastrointestinal difficulties or sleep disorders. There are no medications approved specifically for the treatment of CDD. Genetic testing is available to determine if a patient has a mutation in the CDKL5 gene. In June 2017, we were granted FDA orphan drug designation for ganaxolone for the treatment of CDKL5 Disorder.  Additionally, in November 2019, the European Medicine Agency’s (EMA) Committee for Orphan Medicinal Products (COMP) granted orphan drug designation for ganaxolone for the treatment of CDD.

In July 2021, we submitted our New Drug Application (NDA), which was accepted for filing in September 2021 and granted Priority Review designation. The FDA assigned a Prescription Drug User Fee Act (PDUFA) action date for this NDA of March 20, 2022. Priority Review designation is given to an investigational medicine that, if approved, would be a significant improvement in the safety or effectiveness of the treatment of a serious condition and accelerates the timing of the FDA review of the application compared to a standard review. In its acceptance letter, the FDA indicated that it was not currently planning to hold an advisory committee meeting to discuss the application.

We also had a pre-Marketing Authorization Application (MAA) meeting with the EMA in March 2021 to discuss the proposed format and content of the MAA. In August 2021, the Committee for Medicinal Products for Human Use (CHMP) of the EMA granted our request for accelerated assessment of ganaxolone for the treatment of seizures associated with CDD. Accelerated assessment is granted by the CHMP when a medicinal product is expected to be of major public health interest and therapeutic innovation. Accelerated assessment potentially provides a reduced review timeline from 210 to 150 days once the MAA is filed and validated, not counting clock stops when applicants are requested to provide additional information. The MAA for ganaxolone was submitted to the EMA on October 11, 2021 and was accepted for review on October 28, 2021.

In September 2020, we announced in top-line results that ganaxolone achieved the primary endpoint in a pivotal Phase 3 clinical trial (Marigold Study), which evaluated the use of oral ganaxolone in children and young adults with

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CDD. The top-line results reported for the Marigold Study in September 2020 indicated that the primary endpoint, median 28-day major motor seizure frequency reduction, was 32.2% for ganaxolone compared to 4.0% for placebo (p=0.002). In connection with the preparation of the NDA submission for CDD, we determined that the top-line data previously reported in September 2020 included seizure diary entries that were duplicates of seizures that parents or caregivers had already entered. The duplicate data, which was the result of programming and data transfer errors, affected approximately 1.7% of total seizures reported. These duplicate entries were deleted from the final data analysis that was submitted with the NDA for the Marigold Study. The final data analysis of the primary endpoint resulted in a median 28-day major motor seizure frequency reduction of 30.7% compared to 6.9% for placebo (p=0.0036). We do not believe these changes affect the statistical or clinical conclusions of the Marigold Study.

In July 2020, the FDA granted Rare Pediatric Disease Designation (RPD Designation) for ganaxolone for the treatment of CDD. The FDA grants RPD Designation for diseases that affect fewer than 200,000 people in the U.S. and in which the serious or life-threatening manifestations occur primarily in individuals 18 years of age and younger. If an NDA for ganaxolone in CDD is approved, we may be eligible to receive a priority review voucher from the FDA, which can be redeemed for priority review in a subsequent marketing application or can be sold or transferred to a third party. The authority for the FDA to award rare pediatric disease priority review vouchers for drugs after September 30, 2024 is currently limited to drugs that RPD Designation on or prior to September 30, 2024, and the FDA may only award rare pediatric disease priority review vouchers through September 30, 2026. If the NDA for ganaxolone is not approved on or prior to September 30, 2026 for any reason, it will not be eligible for a priority review voucher. However, it is possible that the authority for the FDA to award rare pediatric disease priority review vouchers will be further extended by Congress.

In September 2020, Ovid Therapeutics, Inc. (Ovid) contacted us and disclosed that it owns two recently issued patents that include claims that encompass our product candidates for the treatment of CDD and PCDH19. Ovid may file a lawsuit against us alleging infringement of its patents and/or we may challenge the validity of Ovid’s patents with the USPTO or through the courts. Any such proceeding, regardless of its outcome, would likely result in the expenditure of significant financial resources and the diversion of management’s time and resources. In addition, any such proceeding may cause negative publicity, adversely impact patients, and we may be prohibited from marketing or selling ganaxolone for CDD and PCDH19, during such proceedings or if we are not successful in such proceedings. If Ovid does decide to bring an infringement lawsuit, we do not expect that it will be filed before a commercial launch of ganaxolone for CDD, or PCDH19, as applicable, based upon the “safe harbor” provisions of the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act). We may need to acquire or obtain a license to the Ovid patents to market or sell ganaxolone for CDD, which may not be available on commercially acceptable terms or at all. If we are not able to acquire the Ovid patents or negotiate a license on acceptable terms, and if our product is determined to infringe Ovid’s patents and the patents are determined to be valid, then we may be forced to pay Ovid royalties, damages and costs, or we may be prevented from commercializing ganaxolone for CDD altogether, which would have a material adverse impact on our business. We are also aware of a patent application owned by Ovid that is pending in the European Patent Office. That patent application includes claims that encompass our product candidates for use in the treatment of CDD. This pending application is under examination. In March 2020 the European Patent Office issued an examiner report stating that none of the claims meet the requirements for patenting. Ovid filed a brief response but did not amend any of the claims. The application remains under examination and no claims have been allowed. It is possible that this pending application may issue as a patent with claims that encompass our product candidates for the treatment of CDD, in which case, the above risks would also apply to any such patent that issues. We are also aware of a pending U.S. patent application by Ovid in the same patent family that includes claims that encompass our product candidate for the treatment of SE. This pending patent application is in the early stages of examination at the USPTO. It is possible that this pending patent application may issue as a patent with claims that encompass our product candidate for the treatment of RSE, in which case, the above risks would also apply to any such patent that was issued.

Tuberous Sclerosis Complex (TSC)

TSC is a rare genetic disorder that affects many organs and causes non-malignant tumors in the brain, skin, kidney, heart, eyes, and lungs. The condition is caused by inherited mutations in either the TSC1 gene or the TSC2 gene. TSC occurs with a frequency of 1:6,000 live births and a mutation is found in 85% of patients. While the disease phenotype can be extremely variable, epilepsy occurs in up to 85% of TSC patients. TSC is a leading cause of genetic epilepsy, often manifesting in the first year of life as either focal seizures or infantile spasms. There are currently

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few disease-specific treatments approved for seizures in TSC. The orphan drug designations for ganaxolone for the treatment in TSC were granted by the FDA in August 2021 and by the EMA in October 2021.

In August 2021, we announced top-line data from our open-label Phase 2 trial (CALM Trial) evaluating safety and efficacy of adjunctive oral ganaxolone treatment in 23 patients with seizures associated with tuberous sclerosis complex (TSC). This open-label trial, the CALM study, enrolled 23 patients ages 2 to 32 who entered a four-week baseline period followed by a 12-week treatment period where they received up to 600 mg of ganaxolone (oral liquid suspension) three times a day. Patients who met eligibility criteria were able to continue ganaxolone treatment during a 24-week extension. The primary endpoint was the percent change in 28-day TSC-associated seizure frequency during the 12-week treatment period relative to the four-week baseline period. Secondary outcome measures included the percentage of patients experiencing a greater than or equal to 50% reduction in 28-day TSC-associated seizure frequency through the end of the 12-week treatment period compared to the 4-week baseline period.

The primary endpoint showed a median 16.6% reduction in 28-day primary endpoint seizure frequency relative to the four-week baseline period. A secondary endpoint showed that the proportion of patients that achieved an equal to or greater than 50% seizure reduction was 30.4%. During the trial, patients with focal seizures (n=19) showed a median 25.2% reduction in focal seizure frequency. Ganaxolone was generally well-tolerated with somnolence reported as the most common adverse event. In addition, one treatment-related serious adverse event of seizure was reported in the trial. Four patients discontinued the trial due to adverse events. Additionally, the data from the trial suggested that in patients on concomitant Epidiolex, early elevation of ganaxolone blood levels occurred and appeared to be linked to greater somnolence. We have adjusted the titration schedule and maximum daily dose of ganaxolone in the proposed Phase 3 TSC clinical trial protocol in patients receiving concomitant Epidiolex with a goal of improving tolerability in those patients.

In response to our request for a Type B meeting with the FDA regarding a proposed Phase 3 TSC clinical trial, the FDA provided written responses to our questions in lieu of a meeting. We believe the written responses show overall alignment on the clinical development plan in TSC. Although it will be a matter of review, we also believe based on FDA’s written responses, that if FDA determines that ganaxolone has established efficacy for the treatment of seizures associated with CDD, such a determination could serve as confirmatory evidence in support of a single adequate and well controlled registration trial in TSC. A meeting with the EMA is targeted for the first quarter of 2022. We are targeting the first quarter of 2022 for the first patient to be enrolled in a global Phase 3 randomized, double blind, placebo-controlled trial (TrustTSC Trial) of adjunctive ganaxolone in approximately 160 TSC patients. The proposed primary endpoint for the TrustTSC Trial is percent change in 28-day TSC-associated seizure frequency.

Lennox-Gestaut Syndrome (LGS)

LGS is a severe form of epilepsy that typically begins between one and eight years of age. Affected children experience multiple seizure types that are often unresponsive to treatment, the most common being atonic, tonic and atypical absence seizures. Children with LGS may also have neurodevelopmental delay and behavioral problems.

We plan to pursue the development of ganaxolone for LGS, given the overlap in seizure types and etiologies with other disorders where ganaxolone has potential to improve clinical outcomes, such as CDD and TSC. We are planning to use a second generation formulation of ganaxolone for our LGS development program. We plan to present additional clinical data in the fourth quarter of 2021 and target the initiation of a Phase 2 clinical trial in the second half of 2022.

PCDH19-Related Epilepsy (PCDH19-RE)

PCDH19-RE is a rare epileptic syndrome characterized by early-onset seizures, cognitive and sensory impairment, and psychiatric and behavioral disturbances. We conducted a Phase 2 proof-of-concept (POC) clinical trial (Violet Study) of ganaxolone treatment in patients with PCDH19-RE

We have deferred further development of ganaxolone for the treatment of PCDH19-RE in order to focus our efforts and our resources on our ongoing development of ganaxolone in current indications. Eligible patients who

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completed the PCDH19  Phase 2 Clinical Trial may remain on ganaxolone either through the open label extension or as compassionate use under the care of the investigator responsible for their treatment.

Reverse stock split

On September 23, 2020, we effected a 1-for-4 reverse split of shares of our common stock (Reverse Split), as approved by our Board of Directors and stockholders. The par value per share of our common stock was not adjusted as a result of the Reverse Split, and our authorized shares of common stock was reduced to 150,000,000. All of the share and per share amounts included in this Quarterly Report on Form 10-Q have been adjusted to reflect the Reverse Split.

Operations

Our operations to date have consisted primarily of organizing and staffing our company and developing ganaxolone, including conducting preclinical studies, clinical trials and raising capital. We have funded our operations primarily through sales of equity and debt securities. At September 30, 2021, we had cash and cash equivalents of $145.1 million. We have no products currently available for sale, have incurred operating losses since inception, have not generated any product sales revenue and have not achieved profitable operations. We incurred a net loss of $70.5 million and $50.0 million for the nine months ended September 30, 2021 and 2020, respectively. Our accumulated deficit as of September 30, 2021 was $382.4 million, and we expect to continue to incur substantial losses in future periods. We anticipate that our operating expenses will increase substantially as we continue to advance our clinical-stage product candidate, ganaxolone.

We anticipate that our expenses will increase substantially as we:

● conduct multiple concurrent later stage clinical trials in targeted indications;

● continue the research, development and scale-up manufacturing capabilities to optimize ganaxolone and dose forms for which we may obtain regulatory approval;

● establish and implement sales, marketing and distribution capabilities to commercialize ganaxolone;

● conduct other preclinical studies and clinical trials to support the filing of NDAs with the FDA, MMAs with the EMA and other marketing authorization filings with regulatory agencies in other countries;

● acquire the rights to other product candidates and fund their development;

● maintain, expand and protect our global intellectual property portfolio;

● hire additional clinical, manufacturing, scientific and commercial personnel; and

● add operational, financial and management information systems and personnel, including personnel to support our drug development and potential future commercialization efforts.

We believe that our cash and cash equivalents balance as of September 30, 2021 will be sufficient to maintain the minimum cash balance required under our debt facility and to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of this filing. However, we will need to secure additional funding in the future, from one or more equity or debt financings, government funding, collaborations, licensing transactions, other commercial transactions or other sources, in order to carry out all of our planned research, development and commercialization activities with respect to ganaxolone.

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Financial Overview

Federal Contract Revenue

In September 2020, we entered into the BARDA Contract with BARDA, a division of the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response. Under the BARDA Contract, we will receive an award of up to an estimated $51 million for development of IV administered ganaxolone for the treatment of RSE. Funding will include support on a cost-sharing basis for completion of a Phase 3 clinical trial of IV-administered ganaxolone in patients with RSE who are refractory to second line anti-epileptic drugs, funding of pre-clinical studies to assess whether IV-administered ganaxolone is an effective treatment for RSE due to chemical nerve gas agent exposure, and funding of certain ganaxolone manufacturing scale-up and regulatory activities.

The BARDA Contract consists of an approximately two-year base period-during which BARDA will provide up to approximately $21 million of funding for the RSE Phase 3 clinical trial on a cost share basis and funding of additional preclinical studies of ganaxolone in nerve agent exposure models. Following successful completion of the RSE Phase 3 clinical trial and preclinical studies in the base period, the BARDA Contract provides for approximately $30 million of additional BARDA funding for three options in support of manufacturing, supply chain, clinical, regulatory and toxicology activities. Under the BARDA Contract, we will be responsible for cost sharing in the amount of approximately $33 million and BARDA in the amount of approximately $51 million if all development options are completed. The contract period-of-performance (base period plus option exercises) is up to approximately five years.

We recognize federal contract revenue from the BARDA Contract in the period in which the allowable research and development expenses are incurred. We expect federal contract revenue to increase as the associated costs with our RSE Phase 3 clinical trial increase.

License and Collaboration Revenue

In July 2021, we entered into the Orion Collaboration Agreement with Orion Corporation. Under the terms of the Orion Collaboration Agreement, we granted Orion an exclusive, royalty-bearing, sublicensable license to certain of the Company’s intellectual property rights with respect to commercializing biopharmaceutical products incorporating the Company’s product candidate ganaxolone (Licensed Products) in the European Economic Area, the United Kingdom and Switzerland (collectively, the Territory) for the diagnosis, prevention and treatment of certain human diseases, disorders or conditions (the Field), initially in the indications of CDKL5 deficiency disorder (CDD), tuberous sclerosis complex (TSC) and refractory status epilepticus (RSE).

Under the terms of the Orion Collaboration Agreement, we received a €25.0 million ($29.6 million) upfront payment from Orion in July 2021. In connection with the upfront fee, we agreed to provide Orion with the results of a planned genotoxicity study on the M2 metabolite of ganaxolone, a “Combined Micronucleus & Comet study in vivo.” In the event that the results of such study are positive, based on the criteria set forth in the study’s protocol, Orion will have the right to terminate the Collaboration Agreement within ninety (90) days after its receipt of the final report of such study, in which case we must refund Orion seventy-five percent (75%) of the upfront fee. In the event of such termination and refund, Orion shall have no further rights pursuant to the oral and IV dose formulations of ganaxolone and the Collaboration Agreement shall terminate and be of no further force or effect.

The Company is eligible to receive up to €90.0 million upon the achievement of specific clinical and commercial achievements. Also, as part of the overall arrangement, we have agreed to supply the Licensed Products to Orion at an agreed upon price.

In accordance with the guidance, the Company identified following commitments under the arrangement: (i) exclusive rights to develop, use, sell, have sold, offer for sale and import any product comprised of Licensed Product (the License) (ii) development and regulatory activities (Development and Regulatory Activities), and (iii) requirement to supply Orion with the Licensed Product at an agreed upon price (the Supply of Licensed Product). The Company determined that these three commitments represent distinct performance obligations for purposes of recognizing revenue

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and will recognize license and collaboration revenue or a reduction of expense as it fulfills these performance obligations.

Research and Development Expenses

Our research and development expenses consist primarily of costs incurred for the development of ganaxolone, which include:

● employee-related expenses, including salaries, benefits, travel and stock-based compensation expense;

● expenses incurred under agreements with clinical research organizations (CROs) and investigative sites that conduct our clinical trials and preclinical studies;

● the cost of acquiring, developing and manufacturing clinical trial materials;

● facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, insurance and other supplies;

● costs associated with preclinical activities and regulatory operations; and

● costs associated with developing new formulations and prodrugs of ganaxolone.

We expense research and development costs when we incur them. We record costs for some development activities, such as clinical trials, based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations and information our vendors provide to us. As we fulfill our Development and Regulatory Activities under our Orion Collaboration Agreement, we recognize a reduction of contract liability and research and development expense.

We will incur substantial costs beyond our present and planned clinical trials in order to file NDAs and Supplemental New Drug Applications (sNDAs), or MAAs outside the U.S., for ganaxolone for various clinical indications, and in each case, the nature, design, size and cost of further clinical trials and other studies will depend in large part on the outcome of preceding studies and trials and discussions with regulators. It is difficult to determine with certainty the costs and duration of our current or future clinical trials and preclinical studies, or if, when or to what extent we will generate revenue from the commercialization and sale of ganaxolone if we obtain regulatory approval. We may never succeed in achieving regulatory approval for ganaxolone. The duration, costs and timing of clinical trials and development of ganaxolone will depend on a variety of factors, including the uncertainties of future clinical trials and preclinical studies, uncertainties in clinical trial enrollment rate and significant and changing government regulation.

In addition, the probability of success for our clinical programs will depend on numerous factors, including competition, manufacturing capability and commercial viability. See “Risk Factors.” Our commercial success depends upon attaining significant market acceptance, if approved, among physicians, patients, healthcare payers and the medical community. We will determine which programs to pursue and how much to fund each program in response to the scientific and clinical success, as well as an assessment of commercial potential.

General and Administrative Expenses

General and administrative expenses consist principally of salaries and related costs for executive and other administrative personnel and consultants, including stock-based compensation and travel expenses. Other general and administrative expenses include professional fees for legal, patents, consulting and accounting services. General and administrative expenses are expensed when incurred. We expect that our general and administrative expenses will increase in the future as a result of employee hiring and our scaling-up of operations commensurate with supporting more advanced clinical trials and in preparation for commercial infrastructure. These increases will likely include

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increased costs for insurance, hiring of additional personnel, outside consultants, legal counsel and accountants, among other expenses.

Cost of collaboration revenue

Cost of collaboration revenue represents a one-time fee paid to Purdue Neuroscience Company related to our license agreement. This fee was paid in conjunction with our Orion Collaboration Agreement.

Interest Income

Interest income consists principally of interest income earned on cash and cash equivalents and investment balances.

Interest Expense

Interest expense consists of interest expense and amortization of debt discount related to our Notes Payable.

Results of Operations

Federal Contract Revenue

Federal contract revenue was $1.1 million and $4.8 million for the three and nine months ended September 30, 2021, respectively, compared to $0.2 for each of the comparable periods in 2020 as a result of the BARDA Contract.

License Revenue

License revenue was $9.0 million for the three and nine months ended September 30, 2021 as a result of recognizing the transaction price not subject to certain return provisions based on results of additional pre-clinical testing related to entering into the Orion Collaboration Agreement.

Research and Development Expenses

We allocate direct research and development expenses, consisting principally of external costs, such as fees paid to investigators, consultants, central laboratories and CROs in connection with our clinical trials, and costs related to manufacturing or purchasing clinical trial materials, to specific product development programs. We do not allocate employee and contractor-related costs, costs associated with our facility expenses, including depreciation or other indirect costs, to specific product programs because these costs are deployed across multiple product programs under research and development and, as such, are separately classified. The table below shows our research and development expenses incurred with respect to each active program, in thousands. The primary drivers of our research and development expenditures are currently in our product development programs in RSE, CDD, TSC and PCDH19-RE. We expect our research and development expenses for ganaxolone will continue to increase during subsequent periods.

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We did not allocate research and development expenses to any other specific product development programs during the periods presented (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
CDKL5 deficiency disorder (1)	$	1,968	$	1,477	$	6,529	$	4,655
PCDH19-related epilepsy (2)		628		656		2,070		2,232
Tuberous Sclerosis (3)		1,093		175		2,347		508
Drug Development - Suspension (4)		1,779		1,276		6,653		5,515
Oral Indications Subtotal		5,468		3,584		17,599		12,910
Status epilepticus		1,777		1,504		4,265		2,765
Drug Development - IV		723		897		3,267		2,693
IV Indications Subtotal (5)		2,500		2,401		7,532		5,458
Other research and development (6)		3,679		453		9,818		5,932
Indirect research and development (7)		6,706		4,868		20,557		13,762
Total	$	18,353	$	11,306	$	55,506	$	38,062

Note: Certain prior year expenses have been reclassified to conform to current year presentation.

(1) The increase in the three and nine months ended September 30, 2021 compared to the 2020 period was due primarily to an increase in regulatory and statistical analysis expenses associated with our NDA filing, partially offset by reduced clinical trial activity as 2020 costs associated with our Phase 3 Marigold study exceeded 2021 costs associated with our on-going open label extension.

(2) The decrease in the three and nine months ended September 30, 2021 was primarily due to 2020 including more active clinical development work associated with our Phase 2 Violet study and 2021 including only limited costs associated with our on-going open label extension.

(3) The increase in the three and nine months ended September 30, 2021 was primarily due to increased trial activity in 2021 from the Phase 2 TSC trial and start-up activities for the proposed Phase 3 TSC trial, as compared to more limited Phase 2 start-up activities, including enrollment, in the relevant 2020 periods.

(4) The increase in the three and nine months ended September 30, 2021 was the result of increased manufacturing costs associated with scale up for the NDA submission and preparation for commercialization.

(5) The increase in the three and nine months ended September 30, 2021 was primarily due to start-up activities, including drug manufacturing, associated with the Phase 3 RSE clinical trial and Phase 2 ESE clinical trial.

(6) Other research and development expenses include external expenses associated with preclinical and clinical development of ganaxolone, including safety studies, stability studies, preclinical studies, including animal toxicology and pharmacology studies, and other professional fees. The increase in the three and nine months ended September 30, 2021 was primarily due to safety studies.

(7) The increase is related to increased personnel costs in support of our increased activity in preclinical, clinical, and manufacturing activities, as well as a reduction in expense related to our Development and Regulatory Activities obligation under our Orion Collaboration Agreement.

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General and Administrative Expenses

General and administrative expenses were $9.5 million and $26.7 million for the three and nine months ended September 30, 2021, respectively, compared to $4.6 million and $12.5 million for the three and nine months ended September 30, 2020, respectively. The primary drivers of the increase for the three month comparative period were $1.8 million in increased personnel costs, $1.1 million contract acquisition costs related to our Orion Collaboration Agreement, $1.0 million in increased commercialization preparation, $0.6 million in increased noncash stock-based compensation and $0.4 million of legal costs. The primary drivers of the increase for the nine month comparative period were $4.9 million in increased personnel costs, $4.1 million in increased noncash stock-based compensation, $2.9 million in increased commercialization preparation, $1.1 million contract acquisition costs related to our Orion Collaboration Agreement, $0.8 million in increased legal fees and $0.4 million of other administrative expenses. Of the increased noncash stock-based compensation, $2.1 million was due to modifications of stock options recorded in the first quarter of 2021 in connection with a severance agreement with our former Chief Financial Officer.

Interest Expense

Interest expense increased for the three and nine months ended September 30, 2021 primarily due to $0.5 million interest expense and $0.2 million of debt amortization for the three months ended September 30, 2021 and $0.7 million interest expense and $0.3 million of debt amortization for the nine months ended September 30, 2021 related to our Notes payable (Note 9 in accompanying notes to consolidated financial statements).

Liquidity and Capital Resources

Since inception, we have incurred net losses and negative cash flows from our operations. We incurred net losses of $70.5 million and $50.0 million for the nine months ended September 30, 2021 and 2020, respectively. Our cash used in operating activities was $33.7 million for the nine months ended September 30, 2021 compared to $44.5 million for the same period a year ago. Historically, we have financed our operations principally through the sale of common stock, preferred stock and convertible debt, and the use of term loans. At September 30, 2021, we had cash and cash equivalents of $145.1 million.

European Commercialization Agreement

On July 30, 2021, we entered into a collaboration agreement (the Collaboration Agreement) with Orion Corporation (Orion), whereby Orion received exclusive rights to commercialize the oral and IV dose formulations of ganaxolone in the European Economic Area, United Kingdom and Switzerland in multiple seizure disorders, including CDD, tuberous sclerosis complex (TSC) and RSE. Under the agreement, we received a €25 million ($29.6 million) upfront fee and are eligible to receive up to an additional €97 million in R&D reimbursement and cash milestone payments based on specific clinical and commercial achievements, as well as tiered royalty payments based on net sales ranging from the low double digits to the high teens for the oral programs and the low double-digits to the low twenties for the IV programs. In connection with the upfront fee, we agreed to provide Orion with the results of an on-going genotoxicity study on the M2 metabolite of ganaxolone, a “Combined Micronucleus & Comet study in vivo.” In the event that the results of such study are positive, based on the criteria set forth in the study’s protocol, Orion will have the right to terminate the Collaboration Agreement within ninety (90) days after its receipt of the final report of such study, in which case we must refund Orion seventy-five percent (75%) of the upfront fee. In the event of such termination and refund, Orion shall have no further rights pursuant to the oral and IV dose formulations of ganaxolone and the Collaboration Agreement shall terminate and be of no further force or effect.

Oaktree Credit Agreement

On May 11, 2021 (the Closing Date), we entered into a Credit Agreement and Guaranty (as amended by that certain letter agreement on May 17, 2021, the Credit Agreement) with Oaktree Fund Administration, LLC, as administrative agent and the lenders party thereto that provides for a five-year senior secured term loan facility in an

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aggregate original principal amount of up to $125.0 million available to us in five tranches as follows (collectively, the Term Loans):

● $15.0 million of tranche A-1 term loans advanced on the Closing Date.

● Through December 31, 2021, $30.0 million of tranche A-2 term loans subject to written acceptance by the FDA of an NDA filing relating to the use of ganaxolone in the treatment of CDD. This $30.0 million tranche was drawn in September, 2021 after formal acceptance of the NDA filing.

● Through December 31, 2022, $30.0 million of tranche B term loans subject to receipt of written approval from the FDA of an NDA permitting the marketing of ganaxolone in the United States to treat CDD (the FDA Approval).

● Through June 30, 2023, $25.0 million of tranche C term loans subject to receipt of the FDA Approval and the completion of one or more financings, including through the issuance of common stock, convertible debt, subordinated debt, a synthetic royalty or a sublicense in which we receive gross proceeds in an aggregate amount of at least $40.0 million and net proceeds in an aggregate amount of at least $36.0 million. In addition, the availability of this tranche is subject to either our current Phase 3 trial in RSE or a Phase 3 trial in TSC achieving statistical significance (p value < 0.05) across all primary endpoints and ganaxolone must be generally well tolerated, with a safety profile generally consistent with previous clinical trials.

● Through December 31, 2023, $25 million of tranche D term loans subject to receipt of the FDA Approval and us earning an aggregate of at least $50 million in net product revenue in the United States for a trailing six consecutive months.

The Term Loans will bear interest at a fixed per annum rate (subject to increase during an event of default) of 11.50% and are scheduled to mature on the fifth anniversary of the Closing Date (the Maturity Date). In addition, at the time of funding of any tranche of the Term Loans, we are required to pay an upfront fee of 2.0% of the aggregate principal amount being funded. We are required to make quarterly interest payments until the Maturity Date. We are also required to make principal payments, which are payable in quarterly installments beginning on the last day of the first quarter ending after the third anniversary of the Closing Date in an amount equal to 5.0% of the aggregate amount of the Term Loans outstanding on the date of the first such quarterly principal payment and continuing until the Maturity Date, on which date all outstanding Term Loans and other amounts owed under the Credit Agreement will be required to be paid in full. A commitment fee of 75 basis points per annum will accrue on each of the tranche B, C and D commitments for the period beginning 120 days after the funding date of the tranche A-2 term loans until the applicable tranche is either funded or terminated.

BARDA Contract

In September 2020, we entered into the BARDA Contract with BARDA. Under the BARDA Contract, we will receive an award of up to an estimated $51 million for development of IV administered ganaxolone for the treatment of RSE. Funding will include support on a cost-sharing basis for completion of a Phase 3 clinical trial of IV-administered ganaxolone in patients with RSE who are refractory to second line anti-epileptic drugs, which covers the RAISE Trial, funding of pre-clinical studies to assess whether IV-administered ganaxolone is an effective treatment for RSE due to chemical nerve gas agent exposure, and funding of certain ganaxolone manufacturing scale-up and regulatory activities.

The BARDA Contract consists of an approximately two-year base period-during which BARDA will provide up to approximately $21 million of funding for the RSE Phase 3 clinical trial on a cost share basis and funding of additional preclinical studies of ganaxolone in nerve agent exposure models. Following successful completion of the RSE Phase 3 clinical trial and preclinical studies in the base period, the BARDA Contract provides for approximately $30 million of additional BARDA funding for three options in support of manufacturing, supply chain, clinical, regulatory and toxicology activities. Under the BARDA Contract, we will be responsible for cost sharing in the amount

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of approximately $33 million and BARDA in the amount of approximately $51 million if all development options are completed. The contract period-of-performance (base period plus option exercises) is up to approximately five years.

Equity Financings

In connection with the closing of an equity financing in December 2020, we issued a total of 5,000,000 shares of common stock in an underwritten public offering resulting in aggregate net proceeds, after underwriting discounts and commissions in the public offering and other estimated offering expenses, of $64.9 million

In connection with the closing of an equity financing in June 2020, we issued a total of 4,600,000 shares of common stock in an underwritten public offering resulting in aggregate net proceeds, after underwriting discounts and commissions in the public offering and other estimated offering expenses, of $42.9 million.

In October 2017, we entered into an Equity Distribution Agreement (Prior EDA) with JMP Securities LLC (JMP), under which JMP, as our exclusive agent, at our discretion and at such times that we may determine from time to time, may sell over a three-year period from the execution of the agreement up to a maximum of $50 million of shares of our common stock. During the year ended December 31, 2020, we issued 78,807 shares of our common stock pursuant to the Prior EDA for aggregate net proceeds of $0.6 million. On July 9, 2020, we entered into a new Equity Distribution Agreement (New EDA) with JMP to create an at the market equity program under which we from time to time may offer and sell shares of our common stock having an aggregate offering price of up to $60.0 million through or to JMP. Subject to the terms and conditions of the New EDA, JMP will use its commercially reasonable efforts to sell shares of our common stock from time to time, based upon our instructions. JMP will be entitled to a commission of up to 3.0% of the gross proceeds from each sale of shares of our common stock. The New EDA superseded and terminated the Prior EDA effective immediately upon effectiveness of our shelf registration statement on Form S-3 (File No. 333-239780) filed with the Securities and Exchange Commission on July 9, 2020 and declared effective by the Securities and Exchange Commission on July 27, 2020. We did not sell any shares of our common stock during the nine months ended September 30, 2021 under the New EDA.

Cash Flows

Operating Activities. Cash used in operating activities decreased to $33.7 million for the nine months ended September 30, 2021 compared to $44.5 million for the same period a year ago. The decrease was driven by the upfront payment related to our Orion Collaboration Agreement and increase in the change in accounts payable, accrued expenses and other long term-liabilities, offset by increase in net loss.

Investing Activities. Cash used by investing activities for the nine months ended September 30, 2021 represents $2.1 million in deposits and purchases of property and equipment, offset by the maturity of short-term investments of $1.5 million. Cash used in investing activities for the nine months ended September 30, 2020 represents $8.9 million purchases of short term investments, partially offset by $5.7 million maturities of short-term investments.

Financing Activities. Cash provided by financing activities for the nine months ended September 30, 2021 primarily represents $40.3 million proceeds from notes payable, net of issuance costs and $0.9 million proceeds from the exercise of stock options and for the nine months ended September 30, 2020 represents $43.5 million proceeds from equity offerings, net of offering costs and $0.6 million proceeds from the exercise of stock options.

Funding Requirements

We have not achieved profitability since our inception, and we expect to continue to incur net losses for the foreseeable future. We expect our cash expenditures to increase in the near term as we fund our continuing and planned clinical trials for ganaxolone, as well as scale up our operations and prepare for the potential commercialization of ganaxolone.

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We believe that our cash and cash equivalents balance as of September 30, 2021 will be sufficient to maintain the minimum cash balance required under our debt facility and to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of this filing. However, we will need to raise substantial additional financing in the future to fund our operations. In order to meet these additional cash requirements, we may seek to sell additional equity or convertible debt securities that may result in dilution to our stockholders, or engage in federal contracts or other partnerships. If we raise additional funds through the issuance of convertible debt securities, these securities could have rights senior to those of our common stock and could contain covenants that restrict our operations. There can be no assurance that we will be able to obtain additional equity or debt financing on terms acceptable to us, if at all. Further, the continued spread of COVID-19 has also led to severe disruption and volatility in the global capital markets, which could increase our cost of capital and adversely affect our ability to access the capital markets in the future. Our failure to obtain sufficient funds on acceptable terms when needed could have a negative impact on our business, results of operations, and financial condition.

Our future capital requirements will depend on many factors, including:

● the effects of the COVID-19 pandemic on our business, the medical community and the global economy;

● the results of our preclinical studies and clinical trials;

● the development, formulation and commercialization activities related to ganaxolone;

● the scope, progress, results and costs of researching and developing ganaxolone or any other future product candidates, and conducting preclinical studies and clinical trials;

● the timing of, and the costs involved in, obtaining regulatory approvals for ganaxolone or any other future product candidates;

● the cost of commercialization activities if ganaxolone or any other future product candidates are approved for sale, including marketing, sales and distribution costs;

● the cost of manufacturing and formulating ganaxolone, or any other future product candidates, to internal and regulatory standards for use in preclinical studies, clinical trials and, if approved, commercial sale;

● our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such agreements;

● our ability to receive funding under the BARDA Contract;

● our expectations regarding the amount and timing of milestone and royalty payments pursuant to our exclusive license agreement with Orion for the commercialization of ganaxolone in Europe;

● our obligation to reimburse the upfront payment under the Collaboration Agreement to Orion in the event of a positive genotoxicity study;

● our eligibility for additional debt tranches under the Credit Agreement with Oaktree;

● any product liability, infringement or other lawsuits related to our product candidates and, if approved, products;

● capital needed to attract and retain skilled personnel;

● the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; and

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● the timing, receipt and amount of sales of, or royalties on, future approved products, if any.

Please see “Risk Factors” for additional risks associated with our substantial capital requirements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Discussion of Critical Accounting Policies and Significant Judgments and Estimates

The preparation of financial statements in conformity with GAAP requires us to use judgment in making certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in our financial statements and accompanying notes. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require difficult, subjective and complex judgments by management in order to make estimates about the effect of matters that are inherently uncertain. During the nine months ended September 30, 2021, there were no significant changes to our critical accounting policies from those described in our annual financial statements for the year ended December 31, 2020, which we included in our Annual Report on Form 10-K and was filed with the SEC on March 9, 2021.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (Exchange Act) and are not required to provide the information under this item.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2021.

(b) Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended September 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become subject to litigation and claims arising in the ordinary course of business. We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceedings against us that we believe could have a material adverse effect on our business, operating results or financial condition.

Item 1A. Risk Factors

Our business is subject to substantial risks and uncertainties. The occurrence of any of the following risks and uncertainties, either alone or taken together, could materially and adversely affect our business, financial condition, results of operations or prospects. In these circumstances, the market price of our common stock could decline and you may lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Risks and uncertainties of general applicability and additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, results of operations or prospects.

Risks Related to our Financial Position and Need for Additional Capital

We have incurred significant losses since our inception and anticipate that we will continue to incur losses in the future.

We have incurred significant operating losses since our inception, including a net loss of $70.5 million for the nine months ended September 30, 2021. As of September 30, 2021, we had an accumulated deficit of $382.4 million. Our prior losses, combined with expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital. Our losses have resulted principally from costs incurred in our research and development activities. We anticipate that our operating losses will substantially increase over the next several years as we execute our plan to expand our research, development and commercialization activities of our product candidate, ganaxolone. In addition, if we obtain regulatory approval of ganaxolone, we may incur significant sales and marketing expenses. Because of the numerous risks and uncertainties associated with developing pharmaceutical products, we are unable to predict the extent of any future losses or whether or when we will become profitable, if ever. The net losses we incur may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance. In any particular quarter or quarters, our operating results could be below the expectations of securities analysts or investors, which could cause our stock price to decline.

We have not generated any revenue to date from product sales. We may never achieve or sustain profitability, which could depress the market price of our common stock, and could cause you to lose all or a part of your investment.

We have no products approved for commercial sale and have not generated any revenue from sales of any of our product candidates, and we do not know when, or if, we will generate revenues in the future. Our ability to generate revenue from product sales and achieve profitability will depend upon our ability to successfully gain regulatory approval and commercialize ganaxolone or other product candidates that we may develop, in-license or acquire in the future. Even if we obtain regulatory approval for ganaxolone, we do not know when we will generate revenue from product sales, if at all. Our ability to generate revenue from product sales of ganaxolone or any other future product candidates also depends on a number of additional factors, including our ability to:

● successfully complete pre-clinical and clinical development activities, including enrollment of clinical trial participants, completion of the necessary pre-clinical studies and clinical trials and attainment of study and trial results that will support regulatory approvals;

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● complete and submit NDAs to the FDA, MAAs with the EMA and other marketing authorization filings with regulatory agencies in other countries, and obtain regulatory approval for indications for which there is a commercial market;

● make or have made commercial quantities of our products at acceptable cost levels;

● develop a commercial organization capable of manufacturing, selling, marketing and distributing any products we intend to sell ourselves in the markets in which we choose to commercialize on our own;

● find suitable partners to help us market, sell and distribute our approved products in other markets;

● obtain adequate pricing, coverage and reimbursement from third parties, including government and private payers;

● launch and commercialize product candidates for which we obtain regulatory approval;

● obtain market acceptance of our product candidates as viable treatment options;

● address any competing technological and market developments;

● implement additional internal systems and infrastructure, as needed;

● identify and validate new product candidates;

● negotiate favorable terms in any collaboration, licensing or other commercial arrangements into which we may enter;

● resolve potential intellectual property disputes with third parties;

● maintain, protect and expand our portfolio of intellectual property rights, including patents, trade secrets and know-how; and

● attract, hire and retain qualified personnel.

In addition, because of the numerous risks and uncertainties associated with product development, including that ganaxolone may not advance through development or achieve the endpoints of applicable preclinical studies and clinical trials, we are unable to predict the timing or amount of increased expenses, or if or when we will be able to achieve or maintain profitability. Our expenses could increase beyond expectations if we are required by the FDA or other regulatory agencies, domestic or foreign, to perform preclinical studies and clinical trials or other studies in addition to those that we currently anticipate. Even if we are able to complete the development and regulatory process for ganaxolone, we anticipate incurring significant costs associated with commercializing ganaxolone.

Even if we are able to generate revenue from the sale of ganaxolone or any future commercial products, we may not become profitable and will need to obtain additional funding to continue operations. If we fail to become profitable or are unable to sustain profitability on a continuing basis, and we are not successful in obtaining additional funding, then we may be unable to continue our operations at planned levels, or at all, which would likely materially and adversely affect our business and the market price of our common stock.

We will require additional capital to fund our operations and if we fail to obtain necessary financing, we may be unable to complete the development and commercialization of ganaxolone.

Our operations have consumed substantial amounts of cash since inception. We expect to continue to spend substantial amounts to advance the clinical and regulatory development of ganaxolone and, if approved, commercialize

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ganaxolone. We will require additional capital for the further development, regulatory submission and potential commercialization of ganaxolone and may also need to raise additional funds sooner should we choose to accelerate development of ganaxolone. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or eliminate our research and development programs or any future commercialization efforts.

We believe that our cash and cash equivalents balance as of September 30, 2021 will be sufficient to maintain the minimum cash balance required under our debt facility and to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of this filing. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we currently expect. Our future funding requirements, both near and long-term, will depend on many factors, including, but not limited to the:

● the effects of the COVID-19 pandemic on our business, the medical community and the global economy;

● the results of our preclinical studies and clinical trials;

● the development, formulation and commercialization activities related to ganaxolone;

● the scope, progress, results and costs of researching and developing ganaxolone or any other future product candidates, and conducting preclinical studies and clinical trials;

● the timing of, and the costs involved in, obtaining regulatory approvals for ganaxolone or any other future product candidates;

● the cost of commercialization activities if ganaxolone or any other future product candidates are approved for sale, including marketing, sales and distribution costs;

● the cost of manufacturing and formulating ganaxolone, or any other future product candidates, to internal and regulatory standards for use in preclinical studies, clinical trials and, if approved, commercial sale;

● our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such agreements;

● our ability to receive funding under the BARDA Contract;

● our expectations regarding the amount and timing of milestone and royalty payments pursuant to our exclusive license agreement with Orion for the commercialization of ganaxolone in Europe;

● our obligation to reimburse the upfront payment under the Collaboration Agreement to Orion in the event of a positive genotoxicity study;

● any product liability, infringement or other lawsuits related to our product candidates and, if approved, products;

● capital needed to attract and retain skilled personnel;

● the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; and

● the timing, receipt and amount of sales of, or royalties on, future approved products, if any.

If we are unable to expand our operations or otherwise capitalize on our business opportunities due to a lack of capital, our ability to become profitable will be compromised. Failure to progress our product development or commercialization of ganaxolone as anticipated will have a negative effect on our business, future prospects and ability

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to obtain further financing on acceptable terms, if at all, and the value of the enterprise, which could require us to, among other things:

● significantly delay, scale back or discontinue the development or commercialization of ganaxolone or one or more of our other research and development initiatives;

● seek collaborators for one or more of our current or future product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available;

● sell or license on unfavorable terms our rights to ganaxolone or one of our future product candidates that we otherwise would seek to develop or commercialize ourselves; or

● seek bankruptcy protection.

Our failure to comply with the covenants or other terms of the Credit Agreement, including as a result of events beyond our control, could result in a default under the Credit Agreement that could materially and adversely affect the ongoing viability of our business.

On May 11, 2021 (the Closing Date), we entered into a Credit Agreement and Guaranty (as amended by that certain letter agreement on May 17, 2021, the Credit Agreement) with Oaktree Fund Administration, LLC, as administrative agent (Oaktree) and the lenders party thereto (collectively, the Lenders) that provides for a five-year senior secured term loan facility in an aggregate original principal amount of up to $125.0 million, consisting of (i) tranche A-1 term loans in an aggregate principal amount of $15.0 million advanced on the Closing Date, (ii) tranche A-2 term loans in an aggregate principal amount of $30.0 million advanced on September 27, 2021, (iii) tranche B term loans in an aggregate principal amount of $30.0 million, (iv) tranche C term loans in an aggregate principal amount of $25.0 million and (v) tranche D term loans in an aggregate principal amount of $25.0 million (collectively, the Term Loans). Our ability to draw each tranche of the Term Loans is subject to the satisfaction of certain conditions applicable to each tranche as specified in the Credit Agreement. The Term Loans bear interest at a fixed per annum rate (subject to increase during an event of default) of 11.50% and are scheduled to mature on the fifth anniversary of the Closing Date (the Maturity Date). In addition, at the time of funding of any tranche of the Term Loans, we are required to pay an upfront fee of 2.0% of the aggregate principal amount being funded. We are required to make quarterly interest payments until the Maturity Date. We are also required to make principal payments, which are payable in quarterly installments beginning on the last day of the first quarter ending after the third anniversary of the Closing Date, in an amount equal to 5.0% of the aggregate amount of the Term Loans outstanding on the date of the first such quarterly principal payment and continuing until the Maturity Date, on which date all outstanding Term Loans and other amounts owed under the Credit Agreement will be required to be paid in full. A commitment fee of 75 basis points per annum will accrue on each of the tranche B, C and D commitments for the period beginning 120 days after the funding date of the tranche A-2 term loans until the applicable tranche is either funded or terminated. The Term Loans will be guaranteed by certain of our future subsidiaries. Our obligations under the Credit Agreement and the guarantee of such obligations are secured by a pledge of substantially all of our assets and will be secured by a pledge of substantially all of the assets of the future guarantors.    The Credit Agreement contains various covenants that limit our ability to engage in specified types of transactions without Oaktree's prior consent, as well as a financial covenant that requires us to maintain at all times cash and cash equivalents in certain deposit accounts in an amount at least equal to (i) from the funding date of the tranche A-2 term loans until the funding date of the tranche B term loans, $20.0 million, and (ii) from the funding of the tranche B term loans until the Maturity Date, $15.0 million.

Oaktree may elect to accelerate the repayment of all unpaid principal of the Term Loans, accrued interest and other amounts owed under the Credit Agreement upon consummation of a specified change of control transaction or the occurrence of certain events of default (as specified in the Credit Agreement), including, among other things:

●our default in a payment obligation under the Credit Agreement;

●our breach of the restrictive covenants or other terms of the Credit Agreement;

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●our breach of reporting obligations;

●our failure to properly maintain the collateral;

●certain regulatory actions that causes an ongoing delay in commercialization of ganaxolone and which could reasonably be expected to result in a material adverse effect;

●a recall of ganaxolone that could reasonably be expected to result in a material adverse effect;

●following the sale of ganaxolone by us in the United States to treat CDD, an injunction against the sale or manufacture of ganaxolone for more than 45 days that could, after the termination of such 45-day period, reasonably be expected to result in a material adverse effect; and

●certain specified insolvency and bankruptcy-related events.

Subject to any applicable cure period set forth in the Credit Agreement, all amounts outstanding with respect to the Term Loans (principal and accrued interest), as well as any applicable prepayment premiums, interest “make-whole” payments or exit fees, would become due and payable (i) immediately, in the case of a payment or bankruptcy event of default or (ii) in the case of any other event of default, upon the request of Lenders holding at least a majority of the outstanding Term Loans and Term Loan commitments, at a default interest rate of 13.50%. Our assets or cash flow may not be sufficient to fully repay our obligations under the Term Loans if the obligations thereunder are accelerated upon any events of default. The duration and magnitude of any negative impact from the COVID-19 pandemic on ganaxolone commercialization, development or net revenues could also affect our ability to meet the requirements to draw on one or more of the Term Loan tranches and to remain in compliance with our liquidity financial covenant. Further, if we are unable to repay, refinance or restructure our obligations under the Term Loans, Oaktree on behalf of the Lenders could proceed to protect and enforce their rights under the Credit Agreement and other loan documents by exercising such remedies (including foreclosure on the assets securing our obligations under the Credit Agreement and the other loan documents) as are available to Oaktree and the Lenders and in respect thereof under applicable law, either by suit in equity or by action at law, or both, whether for specific performance of any covenant or other agreement contained in the Credit Agreement or other loan documents or in aid of the exercise of any power granted in the Credit Agreement or other loan documents. The foregoing would materially and adversely affect the ongoing viability of our business.

If we are unable to satisfy certain conditions in our Credit Agreement, we will be unable to draw down the remaining amount of the term loan facility.

For our Credit Agreement, we must satisfy certain conditions to be eligible to draw down the tranche B term loans of $30.0 million, the tranche C term loans of $25.0 million and the tranche D term loans of $25.0 million. The tranche B term loans of $30.0 million may be drawn by us on or before December 31, 2022, provided that we satisfy certain conditions described in the Credit Agreement, including receipt of written approval from the FDA of an NDA permitting the marketing of ganaxolone in the United States to treat CDD (the FDA Approval). The tranche C term loans of $25.0 million may be drawn by us on or before June 30, 2023, provided that we satisfy certain conditions described in the Credit Agreement, including (i) receipt of the FDA Approval, (ii) the completion of one or more financings, including through the issuance of common stock, convertible debt, subordinated debt, a synthetic royalty or a sublicense in which we receive gross proceeds in an aggregate amount of at least $40.0 million and net proceeds in an aggregate amount of at least $36.0 million and (iii) either our current Phase 3 trial in RSE or a Phase 3 trial in TSC achieving statistical significance (p value < 0.05) across all primary endpoints and ganaxolone being generally well tolerated, with a safety profile generally consistent with previous clinical trials. The tranche D term loans of $25.0 million may be drawn by us on or before December 31, 2023, provided that we satisfy certain conditions described in the Credit Agreement, including receipt of the FDA Approval and us earning an aggregate of at least $50 million in net product revenue in the United States for a trailing six consecutive months. If we are unable to satisfy those conditions, we would not be able to draw down the respective tranche of loans and may not be able to obtain alternative financing on commercially reasonable terms or at all.

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Our Credit Agreement contains restrictions that limit our flexibility in operating our business.

The Credit Agreement contains various covenants that limit our ability to engage in specified types of transactions without the prior consent of Oaktree and the Lenders holding a majority of the Term Loan commitments. These covenants limit our ability to, among other things:

●sell, transfer, lease or dispose of our assets;

●create, incur or assume additional indebtedness;

●encumber or permit liens on certain of our assets;

●make restricted payments, including paying dividends on, repurchasing or making distributions with respect to our common stock;

●make specified investments (including acquisitions, loans and advances);

●consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

●enter into certain transactions with our affiliates;

●grant certain license rights related to our products, technology and other intellectual property rights; and

●permit our cash and cash equivalents held in certain deposit accounts to at any time be less than (i) from the funding of the tranche A-2 term loans until the funding of the tranche B term loans, $20.0 million and (ii) from the funding date of the tranche B term loans until the Maturity Date, $15.0 million.

The covenants in our Credit Agreement and related security agreements may limit our ability to take certain actions that may be in our long-term best interests. In the event that we breach one or more covenants, Oaktree may choose to declare an event of default and require that we immediately repay all amounts outstanding under the Credit Agreement, plus penalties and interest, terminate the Lenders’ commitments to fund any undrawn Term Loan tranches and foreclose on the collateral granted to them to secure the obligations under the Credit Agreement and the other loan documents. Such repayment could have a material adverse effect on our business, operating results and financial condition.

Raising additional capital could dilute our stockholders, restrict our operations or require us to relinquish rights to ganaxolone or any other future product candidates.

Until we can generate substantial revenue from product sales, if ever, we expect to seek additional capital through a combination of private and public equity offerings, debt financings, government funding, collaborations, licensing arrangements and other commercial transactions and funding opportunities. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of stockholders. Debt financing or other commercial transactions, if available, may involve agreements that include liens or restrictive covenants limiting our ability to take important actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaborations, licensing arrangements or other commercial with third parties, we may have to relinquish valuable rights to ganaxolone or any other future product candidates in particular countries, or grant licenses on terms that are not favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market ganaxolone or any other future product candidates that we would otherwise prefer to develop and market ourselves.

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We intend to expend our limited resources to pursue our sole product candidate, ganaxolone, and may fail to capitalize on other technologies or product candidates that may be more profitable or for which there may be a greater likelihood of success.

Because we have limited financial and managerial resources, we are focusing on research programs relating to ganaxolone, which concentrates the risk of product failure in the event ganaxolone proves to be ineffective or inadequate for clinical development or commercialization. As a result, we may forego or delay pursuit of opportunities for other technologies or product candidates that later could prove to have greater commercial potential. We may be unable to capitalize on viable commercial products or profitable market opportunities as a result of our resource allocation decisions. Our spending on proprietary research and development programs relating to ganaxolone may not yield any commercially viable products. If we do not accurately evaluate the commercial potential or target market for ganaxolone, we may relinquish valuable rights to ganaxolone through collaboration, licensing or other commercial arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to ganaxolone.

We could be required to repay a portion of the upfront fee to Orion depending on the results of our planned genotoxicity study.

On July 30, 2021, we entered into the Collaboration Agreement with Orion whereby Orion received exclusive rights to commercialize ganaxolone in the European Economic Area, United Kingdom and Switzerland in multiple seizure disorders, including CDD, TSC and RSE, if and when approved. In connection with the Collaboration Agreement, we received an upfront fee of €25 million. In connection therewith, we agreed to provide Orion with the results of a planned genotoxicity study on the M2 metabolite of ganaxolone, a “Combined Micronucleus & Comet study in vivo.” In the event that the results of such study are positive, based on the criteria set forth in the study’s protocol, Orion will have the right to terminate the Collaboration Agreement within ninety (90) days after its receipt of the final report of such study, in which case we must refund Orion seventy-five percent (75%) of the upfront fee. In the event of such termination and refund, Orion shall have no further rights to the oral and IV dose formulations of ganaxolone and the Collaboration Agreement shall terminate and be of no further force or effect. If we are required to repay a portion of the upfront fee to Orion, the Collaboration Agreement will terminate. In such case, our ability to commercialize ganaxolone in Europe would be significantly limited unless we are able to find another suitable partner., and our business, results of operations, financial condition and prospects could be materially and adversely affected.

We have a limited operating history, which may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

Our operations to date have been limited to conducting preclinical and clinical development activities for ganaxolone and performing research and development with respect to our preclinical and clinical programs. In addition, as a clinical stage pharmaceutical company, we have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the pharmaceutical area. Nor have we demonstrated an ability to obtain regulatory approval to commercialize any product candidate. Consequently, any predictions about our future performance may not be as accurate as they would be if we had a history of successfully developing and commercializing pharmaceutical products. Further, our budgeted expense levels are based in part on our expectations concerning the costs of our research, preclinical development and clinical trials, which depend on the success of such activities, and our ability to effectively and efficiently conduct such research, preclinical development, clinical trials and our expectations related to our efforts to achieve FDA or foreign regulatory approval with respect to ganaxolone. Our limited operating history and clinical trial experience make these costs difficult to forecast accurately. We may be unable to adjust our operations in a timely manner to compensate for any unexpected increase in costs. Further, our manufacturing costs and operating expenses may increase significantly as we expand our operations. Accordingly, a significant increase in costs could have an immediate and material adverse effect on our business, results of operations and financial condition.

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Our ability to use our net operating loss carryforwards and other tax attributes may be limited.

As of December 31, 2020, we had U.S. net operating loss, or NOL, carryforwards of approximately $212.0 million for U.S. federal income tax and approximately $209.5 million for state income tax purposes available to offset future taxable income and U.S. federal and state research and development tax credits of approximately $11.5 million, prior to consideration of annual limitations that may be imposed under Section 382 of the Internal Revenue Code of 1986, as amended, or Section 382. Our U.S. NOL carryforwards begin to expire in 2023 if not utilized.

Our U.S. NOL and tax credit carryforwards could expire unused and be unavailable to offset future income tax liabilities. Under Section 382, and corresponding provisions of U.S. state law, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change U.S. NOLs and other pre-change tax attributes, such as research and development tax credits, to offset its post-change income may be limited. We have completed several financings since our inception that may have resulted in “ownership changes” within the meaning of Section 382. We have not evaluated the ownership history of our company to determine if there were any ownership changes as defined under Section 382 and the effects any ownership change may have had. We may experience additional ownership changes in the future as a result of subsequent shifts in our stock ownership, including through completed or contemplated financings, some of which may be outside of our control. If we determine that a future ownership change has occurred and our ability to use our historical net operating loss and tax credit carryforwards is materially limited, it would harm our future operating results by effectively increasing our future tax obligations. Furthermore, the losses could expire before we generate sufficient income to utilize them.

Risks Related to Clinical Development and Regulatory Approval of our Product Candidates

Our future success is dependent on the successful clinical development, regulatory approval and commercialization of ganaxolone, which is being studied in several indications and will require significant capital resources and years of additional clinical development effort.

We do not have any products that have gained regulatory approval in any jurisdiction. Our only product candidate is ganaxolone. As a result, our business is dependent on our ability to successfully complete clinical development, scale-up manufacturing, obtain regulatory approval, and, if approved, commercialize ganaxolone in a timely manner. We cannot commercialize ganaxolone in the United States without first obtaining regulatory approval from the FDA; similarly, we cannot commercialize ganaxolone outside of the United States without obtaining regulatory approval from comparable foreign regulatory authorities. Before obtaining regulatory approvals for the commercial sale of ganaxolone for a target indication, we must demonstrate with substantial evidence gathered in preclinical studies and clinical trials and, with respect to approval in the United States, to the satisfaction of the FDA, that ganaxolone is safe and effective for use for that target indication and that the manufacturing facilities, processes and controls are adequate.

The FDA has provided guidance to the industry that the substantial evidence requirement for effectiveness, which had generally been interpreted as calling for two adequate and well-controlled clinical trials, could also be met by a single clinical trial plus confirmatory evidence. In September 2020, we announced that ganaxolone achieved the primary endpoint in the Marigold Study, which evaluated the use of oral ganaxolone in children and young adults with CDD. We requested feedback from the FDA as to whether the Marigold Study could serve as a single pivotal efficacy trial to support the approval of ganaxolone for the treatment of CDD.  Based on the information we provided the FDA, which included supportive data from an earlier clinical trial, the FDA responded that the efficacy and safety data to be included in our planned NDA appear capable of supporting the filing of our planned NDA. The adequacy of these data to support an approval of ganaxolone for CDD will be a matter for FDA review of the application. There is a risk that the FDA may determine as a result of their review of our NDA, that we have not met the FDA requirements for ganaxolone approval.

In addition, ganaxolone is metabolized extensively in animals and humans. During the development of CDD, one major metabolite (M2) was present in plasma of humans that was not found in plasma of rats or dogs. The chemical structure of M2 has been identified. In October 2020, the FDA communicated that the characterization of the activity of the M2 metabolite of ganaxolone would need to be included at the time of submission; results from any additional

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studies that may be required based on an evaluation of these data could be submitted during the review or, if unavailable, in response to a post-marketing requirement(s) if the application is approved. If such additional non-clinical data indicates a safety issue, it may impact approvability or the FDA may impose serious and extensive restrictions on the commercialization of oral ganaxolone for CDD, which could have a material adverse impact on our business, results of operations and financial condition. We have recently completed an activity assay for the M2 metabolite of ganaxolone and have included the results in the July 2021 NDA submission, as required. We have engaged a contract organization to synthesize and manufacture the M2 metabolite of ganaxolone for further testing. The further testing involves a dose range finding study in rats and then an in vivo micronucleus with comet analysis for the detection of genotoxicity. We estimate that this testing will be complete in Q1 2022. In the event of a positive genotoxicity study, we could conduct additional toxicity studies to further identify the effect of the M2 metabolite of ganaxolone. Although we believe any additional studies necessary to evaluate the metabolite could be conducted post approval, there is a risk that a positive genotoxicity study will significantly negatively impact our ability to receive approval of ganaxolone from the FDA. In the EU, if additional studies are needed, these are usually required before or during Marketing Authorization Application (MAA) review which could negatively impact regulatory approvability. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical and other studies.

We submitted our NDA for ganaxolone in CDD in July 2021 and the filing was accepted in September 2021, which means that FDA has made a threshold determination that the NDA is sufficiently complete to permit a substantive review. Even though the FDA has accepted our NDA for CDD for review, there is a risk the FDA may determine as a result of its review that the NDA does not meet the standards for regulatory approval. If the FDA were to decide not to approve the NDA in its initially submitted form, the FDA would issue a complete response letter describing the deficiencies in the NDA identified by the FDA. The deficiencies identified may be minor, for example, requiring labeling changes; or major, for example, requiring additional clinical trials. Additionally, the complete response letter may include recommended actions for the FDA to reconsider the application. If a complete response letter were to be issued, we may either resubmit the NDA, addressing all of the deficiencies identified in the complete response letter, or withdraw the application. Even if we resubmit the NDA after addressing the issues identified in the complete response letter, approval of the NDA is not assured, as FDA may determine the resubmitted NDA still does not meet the standards for approval.

We are conducting the RAISE Trial in RSE, which is a life threatening medical condition involving prolonged seizure activity in seriously ill patients.  The RAISE Trial requires expertise in electroencephalogram (EEG) interpretation, which may be subject to variability, and the FDA or foreign regulatory authorities could find the data generated in this trial inadequate or difficult to interpret, which could delay, limit or prevent regulatory approval for this indication. Additionally, the clinical trial endpoints of the RAISE Trial are based on treatment outcomes, including initiation of anesthesia for treatment of RSE. Practice variability in the use of anesthesia for SE treatment could adversely impact the ability to show a treatment effect with ganaxolone.

We have recently reported data from the CALM Trial evaluating safety and efficacy of adjunctive oral ganaxolone treatment in patients with tuberous sclerosis complex (TSC). The primary endpoint showed median 16.6% reduction in 28-day primary endpoint seizure frequency relative to the four-week baseline period. In addition, data from the Phase 2 TSC trial suggested that in patients on concomitant Epidiolex, early elevation of ganaxolone blood levels occurred and appeared to be linked to greater somnolence. We have adjusted the titration schedule and maximum daily dose of ganaxolone in the proposed Phase 3 TSC clinical trial protocol in patients receiving concomitant Epidiolex with a goal of improving tolerability in those patients. Undesirable side effects, including those resulting from drug interactions with Epidiolex and other antiseizure medications, could delay clinical trials and result in the FDA or other regulatory authorities requiring us to conduct additional studies or trials for our product candidate either prior or post-approval, such as additional drug-drug interaction studies or safety or efficacy studies or trials, or it may object to elements of our clinical development program. There is also a risk that the planned Phase 3 clinical trial of ganaxolone in TSC will generate data that is not sufficient to support regulatory approvals for this indication.

Even if ganaxolone were to obtain approval from the FDA and comparable foreign regulatory authorities for CDD, RSE, or any other indication, any approval might contain significant limitations, such as restrictions as to specified age groups, warnings, precautions or contraindications, or may be subject to burdensome post-approval trial or risk

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management requirements. If we are unable to obtain regulatory approval for ganaxolone in one or more jurisdictions, or any approval contains significant limitations, we may not be able to obtain sufficient funding or generate sufficient revenue to continue the development of any other product candidate that we may in-license, develop or acquire in the future. Furthermore, even if we obtain regulatory approval for ganaxolone, we will still need to develop a commercial organization, establish commercially viable pricing and obtain adequate reimbursement from third-party and government payers. If we are unable to successfully commercialize ganaxolone, we may not be able to earn sufficient revenue to continue our business.

We are conducting clinical development activities for ganaxolone across multiple indications, and such clinical development activities may not produce favorable results, which could adversely impact our ability to achieve regulatory approval for ganaxolone in such indications.

We are conducting clinical development activities for ganaxolone across multiple indications. Success in preclinical studies and early clinical trials in one indication does not ensure that later clinical trials in such indication or other indications will generate adequate data to demonstrate the efficacy and safety of ganaxolone in one or more indications. Furthermore, unfavorable clinical trial results in one ganaxolone indication may adversely impact our ability to continue to develop such indication or other ganaxolone indications. A number of companies in the pharmaceutical and biotechnology industries, including those with greater resources and experience, have suffered significant setbacks in clinical trials, even after seeing promising results in earlier studies and clinical trials. For example, while ganaxolone showed statistical separation from placebo in a Phase 2 clinical trial in adjunctive treatment of adults with focal onset seizures, ganaxolone failed to show a similar statistically significant separation in a Phase 3 clinical trial for the same indication. As a result, we discontinued our program in adult focal onset seizures and began to focus our efforts on advancing ganaxolone in RSE and pediatric orphan genetic epilepsy indications. We do not know whether the clinical trials we may conduct will demonstrate adequate efficacy and safety to result in regulatory approval to market ganaxolone in any particular jurisdiction or indication. If clinical trials underway or conducted in the future do not produce favorable results, our ability to achieve regulatory approval for ganaxolone may be adversely impacted. Further, even if we believe the data collected from our clinical trials of ganaxolone are promising, these data may not be sufficient to support approval by the FDA or foreign regulatory authorities. Pre-clinical and clinical data can be interpreted in different ways. Accordingly, the FDA or foreign regulatory authorities could interpret these data in different ways from us, which could delay, limit or prevent regulatory approval.

Ganaxolone may cause undesirable side effects or have other properties, such as abuse potential, that could delay or prevent its regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following any marketing approval.

Undesirable side effects caused by ganaxolone could cause us, an institutional review board (IRB), or regulatory authorities to interrupt, delay or halt clinical trials and could result in a restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authority. To date, a total of 1,930 patients have received at least one dose of ganaxolone across the 46 completed trials. This includes 447 patients in Phase 1 and 1,483 patients in Phase 2/3 trials. In addition, 77 patients were administered the IV formulation and 16 patients received both the IV and oral formulations. Although ganaxolone has generally been well-tolerated by patients in our clinical trials to date, in some cases there were side effects, and some of the side effects were severe. The most frequent side effects were dizziness, fatigue and somnolence (or drowsiness). More side effects of the CNS were categorized as severe as compared to side effects of other body systems.

If these side effects are reported in future clinical trials, or if other safety or toxicity issues are reported in our future clinical trials, we may not receive approval to market ganaxolone or approval may be limited, which could prevent us from ever generating material revenue or achieving profitability. Furthermore, although we are currently developing ganaxolone for multiple indications, negative safety findings in any one indication could force us to delay or discontinue development in other indications. Results of our clinical trials could reveal an unacceptably high severity and prevalence of side effects. In such an event, our clinical trials could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development, or deny approval, of ganaxolone for any or all targeted indications. Drug-related side effects could affect trial subject recruitment or the ability of enrolled patients to complete our future clinical trials and may result in potential product liability claims. Additionally, in our clinical trials

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ganaxolone is added to the standard of care, which includes many antiseizure medications. Drug interactions with any of the medications could result in safety concerns or reduce the population in which ganaxolone may be used. For example, in our recently completed clinical trial of ganaxolone in TSC, we reported data that suggested that in patients on concomitant Epidiolex, early elevation of ganaxolone blood levels occurred and appeared to be linked to greater somnolence. Undesirable side effects, including those resulting from drug interactions with Epidiolex and other antiseizure medications, could delay clinical trials and result in the FDA or other regulatory authorities requiring us to conduct additional studies or trials for our product candidate either prior to or post-approval, such as additional drug-drug interaction studies or safety or efficacy studies or trials, or it may object to elements of our clinical development program.

In addition, ganaxolone is metabolized extensively in animals and humans. During the development of CDD, one major metabolite (M2) was present in plasma of humans that was not found in plasma of rats or dogs. The chemical structure of M2 has been identified. In October 2020, the FDA communicated that the characterization of the activity of the M2 metabolite of ganaxolone would need to be included at the time of submission; results from any additional studies that may be required based on an evaluation of these data could be submitted during the review or, if unavailable, in response to a post-marketing requirement(s) if the application is approved. If such additional non-clinical data indicates a safety issue, it may impact approvability or the FDA may impose serious and extensive restrictions on the commercialization of CDD, which could have a material adverse impact on our business, results of operations and financial condition. We have recently completed an activity assay for the M2 metabolite of ganaxolone and have included the results in the July 2021 NDA submission, as required. We have engaged a contract organization to synthesize and manufacture the M2 metabolite of ganaxolone for further testing. The further testing involves a dose range finding study in rats and then an in vivo micronucleus with comet analysis for the detection of genotoxicity. We estimate that this testing will be complete in Q1 2022. In the event of a positive genotoxicity study, we could conduct additional toxicity studies to further identify the effect of the M2 metabolite of ganaxolone. Although we believe any additional studies necessary to evaluate the metabolite, could be conducted post approval, there is a risk that a positive genotoxicity study will significantly negatively impact our ability to receive approval of ganaxolone from the FDA. In the EU, if additional studies are needed, these are usually required before or during Marketing Authorization Application (MAA) review which could negatively impact regulatory approvability.

If ganaxolone receives marketing approval, and we or others later identify undesirable side effects caused by ganaxolone, a number of potentially significant negative consequences could result, including:

● we may be forced to suspend marketing of ganaxolone;

● regulatory authorities may withdraw their approvals of ganaxolone;

● regulatory authorities may require additional warnings on the label that could diminish the usage or otherwise limit the commercial success of ganaxolone;

● we may be required to conduct post-marketing trials;

● we may be required to develop a Risk Evaluation and Mitigation Strategy (REMS) for ganaxolone or if a REMS is already in place, to incorporate additional requirements under the REMS, and comparable regulatory authorities outside the United States may require similar risk management strategies;

● we could be sued and held liable for harm caused to patients; and

● our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of ganaxolone, if approved.

Additionally, the FDA is expected to recommend scheduling of ganaxolone as a controlled substance based on the abuse liability assessment conducted for the NDA submission. In such event, the U.S. Drug Enforcement

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Administration (DEA) will need to determine the controlled substance schedule of the product, taking into account the recommendation of the FDA. DEA scheduling would be expected to occur within 90 days of a potential approval and would delay our ability to market ganaxolone until determined. If ganaxolone is determined to be a controlled substance, the manufacture, import, export, distribution, storage, sale, dispensing, prescribing, and use will be subject to a significant degree of additional regulation by the DEA as well as state regulatory authorities. The restrictive nature of these regulations could also limit commercialization and market acceptance of ganaxolone, if approved.

The therapeutic efficacy and safety of ganaxolone have not been established by regulatory authorities, and we may not be able to successfully develop and commercialize ganaxolone in the future.

Ganaxolone is a novel compound and its potential therapeutic benefit is unproven. Our ability to generate revenue from ganaxolone will depend on our successful development and commercialization after regulatory approval, which is subject to many potential risks and may not occur. Ganaxolone may interact with human biological systems in unforeseen, ineffective or harmful ways. If ganaxolone is associated with undesirable side effects or has characteristics that are unexpected, we may need to abandon its development or limit development to certain uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. Many compounds that initially showed promise in early stage testing for treating the target indications for ganaxolone have later been found to cause side effects that prevented further development of the compound. As a result of these and other risks described herein that are inherent in the development of novel therapeutic agents, we may never successfully develop, enter into or maintain third-party licensing or collaboration transactions with respect to, or successfully commercialize, ganaxolone, in which case we will not achieve profitability and the value of our stock may decline.

Clinical development of product candidates involves a lengthy and expensive process with an uncertain outcome.

Clinical trials are expensive, can take many years to complete, and are inherently uncertain as to outcome. Failure can occur at any time during the clinical development process.

We may experience delays in our ongoing or future clinical trials and we do not know whether planned clinical trials will begin or enroll patients on time, need to be redesigned or be completed on schedule, if at all. There can be no assurance that the FDA or other foreign regulatory authorities will not put clinical trials of ganaxolone on clinical hold now or in the future. Clinical trials may be delayed, suspended or prematurely terminated for a variety of reasons, such as:

● delay or failure in reaching agreement with the FDA or a comparable foreign regulatory authority on a trial design that we are able to execute;

● delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial;

● delay or failure in reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

● any shelter-in-place orders from local, state or federal governments or clinical trial site policies resulting from the COVID-19 pandemic that determine essential and non-essential functions and staff, which may impact the ability of site staff to conduct assessments, or result in delays to the conduct of the assessments, as part of our clinical trial protocols, or the ability to enter assessment results into clinical trial databases in a timely manner;

● delay or failure in obtaining IRB approval or the approval of other reviewing entities, including comparable foreign regulatory authorities, to conduct a clinical trial at each site;

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● withdrawal of clinical trial sites from our clinical trials as a result of changing standards of care or the ineligibility of a site to participate in our clinical trials;

● delay or failure in recruiting and enrolling suitable trial patients to participate in a trial;

● delay or failure in trial patients completing a trial or returning for post-treatment follow-up;

● clinical sites and investigators deviating from a trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial;

● inability to identify and maintain a sufficient number of trial sites, many of which may already be engaged in other clinical trial programs, including some that may be for competing product candidates with the same indication;

● failure of our third-party clinical trial managers to satisfy their contractual duties or meet expected deadlines;

● limitations on our or our third-party clinical trial managers’ ability to access and verify clinical trial data captured at clinical trial sites through monitoring and source document verification;

● delay or failure in adding new clinical trial sites;

● ambiguous or negative interim results or results that are inconsistent with earlier results;

● feedback from the FDA or a comparable regulatory authority outside the United States, IRBs, or data safety monitoring boards, or results from earlier stage or concurrent preclinical studies and clinical trials, that might require modification to the protocol for the trial;

● decision by the FDA or a comparable regulatory authority outside the United States, an IRB or us, or a recommendation by a data safety monitoring board to suspend or terminate clinical trials at any time for safety issues or for any other reason;

● unacceptable risk-benefit profile, unforeseen safety issues or adverse side effects or AEs associate with a product candidate;

● failure of a product candidate to demonstrate any or enough of a benefit;

● difficulties in manufacturing or obtaining from third parties sufficient quantities of a product candidate for use in clinical trials that meet internal and regulatory standards;

● lack of adequate funding to continue the clinical trial, including the incurrence of unforeseen costs due to enrollment delays, requirements to conduct additional clinical trials or increased expenses associated with the services of our CROs and other third parties;

● political developments that affect our ability to develop and obtain approval for ganaxolone or impair our license rights to develop and obtain approval for ganaxolone in other countries; or

● changes in governmental regulations or administrative actions.

Trial subject enrollment, which significantly impacts the timing of clinical trials, is affected by many factors including the size and nature of the subject population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, ability to obtain and maintain patient consents, risk that enrolled patients will drop out before completion, competing clinical trials and clinicians’ and patients’ perceptions as to the potential

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advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved or product candidates that may be studied in competing clinical trials for the indications we are investigating. Some of our clinical trials are directed at small patient populations. Patient enrollment in these trials could be particularly challenging. In the past, we have experienced delays in enrolling patients in trials directed at small patient populations. We rely on CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials, and while we have agreements governing their committed activities, we have limited influence over their actual performance.

If we experience delays in the completion of any clinical trial of ganaxolone, the commercial prospects of ganaxolone may be harmed, and our ability to generate product revenue from ganaxolone, if approved, will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow down our development and approval process for ganaxolone and jeopardize our ability to commence product sales and generate revenues. In addition, many of the factors that could cause a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of ganaxolone.

Even if ganaxolone receives regulatory approval, we will have to comply with current and future regulatory requirements and may face regulatory difficulties.

Even if we obtain regulatory approval for ganaxolone, it would be subject to ongoing requirements by the FDA and comparable foreign regulatory authorities governing the manufacture, quality control, further development, labeling, packaging, storage, distribution, safety surveillance, patient registry, import, export, advertising, promotion, recordkeeping and reporting of safety and other post-market information. The safety profile of ganaxolone will continue to be closely monitored by the FDA and comparable foreign regulatory authorities after approval. If new safety information becomes available after approval of ganaxolone, the FDA or comparable foreign regulatory authorities may require labeling changes or establishment of a REMS or similar strategy, impose significant restrictions on ganaxolone’s indicated uses or marketing, or impose ongoing requirements for potentially costly post-approval trials or post-market surveillance. We will also be subject to continued compliance with current good manufacturing practices (cGMP) and good clinical practices (GCP) requirements for any clinical trials that we conduct post-approval.

In addition, manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP and other regulations. If we or a regulatory authority discover previously unknown problems with a product, such as adverse events (AEs) of unanticipated severity or frequency, or problems with the facility where the product is manufactured, a regulatory authority may impose restrictions on that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing. If we, ganaxolone or the manufacturing facilities for ganaxolone fail to comply with applicable regulatory requirements, a regulatory authority may, among other things:

● issue warning letters or untitled letters;

● mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;

● require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;

● seek an injunction or impose civil or criminal penalties or monetary fines;

● suspend or withdraw regulatory approval;

● suspend any ongoing clinical trials;

● refuse to approve pending applications or supplements to applications filed by us;

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● suspend or impose restrictions on operations, including costly new manufacturing requirements; or

● seize or detain products, refuse to permit the import or export of products, or require us to initiate a product recall.

The occurrence of any event or penalty described above may inhibit or preclude our ability to commercialize ganaxolone and generate revenue.

The FDA’s and other regulatory authorities’ policies may change, and additional government regulations may be enacted. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval for ganaxolone that we may have obtained, and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.

Advertising and promotion of ganaxolone, if approved by the FDA, will be heavily scrutinized by, among others, the FDA, the United States Department of Justice (DOJ), the Office of the Inspector General of the United States Department of Health and Human Services (HHS OIG), state attorneys general, members of Congress and the public. The FDA and other federal regulatory agencies closely regulate the marketing and promotion of drugs through, among other things, standards and regulations for direct-to-consumer advertising, advertising and promotion to healthcare professionals, communications regarding unapproved uses, industry-sponsored scientific and educational activities, and promotional activities involving the Internet. A product cannot be promoted before it is approved. After approval, product promotion can include only those claims relating to safety and effectiveness that are consistent with the labeling approved by the FDA. Healthcare providers are permitted to prescribe drugs for “off-label” uses — that is, uses not approved by the FDA and not described in the product’s labeling — because the FDA does not regulate the practice of medicine. However, FDA regulations impose restrictions on manufacturers’ communications regarding off-label uses. Broadly speaking, a manufacturer may not promote a drug for off-label use, but under certain conditions may engage in non-promotional, balanced, scientific communication regarding off-label use. Failure to comply with applicable FDA requirements and restrictions in this area may subject a company to adverse publicity and enforcement action, including enforcement letters, inquiries and investigations, and civil and criminal sanctions by the FDA or other government agencies. In addition, advertising and promotion of ganaxolone, if approved outside of the United States, will be heavily scrutinized by comparable foreign regulatory authorities.

In the United States, promoting ganaxolone for unapproved indications can also subject us to false claims litigation under federal and state statutes, and other litigation and/or investigation, which can lead to civil and criminal penalties and fines and agreements that materially restrict the manner in which we promote or distribute our drug products. These false claims statutes include the False Claims Act (FCA), which allows any individual to bring a lawsuit against a pharmaceutical company on behalf of the federal government alleging submission of false or fraudulent claims, or causing to present such false or fraudulent claims, for payment by a federal program such as Medicare or Medicaid. If the government prevails in the lawsuit, the individual will share in any fines or settlement funds. If we do not lawfully promote our approved products, we may become subject to such litigation and/or investigation and, if we are not successful in defending against such actions, those actions could adversely affect our business prospects, financial condition and results of operations.

In the European Union (EU), strict requirements and restrictions regarding advertising and promotion apply, the details of which may vary per EU Member States. Violation of those rules could subject us to litigation, investigations and/or civil and criminal penalties, which could adversely affect our business, prospects, financial condition and results of operations.

We may not be able to obtain or maintain orphan drug exclusivity for ganaxolone across all indications and markets, which could limit the potential profitability of ganaxolone.

Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate a product as

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an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 people in the United States. Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for an indication for which it receives the designation, then the product is entitled to a period of marketing exclusivity that precludes the FDA from approving another marketing application for the same drug for the same indication for the exclusivity period except in limited situations. For purposes of small molecule drugs, the FDA defines “same drug” as a drug that contains the same active moiety and is intended for the same use as the drug in question. A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation.

We have received orphan drug designation in the United States for treating Infantile Spasms, SE, CDD, TSC and PCDH19-Related Epilepsy (PCDH19-RE) with ganaxolone and expect that we may in the future pursue orphan drug designations for ganaxolone for one or more additional indications. However, obtaining an orphan drug designation can be difficult and we may not be successful in doing so for additional ganaxolone indications. Orphan drug exclusivity for a product candidate may not effectively protect the product from the competition of different drugs for the same condition, which could be approved during the exclusivity period. In addition, after an orphan drug is approved, the FDA could subsequently approve another application for the same drug for the same indication if the FDA concludes that the later drug is shown to be safer, more effective or makes a major contribution to patient care. Orphan drug exclusive marketing rights in the United States also may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition. The failure to obtain or maintain an orphan drug designation for any indication of ganaxolone that we may develop, or the inability to obtain or maintain orphan drug exclusivity could reduce our ability to make sufficient sales of ganaxolone to balance our expenses incurred to develop it, which would have a negative impact on our operational results and financial condition.

In the EU, we have received orphan designation for treating CDD with ganaxolone. Orphan designation would entitle us to receive ten years of orphan market exclusivity in the EU, but only if the product continues to meet the orphan designation criteria when the marketing authorization is granted. If a similar medicinal product (i.e., a medicinal product with an identical active substance, or an active substance with the same principal molecular structural features and which acts via the same mechanism) receives marketing authorization for the same indication before we receive marketing authorization, the other product’s orphan market exclusivity may prevent ganaxolone from receiving marketing authorization, unless we are able to demonstrate that ganaxolone is safer, more effective or otherwise clinically superior. In the EU, if we obtain and maintain orphan designation for ganaxolone upon marketing authorization, the European Commission could subsequently approve a similar medicinal product for the same indication if the European Commission, after assessment by the EMA, concludes that the similar medicinal product is safer, more effective or otherwise clinically superior. Orphan market exclusivity rights in the EU may also be lost if we are unable to supply sufficient quantities of the product.

The failure to obtain or maintain an orphan drug designation for any indication of ganaxolone that we may develop, or the inability to obtain or maintain orphan drug exclusivity could reduce our ability to make sufficient sales of ganaxolone to balance our expenses incurred to develop it, which would have a negative impact on our operational results and financial condition.

Even though we have received RPD Designation from the FDA for ganaxolone for the treatment of CDD, we may not receive a rare pediatric disease priority review voucher.

In July 2020, the FDA granted RPD Designation for ganaxolone for the treatment of CDD. The FDA grants RPD Designation for diseases that affect fewer than 200,000 people in the U.S. and in which serious or life-threatening manifestations occur primarily in individuals 18 years of age and younger. If an NDA for ganaxolone in CDD is approved, we may be eligible to receive a priority review voucher from the FDA, which can be redeemed for priority review in a subsequent marketing application or can be sold or transferred to a third party. However, receiving a RPD Designation for ganaxolone for the treatment of CDD does not guarantee that an NDA for ganaxolone for the treatment of CDD will meet the eligibility criteria for a RPD priority review voucher at the time the application is approved. Under the Federal Food, Drug, and Cosmetic Act (the FDC Act), we will need to request a RPD priority

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review voucher in our original NDA for ganaxolone. The FDA may determine that the NDA for ganaxolone, if approved, does not meet the eligibility criteria for a RPD priority review voucher, including for the following reasons:

● CDD no longer meets the definition of a RPD;

● ganaxolone contains an active ingredient (including any ester or salt of the active ingredient) that has been previously approved in an application;

● the NDA is not deemed eligible for priority review;

● the NDA does not rely on clinical data derived from studies examining a pediatric population and dosages of the drug intended for that population; or

● the NDA seeks approval for a different adult indication than the rare pediatric disease for which ganaxolone is designated.

The authority for the FDA to award RPD priority review vouchers for drugs after September 30, 2024 is currently limited to drugs that receive rare pediatric disease designation on or prior to September 30, 2024, and the FDA may only award RPD priority review vouchers through September 30, 2026. If the NDA for ganaxolone is not approved on or prior to September 30, 2026 for any reason, it will not be eligible for a priority review voucher. However, it is possible the authority for the FDA to award RPD priority review vouchers will be further extended by Congress.

If a priority review voucher is granted, we may use the voucher for our own FDA approval processes or decide to sell the voucher to other biotech or pharmaceutical companies. The market for priority review vouchers has a limited history and disclosed sales prices may not be indicative of the current value of vouchers, which may also fluctuate significantly. The Consolidated Appropriations Act, 2021, which was enacted on December 27, 2020, extended the priority review voucher program such that drugs designated for a RPD by September 30, 2024 can receive a voucher if the drug is submitted and approved by September 30, 2026. Further, the potential award of a voucher would trigger an obligation to market the relevant RPD product within one year from FDA approval or the FDA may revoke the voucher. Finally, a voucher award subjects us to additional post-marketing reporting obligations to the FDA.

Failure to obtain regulatory approval in international jurisdictions would prevent ganaxolone from being marketed in these jurisdictions.

In order to market and sell our products in the EU and many other jurisdictions, we must obtain separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involve additional testing. The time required to obtain approval may differ substantially from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all of the risks associated with obtaining FDA approval. In addition, many countries outside the United States require that a product be approved for reimbursement before the product can be approved for sale in that country. We may not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our products in any market. If we are unable to obtain approval of ganaxolone by regulatory authorities in the EU or another country or jurisdiction, the commercial prospects of ganaxolone may be significantly diminished and our business prospects could decline.

Ganaxolone may be regulated as a controlled substance, the making, use, sale, importation, exportation, and distribution of which is subject to significant regulation by the DEA and other regulatory agencies.

The FDA may recommend controlled substance scheduling for ganaxolone. In such event, the DEA will need to determine the controlled substance schedule taking into account the recommendation of the FDA. The DEA regulates controlled substances as Schedule I, II, III, IV or V substances. Schedule I substances by definition have no established

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medicinal use, and may not be marketed or sold in the U.S. A pharmaceutical product may be listed as Schedule II, III, IV or V, with Schedule II substances considered to present the highest risk of abuse and Schedule V substances the lowest relative risk of abuse among such substances. If ganaxolone is determined to be a controlled substance, the manufacturing, shipping, distribution, import, export, packaging, storing, prescribing, dispensing, selling and use of ganaxolone will be subject to an additional regulation, including under the CSA and DEA regulations. Regulations associated with controlled substances also govern production and procurement quotas, recordkeeping, reporting, handling, and disposal Additionally, if ganaxolone is determined to be a controlled substance, facilities conducting research, manufacturing, distributing, importing or exporting, or dispending ganaxolone must be registered (licensed) to perform these activities and have the security, control, recordkeeping, reporting and inventory mechanisms required by the DEA to prevent drug loss and intervention. All these facilities must renew their registrations annually, except dispensing facilities, which must renew every three years. The DEA, and some states, also conduct periodic inspections of registered establishments that handle controlled substances. These regulations increase the personnel needs and the expense associated with development commercialization of products. Because of their restrictive nature, these laws and regulations could also limit commercialization of ganaxolone, if approved. Failure to comply with these laws and regulations could also result in withdrawal of our DEA registrations, disruption in manufacturing and distribution activities, consent decrees, criminal and civil penalties and state actions, among other consequences.

Various states also independently regulate controlled substances. Though state controlled substances laws often mirror federal law, because states are separate jurisdictions, they may separately schedule drugs as well. While some states automatically schedule a drug when the DEA does so, in other states there must be a rulemaking or a legislative action. State scheduling may delay commercial sale of ganaxolone, if approved, and adverse scheduling could impair the commercial attractiveness of ganaxolone. We must also obtain separate state registrations in order to be able to obtain, handle and distribute controlled substances for clinical trials or commercial sale, and failure to meet applicable regulatory requirements could lead to enforcement and sanctions from the states in addition to those from the DEA or otherwise arising under federal law.

Risks Related to the Commercialization of Our Product

Our commercial success depends upon attaining significant market access and acceptance of ganaxolone, if approved, among physicians, patients, government and private payers and others in the medical community and attaining sufficient reimbursement for ganaxolone.

Even if ganaxolone receives regulatory approval, it may not gain market acceptance among physicians, patients, government and private payers, or others in the medical community. Market acceptance of ganaxolone, if we receive approval, depends on a number of factors, including:

● clinically and commercially viable product profile as supported by clinical trials;

● efficacy and safety of ganaxolone, or ganaxolone administered with other drugs, each as demonstrated in clinical trials and post-marketing experience;

● clinical indications for which ganaxolone is approved;

● acceptance by physicians and patients of ganaxolone as a safe and effective treatment;

● potential and perceived advantages of ganaxolone over alternative treatments;

● safety of ganaxolone seen in a broader patient group, including its use outside the approved indications should physicians choose to prescribe for such uses;

● prevalence and severity of any side effects and drug interactions, including any drug interactions with Epidiolex and other antiseizure medications;

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● product labeling or product insert requirements of the FDA or comparable foreign regulatory authorities;

● timing of market introduction of ganaxolone as well as competitive products;

● cost of treatment in relation to alternative treatments;

● availability of coverage and adequate reimbursement and pricing by government and private payers;

● relative convenience and ease of administration;

● effectiveness of our sales and marketing strategy and efforts;

● adequate commercial investment; and

● stability and continuity of product supply chains.

If ganaxolone is approved but fails to achieve market acceptance among physicians, patients, government or private payers or others in the medical community, or the products or product candidates that are being administered with ganaxolone are restricted, withdrawn or recalled, or fail to be approved, as the case may be, we may not be able to generate significant revenues, which would compromise our ability to become profitable.

We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

The development and commercialization of new drug products is highly competitive. We face competition with respect to ganaxolone and will face competition with respect to any other product candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications for which we are developing ganaxolone. Some of these competitive products and therapies are based on scientific approaches that are the same as, or similar to, our approach, and others are based on entirely different approaches. For example, there are several companies developing product candidates that target the same GABA_A neuroreceptor that we are targeting or that are testing product candidates in the same indications that we are testing. Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

Ganaxolone is presently being developed as an antiepileptic therapeutic. There are a variety of marketed therapies available for these patients.

Specifically, there are more than 25 approved AEDs available in the United States and worldwide, including the generic products levetiracetam, lamotrigine, carbamazepine, oxcarbazepine, valproic acid and topiramate. Recent market entrants include branded products developed by Lundbeck, UCB, Eisai, Jazz Pharmaceuticals (via acquisition of GW Pharmaceuticals), Zogenix, SK Biopharmaceuticals and Sunovion Pharmaceuticals. In addition, there are several drugs in development for the treatment of pediatric orphan indications, including compounds being developed by Jazz Pharmaceuticals (via acquisition of GW Pharmaceuticals), Zogenix, Zynerba, Takeda, and Ovid.

Many of the approved drugs are well established therapies or products and are widely accepted by physicians, patients and third-party payers. Insurers and other third-party payers may also encourage the use of generic products. These factors may make it difficult for us to achieve market acceptance at desired levels or in a timely manner to ensure viability of our business.

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More established companies may have a competitive advantage over us due to their greater size, cash flows and institutional experience. Compared to us, many of our competitors may have significantly greater financial, technical and human resources.

As a result of these factors, our competitors may obtain regulatory approval of their products before we are able to, which may limit our ability to develop or commercialize ganaxolone. Our competitors may also develop products that are safer, more effective, more widely used and cheaper than ours, and may also be more successful than us in manufacturing and marketing their products. These appreciable advantages could render ganaxolone obsolete or non-competitive before we can recover the expenses of ganaxolone’s development and commercialization.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical trial sites and subject registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell ganaxolone, we may be unable to generate any revenue.

We do not currently have an organization for the sale, marketing and distribution of pharmaceutical products and the cost of establishing and maintaining such an organization may exceed the cost-effectiveness of doing so. In order to market ganaxolone, if approved by the FDA or comparable foreign regulatory authorities, we must build our sales, marketing, managerial and other non-technical capabilities or make arrangements with third parties to perform these services. If we are unable to establish adequate sales, marketing and distribution capabilities, whether independently or with third parties, we may not be able to generate product revenue and may not become profitable. We will be competing with many companies that currently have extensive and well-funded sales and marketing operations. Without an internal commercial organization or the support of a third party to perform sales and marketing functions, we may be unable to compete successfully against these more established companies. To the extent we rely on third parties to commercialize ganaxolone, if approved, we may have little or no control over the marketing and sales efforts of such third parties, and our revenues from product sales may be lower than if we had commercialized ganaxolone ourselves.

Even if we are able to commercialize ganaxolone, it may not receive coverage and adequate reimbursement from third-party payers, which could harm our business.

Our ability to commercialize ganaxolone successfully will depend, in part, on the extent to which coverage and adequate reimbursement for ganaxolone and related treatments will be available from government health administration authorities, private health insurers and other organizations. Government authorities and third-party payers, such as private health insurers and health maintenance organizations, determine which medications they will cover and establish reimbursement levels. A primary trend in the United States healthcare industry and elsewhere is cost containment. Government authorities and third-party payers have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third-party payers are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for drugs. Third-party payers may also seek additional clinical evidence, beyond the data required to obtain marketing approval, demonstrating clinical benefits and value in specific patient populations before covering ganaxolone for those patients. We cannot be sure that coverage and adequate reimbursement will be available for ganaxolone and, if reimbursement is available, what the level of reimbursement will be. Coverage and reimbursement may impact the demand for, or the price of, ganaxolone, if we obtain marketing approval. If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize ganaxolone even if we obtain marketing approval.

There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or comparable foreign regulatory authorities. Moreover, eligibility for coverage and reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution.

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Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may only be temporary. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payers and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Third-party payers often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies. Our inability to obtain coverage and profitable reimbursement rates from both government-funded and private payers for any approved products that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.

If the market opportunities for ganaxolone are smaller than we believe they are, our results of operations may be adversely affected and our business may suffer.

We focus our research and product development on therapeutics to treat patients suffering from seizure disorders. Our projections of both the number of people who have these disorders, as well as the subset of people with these diseases who have the potential to benefit from treatment with ganaxolone, are based on estimates. These estimates may prove to be incorrect and new studies or clinical trials may change the estimated incidence or prevalence of these disorders. The number of patients in the United States and elsewhere may turn out to be lower than expected, may not be otherwise amenable to treatment with ganaxolone, or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our results of operations and our business.

A variety of risks associated with marketing ganaxolone internationally could materially adversely affect our business.

We plan to seek regulatory approval for ganaxolone outside of the United States, and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including:

● differing regulatory requirements in foreign countries;

● the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from a foreign market (with low or lower prices) rather than buying them locally;

● viable pricing awarded in international markets to support commercial investment is required;

● unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements;

● economic weakness, including inflation, or political instability in particular foreign economies and markets;

● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

● foreign taxes, including with respect to our Irish subsidiary;

● foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;

● difficulties staffing and managing foreign operations;

● workforce uncertainty in countries where labor unrest is more common than in the United States;

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● challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States;

● production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

● business interruptions resulting from geo-political actions, including war and terrorism, as well as from pandemics, including the COVID-19 pandemic.

These and other risks associated with our international operations may materially adversely affect our ability to attain or maintain profitable operations.

Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of ganaxolone or other product candidates that we may develop.

We face an inherent risk of product liability exposure related to the testing of ganaxolone by us or our investigators in human clinical trials and will face an even greater risk if ganaxolone receives regulatory approval and we subsequently commercialize it. Product liability claims may be brought against us by patients enrolled in our clinical trials, patients, healthcare providers or others using, administering or selling ganaxolone. If we cannot successfully defend ourselves against claims that ganaxolone caused injuries, we could incur substantial liabilities. Regardless of merit or eventual outcome, liability claims may result in, for example:

● decreased demand for ganaxolone;

● termination of clinical trial sites, entire clinical trials or development programs;

● injury to our reputation and significant negative media attention;

● withdrawal of clinical trial patients;

● significant costs to defend the related litigation;

● substantial monetary awards to patients;

● loss of revenue;

● diversion of management and scientific resources from our business operations;

● the inability to commercialize ganaxolone; and

● increased scrutiny and potential investigation by, among others, the FDA, the DOJ, the HHS OIG, state attorneys general, members of Congress and the public.

We currently have product liability insurance coverage, which may not be adequate to cover all liabilities that we may incur. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise. We intend to expand our product liability insurance coverage to include the sale of commercial products if we obtain marketing approval for ganaxolone, but we may be unable to obtain commercially reasonable product liability insurance for ganaxolone, if approved for marketing. Large judgments have been awarded in class action lawsuits based on drugs that had unanticipated side effects. A successful product liability claim or series of claims brought against us, particularly if judgments exceed our insurance coverage, could have a material adverse effect on our business and financial condition.

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Risks Related to Our Dependence on Third Parties

We rely on third parties to conduct our preclinical studies and clinical trials. If these third parties do not successfully carry out their duties in compliance with contractual terms and/or regulatory requirements or meet expected timelines, our development plans may be adversely affected and we may not be able to obtain regulatory approval for or commercialize ganaxolone.

We rely on third-party CROs to monitor and manage data for our ongoing preclinical and clinical programs. We also rely on third parties to assist in conducting our preclinical studies in accordance with GLP and the Animal Welfare Act requirements, where applicable. We and our CROs are required to comply with federal regulations and GCP, which are international requirements meant to protect the rights and health of patients that are enforced by the FDA, the competent authorities of the EU Member States and comparable foreign regulatory authorities for ganaxolone. Regulatory authorities enforce GCP through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of our CROs fail to comply with applicable GCP, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP requirements. In addition, our clinical trials must be conducted with product produced under cGMP requirements. Failure to comply with these regulations may require us to repeat or conduct additional preclinical studies and clinical trials, which would delay the regulatory approval process.

Although we depend heavily on these parties and have contractual agreements governing their activities, we cannot control them and therefore, we cannot be assured that these third parties will devote sufficient time and resources to our ongoing clinical, nonclinical and preclinical programs. If CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines or if the quality or accuracy of the data they obtain is compromised due to the failure to adhere to our protocols, regulatory requirements or for other reasons, our preclinical studies and clinical trials may be extended, delayed or terminated and we may not be able to obtain regulatory approval for or successfully commercialize ganaxolone. As a result, our results of operations and the commercial prospects for ganaxolone would be harmed, our costs could increase and our ability to generate revenue could be delayed.

If any of our relations terminate, switching or adding additional CROs would involve additional cost and require management time and focus. Identifying, qualifying and managing performance of third-party service providers can be difficult, time consuming and cause delays in our development programs. In addition, there is a natural transition period when a new CRO commences work. If any of our relationships with our third-party CROs terminate, we may not be able to enter into arrangements with alternative CROs or to do so on commercially reasonable terms. As a result, delays my occur, which can materially impact our ability to meet our desired development timelines.

In addition, the use of third-party service providers requires us to disclose our proprietary information to these parties, which could increase the risk that this information will be misappropriated. We currently have a small number of employees, which limits the internal resources we have available to monitor our third-party providers. To the extent we are unable to identify and successfully manage the performance of third-party service providers, our business may be adversely affected. Though we carefully manage our relationships with our CROs, there can be no assurance that we will not encounter challenges or delays in the future or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects.

Our experience manufacturing ganaxolone is limited to the needs of our preclinical studies and clinical trials. We have no experience manufacturing ganaxolone on a commercial scale and have no manufacturing facility. We are dependent on third-party manufacturers for the manufacture of ganaxolone as well as on third parties for our supply chain, and if we experience problems with any such third parties, the manufacturing of ganaxolone could be delayed.

We do not own or operate facilities for the manufacture of ganaxolone. We currently have no plans to build our own clinical or commercial scale manufacturing capabilities. We currently rely on contract manufacturing organizations (CMOs) for the chemical manufacture of raw materials and active pharmaceutical ingredients for ganaxolone and other CMOs for the production of the ganaxolone nanoparticulate formulation into capsules, liquid suspension and IV, and we

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plan to rely on CMOs for the manufacture of ganaxolone for commercial use, if approved. To meet our projected needs for preclinical and clinical supplies to support our activities through regulatory approval and commercial manufacturing, the CMOs with whom we currently work will need to increase the scale of production. We may need to identify additional CMOs for continued production of supply for ganaxolone. Although alternative third-party suppliers with the necessary manufacturing and regulatory expertise and facilities exist, it could be expensive and take a significant amount of time to arrange for alternative suppliers. If we are unable to arrange for alternative third-party manufacturing sources on commercially reasonable terms, in a timely manner or at all, we may not be able to complete development of ganaxolone, or market or distribute ganaxolone.

Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured ganaxolone ourselves, including reliance on the third party for regulatory compliance and quality assurance, the possibility of breach of the manufacturing agreement by the third party because of factors beyond our control, including a failure to synthesize and manufacture ganaxolone, and the possibility of termination or nonrenewal of the manufacturing agreement by the third party, based on its own business priorities, at a time that is costly or damaging to us. In addition, the FDA and other regulatory authorities will require that ganaxolone be manufactured according to cGMP and similar foreign standards. Any failure by our third-party manufacturers to comply with cGMP or failure to scale up manufacturing processes, including any failure to deliver sufficient quantities of ganaxolone in a timely manner, could lead to a delay in, or failure to obtain, regulatory approval of ganaxolone. In addition, such failure could be the basis for the FDA or other regulatory authorities to issue a warning letter, withdraw approvals for ganaxolone previously granted to us, or take other regulatory or legal action, including recall or seizure of outside supplies of ganaxolone, total or partial suspension of production, suspension of ongoing clinical trials, refusal to approve pending applications or supplemental applications, detention of product, refusal to permit the import or export of products, injunction, or imposing civil and criminal penalties.

Any significant disruption in our supplier relationships could harm our business. Any significant delay in the supply of ganaxolone or its key raw materials for an ongoing preclinical study or clinical trial could considerably delay completion of such preclinical study or clinical trial, product testing and potential regulatory approval of ganaxolone. If our manufacturers or we are unable to purchase these key raw materials after regulatory approval has been obtained for ganaxolone, the commercial launch of ganaxolone would be delayed or there would be a shortage in supply, which would impair our ability to generate revenues from the sale of ganaxolone.

We will depend on Orion for the commercialization of ganaxolone in Europe, and if they terminate the Collaboration Agreement we would not have a European commercial presence.

On July 30, 2021, we entered into the Collaboration Agreement with Orion whereby Orion received exclusive rights to commercialize ganaxolone in the European Economic Area, United Kingdom and Switzerland in multiple seizure disorders, including CDD, TSC and RSE, if and when approved. The timing and amount of any milestone and royalty payments we receive under this agreement will depend in part on Orion’s efforts. We will also depend on Orion to comply with all applicable laws relative to the commercialization of ganaxolone in Europe. We do not control the individual efforts of Orion, and any failure by Orion to devote sufficient time and effort to the commercialization of ganaxolone could have a material adverse impact on our financial results and operations, such as a failure by Orion to meet its obligations to us, including future milestone and royalty payments. In addition, if Orion were to violate, or was alleged to have violated, any laws or regulations during the performance of its obligations for us, it is possible that we could suffer financial and reputational harm or other negative outcomes, including possible legal consequences.

Any termination, breach or expiration of the agreement with Orion could have a material adverse effect on our financial position by reducing or eliminating the potential for us to receive milestones and royalties. In such an event, we may be required to devote additional efforts and to incur additional costs associated with pursuing the commercialization of ganaxolone in Europe. If we breach our obligations under the agreement with Orion and are unable to cure such breach, Orion may terminate the agreement and retain all rights to commercialize ganaxolone in Europe with no obligation to make any additional milestone or royalty payments. For example, we agreed to provide Orion with the results of a planned genotoxicity study on the M2 metabolite of ganaxolone, a “Combined Micronucleus & Comet study in vivo.” In the event that the results of such study are positive, based on the criteria set forth in the study’s protocol, Orion will have the right to terminate the Collaboration Agreement within ninety (90) days after its receipt of the final

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report of such study, in which case we must refund Orion seventy-five percent (75%) of the upfront fee. In the event of such termination and refund, Orion shall have no further rights pursuant to the oral and IV dose formulations of ganaxolone and the Collaboration Agreement shall terminate and be of no further force or effect.

Government funding for certain aspects of our programs adds uncertainty to our research efforts with respect to those programs and may impose requirements that increase the costs of commercialization and production of product candidates developed under those government-funded programs.

In September 2020, we entered into the BARDA Contract with BARDA, a division of the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response. Under the BARDA Contract, we received an award of up to an estimated $51 million for development of IV administered ganaxolone for the treatment of RSE. The BARDA Contract consists of an approximately two-year base period-during which BARDA will provide up to approximately $21 million of funding for the RSE Phase 3 clinical trial on a cost share basis and funding of additional preclinical studies of ganaxolone in nerve agent exposure models. Following successful completion of the RSE Phase 3 clinical trial and preclinical studies in the base period, the BARDA Contract provides for approximately $30 million of additional BARDA funding for three options in support of manufacturing, supply chain, clinical, regulatory and toxicology activities. Under the BARDA Contract, we will be responsible for cost sharing in the amount of approximately $33 million and BARDA will be responsible for approximately $51 million, if all development options are completed. The contract period-of-performance (base period plus option exercises) is up to approximately five years.

Programs funded by the United States government and its agencies include provisions that confer on the government substantial rights and remedies, many of which are not typically found in commercial contracts, including powers of the government to:

● terminate agreements, in whole or in part, for any reason or no reason;

● reduce or modify the government’s obligations under such agreements without the consent of the other party;

● claim rights, including intellectual property rights, in products and data developed under such agreements;

● audit contract-related costs and fees, including allocated indirect costs;

● suspend the contractor from receiving new contracts pending resolution of alleged violations of procurement laws or regulations;

● impose United States manufacturing requirements for products that embody inventions conceived or first reduced to practice under such agreements;

● suspend or debar the contractor from doing future business with the government; and

● control and potentially prohibit the export of products.

We may not have the right to prohibit the United States government from using or allowing others to use certain technologies developed by us, and we may not be able to prohibit third-party companies, including our competitors, from using those technologies in providing products and services to the United States government. The United States government generally obtains the right to royalty-free use of technologies that are developed under United States government contracts.

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In addition, government contracts normally contain additional requirements that may increase our costs of doing business, reduce our profits, and expose us to liability for failure to comply with these terms and conditions. These requirements include, for example:

● specialized accounting systems unique to government contracts;

● mandatory financial audits and potential liability for price adjustments or recoupment of government funds after such funds have been spent;

● public disclosures of certain contract information, which may enable competitors to gain insights into our research program; and

● mandatory socioeconomic compliance requirements, including labor standards, non-discrimination and affirmative action programs and environmental compliance requirements.

If we fail to maintain compliance with these requirements, we may be subject to potential contract liability and to termination of our contracts. In addition, if an audit or review uncovers any improper or illegal activity, we may be subject to civil and criminal penalties and administrative sanctions, including termination of our contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S. government. We could also suffer serious harm to our reputation if allegations of impropriety were made against us. In addition, under U.S. government purchasing regulations, some of our costs may not be reimbursable or allowed under the BARDA Contract. Further, as a U.S. government contractor, we are subject to an increased risk of investigations, criminal prosecution, civil fraud, whistleblower lawsuits and other legal actions and liabilities as compared to private sector commercial companies.

Further, changes in government budgets and agendas may result in a decreased and de-prioritized emphasis on supporting the RSE development program. Any reduction or delay in BARDA funding may force us to seek alternative funding in order to progress our RSE program, which may not be available on non-dilutive terms, terms favorable to us or at all.

We may elect to enter into license or collaboration agreements to partner ganaxolone in territories currently retained by us. Our dependence on such relationships may adversely affect our business.

Because we have limited resources, we have and expect that we will continue to enter into license or collaboration agreements with other pharmaceutical or biotechnology companies. Any failure by our partners to perform their obligations or any decision by our partners to terminate these agreements could negatively impact our ability to successfully develop, obtain regulatory approvals for and commercialize ganaxolone. In the event we grant exclusive rights to such partners, we would be precluded from potential commercialization of ganaxolone within the territories in which we have a partner. In addition, any termination of our license or collaboration agreements will terminate the funding we may receive under the relevant license or collaboration agreement and may impair our ability to fund further development efforts and our progress in our development programs.

Our commercialization strategy for ganaxolone may depend on our ability to enter into agreements with partners to obtain assistance and funding for the development and potential commercialization of ganaxolone in the territories in which we seek to partner. Despite our efforts, we may be unable to secure license or collaboration agreements or other arrangements that are necessary for us to further develop and commercialize ganaxolone. Supporting diligence activities conducted by potential licensees or collaborators and negotiating the financial and other terms of a license or collaboration agreement are long and complex processes with uncertain results. Even if we are successful in entering into one or more license or collaboration agreements, such agreements may involve greater uncertainty for us, as we would have less control over certain aspects of our partnered programs than we do over our un-partnered programs. We may determine that continuing a license or collaboration under the terms provided is not in our best interest, and we may terminate the license or collaboration. Our potential future partners could delay or terminate their agreements, and as a result ganaxolone may never be successfully commercialized.

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Further, our potential future partners may develop alternative products or pursue alternative technologies either on their own or in collaboration with others, including our competitors, and the priorities or focus of our partners may shift such that ganaxolone receives less attention or resources than we would like, or they may be terminated altogether. Any such actions by our potential future partners may adversely affect our business prospects and ability to earn revenue. In addition, we could have disputes with our potential future partners, such as the interpretation of terms in our agreements. Any such disagreements could lead to delays in the development or commercialization of ganaxolone or could result in time-consuming and expensive litigation or arbitration, which may not be resolved in our favor.

If our third-party manufacturers use hazardous and biological materials in a manner that causes injury or violates applicable law, we may be liable for damages.

Our research and development activities involve the controlled use of potentially hazardous substances, including chemical and biological materials by our third-party manufacturers. Our manufacturers are subject to federal, state and local laws and regulations in the United States governing the use, manufacture, storage, handling and disposal of medical, radioactive and hazardous materials. We cannot completely eliminate the risk of contamination or injury resulting from medical, radioactive or hazardous materials. As a result of any such contamination or injury we may incur liability or local, city, state or federal authorities may curtail the use of these materials and interrupt our business operations. In the event of an accident, we could be held liable for damages or penalized with fines, and the liability could exceed our resources. We do not have any insurance for liabilities arising from medical radioactive or hazardous materials. Compliance with applicable environmental laws and regulations is expensive, and current or future environmental regulations may impair our research, development and production efforts, which could harm our business, prospects, financial condition or results of operations.

Risks Related to Regulatory Compliance

Currently enacted and future legislation, including potentially unfavorable pricing regulations or other healthcare reform initiatives, may increase the difficulty and cost for us to obtain marketing approval of and commercialize ganaxolone and affect the prices we may obtain.

The regulations that govern, among other things, marketing approvals, coverage, pricing and reimbursement for new drug products vary widely from country to country. In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of ganaxolone, restrict or regulate post-approval activities and affect our ability to successfully sell ganaxolone, if we obtain marketing approval.

In the United States, there have been and continue to be a number of legislative and regulatory changes and proposed changes to contain healthcare costs. For example, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the Medicare Modernization Act) changed the way Medicare covers and pays for pharmaceutical products. The legislation expanded Medicare coverage for drug purchases by eligible beneficiaries and introduced a new reimbursement methodology based on average sales prices for physician administered drugs. In recent years, Congress has considered reductions in Medicare reimbursement for drugs administered by physicians. The Centers for Medicare & Medicaid Services (CMS) also has the authority to revise reimbursement rates and to implement coverage restrictions for drugs. Cost reduction initiatives and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved products, which in turn would affect the price we can receive for those products. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our drugs. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for ganaxolone, if approved, or additional pricing pressures.

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the Affordable Care Act) is intended to reduce the cost of, improve the quality of, and expand access to healthcare, among other things. Among other things, the Affordable Care Act expanded manufacturers’ Medicaid rebate

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liability to include covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations, increased the minimum rebate due for innovator drugs from 15.1% of average manufacturer price (AMP) to 23.1% of AMP and capped the total rebate amount for innovator drugs at 100.0% of AMP. The Affordable Care Act and subsequent legislation also changed the definition of AMP. Furthermore, the Affordable Care Act imposed a significant annual, nondeductible fee on companies that manufacture or import certain branded prescription drug products.

Certain provisions of the Affordable Care Act have been subject to judicial challenges as well as efforts to repeal, replace or otherwise modify them or to alter their interpretation or implementation. Additional legislative changes, regulatory changes, and judicial challenges related to the Affordable Care Act remain possible, but the nature and extent of such potential changes or challenges are uncertain at this time. The implications of the Affordable Care Act, and efforts to repeal, replace, or otherwise modify or invalidate, the Affordable Care Act or its implementing regulations, or portions thereof, and the political uncertainty surrounding any efforts to repeal, replace, or otherwise modify the Affordable Care Act for our business and financial condition, if any, are not clear. We will continue to evaluate the effect that the Affordable Care Act as well as its possible repeal, replacement, modification, or invalidation, in whole or in part, have on our business.

In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted. The Budget Control Act of 2011, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals in spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction of an amount greater than $1.2 trillion for the years 2013 through 2021, triggering the legislation’s automatic reduction to several government programs. This includes aggregate reductions to Medicare payments to healthcare providers of, on average, 2.0% per fiscal year, starting in 2013 and continuing through 2030 (with the exception of a temporary suspension from May 1, 2020 through December 31, 2021) unless additional Congressional action is taken. The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several categories of healthcare providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. If we ever obtain regulatory approval and commercialization of ganaxolone, these laws may result in reductions in Medicare and other healthcare funding, which could have a material adverse effect on our customers and accordingly, our financial operations.

In addition, legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of ganaxolone may be.

In the United States, the EU and other potentially significant markets for ganaxolone, there has been increasing legislative, regulatory, and enforcement interest with respect to drug pricing practices. There have been several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs. Government authorities and third-party payers are increasingly attempting to limit or regulate the price of medical products and services, particularly for new and innovative products and therapies, which has resulted in lower average selling prices. Furthermore, the increased emphasis on managed healthcare in the United States and on country and regional pricing and reimbursement controls in the EU will put additional pressure on product pricing, reimbursement and usage, which may adversely affect our future product sales and results of operations. These pressures can arise from rules and practices of managed care groups, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical reimbursement policies and pricing in general.

Some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain marketing approval for ganaxolone in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, which could negatively impact the revenue we are able to generate from the sale of the product in that particular country. Adverse

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pricing limitations may hinder our ability to recoup our investment in ganaxolone even if ganaxolone obtains marketing approval.

If we participate in the Medicaid Drug Rebate Program and fail to comply with our reporting and payment obligations under that program or other governmental pricing programs that we participate in, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

We expect to participate in and have certain price reporting obligations to the Medicaid Drug Rebate Program. Under the Medicaid Drug Rebate Program, if we successfully commercialize one or more products for which we receive regulatory approval, we would be required to pay a rebate to each state Medicaid program for our covered outpatient drugs that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid program as a condition of having federal funds being made available for our drugs under Medicaid and Medicare Part B. Those rebates are based on pricing data, such as average manufacturer price and best price, that we would have to report on a monthly and quarterly basis to the CMS, the federal agency that administers the Medicaid Drug Rebate Program. These data include the average manufacturer price and, in the case of single-source and innovator multiple-source products, the best price for each drug which, in general, represents the lowest price available from the manufacturer to any entity in the United States in any pricing structure, calculated to include all sales and associated rebates, discounts and other price concessions subject to certain exclusions. The Affordable Care Act made significant changes to the Medicaid Drug Rebate Program, and CMS issued a final regulation, which became effective on April 1, 2016, to implement the changes to the Medicaid Drug Rebate program under the Affordable Care Act. On December 21, 2020, CMS issued a final regulation that modified existing Medicaid Drug Rebate Program regulations to permit reporting multiple Best Price figures with regard to value-based purchasing arrangements (beginning in 2022); provide definitions for “line extension,” “new formulation,” and related terms with the practical effect of expanding the scope of drugs considered to be line extensions (beginning in 2022); and revise AMP and Best Price exclusions with respect to manufacturer-sponsored patient benefit programs, specifically regarding inapplicability of such exclusions in the context of pharmacy benefit manager “accumulator” programs (beginning in 2023). Our failure to comply with the aforementioned price reporting and rebate payment obligations if we participate in the Medicaid Drug Rebate Program could negatively impact our financial results.

Federal law requires that any company that participates in the Medicaid Drug Rebate Program also participate in the 340B program in order for federal funds to be available for the manufacturer’s drugs under Medicaid and Medicare Part B. The 340B program, which is administered by the Health Resources and Services Administration (HRSA), requires participating manufacturers to agree to charge statutorily defined covered entities no more than the 340B “ceiling price” for the manufacturer’s covered outpatient drugs. These 340B covered entities include a variety of community health clinics and other entities that receive health services grants from the Public Health Service, as well as certain hospitals that serve a disproportionate share of low-income patients. The Affordable Care Act expanded the list of covered entities to include certain children’s hospitals, free-standing cancer hospitals, critical access hospitals, rural referral centers and sole community hospitals, but exempted “orphan drugs” from the ceiling price requirements for these covered entities. The 340B ceiling price is calculated using a statutory formula based on the average manufacturer price and unit rebate amount for the covered outpatient drug as calculated under the Medicaid Drug Rebate Program, and in general, products subject to Medicaid price reporting and rebate liability are also subject to the 340B ceiling price calculation and discount requirement. Any additional future changes to the definition of average manufacturer price and the Medicaid unit rebate amount under the Affordable Care Act or other legislation or regulation could affect our 340B ceiling price calculations and negatively impact our results of operations if we successfully commercialize one or more products for which we receive regulatory approval.

HRSA issued a final regulation, effective January 1, 2019, regarding the calculation of the 340B ceiling price and the imposition of civil monetary penalties on manufacturers that knowingly and intentionally overcharge covered entities. HRSA also has implemented a ceiling price reporting requirement, pursuant to which manufacturers must report the 340B ceiling prices for their covered outpatient drugs to HRSA on a quarterly basis. HRSA then publishes those prices to 340B covered entities. Moreover, under a final regulation effective January 13, 2021, HRSA newly established an administrative dispute resolution (ADR) process for claims by covered entities that a manufacturer has engaged in overcharging, including claims that a manufacturer has limited the covered entity’s ability to purchase covered outpatient drugs at or below the 340B ceiling price, and by manufacturers that a covered entity violated the prohibitions against diversion or duplicate

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discounts, including claims that an individual does not qualify as a patient for 340B Program purposes and claims that a covered entity is not eligible for the 340B Program. Such claims are to be resolved through an ADR panel of government officials rendering a decision that can be appealed to a federal court. An ADR proceeding could subject a manufacturer to onerous procedural requirements and could result in additional liability. In addition, legislation may be introduced that, if passed, would further expand the 340B program to additional covered entities or would require participating manufacturers to agree to provide 340B discounted pricing on drugs used in an inpatient setting.

Federal law also requires that a company that participates in the Medicaid Drug Rebate Program report average sales price information each quarter to CMS for certain categories of drugs that are paid under the Medicare Part B program. Manufacturers calculate the average sales price based on a statutorily defined formula as well as regulations and interpretations of the statute by CMS. CMS uses these submissions to determine payment rates for drugs under Medicare Part B. For calendar quarters beginning January 1, 2022, manufacturers will need to start reporting the average sales price for drugs under the Medicare Part B program regardless of whether they are enrolled in the Medicaid Drug Rebate Program.  Currently, only manufacturers participating in the Medicaid Drug Rebate Program are obligated to do so.  

In addition, in a November 20, 2020 interim final rule, CMS established a “Most Favored Nation” demonstration model to test Medicare Part B reimbursement of certain separately payable drugs or biologicals identified by CMS as having the highest annual Medicare Part B spending via an alternative payment methodology based on international reference prices. The list of products is to be updated annually to add more products, and products are not to be removed from the list absent limited circumstances. The rule has become subject to judicial challenges, and federal courts have halted implementation of the rule at this time via court order. There is also proposed legislation pending that would establish an international reference price-based payment methodology.

Pricing and rebate calculations vary among products and programs. The calculations are complex and are often subject to interpretation by the manufacturer, governmental or regulatory agencies, and the courts.  If we participate in the Medicaid Drug Rebate Program and consequently the 340B program, we could be held liable for errors associated with our submission of pricing data, including, but not limited to, the following penalties. In addition to retroactive Medicaid rebates and the potential for 340B program refunds, if we are found to have knowingly submitted false average manufacturer price or best price information to the government, we may be liable for significant civil monetary penalties per item of false information. If we are found to have made a misrepresentation in the reporting of our average sales price, the Medicare statute provides for significant civil monetary penalties for each misrepresentation for each day in which the misrepresentation was applied. Civil monetary penalties can also be applied if we are found to have knowingly and intentionally charged 340B covered entities more than the statutorily mandated ceiling price.  A covered entity or association representing covered entities can also bring claims against us through HRSA’s 340B ADR process. HRSA could terminate our 340B program Pharmaceutical Pricing Agreement for good cause, which would cause our Medicaid National Drug Rebate Agreement to be terminated, rendering federal funds for our covered outpatient drugs unavailable under Medicaid and Medicare Part B.  Our failure to submit monthly/quarterly average manufacturer price and best price data on a timely basis could result in a significant civil monetary penalty per day for each day the information is late beyond the due date. Such failure also could be grounds for CMS to terminate our Medicaid drug rebate agreement, pursuant to which we would be participating in the Medicaid Drug Rebate Program. In the event that CMS terminates our rebate agreement, no federal payments would be available under Medicaid or Medicare Part B for our covered outpatient drugs. If we are found to have knowingly misclassified a drug (i.e., by knowingly classifying it as a generic drug for Medicaid Drug Rebate Program purposes, which are subject to lower rebates, instead of a single-source or innovator multiple-source drug) we could be subject to civil monetary penalties no greater than two times the difference between the rebates we should have paid and the rebates we actually paid, which penalties are in addition to the penalties discussed previously.

CMS and the HHS OIG have pursued manufacturers that were alleged to have failed to report these data to the government in a timely manner. Governmental agencies may also make changes in program interpretations, requirements or conditions of participation, some of which may have implications for amounts previously estimated or paid. If we participate in the Medicaid Drug Rebate Program and consequently the 340B program, we cannot assure you that our submissions will not be found to be incomplete or incorrect.

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In order to be eligible to have our products that we successfully commercialize paid for with federal funds under the Medicaid and Medicare Part B programs and purchased by certain federal agencies and grantees, we also would have to participate in the Department of Veterans Affairs (VA) Federal Supply Schedule (FSS) pricing program. As part of this program, we would be obligated to make our products available for procurement on an FSS contract under which we would be required to comply with standard government contract terms and conditions and charge a price that is no higher than the statutory Federal Ceiling Price (FCP) to four federal agencies (VA, Department of Defense (DOD), Public Health Service, and U.S. Coast Guard).

The FCP is based on the Non-Federal Average Manufacturer Price (Non-FAMP), which we would be required to calculate and report to the VA on a quarterly and annual basis. Pursuant to applicable law and related contract terms, knowing provision of false information in connection with a Non-FAMP filing can subject a manufacturer to significant civil monetary penalties for each item of false information. The FSS pricing program and contract also contain extensive disclosure and certification requirements.

If we successfully commercialize one or more products for which we receive regulatory approval, we also would participate in the Tricare Retail Pharmacy program, under which we would be required to pay quarterly rebates on utilization of innovator products that are dispensed through the Tricare Retail Pharmacy network to Tricare beneficiaries. The rebates are calculated as the difference between the annual Non-FAMP and FCP. We would be required to list our innovator products on a Tricare Agreement in order for them to be eligible for DOD formulary inclusion. If it were concluded that we had overcharged the government in connection with our FSS contract or Tricare Agreement, whether due to a misstated FCP or otherwise, we would be required to refund the difference to the government. Failure to make necessary disclosures and/or to identify contract overcharges could result in allegations against us under the FCA and /or other laws and regulations. Unexpected refunds to the government, and/or having to respond to a government investigation or enforcement action, could be expensive and time-consuming, and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Laws and regulations governing international operations may preclude us from developing, manufacturing and selling product candidates outside of the United States and require us to develop and implement costly compliance programs.

As we seek to expand our operations outside of the United States, we must comply with numerous laws and regulations in each jurisdiction in which we plan to operate. The creation and implementation of international business practices compliance programs is costly and such programs are difficult to enforce, particularly where reliance on third parties is required.

The Foreign Corrupt Practices Act (FCPA) prohibits any United States individual or business from paying, offering, authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in the United States to comply with certain accounting provisions requiring such companies to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations. The anti-bribery provisions of the FCPA are enforced primarily by the DOJ. The SEC is involved with enforcement of the books and records provisions of the FCPA.

Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, the FCPA presents particular challenges in the pharmaceutical industry, because, in many countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials. Certain payments to hospitals in connection with clinical trials and other work have been deemed to be improper payments to government officials and have led to FCPA enforcement actions.

Various laws, regulations and executive orders also restrict the use and dissemination outside of the United States, or the sharing with certain foreign nationals, of information classified for national security purposes, as well as certain products and technical data relating to those products. Our expanding presence outside of the United States will

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require us to dedicate additional resources to comply with these laws, and these laws may preclude us from developing, manufacturing, or selling ganaxolone outside of the United States, which could limit our growth potential and increase our development costs.

The failure to comply with laws governing international business practices may result in substantial penalties, including suspension or debarment from government contracting. Violation of the FCPA can result in significant civil and criminal penalties. Indictment alone under the FCPA can lead to suspension of the right to do business with the United States government until the pending claims are resolved. Conviction of a violation of the FCPA can result in long-term disqualification as a government contractor. The termination of a government contract or relationship as a result of our failure to satisfy any of our obligations under laws governing international business practices would have a negative impact on our operations and harm our reputation and ability to procure government contracts. The SEC also may suspend or bar issuers from trading securities on United States exchanges for violations of the FCPA’s accounting provisions.

Our relationships with customers and third-party payers will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.

Healthcare providers, physicians and others will play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval. Our future arrangements with healthcare professionals, third-party payers, patients and others will expose us to broadly applicable fraud and abuse, anti-kickback, false claims, and other healthcare laws and regulations that may affect the business or financial arrangements and relationships through which we would market, sell and distribute our products. Even though we do not and will not control referrals of healthcare services or bill directly to Medicare, Medicaid or other third-party payers, federal and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights are and will be applicable to our business. Restrictions under applicable federal and state healthcare laws and regulations that may affect our operations (including our marketing, promotion, educational programs, pricing, and relationships with healthcare providers or other entities, among other things) and expose us to areas of risk including the following:

● the federal Anti-Kickback Statute (AKS) prohibits, among other things, knowingly and willfully soliciting, offering, or receiving remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, or arranging for the purchase, lease, or order of, any healthcare item or service, for which payment may be made under a federal healthcare program such as Medicare & Medicaid;

● the FCA prohibits, among other things, individuals or entities from, among other things, knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds, or knowingly making, using, or causing to be made or used a false record or statement material to an obligation to pay money to the government, or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government;

● other federal false claims laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs;

● the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations (collectively, HIPAA) imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program, including private third-party payors, and also prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statements in connection with the delivery of or payment for healthcare benefits, items or services;

● the federal Physician Payments Sunshine Act, implemented as the Open Payments Program, requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or Children’s Health Insurance Program, to report annually to CMS information related to payments and other transfers of value to physicians, and teaching hospitals, and starting in 2022

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certain other health care professionals, and ownership and investment interests held by physicians and their immediate family members and applicable group purchasing organizations; and

● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payers, including private insurers, as well as other state laws and regulations governing pharmaceutical manufacturers; and

● state and foreign laws and regulations govern the privacy and security of health information in specified circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

For a fuller discussion of the applicable anti-kickback, fraud and abuse, transparency, and other health care laws and regulations applicable to our business, see Item 1, “Business – Other Healthcare Laws and Compliance Requirements” in our most recent Annual Report on Form 10-K filed on March 9, 2021.

Efforts to ensure that our business arrangements with third parties are compliant with applicable healthcare laws and regulations will involve the expenditure of appropriate, and possibly significant, resources. Nonetheless, it is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment, exclusion from government funded healthcare programs, such as Medicare & Medicaid, and the curtailment or restructuring of our operations. If any physicians or other healthcare providers or entities with whom we expect to do business are found to not be in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

We may be subject to data privacy and security regulations by both the federal government and the states in which we conduct our business, which could impose significant regulatory hurdles on our business.

HIPAA imposes requirements relating to the privacy, security and transmission of individually identifiable health information. HIPAA imposes privacy and security obligations on covered entity health care providers, health plans, and health care clearinghouses, as well as their “business associates”—independent contractors or agents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of a covered entity. We may obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under HIPAA. Although we are not directly subject to HIPAA, other than potentially with respect to providing certain employee benefits, we could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA. In addition, numerous other federal and state laws and regulations govern privacy and security, including state data breach notification laws, state health information and/or genetic privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the FTC Act, and the California Consumer Privacy Act (CCPA), many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. Compliance with these laws is difficult, constantly evolving, and time consuming. Federal regulators, state attorneys general, and plaintiffs’ attorneys have been and will likely continue to be active in this space.

In California, the CCPA took effect on January 1, 2020. The CCPA establishes certain requirements for data use and sharing transparency and creates new data privacy rights for California residents. The CCPA and its implementing regulations have already been amended multiple times since their enactment. Similarly, there are a number of legislative proposals in the EU, the United States (at both the federal and state level), as well as in other jurisdictions that could change existing obligations, and/or impose new obligations or limitations in areas affecting our business. These laws and regulations are evolving and subject to interpretation, and may impose limitations on our activities or otherwise adversely affect our business. In addition, some countries are considering or have passed legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements that

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could increase the cost and complexity of delivering our services and research activities. These laws and regulations, as well as any associated claims, inquiries, or investigations or any other government actions may lead to unfavorable outcomes including increased compliance costs, delays or impediments in the development of new products, negative publicity, increased operating costs, diversion of management time and attention, and remedies that harm our business, including fines or demands or orders that we modify or cease existing business practices.

If we, our agents, or our third party partners fail to comply or are alleged to have failed to comply with these or other applicable data protection and privacy laws and regulations, or if we were to experience a data breach involving personal information, we could be subject to government enforcement actions or private lawsuits. Any associated claims, inquiries, or investigations or other government actions could lead to unfavorable outcomes that have a material impact on our business including through significant penalties or fines, monetary judgments or settlements including criminal and civil liability for us and our officers and directors, increased compliance costs, delays or impediments in the development of new products, negative publicity, increased operating costs, diversion of management time and attention, or other remedies that harm our business, including orders that we modify or cease existing business practices.

In addition, the EU’s legislative and regulatory landscape for privacy and data security continues to evolve. There has been increased attention to privacy and data security issues that could potentially affect our business, including the EU General Data Protection Regulation (GDPR), which entered into effect on May 25, 2018 and imposes penalties up to 4% of annual global turnover for breaches of related obligations.

In the event we enroll patients in our ongoing or future clinical trials in the European Economic Area (EEA), we will be subject to the additional privacy restrictions imposed by the General Data Protection Regulation (the GDPR), including restrictions relating to the collection, use, storage, transfer, and other processing of personal data, including personal health data, regarding individuals in the EEA as governed by the GDPR and the related national data protection laws of the individual EEA countries. The GDPR imposes several requirements on companies that process personal data, with especially strict rules on the transfer of personal data out of the EEA, including to the U.S, and fines and penalties for failure to comply with the requirements of the GDPR and the related national data protection laws of the individual EEA countries. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. The obligations under the GDPR may be onerous and adversely affect our business, financial condition, results of operations and prospects. Compliance with the GDPR will be a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with any EEA activities. Further, the United Kingdom’s exit from the EU, often referred to as Brexit, has created uncertainty with regard to future data protection regulation in the United Kingdom. The European Commission has adopted an Adequacy Decision concerning the level of data protection in the United Kingdom. Personal data may now flow freely from the EEA to the United Kingdom, however, the European Commission may suspend the Adequacy Decision if it considers that the United Kingdom no longer provides for an adequate level of data protection.

Because of the remote work policies we implemented due to the COVID-19 pandemic, information that is normally protected, including company confidential information, may be less secure. Cybersecurity and data security threats continue to evolve and raise the risk of an incident that could affect our operations or compromise our business information or sensitive personal information, including health data.

We may also need to collect more extensive health-related information from our employees to manage our workforce. If we or our third party partners fail to comply or are alleged to have failed to comply with applicable data protection and privacy laws and regulations, and related employment rules, or if we were to experience a data breach involving personal information, we could be subject to government enforcement actions or private lawsuits.

In addition, our business could be adversely impacted if our ability to transfer personal data outside of the EEA or Switzerland is restricted, which could adversely impact our operating results. For example, in July 2020, the Court of Justice of the European Union, or the Court of Justice, declared the Privacy Shield Decision (Decision 2018/1250) invalid, which could adversely impact our ability to transfer personal data from the EU to the U.S. The Court of Justice further ruled that in order to transfer data outside of the EU, under the existing mechanism known as the Standard

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Contractual Clauses (SCCs), the exporter and the importer must ensure that the importer may guarantee a level of personal data protection in the importing country’s level of protection must be adequate that is essentially equivalent to that of the EEA.

On September 8, 2020, the Federal Data Protection and Information Commissioner (FDPIC) of Switzerland issued an opinion concluding that the Swiss-U.S. Privacy Shield Framework does not provide an adequate level of protection for data transfers from Switzerland to the United States. The FDPIC also found that SCCs may still be legally adequate at an individual level provided that they can pass a risk assessment conducted by the FDPIC. If the level of protection in the U.S. or any other importing country is called into question under the SCCs, this could further impact our ability to transfer data outside of the EU or Switzerland.

The impact of Brexit on the on-going validity in the UK of current EU authorizations for medicinal products, whether granted through the centralized procedure, decentralized procedure, or mutual recognition, and on the future process for obtaining marketing authorization for pharmaceutical products manufactured or sold in the UK remains uncertain. Although the body of the UK-EU Trade and Cooperation Agreement includes general terms which apply to medicinal products, greater detail on sector-specific issues is provided in an Annex to the Agreement. The Annex provides a framework for the recognition of GMP inspections and for the exchange and acceptance of official GMP documents. The regime does not, however, extend to procedures such as batch release certification. Among the changes that will now occur are that Great Britain, comprised of England, Scotland and Wales, will be treated as a third country. Northern Ireland will, with regard to EU regulations, continue to follow the EU regulatory rules. As part of the UK-EU Trade and Cooperation Agreement, the EU and the UK will recognize GMP inspections carried out by the other Party and the acceptance of official GMP documents issued by the other Party. The UK-EU Trade and Cooperation Agreement also encourages, although it does not oblige, the parties to consult one another on proposals to introduce significant changes to technical regulations or inspection procedures. Among the areas of absence of mutual recognition are batch testing and batch release. The UK has unilaterally agreed to accept EU batch testing and batch release for a period of at least two years until January 1, 2023. However, the EU continues to apply EU laws that require batch testing and batch release to take place in the EU territory. This means that medicinal products that are tested and released in the UK must be retested and re-released when entering the EU market for commercial use. As regards marketing authorizations, Great Britain will have a separate regulatory submission process, approval process and a separate national MA. Northern Ireland will, however, continue to be covered by the marketing authorizations granted by the EC.

Risks Related to Intellectual Property

If we are unable to protect our intellectual property rights or if our intellectual property rights are inadequate for our technology and product candidates, our competitive position could be harmed.

Our commercial success will depend in large part on our ability to obtain and maintain patent and other intellectual property protection in the United States and other countries with respect to our technology and products. We rely on trade secret, patent, copyright and trademark laws, and confidentiality, licensing and other agreements with employees and third parties, all of which offer only limited protection. We seek to protect our proprietary position by filing and prosecuting patent applications in the United States and abroad related to our novel technologies and products that are important to our business.

The patent positions of biotechnology and pharmaceutical companies generally are highly uncertain, involve complex legal and factual questions and have in recent years been the subject of much litigation. As a result, the issuance, scope, validity, enforceability and commercial value of our patents, including those patent rights licensed to us by third parties, are highly uncertain. The steps we or our licensors have taken to protect our proprietary rights may not be adequate to preclude misappropriation of our proprietary information or infringement of our intellectual property rights, both inside and outside the United States. Further, the examination process may require us or our licensors to narrow the claims for our pending patent applications, which may limit the scope of patent protection that may be obtained if these applications issue. The rights already granted under any of our currently issued patents or those licensed to us and those that may be granted under future issued patents may not provide us with the protection or competitive advantages we are seeking. If we or our licensors are unable to obtain and maintain patent protection for our technology and products, or if the scope of the patent protection obtained is not sufficient, our competitors could develop and

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commercialize technology and products similar or superior to ours, and our ability to successfully commercialize our technology and products may be adversely affected. It is also possible that we or our licensors will fail to identify patentable aspects of inventions made in the course of our development and commercialization activities before it is too late to obtain patent protection on them.

With respect to patent rights, the ganaxolone compound and its original synthesis were published in the early 1990s and we do not own or license patent rights on the ganaxolone compound. We seek patent protection in the United States and internationally for synthetic methods for making ganaxolone, ganaxolone nanoparticles, which are used in certain oral solid, oral liquid, and IV dose formulations, other injectable and oral ganaxolone formulations, and methods of treatment using ganaxolone. We do not know whether any of our granted or issued patents will, or if any of our pending patent applications will grant as patents that will, effectively prevent others from commercializing competitive technologies and products. There is a risk that others, including companies that make generic pharmaceuticals, may develop ganaxolone for the same as similar uses as us, and that our patents will not effectively prevent them from commercializing their ganaxolone products. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing or in some cases not at all, until they are issued as a patent. Therefore, we cannot be certain that we or our licensors were the first to make the inventions claimed in our owned or licensed patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions.

Our pending applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications. Because the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, issued patents that we own or have licensed from third parties may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in the loss of patent protection, the narrowing of claims in such patents or the invalidity or unenforceability of such patents, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection for our technology and products. Protecting against the unauthorized use of our or our licensors’ patented technology, trademarks and other intellectual property rights is expensive, difficult and may in some cases not be possible. In some cases, it may be difficult or impossible to detect third-party infringement or misappropriation of our intellectual property rights, even in relation to issued patent claims, and proving any such infringement may be even more difficult.

Competitors may infringe our patents or misappropriate or otherwise violate our intellectual property rights. To counter infringement or unauthorized use, litigation may be necessary in the future to enforce or defend our intellectual property rights, to protect our trade secrets or to determine the validity and scope of our own intellectual property rights or the proprietary rights of others. Also, third parties may initiate legal proceedings against us to challenge the validity or scope of intellectual property rights we own or control. These proceedings can be expensive and time consuming. Many of our current and potential competitors have the ability to dedicate substantially greater resources to defend their intellectual property rights than we can. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing upon or misappropriating our intellectual property. Litigation could result in substantial costs and diversion of management resources, which could harm our business and financial results. In addition, in an infringement proceeding, a court may decide that a patent owned or controlled by us is invalid or unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated, held unenforceable or interpreted narrowly. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of shares of our common stock.

Third parties, such as Ovid Therapeutics, Inc., may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could harm our business.

Our commercial success depends upon our ability to develop, manufacture, market and sell our products, all of which contain ganaxolone, if approved, and to use our related technologies. We may become party to, or threatened with,

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adversarial proceedings or litigation regarding intellectual property rights with respect to one or more of our products, including interference or derivation proceedings before the United States Patent and Trademark Office (USPTO). Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future. If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue commercializing one or more of our products. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Under certain circumstances, we could be forced, including by court order, to cease commercializing one or more of our products. In addition, in any such proceeding or litigation, we could be found liable for monetary damages. A finding of infringement could prevent us from commercializing one or more of our products or force us to cease some of our business operations, which could materially harm our business. Any claims by third parties that we have misappropriated their confidential information or trade secrets could have a similar negative impact on our business.

While our product candidates are in preclinical studies and clinical trials, we believe that the use of our product candidates in these preclinical studies and clinical trials falls within the scope of the exemptions provided by 35 U.S.C. Section 271(e) in the United States, which exempts from patent infringement liability activities reasonably related to the development and submission of information to the FDA (Federal Development Patent Infringement Exemption). As our product candidates progress toward commercialization, the possibility of a patent infringement claim against us increases. While ganaxolone itself is off patent, we attempt to ensure that our product candidates and the methods we employ to manufacture ganaxolone do not infringe other parties’ patents and other proprietary rights. There can be no assurance they do not, however, and competitors or other parties may assert that we infringe their proprietary rights in any event.

In September 2020, Ovid Therapeutics, Inc. (Ovid) contacted us and disclosed that it owns two recently issued patents that include claims that encompass our product candidates for the treatment of CDD and PCDH19. Ovid may file a lawsuit against us alleging infringement of its patents and/or we may challenge the validity of Ovid’s patents with the USPTO or through the courts. Any such proceeding, regardless of its outcome, would likely result in the expenditure of significant financial resources and the diversion of management’s time and resources. In addition, any such proceeding may cause negative publicity, adversely impact patients, and we may be prohibited from marketing or selling ganaxolone for CDD and PCDH19, during such proceedings or if we are not successful in such proceedings. If Ovid does decide to bring an infringement lawsuit, we do not expect that it will be filed before a commercial launch of ganaxolone for CDD, or PCDH19, as applicable, based upon the “safe harbor” provisions of the Hatch-Waxman Act. We may need to acquire or obtain a license to the Ovid patents to market or sell ganaxolone for CDD and PCDH19, which may not be available on commercially acceptable terms or at all. If we are not able to acquire the Ovid patents or negotiate a license on acceptable terms, and if our product is determined to infringe Ovid’s patents and the patents are determined to be valid, then we may be forced to pay Ovid royalties, damages and costs, or we may be prevented from commercializing ganaxolone for CDD and PCDH19 altogether, which would have a material adverse impact on our business. We are also aware of a patent application owned by Ovid that is pending in the European Patent Office. That patent application includes claims that encompass our product candidates for use in the treatment of CDD. This pending application is under examination. In March 2020 the European Patent Office issued an examiner report stating that none of the claims meet the requirements for patenting. Ovid filed a brief response but did not amend any of the claims. The application remains under examination and no claims have been allowed. It is possible that this pending application may issue as a patent with claims that encompass our product candidates for the treatment of CDD, in which case, the above risks would also apply to any such patent that issues. We are also aware of a pending patent application by Ovid in the same patent family that includes claims that encompass our product candidate for the treatment of SE. This pending patent application is in the early stages of examination at the USPTO. It is possible that this pending patent application may issue as a patent with claims that encompass our product candidate for the treatment of RSE, in which case, the above risks would also apply to any such patent that was issued.

We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting and defending patents on our product candidates and any future product candidates throughout the world would be prohibitively expensive, and our or our licensors’ intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws and practices of some foreign countries, particularly those relating to pharmaceuticals, do not protect intellectual property

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rights to the same extent as federal and state laws in the United States. For example, novel formulations and methods of medical treatment and manufacturing processes may not be patentable in certain jurisdictions, and the requirements for patentability may differ in certain countries, particularly developing countries. Furthermore, generic drug manufacturers or other competitors may challenge the scope, validity or enforceability of our patents, requiring us to engage in complex, lengthy and costly litigation or other proceedings. Generic drug manufacturers may develop, seek approval for, and launch generic versions of our products. Many countries, including EU countries, India, Japan and China, have compulsory licensing laws under which a patent owner may be compelled under certain circumstances to grant licenses to third parties. In those countries, we may have limited remedies if patents are infringed or if we are compelled to grant a license to a third party, which could materially diminish the value of our patents. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from our intellectual property.

We may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions into or within the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products, and may export otherwise infringing products to territories where we have patent protection, but where enforcement is not as strong as that in the United States. These products may compete with our products in jurisdictions where we do not have any issued patents and our patent claims or other intellectual property rights may not be effective or sufficient to prevent them from competing with us in these jurisdictions.

Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.

Patent terms may be inadequate to protect our competitive position on our products for an adequate amount of time.

Given the amount of time required for the development, testing and regulatory review of new product candidates, such as our product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. For example, certain patents licensed to us by CyDex that relate to Captisol®, which is used in some of our product candidates, have expired, and sulfobutylether beta-cyclodextrin compounds that are similar to CyDex’s Captisol® are available from other suppliers. It is possible that others may seek to develop ganaxolone formulations using sulfobutylether beta-cyclodextrin compounds obtained from such other suppliers.

We expect to seek extensions of patent terms in the United States and, if available, in other countries where we are prosecuting patents. In the United States, the Drug Price Competition and Patent Term Restoration Act of 1984 permits under certain circumstances a patent term extension of up to five years beyond the normal expiration of a patent. However, the applicable authorities, including the FDA and the USPTO in the United States, and any analogous regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to our patents, or may grant more limited extensions than we request. If this occurs, our competitors may be able to take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case.

Changes in patent laws could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.

As is the case with other pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the pharmaceutical industry involve technological and legal complexity, and obtaining and enforcing pharmaceutical patents is costly, time-consuming, and inherently uncertain. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. For example, the United States Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in

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certain circumstances or weakening the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce existing patents and patents we may obtain in the future. Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents.

In addition, the Leahy-Smith America Invents Act (Leahy-Smith Act) includes a number of provisions that affect the way patent applications are prosecuted and may also affect patent litigation. In particular, under the Leahy-Smith Act, the United States transitioned to a “first to file” system in which the first inventor to file a patent application is entitled to the patent. Third parties are allowed to submit prior art before the issuance of a patent by the USPTO and may become involved in derivation, reexamination, inter-partes review or post-grant review proceedings challenging our patent rights or the patent rights of our licensors. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate patent rights, which could adversely affect our competitive position.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submissions, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we or our licensors fail to maintain the patents and patent applications covering our product candidates, our competitive position would be adversely affected.

We may be subject to claims by third parties asserting that we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property.

Some of our employees were previously employed at universities or at other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Some of these employees, including each member of our senior management, executed proprietary rights, non-disclosure and non-competition agreements, or similar agreements, in connection with such previous employment. Although we try to ensure that our employees do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or these employees have used or disclosed intellectual property, including trade secrets or other proprietary information, of any such third party. Litigation may be necessary to defend against such claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel or sustain damages. Such intellectual property rights could be awarded to a third party, and we could be required to obtain a license from such third party to commercialize our technology or products. Such a license may not be available on commercially reasonable terms or at all. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

We rely on government funding for certain aspects of our research and development activities and we may develop intellectual property through such activities and therefore may be subject to federal regulations such as “march-in” rights, certain reporting requirements and a preference for U.S. based companies. Compliance with such regulations may limit our exclusive rights, and limit our ability to contract with non-U.S. manufacturers.

In September 2020, we entered into the BARDA Contract for the completion of pre-clinical and clinical development activities for IV administered ganaxolone for the treatment of RSE. We may generate intellectual property

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rights through the use of this U.S. government funding and are therefore subject to certain federal regulations. As a result, the U.S. government may have certain rights to intellectual property embodied in our current or future product candidates pursuant to the Bayh-Dole Act of 1980 (Bayh-Dole Act), and implementing regulations. These U.S. government rights in certain inventions developed under a government-funded program include a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose. In addition, the U.S. government has the right to require us to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third party if it determines that: (i) adequate steps have not been taken to commercialize the invention; (ii) government action is necessary to meet public health or safety needs; or (iii) government action is necessary to meet requirements for public use under federal regulations (also referred to as “march-in rights”). The U.S. government also has the right to take title to these inventions if we to disclose the invention to the government and fail to file an application to register the intellectual property in the specified manner and within specified time limits. These time limits have recently been changed by regulation, and may change in the future. Intellectual property generated under a government funded program is also subject to certain reporting requirements, compliance with which may require us to expend substantial resources. In addition, the U.S. government requires that any products embodying the subject invention or produced through the use of the subject invention be manufactured substantially in the United States. The manufacturing preference requirement can be waived if the owner of the intellectual property can show that reasonable but unsuccessful efforts have been made to grant licenses on similar terms to potential licensees that would be likely to manufacture substantially in the United States or that under the circumstances domestic manufacture is not commercially feasible. This preference for U.S. manufacturers may limit our ability to contract with non-U.S. product manufacturers for products covered by such intellectual property. To the extent any of our current or future intellectual property is generated through the use of U.S. government funding, the provisions of the Bayh-Dole Act may similarly apply.

Intellectual property rights do not necessarily address all potential threats to our competitive advantage.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative:

● others may be able to make compounds or ganaxolone formulations that are similar to our product candidates but that are not covered by the claims of the patents that we own or control;

● we or any strategic partners might not have been the first to make the inventions covered by the issued patents or pending patent applications that we own or control;

● we might not have been the first to file patent applications covering certain of our inventions;

● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

● it is possible that our pending patent applications will not lead to issued patents;

● issued patents that we own or control may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges;

● our competitors might conduct research and development activities in the United States and other countries that provide a safe harbor from patent infringement claims for certain research and development activities, as well as in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

● we may not develop additional proprietary technologies that are patentable; and

● the patents of others may have an adverse effect on our business.

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Risks Related to our Business Operations

The COVID-19 pandemic could continue to adversely affect our business and our ability to conduct and complete clinical trials.

In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) was identified in Wuhan, China. This virus was declared a pandemic by the World Health Organization in March 2020 and has spread to nearly every country in the world, including the United States. Many countries, including the United States, have implemented travel restrictions, business shutdowns and social distancing measures in order to contain the spread of COVID-19 that have impacted clinical development through supply chain shortages and clinical trial enrollment difficulties as hospitals reduce and redeploy staff, divert resources to patients suffering from COVID-19 and limit hospital access for non-patients. The pandemic poses the risk that we, our employees, contractors, suppliers, or other partners may be prevented from conducting normal business activities for an indefinite period of time, including those due to restrictions that may be requested or mandated by governmental authorities.

The continued global spread of COVID-19 has not materially adversely impacted our operating results, financial condition or cash flows as of and for the nine months ended September 30, 2021. However, COVID-19 has impacted our clinical operations and timelines. In response to COVID-19, for our ongoing clinical trials, we have implemented multiple measures consistent with the U.S. Food and Drug Administration’s guidance on the conduct of clinical trials of medical products during the COVID-19 pandemic, including implementing remote site monitoring and remote visits using telemedicine where needed. However, COVID-19 may still adversely impact our clinical trials. For example, our Phase 3 clinical trial in refractory status epilepticus (RSE) is conducted in hospitals, including academic medical centers, which have experienced high rates of COVID-19 admissions. Due to COVID-19, priorities in several academic medical centers participating in the RAISE Trial, including staff turnover and the need for clinical sites to devote significant resources to patients with COVID-19, the trial has experiences site initiation and enrollment delays. Given these challenges, we previously updated our expectation of top-line data readout for the RAISE Trial to be available in the second half of 2022. In addition, our ganaxolone clinical trials in the outpatient setting may be negatively impacted if patients and their caregivers do not want to participate while COVID-19 outbreaks continue. We are unable to predict the impact that COVID-19 will have in the future on our business, operating results, financial condition and cash flows. The duration and severity of the pandemic and its long-term impact on our business are uncertain at this time, and our ability to raise sufficient additional financing depends on many factors beyond our control, including the current volatility in the capital markets as a result of the COVID-19 pandemic.

If a patient participating in one of our clinical trials contracts COVID-19, this could negatively impact the data readouts from these trials; for example, the patient may be unable to participate further (or may have to limit participation) in our clinical trial, the patient may show a different efficacy assessment than if the patient had not been infected, or the patient could experience an AE that could be attributed to our product candidate.

There is also a risk that clinical supplies of our product candidates may be significantly delayed or may become unavailable as a result of COVID-19 and the resulting impact on our suppliers’ labor forces and operations, including as a result of governmental restrictions on business operations and the movement of people and goods in an effort to curtail the spread of the virus. There can be no assurance that we would be able to timely implement any mitigation plans. Disruptions in our supply chain, whether as a result of restricted travel, quarantine requirements or otherwise, could negatively impact clinical supplies of our product candidates, which could materially adversely impact our clinical trial and development timelines.

The global spread of COVID-19 has also led to severe disruption and volatility in the global capital markets, which could increase our cost of capital and adversely affect our ability to access the capital markets in the future. It is likely that the continued spread of COVID-19 will cause an economic slowdown or recession or cause other unpredictable events, each of which could adversely affect our business, results of operations or financial condition.

The extent to which COVID-19 impacts our business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 outbreak and the actions to contain the outbreak or treat its impact, among others. Moreover, the COVID-19 outbreak

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has begun to have indeterminable adverse effects on general commercial activity and the world economy, and our business and results of operations could be adversely affected to the extent that COVID-19 or any other pandemic harms the global economy generally.

We will need to grow the size of our organization, and we may experience difficulties in managing this growth.

As of September 30, 2021, we had 100 full-time and no part-time employees. As our development and commercialization plans and strategies develop, or as a result of any future acquisitions, we will need additional managerial, operational, sales, marketing, financial and other resources. In addition, it may become more cost effective to bring in house certain resources currently outsourced to consultants and other third-parties. Our management, personnel and systems currently in place may not be adequate to support our future growth. Future growth would impose significant added responsibilities on members of management, including:

● managing our clinical trials effectively;

● identifying, recruiting, maintaining, motivating and integrating additional employees;

● managing our internal development efforts effectively while complying with our contractual obligations to licensors, licensees, contractors and other third parties;

● improving our managerial, development, operational and finance systems; and

● expanding our facilities.

As our operations expand, we will need to manage additional relationships with various strategic partners, suppliers and other third parties. Our future financial performance and our ability to commercialize ganaxolone, if approved, and to compete effectively will depend, in part, on our ability to manage any future growth effectively. To that end, we must be able to manage our development efforts and clinical trials effectively and hire, train and integrate additional management, administrative and sales and marketing personnel. Our failure to accomplish any of these tasks could prevent us from successfully growing our company.

Risks Related to Ownership of Our Common Stock

The market price of our stock has been, and may continue to be, highly volatile, and you could lose all or part of your investment.

Historically, the trading price of our common stock has been highly volatile, and it is likely that such price will continue to be volatile in the future. The trading price of our common stock could be subject to wide fluctuations in response to various factors, some of which are beyond our control. In addition to the factors discussed elsewhere in this “Risk Factors” section, these factors could include:

● the success of competitive products or technologies;

● regulatory actions with respect to our products or our competitors’ products;

● actual or anticipated changes in our growth rate relative to our competitors;

● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments;

● developments or disputes concerning patent applications, issued patents or other proprietary rights;

● the level of expenses related to our clinical development programs;

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● the results of our efforts to in-license or acquire additional product candidates or products;

● actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;

● variations in our financial results or those of companies that are perceived to be similar to us;

● fluctuations in the valuation of companies perceived by investors to be comparable to us;

● share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

● announcement or expectation of additional financing efforts;

● sales of our common stock by us, our insiders or our other stockholders;

● changes in the structure of healthcare payment systems; and

● other events or factors, many of which are beyond our control.

In addition, the stock market in general, the Nasdaq Global Market and pharmaceutical and biotechnology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance. The realization of any of these risks or any of a broad range of other risks, including those described in these “Risk Factors,” could have a dramatic and material adverse impact on the market price of our common stock.

Insiders have substantial influence over us and could delay or prevent a change in corporate control.

We estimate that our executive officers, directors and holders of 5% or more of our capital stock collectively beneficially own approximately 38.9% of our voting stock. Upon conversion of all of our outstanding convertible preferred stock, as of September 30, 2021, our executive officers, directors and holders of 5% or more of our capital stock collectively would beneficially own approximately 38.5% of our voting stock. This concentration of ownership could harm the market price of our common stock by delaying, deferring or preventing a strategic transaction, even if such a transaction would benefit other stockholders. The interests of this group of stockholders may not always coincide with your interests or the interests of other stockholders and they may act in a manner that advances their best interests and not necessarily those of other stockholders, including seeking a premium value for their common stock, and might negatively affect the prevailing market price for our common stock.

Our operating results may fluctuate significantly in the future, which may cause our results to fall below the expectations of securities analysts, stockholders and investors.

Our operating results may fluctuate significantly in the future as a result of a variety of factors, many of which are outside of our control. These factors include, but are not limited to:

● the timing, implementation and cost of our research, preclinical studies and clinical trials;

● our ability to attract and retain personnel with the necessary strategic, technical and creative skills required for effective operations;

● introduction of new technologies;

● product liability litigation, class action and derivative action litigation, or other litigation;

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● the amount and timing of capital expenditures and other costs relating to the expansion of our operations;

● the state of the debt and/or equity capital markets at the time of any proposed offering we choose to initiate;

● our ability to successfully integrate new acquisitions into our operations;

● government regulation and legal developments regarding ganaxolone in the United States and in the foreign countries in which we may operate in the future; and

● general economic conditions.

As a strategic response to changes in the competitive environment, we may from time to time make pricing, service, technology or marketing decisions or business or technology acquisitions that could have a material adverse effect on our operating results. Due to any of these factors, our operating results may fall below the expectations of securities analysts, stockholders and investors in any future period, which may cause our stock price to decline.

Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.

If our stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline. As of September 30, 2021, we had outstanding a total of 36,751,201 shares of common stock and 4,575 shares of Series A Participating Convertible Preferred Stock, par value $0.001 per share (Series A Preferred Stock). The Series A Preferred Stock were convertible into 915,000 shares of common stock as of September 30, 2021, subject to certain ownership limitations. In addition, shares of common stock that are either subject to outstanding options or reserved for future issuance under our employee benefit plans or otherwise will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules and either the registration of such shares under the Securities Act of 1933, as amended (Securities Act) or the application of exemptions from such registration with respect to any sales such as Rule 144 under the Securities Act. If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline.

Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our fourth amended and restated certificate of incorporation, as amended (Certificate of Incorporation) and amended and restated bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management. These include provisions that:

● permit our board of directors to issue up to 25,000,000 shares of preferred stock, with any rights, preferences and privileges as it may designate, of which 4,575 shares of Series A Preferred Stock are outstanding;

● provide that all vacancies on our board of directors, including as a result of newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

● establish a classified board of directors such that only one of three classes of directors is elected each year;

● provide that directors can only be removed for cause;

● require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent;

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● provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide advance notice in writing, and also specify requirements as to the form and content of a stockholder’s notice;

● not provide for cumulative voting rights, thereby allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election; and

● provide that special meetings of our stockholders may be called only by the chairperson of the board of directors, the chief executive officer or the board of directors.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, who are responsible for appointing the members of our management. Because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (DGCL), which prohibits, with some exceptions, stockholders owning in excess of 15.0% of our outstanding capital stock from merging or combining with us.

Our Certificate of Incorporation contains exclusive forum provisions, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL, or (d) any action asserting a claim that is governed by the internal affairs doctrine, in each such case subject to such Court of Chancery’s having personal jurisdiction over the indispensable parties named as defendants therein.

For the avoidance of doubt, the exclusive forum provisions described above do not apply to any claims arising under the Securities Act or under the Exchange Act. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder, and Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

The choice of forum provisions in our Certificate of Incorporation may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and our directors, officers, employees and agents even though an action, if successful, might benefit our stockholders. The applicable courts may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders. With respect to the provision making the Court of Chancery the sole and exclusive forum for certain types of actions, stockholders who do bring a claim in the Court of Chancery could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware. Finally, if a court were to find these provisions of our Certificate of Incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could have a material adverse effect on the company.

General Risk Factors

Our business and operations would suffer in the event of computer system failures, cyberattacks or a deficiency in our cybersecurity or those of any business partners.

Despite the implementation of security measures, our internal computer systems, and those of our CROs and other third parties on which we rely, are vulnerable to damage from computer viruses, unauthorized access, natural

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disasters, fire, terrorism, war and telecommunication and electrical failures, cyberattacks or cyber-intrusions over the Internet, loss of funds or information from phishing or other fraudulent schemes, attachments to emails, persons inside our organization, or persons with access to systems inside our organization or those with whom we do business. The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Such an event could cause interruption of our operations or loss of Company funds and have a negative financial consequence on our business. In addition, our systems safeguard important confidential personal data regarding patients enrolled in our clinical trials. If a disruption event were to occur and cause interruptions in our operations, it could result in a material disruption of our drug development programs. For example, the loss of data relating to completed, ongoing or planned clinical trials could result in delays in our regulatory approval efforts and cause us to incur significant additional costs to recover or reproduce the data. To the extent that any disruption or security breach results in a loss of or damage to our data or applications, misappropriation of funds to unintended recipients, or inappropriate disclosure of confidential, proprietary or personal information, we could incur material legal claims and liabilities and damage to our reputation and the further development of ganaxolone could be delayed. Additionally, breach remediation costs may be significant.

Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses.

Our operations could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured. The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses. We rely on third-party manufacturers to produce ganaxolone. Our ability to obtain clinical supplies of ganaxolone could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption. In addition, while we believe that we currently have sufficient supply of our product candidates to continue our ongoing clinical trials, some of our product candidates, or materials contained therein, come from facilities located in areas impacted by the COVID-19 pandemic. There is no guarantee that the COVID-19 pandemic, or any potential future outbreak or pandemic, would not materially impact our future supply chain. The ultimate impact on us, our significant suppliers and our general infrastructure of being in certain geographical areas is unknown, but our operations and financial condition could suffer in the event of a major earthquake, fire or other natural disaster.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

Exhibit Number	Exhibit Description
3.1	Fourth Amended and Restated Certificate of Incorporation. (Incorporated by reference to Exhibit 3.1 to Form 8-K current report filed on August 7, 2014.)
3.2	Certificate of Amendment of the Fourth Amended and Restated Certificate of Incorporation. (Incorporated by reference to Exhibit 3.1 to Form 8-K current report filed on April 2, 2020.)
3.3	Certificate of Amendment of the Fourth Amended and Restated Certificate of Incorporation. (Incorporated by reference to Exhibit 3.1 to Form 8-K current report filed on May 27, 2020.)
3.4	Certificate of Amendment of the Fourth Amended and Restated Certificate of Incorporation. (Incorporated by reference to Exhibit 3.1 to Form 8-K current report filed on September 22, 2020.)
3.5	Certificate of Amendment of the Fourth Amended and Restated Certificate of Incorporation. (Incorporated by reference to Exhibit 3.2 to Form 8-K current report filed on September 22, 2020.)
3.6	Amended and Restated By-laws. (Incorporated by reference to Exhibit 3.2 to Form 8-K current report filed on August 7, 2014.)
3.7	Certificate of Designations, Preferences and Rights of Series A Participating Convertible Preferred Stock. (Incorporated by reference to Exhibit 3.1 to Form 8-K current report filed on December 13, 2019.)
4.1	Specimen Certificate evidencing shares of the Company’s common stock. (Incorporated by reference to Exhibit 4.1 to Form S-1/A registration statement filed on July 18, 2014.)
10.1*	Collaboration Agreement, dated as of July 30, 2021, by and between Marinus Pharmaceuticals, Inc. and Orion Corporation.
10.2	Form of Incentive Stock Option Agreement for Employees under the Marinus Pharmaceuticals, Inc. 2014 Equity Incentive Plan, as amended.
10.3	Form of Nonqualified Stock Option Agreement for Employees under the Marinus Pharmaceuticals, Inc. 2014 Equity Incentive Plan, as amended.
10.4	Form of Nonqualified Stock Option Agreement for Non-Employee Directors under the Marinus Pharmaceuticals, Inc. 2014 Equity Incentive Plan, as amended.
10.5	Form of Nonqualified Stock Option Agreement for Employees granted as an Inducement Award.
10.6	Form of Restricted Stock Unit Agreement for Employees under the Marinus Pharmaceuticals, Inc. 2014 Equity Incentive Plan, as amended.
10.7	Form of Restricted Stock Unit Agreement for Non-Employee Directors under the Marinus Pharmaceuticals, Inc. 2014 Equity Incentive Plan, as amended.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15a-14(a) under the Exchange Act (filed herewith).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15a-14(a) under the Exchange Act (filed herewith).
32.1	Certification Pursuant to 18 U.S.C. Section 1350 of principal executive officer and principal financial officer (furnished herewith).
101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Labels Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
104	Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

* Portions of this exhibit have been omitted as the registrant has determined that the omitted information (i) is not material and (ii) is the type that the registrant treats as private or confidential.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Signature	Title	Date
/s/ SCOTT BRAUNSTEIN	President and Chief Executive Officer (principal executive officer) and Director	November 9, 2021
Scott Braunstein
/s/ STEVEN PFANSTIEL	Chief Financial Officer and Treasurer (principal financial and accounting officer)	November 9, 2021
Steven Pfanstiel

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EX-10.1

Exhibit 10.1

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

“[***]”, HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE

THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

COLLABORATION AGREEMENT

This COLLABORATION AGREEMENT (this “Agreement”) is made as of July 30, 2021 (the “Effective Date”), by and between Marinus Pharmaceuticals, Inc. a corporation incorporated and existing under the laws of the State of Delaware (“Marinus”), having a principal place of business at 5 Radnor Corporate Center, 100 Matsonford Rd, Suite 500, Radnor, PA 19087, and Orion Corporation, a corporation incorporated and existing under the laws of Finland, business identity code 1999212-6 (“Licensee”), having a principal place of business at Orionintie 1, 02200 Espoo, Finland. Marinus and Licensee are referred to in this Agreement individually as a “Party” and collectively as the “Parties”.

BACKGROUND

A.Marinus is a pharmaceutical company focused on developing and commercializing innovative therapeutics to treat patients suffering from rare seizure disorders and controls certain patents and know-how relating to such therapeutics;

B.Licensee is a pharmaceutical company with expertise in the commercialization of pharmaceutical products in the Territory (as defined below); and

C.Licensee wishes to obtain from Marinus an exclusive license to commercialize Licensed Products in the Field in the Territory (each, as defined below), and Marinus is willing to grant such an exclusive license to Licensee, all in accordance with the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein below, and other good and valuable consideration, the sufficiency of which is hereby acknowledged by both Parties, the Parties agree as follows:

ARTICLE 1

DEFINITIONS & INTERPRETATION

Whenever used in this Agreement with an initial capital letter, the terms defined in this 0 and elsewhere in this Agreement, whether used in the singular or plural, shall have the meanings specified.

1.1“Acquiring Entity” means, collectively, the Third Party referenced in the definition of Change of Control and such Third Party’s Affiliates, other than (a) the applicable Party in the definition of Change of Control, and (b) such Party’s Affiliates, determined immediately prior to the closing of such Change of Control.

1.2“Active Ingredient” means a clinically active material that provides pharmacological activity in a pharmaceutical product.

1.3“Affiliate” means, with respect to a Person, any other Person which, directly or indirectly through one (1) or more intermediaries, controls, is controlled by or is under common control with such Person. For purposes of this definition, the term “control” (including, with

correlative meanings, the terms “controlled by” and “under common control with”) as used with respect to a Person means (a) direct or indirect ownership of more than fifty percent (50%) of the voting securities or other voting interest of any Person, or (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract, as a general partner,  or otherwise. The Parties acknowledge that in the case of certain entities organized under the laws of certain countries outside the United States, the maximum percentage ownership permitted by law for a foreign investor may be less than fifty percent (50%), and that in such case such lower percentage will be substituted in the preceding sentence, provided that such foreign investor has the power to direct the management and policies of such entity.

1.4 “Annual Net Sales” means, for a given Licensed Product, all Net Sales of such Licensed Product in the Territory during each Calendar Year by Licensee, its Affiliates and sublicensees.

1.5 “Applicable Laws” means collectively all laws, regulations, ordinances, decrees, judicial and administrative orders (and any license, franchise, permit or similar right granted under any of the foregoing), including Data Protection Laws and Anti-Corruption Laws, and any policies and other requirements of any applicable Governmental Authority that govern or otherwise apply to a Party’s activities in connection with this Agreement.

1.6“Biodefense Purposes” means the purchase of any Licensed Product by a Governmental Authority (or a non-Governmental Authority that is acting at the direction of or on behalf of a Governmental Authority) for use solely in the treatment of organophosphate intoxication, as, and to the extent, permitted by Applicable Laws.

1.7“Business Day” means a day other than a Saturday, Sunday or any other day on which banking institutions in Philadelphia, Pennsylvania or Helsinki, Finland are authorized or required by Applicable Laws to remain closed.

1.8“Calendar Quarter” means the period beginning on the Effective Date and ending on the last day of the calendar quarter in which the Effective Date falls, and thereafter each successive period of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31; provided that, the final Calendar Quarter shall end on the last day of the Term.

1.9“Calendar Year” means the period beginning on the Effective Date and ending on December 31 of the calendar year in which the Effective Date falls, and thereafter each successive period of twelve (12) months commencing on January 1 and ending on December 31; provided that, the final Calendar Year shall end on the last day of the Term.

1.10“CDD” means CDKL5 deficiency disorder.

1.11“CDKL5” means cyclin-dependent kinase-like 5.

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

“[***]”, HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE

THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

1.12“Change of Control” means, with respect to a Party: (a) a merger or consolidation of such Party with a Third Party that results in the voting securities of such Party outstanding immediately prior thereto, or any securities into which such voting securities have been converted or exchanged, ceasing to represent at least fifty percent (50%) of the combined voting power of the surviving entity or the parent of the surviving entity immediately after such merger or consolidation; (b) a transaction or series of related transactions in which a Third Party, together with its Affiliates, becomes the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of such Party or the parent of such Party; or (c) the sale or other transfer to a Third Party of all or substantially all of such Party’s business.

1.13“Clinical Data” means any and all data (together with all clinical trial reports and the results of analyses thereof) derived or generated in any Clinical Trial conducted by or on behalf of a Party or any of its Affiliates.

1.14“Clinical Trial” means any human clinical trial of a Licensed Product.

1.15“Commercialization” or “Commercialize” means any and all activities directed to marketing, detailing, promoting, advertising and obtaining pricing and reimbursement approvals of a product (if applicable) (including using, importing, pricing, selling and offering for sale such product), and will include post-launch marketing, promoting, advertising detailing, marketing, research, distributing, order processing, handling returns and recalls, booking sales, customer service, administering and commercially selling such product, importing, exporting or transporting such product for commercial sale, and regulatory compliance with respect to the foregoing. For clarity, “Commercialization” does not include the conduct of any Clinical Trials or Manufacturing. When used as a verb, “Commercialize” means to engage in Commercialization.

1.16“Commercially Reasonable Efforts” means, with respect to a Party’s obligations or activities under this Agreement, the carrying out of obligations or activities using efforts not less than the efforts a company similar to such Party would devote to a product having similar market potential, profit potential or strategic value as the Licensed Products, based on conditions then prevailing.

1.17“Competing Indication” means TSC, RSE, and CDD and/or any other Indication for which Licensee has Commercialized the Licensed Product in the Field in the Territory pursuant to the terms of this Agreement.

1.18“Competing Product” means any product other than a Licensed Product that is being Developed, Manufactured or Commercialized for the treatment or prevention of a Competing Indication. For the avoidance of doubt, generic products (products that are not protected by valid Patent Rights or Regulatory Exclusivity) other than branded generic products (carrying a proprietary brand name/logo other than the company name and/or logo) shall not be considered Competing Products even if such products would otherwise fall within the definition of the Competing Product in accordance with this Section 1.18.

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

“[***]”, HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE

THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

1.19“Confidential Information” of a Party (a “Disclosing Party”) means, subject to Section 9.2, all technical, scientific, trade, research, business, financial, marketing, product, supplier, intellectual property, and other non-public or proprietary data or information that is disclosed by a Disclosing Party or its Affiliates to the other Party (a “Receiving Party”) or any of its Affiliates pursuant to this Agreement (or any such information disclosed prior to the Effective Date pursuant to the Confidentiality Agreement), whether made available orally, in writing, or in electronic form. For purposes of clarity, unless excluded pursuant to Section 9.2, (a) all Clinical Data and results generated in any Clinical Trial conducted by or on behalf of Marinus pursuant to the Development Plan shall be deemed Confidential Information of Marinus; (b) all Manufacturing information shall be deemed Confidential Information of the Disclosing Party; (c) all Inventions shall be deemed the Confidential Information of the owning Party as set forth in Section 12.1(a); (d) any scientific, technical or financial information, including (except as set forth in (a) above) Clinical Data and information disclosed through an audit report, Commercialization report, Development report or other report, shall constitute Confidential Information of the Disclosing Party; (e) any combination of Confidential Information shall not be considered in the public domain or in the possession of the Receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the Receiving Party unless the combination and its principles are in the public domain or in the possession of the Receiving Party; and (f) the existence and terms of this Agreement shall be deemed Confidential Information of both of the Parties.

1.20“Contemplated Clinical Trials” means the Clinical Trials set forth on Schedule 1.20.

1.21“Control” or “Controlled” means, with respect to any Patent Rights, Know-How, other intellectual property right, compounds, molecules or Confidential Information, the ability of a Party (whether through ownership, license or sublicense (other than a license, sublicense or other right granted pursuant to this Agreement)) to grant to the other Party the licenses, sublicenses or rights as provided herein, or to otherwise disclose such intellectual property, compounds, molecules or Confidential Information to the other Party, without violating the terms of any then-existing agreement with any Third Party at the time such Party would be required hereunder to grant the other Party such license, sublicenses or rights as provided herein or to otherwise disclose such intellectual property, compounds, molecules or Confidential Information to the other Party. Notwithstanding the foregoing, a Party will be deemed not to Control any Patent Rights, Know-How, other intellectual property right, Confidential Information, compound, or molecule that is owned or in-licensed by an Acquiring Entity.

1.22“Cover” means, with respect to a Licensed Product and any Patent Rights in a particular country, that the Manufacture, Development or Commercialization of such Licensed Product, as applicable, in such country would, but for the licenses granted herein, infringe a Valid Claim of such Patent Rights. Cognates of the word “Cover” shall have correlative meanings.

1.23“Data Protection Laws” means all applicable laws, rules and regulations, including the United States Health Insurance Portability and Accountability Act of 1996 and its

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

“[***]”, HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE

THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

implementing regulations (“HIPAA”), European Data Protection Laws, including the General Data Protection Regulation of 2016, and any other supranational or national legislation relating to privacy or data protection, direct marketing or the interception or communication of electronic messages, in each case as amended, consolidated, re-enacted or replaced from time to time.

1.24“Develop” or “Development” means research, preclinical and clinical drug development activities with respect to a compound or product, including test method development and stability testing, toxicology, formulation, process development (including Chemistry Manufacturing and Controls (“CMC”)), qualification and validation, quality assurance/quality control, Clinical Trials (including Clinical Trials and other studies commenced after Regulatory Approval whether or not necessary, recommended or required to obtain Regulatory Approval), statistical analysis and report writing, the preparation and submission of applications for Regulatory Approvals, regulatory affairs with respect to the foregoing and all other activities related to obtaining and maintaining  a Regulatory Approval (including labeling). When used as a verb, “Develop” means to engage in Development. For clarity, “Develop” or “Development” does not include Manufacturing.

1.25“Development Costs” means, with respect to a Clinical Trial or other Development activities for Licensed Products, the costs and expenses incurred by either Party or any of its respective Affiliates in connection with such Clinical Trial or Development activities, calculated as the sum of: (a) FTE Development Costs; and (b) Out-of-Pocket Development Costs.

1.26“EEA” means collectively (a) all countries in Europe that are covered by the centralized marketing authorization procedure, comprised of all member states of the European Union on the Effective Date, whether or not such countries remain member states of the European Union or remain covered by the centralized marketing authorization procedure, and (b) Iceland, Lichtenstein and Norway.

1.27“Encumbrance” means any mortgage, pledge, hypothecation, license, adverse claim, security interest, encumbrance, title defect, title retention agreement, Third Party right, option, lien, charge, or installment purchase agreement, right of first refusal, right of preemption or right to acquire, or other restriction or limitation on the right to sell or otherwise dispose of the subject property, but excluding any restriction, right or limitation imposed by this Agreement.

1.28“European Data Protection Laws” means the General Data Protection Regulation 2016/679 (the “GDPR”), the e-Privacy Directive 2002/58/EC, the e-Privacy Regulation, once adopted and applicable, and any relevant law, statute, declaration, decree, directive, legislative enactment, order, ordinance, regulation, rule or other binding instrument which implements, replaces, adds to, amends, extends, reconstitutes or consolidates such laws from time to time, including the Data Protection Act 2018 of the United Kingdom and the UK General Data Protection Regulation, in each case as amended, consolidated, re-enacted or replaced from time to time.

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

“[***]”, HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE

THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

1.29“Excluded Field” means and includes (a) the treatment of any unpleasant sensory or emotional experience associated with actual or potential tissue damage, or described in terms of such damage, including discomfort, either acute or chronic, caused by a primary lesion or dysfunction in the peripheral or central nervous system (e.g., neuropathic pain, post-herpetic neuralgia, trigeminal neuralgia), phantom pain, back pain, surgical pain, cancer pain, and pain associated with inflammation or damage of any tissues (e.g., muscle, bone, organs, tendons, nerves, and skin) by disease, injury, infection, surgery, or at birth. For the avoidance of doubt, Licensee shall not be permitted hereunder to pursue or obtain any Regulatory Approval or labeling for a Licensed Product as an analgesic or anesthetic agent or for the treatment of pain and/or any other Indication other than those for which Licensee has rights to Commercialize the Licensed Product pursuant to the terms of this Agreement.

1.30“Field” means the diagnosis, prevention and treatment of all diseases, disorders or conditions in humans, other than those diseases, disorders or conditions which are in the Excluded Field. Examples of diseases, disorders or conditions that are within the Field include psychiatric and stress related disorders (e.g., generalized anxiety, obsessive-compulsive disorders, panic disorders, sleep disorders, depression psychoses, schizophrenia, premenstrual dysphoric disorder, posttraumatic stress disorder, and social isolation), addiction (i.e., alcoholism, benzodiazepine abuse, amphetamine abuse, and cocaine abuse), seizure disorders, disorders involving neurodegeneration and neuronal apoptosis where neuronal protection or neurogenesis provides a functional benefit (e.g., Alzheimer’s disease, pre and post-natal treatment for autism, attention deficit disorder, fragile X syndrome), lysosomal storage disorders, and atherosclerosis.

1.31“First Commercial Sale” means, with respect to any Licensed Product in any country or jurisdiction in the Territory, the first sale of such Licensed Product by Licensee, its Affiliates, or sublicensees to a Third Party for distribution, use or consumption in such country or jurisdiction.

1.32“FTE” means a full-time employee or, in the case of less than a full-time employee, a full-time equivalent employee based on one thousand seven hundred and fifty (1750) person-hours per year. For clarity, indirect personnel (including support functions such as managerial, financial, legal, or business development) shall not constitute FTEs.

1.33“FTE Development Costs” means, with respect to a Clinical Trial or other Development activity, the product of: (a) the number of FTEs utilized by either Party or any of their respective Affiliates in connection with such Clinical Trial or Development activity; and (b) the FTE Rate.

1.34“FTE Rate” means a [***] [***] [***] ([***] [***]) per annum during the first Calendar Year of the Term, such amount to be changed as of January 1 of the immediately-following Calendar Year and annually thereafter to reflect the year-to-year percentage increase or decrease (if any) in the US  Consumer Price Index for Marinus and the European Harmonized Consumer Price Index for Licensee. For clarity, the FTE Rate includes employee salaries, benefits,

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

“[***]”, HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE

THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

vacation, sick days, holidays and travel, and facilities, equipment, and ordinary laboratory consumables.

1.35“Future Clinical Trial” means any Clinical Trial which is intended to generate Clinical Data for any Licensed Product (including a reformulation of a Licensed Product) or Indication in the Territory, other than the Contemplated Clinical Trials.

1.36“Ganaxolone” means, as between the Parties, the compound referred to as 3-alpha-hydroxy-3-beta-methyl 5-alpha-pregnan-20-one, including any analogues or derivatives thereof owned or Controlled by Marinus at any time during the Term, including its salts, or derivatives but not prodrugs of Ganaxolone or its salts, congeners or other derivatives which involve forming or breaking a covalent bond with or of such compound.

1.37“GCP” means all applicable Good Clinic al Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of Clinical Trials, including, as applicable (a) as set forth in the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use Harmonized Tripartite Guideline for Good Clinical Practice (CPMP/ICH/135/95) (the “ICH Guidelines”) and any other guidelines for good clinical practice for trials on medicinal products in the Territory, (b) the Declaration of Helsinki (2004) as last amended at the 52nd World Medical Association in October 2000 and any further amendments or clarifications thereto, (c) U.S. Code of Federal Regulations Title 21, Parts 50 (Protection of Human Subjects), 54 (Financial Disclosures by Clinical Investigators), 56 (Institutional Review Boards) and 312 (Investigational New Drug Application), as may be amended from time to time, (d) the Clinical Trials Directive 2001/20, the Commission Directive on good clinical practice 2005/28, and (e) the equivalent Applicable Laws in any country, each as may be amended and applicable from time to time and in each case, that provide for, among other things, assurance that the clinical data and reported results are credible and accurate and protect the rights, integrity, and confidentiality of trial subjects.

1.38“Generic Version” of a Licensed Product shall mean any generic medicinal  product (other than a product which was initially sold as a Licensed Product hereunder) that is sold by a Third Party. that contains an active ingredient that is the same as, or bioequivalent to, an active ingredient in the application for Regulatory Approval for such Licensed Product, and which  product is submitted for Regulatory Approval through an application for a Regulatory Approval that references any Regulatory Approval for the Licensed Product. For clarity, Generic Version will not include an authorized generic of a Licensed Product.  For clarity, a “generic medicinal product” is a medicinal product which has the same qualitative and quantitative composition in active substances and the same pharmaceutical form as the Licensed Product as a reference medicinal product, and whose bioequivalence with the reference Licensed Product has been demonstrated by appropriate bioavailability studies (Article 10(2) of Directive 2001/83/EC) and has received marketing authorisation on the basis of Article 10(1) of Directive 2001/83/EC without being required to submit the results of pre-clinical tests and clinical trials, but demonstrating that the product meets the definition of a generic medicinal products, i.e. that it is bioequivalent and may refer to the data in the Licensed Product’s marketing authorisation dossier.

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

“[***]”, HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE

THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

1.39“GLP” means all applicable Good Laboratory Practice standards, including, as applicable, as set forth in the then-current good laboratory practice standards promulgated or endorsed by the U.S. Food and Drug Administration, including as defined in 21 C.F.R. Part 58, Commission Directive 2005/28 and the equivalent Applicable Laws in any country, each as may be amended and applicable from time to time.

1.40“GMP” means applicable current Good Manufacturing Practices, including, as applicable, (a) standards set forth in the Federal Food, Drug and Cosmetic act, the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 4, 210, 211, 601, 610 and 820, (b) Commission Directive 2003/94/EC and Eudralex 4, (c) the principles detailed in the International Conference on Harmonization’s Q7 guidelines, and (d) the Applicable Laws in any relevant country  corresponding to (a) through (d) above, each as may be amended and applicable from time to time.

1.41“Governmental Authority” means any federal, state, national, state, provincial or local government, or political subdivision thereof, or any multinational organization or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, or any court or tribunal (or any department, bureau or division thereof, or any governmental arbitrator or arbitral body).

1.42“Indication” means a separate and distinct disease or medical condition in humans (a) which a compound or product that is in clinical Development is intended to treat in such clinical Development, or (b) for which a compound or product has received a separate and distinct Regulatory Approval with an approved label claim to treat such disease or condition, as applicable.

1.43“Invention” means any process, method, composition of matter, discovery, or other invention that is conceived and first reduced to practice, constructively or actually, by or on behalf of either Party or jointly by the Parties in connection with the Parties’ activities under this Agreement, including the Development, Manufacture, or Commercialization of Licensed Products under this Agreement.

1.44“Know-How” means all technical information, know-how, data, Inventions, discoveries, trade secrets, specifications, instructions, processes, formulae, methods, protocols, expertise and other technology applicable to formulations, compositions or products or to their manufacture, development, registration, use or marketing or to methods of assaying or testing them, and all biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical and analytical, safety, quality control, manufacturing, preclinical and clinical data relevant to any of the foregoing. For clarity, Know-How excludes Patent Rights and physical substances.

1.45“Licensed IP” means, collectively, Licensed Know-How and Licensed Patent Rights.

1.46“Licensed Know-How” means all Know-How Controlled by Marinus or any of its Affiliates as of the Effective Date or during the Term that is necessary or reasonably useful for

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Licensee to Develop and Commercialize any Licensed Products in the Field in the Territory in accordance with this Agreement.

1.47“Licensed Patent Rights” means all Patent Rights Controlled by Marinus or its Affiliates as of the Effective Date or during the Term that are necessary or reasonably useful for Licensee to Develop and Commercialize any Licensed Products in the Field in the Territory in accordance with this Agreement. Licensed Patent Rights as of the Effective Date are set forth on Exhibit A, attached to this Agreement.

1.48“Licensed Product” means a biopharmaceutical product which incorporates Ganaxolone as sole Active Ingredient or in combination with one or more other Active Ingredients (in the same formulation) for CDD, RSE, TSE and all Indications for which Licensee is granted Commerialization rights pursuant to Article 4 of this Agreement.

1.49“Licensee IP” means all Patent Rights and Know-How that (a) are Controlled by Licensee or its Affiliates as of the Effective Date or (b) thereafter come into Licensee’s or its Affiliates’ Control independent of this Agreement, and in each case ((a) and (b)), that are used or applied by or on behalf of Licensee or its Affiliates or sublicensees in connection with the Licensed Product under this Agreement.

1.50“Licensee Patent Rights” means all Patent Rights in the Licensee IP.

1.51“Manufacture” or “Manufacturing” means all activities related to themanufacturing of a compound or product or, in either case, any raw material, component or ingredient thereof, including test method development and stability testing, formulation, process development and validation, manufacturing scale-up whether before or after Regulatory Approval, manufacturing any product in bulk or finished form for Development or Commercialization (as applicable), including filling and finishing, packaging, labeling, shipping and holding, in-process and finished product testing, release of a compound or product or, in either case, any component or ingredient thereof, quality assurance and quality control activities related to manufacturing and release of a compound or product, and regulatory activities related to any of the foregoing.

1.52“Net Sales” means, with respect to a Licensed Product, the total invoiced amount billed for sales of a Licensed Product by Licensee, its Affiliates or its sublicensees, less the following items to the extent they are paid or allowed, whether or not such costs are invoiced separately to the customer:

(a)quantity, trade, prompt payment and/or cash discounts actually taken;

(b)amounts repaid or credited and allowances given by reason of chargebacks or billing, errors and rebates (including managed care, hospice and government-mandated rebates), actually allowed or paid;

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(c)amounts refunded or credited for Licensed Products that were rejected, spoiled, damaged, outdated, recalled, or returned;

(d)freight, shipment, and insurance costs incurred by Licensee, its Affiliates, or its sublicensees in transporting Licensed Product(s) from Licensee to customers and which are billed to customers separately from the product (whether in the same or a separate invoice);

(e)taxes, tariffs, customs duties and surcharges and other governmental charges incurred in connection with the sale, exportation or importation of Licensed Product(s); and

Net Sales shall not include (i) the sale or transfer of a Licensed Product among Licensee, its Affiliates or its sublicensees for later sale to an independent Third Party, provided, however, that Net Sales shall include the subsequent sale to an independent Third Party; (ii) the transfer by Licensee, its Affiliates or its sublicensees without charge of reasonable quantities of Licensed Product as samples or as donations to non-profit institutions or government agencies for a non-commercial purpose, or (iii) the use of a Licensed Product by Licensee, its Affiliates, or its sublicensees for quality assurance, research and development purposes.

If Licensee, its Affiliates or its sublicensees commercially use or dispose of any Licensed Product by itself other than in a bona fide sale to a bona fide customer at an arms-length price, the Net Sales hereunder shall be the price which would be then payable in an arm’s length transaction.

1.53“New Indication” means an Indication in the Field other than TSC, CDD or RSE.

1.54“Out-of-Pocket Development Costs” means, with respect to a Clinical Trial or other Development activity, the duly itemized costs and expenses paid by a Party or any of its Affiliates to Third Parties in connection with such Clinical Trial or Development activity, other than any items intended to be covered by the FTE Rate and for, clarity, not including capital expenditures or travel expenses incurred by a Party.

1.55“Patent Prosecution” means activities directed to (a) preparing, filing and prosecuting applications (of all types) for any Patent Rights, (b) managing any interference, opposition, re-issue, reexamination, supplemental examination, invalidation proceedings (including inter partes or post-grant review proceedings), revocation, nullification, or cancellation proceeding relating to the foregoing, (c) deciding whether to abandon, extend or maintain Patent Rights, (d) listing in regulatory publications (as applicable), (e) settling any interference, derivation proceeding, opposition, reexamination, invalidation, revocation, nullification or cancellation proceeding, but excluding the defense of challenges to such patent or patent application as a counterclaim in an infringement proceeding with respect to the particular patent or patent application, and any appeals therefrom, and (f) any other administrative proceedings involving Patent Rights before a patent granting authority of competent jurisdiction, such as the United States Patent and Trademark Office, European Patent Office or national patent office. For purposes of clarity, “Patent Prosecution” will not include any other enforcement actions taken with respect to a patent or patent application, such as e.g. enforcement or defense actions before a court of competent jurisdiction.

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1.56“Patent Rights” means the rights and interests in and to issued patents and pending patent applications (which, for purposes of this Agreement, include certificates of invention, applications for certificates of invention and priority rights) in any country, including all provisional applications, substitutions, continuations, continuations-in-part, continued prosecution applications (including requests for continued examination), divisional applications and renewals, and all letters patent or certificates of invention granted thereon, and all reissues, reexaminations, extensions (including pediatric exclusivity patent extensions), term restorations, renewals, substitutions, confirmations, registrations, revalidations, revisions and additions of or to any of the foregoing, in each case, in any country.

1.57“Per Unit Supply Price” means, on a Licensed Product-by-Licensed Product basis, the supply price for each unit of such Licensed Product set forth on Section 6.3. With respect to any new Licensed Product, the Parties will negotiate and agree in good faith on the Per Unit Supply Price for such Licensed Product, which shall be based on the same methodology used to calculate the Per Unit Supply Price for the initial Licensed Products, and amend Section 6.3 to reflect such amount. For clarity, the Per Unit Supply Price for a given Licensed Product will be the same irrespective of the country within the Territory in which such unit is sold by Licensee, its Affiliates or sublicensees.

1.58“Person” means any individual, corporation, company, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof.

1.59“Personal Data” shall be construed in accordance with the GDPR to the extent applicable.

1.60“Post-Regulatory Approval Studies” means a Clinical Trial (other than a Phase I Clinical Trial, Phase II Clinical Trial or Phase III Clinical Trial) having solely pharmacoeconomic endpoints which is conducted on the Licensed Product after Regulatory Approval for the Licensed Product has been obtained from an appropriate Regulatory Authority, such as e.g. investigator initiated studies. For clarity, pediatric or other studies required by the competent Regulatory Authority in the Territory shall be regarded as Contemplated Clinical Trials and not as Post-Regulatory Approval Studies.

1.61“Regulatory Approval” means, with respect to a given country, approval from the relevant Regulatory Authority (which approval may be in the form of an amendment or supplement to an existing approval) necessary to initiate marketing and selling of a product (including a Licensed Product) in such country, excluding pricing and reimbursement approval. For clarity, any such approval to initiate marketing and selling of a previously-approved product for a New Indication shall constitute a Regulatory Approval.

1.62“Regulatory Authority” means any applicable Governmental Authority with authority over the distribution, importation, exportation, manufacture, production, use, storage, transport, research, non-clinical testing, clinical testing or sale of a pharmaceutical product

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(including any Licensed Product), which may include the authority to grant the required pricing and reimbursement approvals for such sale.

1.63“Regulatory Exclusivity” means any exclusive marketing rights or data exclusivity rights conferred by any applicable Regulatory Authority with respect to a Licensed Product in a given country, other than an issued and unexpired Patent Right, including any new chemical entity exclusivity, reference product exclusivity for biological products, pediatric exclusivity or orphan drug exclusivity, which rights grant an exclusive data protection or commercialization period during which Licensee, its Affiliates or sublicensees have the exclusive right to market and sell such Licensed Product in such country.

1.64“Regulatory Submissions” means, with respect to a Licensed Product, (a) any filings, applications or submissions with any Regulatory Authority, excluding authorizations, approvals or clearances arising from the foregoing, and excluding filings, applications or submissions for pricing and reimbursement approvals, (b) all correspondence or communications with or from the relevant Regulatory Authority, and (c) minutes of any material meetings, telephone conferences or discussions with the relevant Regulatory Authority.

1.65“RSE” means refractory status epilepticus.

1.66“Territory” means (a) the EEA, United Kingdom and Switzerland (including their overseas territories).

1.67“Third Party” means any Person other than a Party or an Affiliate of a Party.

1.68“TSC” means tuberous sclerosis complex.

1.69“United States” means the United States of America and its territories and possessions.

1.70“USD” means United States dollars.

1.71“Valid Claim” means a claim of (a) an issued and unexpired patent or (b) a pending patent application which has not lapsed or been revoked, abandoned or held unenforceable or invalid by a final decision of a court or governmental or supra-governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been disclaimed, denied or admitted to being invalid or unenforceable through reissue, reexamination or disclaimer or otherwise; provided that, if a pending patent application has been pending for at least ten (10) years from the date of filing of the initial priority application, then such corresponding claim in such pending patent application will not be deemed to be a Valid Claim unless and until it subsequently issues.

1.72Additional Definitions. The following table identifies the location of additional definitions set forth in various Sections of this Agreement:

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Definition	Section	Definition	Section
Accounting Firm	8.9(b)	Improvement Inventions	12.1(a)
Agreement	Preamble	Indemnified Party	11.3(a)
Agreement Payments	8.10(a)	Indemnifying Party	11.3(a)
Alliance Manager	3.1
Annual Net Sales	1.4	Initial Term	13.1
Anti-Corruption Laws	10.7(a)(i)	Joint Inventions	12.1(a)
Applicable Cure Period	13.2(a)(i)	Joint Patent Rights	12.1(c)
		JSC	3.2(a)
Automatic Renewal Term	13.1	License	2.1
Breach Notification	Error! Reference source not found.	Licensee	Preamble
		Licensee Indemnitee(s)	11.2
		Licensee Inventions	12.1(a)
		Losses	11.1
Claims	11.1	Marinus	Preamble
Clinical Trial Notice	0	Marinus Indemnitee(s)	11.1
Commercialization Milestone Event	8.3	Marinus Inventions	12.1(a)
Commercialization Milestone Payment	8.3	Notice of Dispute	14.5(a)
Commercialization Plan	7.2(a)
Confidentiality Agreement	14.13	Party/Parties	Preamble
Data Breach	10.4(e)
Development Plan	4.2(a)	Pharmacovigilance Agreement	5.3
Development Milestone Event	8.2	Product Infringement	12.3(a)
Development Milestone Payment	8.2	Product Marks	12.7(a)
Disclosing Party	1.19	Public Official	10.7(d)
Dispute	14.5(a)	Receiving Party	1.19
Effective Date	Preamble	Royalty Term	8.4(b)
Executive Officers	3.4	Rules	14.5(a)
		SEC	9.7(c)
Finance Officers	4.5(c)	Securities Regulators	9.7(c)
Forecast	7.2(b)	Sub-Forecast Year	7.2(b)
GDPR	1.27	Supply Agreement	6.2
HIPAA	1.23	Taxes	8.10(a)
ICC	14.5(a)	Term	13.1
ICH Guidelines	1.36
		Working Group	3.2(c)

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1.73Interpretation. The captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. Unless specified to the contrary, references to Articles, Sections or Exhibits mean the particular Articles, Sections or Exhibits to this Agreement and references to this Agreement include all Exhibits hereto. In the event of any conflict between the main body of this Agreement and any Exhibit hereto, the main body of this Agreement shall prevail. Unless context otherwise clearly requires, whenever used in this Agreement: (a) the words “include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation;” (b) the word “day” or “year” means a calendar day or year unless otherwise specified; (c) the word “notice” shall mean notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement; (d) the words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement as a whole and not merely to the particular provision in which such words appear; (e) the words “shall” and “will” have interchangeable meanings for purposes of this Agreement; (f) the word “or” shall have the inclusive meaning commonly associated with “and/or”; (g) provisions that require that a Party, the Parties or a committee hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (h) words of any gender include the other gender; (i) words using the singular or plural number also include the plural or singular number, respectively; (j) references to any specific law, rule or regulation, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement law, rule or regulation thereof; and (k) neither Party nor its Affiliates shall be deemed to be acting “under authority of” the other Party.

ARTICLE 2

LICENSES

2.1License Grant to Licensee;

(a)License Grant to Licensee. Subject to the terms and conditions of this Agreement, Marinus hereby grants to Licensee an exclusive (subject to Marinus’ retained rights in Section 2.3 and Section 2.6), royalty-bearing license, with the right to grant sublicenses (subject to Section 2.2), under the Licensed IP, to Develop (but only to the extent of conducting Post Regulatory Approval Studies and/or participating in Future Clinical Trials as may be agreed by the Parties, all pursuant to the terms of this Agreement) and Commercialize Licensed Products in the Field in the Territory (the “License”). For clarity, and except as otherwise set forth in the Supply Agreement and/or this Agreement, the License does not include and Licensee is not granted a license to Manufacture any Licensed Product.  For clarity this License does not extend to the Excluded Field and does not include the license to Licensee of any Third Party Patent Rights or Know-How.

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2.2Right to Sublicense.

(a)Subject to the terms and conditions of this Agreement, Licensee shall not have the right to grant sublicenses under the License to any Third Party other than with the prior written approval by Marinus, such approval not to be unreasonably withheld or delayed, and further provided that any sublicenses shall only be through a single tier (so that the sublicense agreement shall specifically provide that the sublicensee has no right to sublicense other parties). Licensee shall have no rights to sublicense to any Third Party any rights to commercialize License Products in Germany, France, Italy, Spain or the United Kingdom.

(b)Each permitted sublicense shall be subject to a written agreement that is consistent with the terms and conditions of this Agreement, and Licensee shall ensure that all of its sublicensees comply with  terms and conditions that are consistent with the terms and conditions of this Agreement. Licensee will remain directly responsible for all its obligations under this Agreement, regardless of whether any such obligation is delegated, subcontracted or sublicensed to any of its Affiliates or sublicensees. Licensee shall provide, or cause to be provided, to Marinus a true and complete copy of each sublicense agreement, which may be redacted to exclude any financial terms (except that Licensee shall provide such terms to the extent reasonably necessary in order to obtain any necessary approvals pursuant to such agreement), within ten (10) days after it becomes effective, and if such agreement is not in English, a translation into English thereof within thirty (30) days after the execution of such sublicense agreement.

2.3Marinus Retained Rights. Notwithstanding the exclusive nature of the License, Marinus expressly retains the rights to use and practice the Licensed IP in the Field in the Territory (a) in order to (i) perform its obligations under this Agreement, (ii) conduct Development, Manufacturing, and regulatory activities, and (iii) conduct any other activities to support Development, Manufacturing, regulatory activities or Commercialization outside of the Territory or outside of the Field, and (b) in accordance with Section 2.6. Should Marinus at any time own or Control rights to any Indication(s) currently retained by a Third Party, Licensee’s rights under this Agreement shall automatically extend to cover such Indication(s). For clarity, Marinus retains the exclusive right to practice, license and otherwise exploit the Licensed IP outside the scope of the License.

2.4License Grants to Marinus. Subject to the terms and conditions of this Agreement, Licensee hereby grants to Marinus:

(a)a non-exclusive, perpetual, irrevocable, fully-paid, royalty-free and sublicensable (through multiple tiers) license, under the Licensee Inventions to Develop, Manufacture and Commercialize Licensed Products outside the Territory and outside of the Field; and

(b)a non-exclusive, fully-paid, royalty-free and sublicensable (through multiple tiers) license, under the Licensee IP to Develop, Manufacture and Commercialize Licensed Products to the extent necessary for Marinus to perform its obligations under this

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Agreement, including to Develop and Manufacture Licensed Products for use in the Territory and the Field.

2.5No Implied Licenses; Negative Covenants. Except as expressly set forth herein, neither Party shall acquire any license or other intellectual property interest, by implication, estoppel or otherwise, under any trademarks, Patent Rights, Know-How or other intellectual property rights of the other Party. Licensee shall not, and shall not permit any of its Affiliates or sublicensees to, practice, license or otherwise exploit any Licensed IP outside the scope of the License.

2.6Biodefense Sales. Notwithstanding any provision contained herein to the contrary, the Parties agree and acknowledge that Marinus has the sole and exclusive right to Develop, Manufacture and Commercialize Licensed Products in or outside of the Territory for Biodefense Purposes.

2.7 Exclusivity. With respect to the Territory, during the period which is the shorter of (i) five (5) years from the First Commercial Sale of a Licensed Product or (ii) the period during which the Parties have agreed to jointly exploit the results of the Development of Licensed Products pursuant to this Agreement, Licensee and its Affiliates and sublicensees shall not market, import, offer for sale, sell or distribute any Competing Product in the Territory. Following expiry of such period, and as long as the Parties still jointly exploit the results of the Development of Licensed Products pursuant to this Agreement, Licensee shall have the right to market, import, offer for sale, sell or distribute, directly or indirectly, any Competing Product in one or more countries of the Territory, provided, however, that Licensee shall notify Marinus in writing of its intention to such effect (such notice identifying the affected countries and scheduled date of launch of a Competing Product) no less than [***][***] [***] prior to the planned launch of a Competing Product. Following the receipt of such notice, Marinus shall have the right to terminate this Agreement upon thirty (30) days’ written notice.

Notwithstanding the foregoing, if Licensee acquires any entity or all or substantially all of the assets of an entity and such entity markets, distributes, sells or offers for sale a Competing Product in any country of the Territory, or such assets include a Competing Product in any country of the Territory or if Licensee is acquired by such entity, Licensee or its successor may maintain compliance with this Article 2.7 by sublicensing such Competing Product to a Third Party so long as Licensee or its successor maintains no active role in the marketing, selling, offering for sale, promotion or distribution of such Competing Product in any country of the Territory.

ARTICLE 3

GOVERNANCE

3.1Alliance Managers. Each Party shall appoint an individual, who is an employee of such Party, to act as its alliance manager under this Agreement as soon as practicable after the Effective Date (the “Alliance Manager”). The Alliance Managers shall: (a) serve as the primary points of contact between the Parties for the purpose of providing the other Party with information on the progress of a Party’s activities under this Agreement; (b) be responsible for facilitating the

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flow of information and otherwise promoting communication, coordination and collaboration between the Parties; (c) facilitate the prompt resolution of any disputes; and (d) attend JSC meetings. An Alliance Manager may also bring any matter to the attention of the JSC if such Alliance Manager reasonably believes that such matter warrants such attention. Each Party may replace its Alliance Manager at any time upon written notice to the other Party.

3.2Joint Steering Committee.

(a)Formation. No later than thirty (30) days following the Effective Date, the Parties shall establish a joint steering committee (the “JSC”) to monitor and coordinate the Development and Commercialization of Licensed Products in the Field in the Territory. The JSC will be composed of two (2) representatives from each Party. Each representative to the JSC shall be an employee of the applicable Party, unless otherwise agreed by both Parties.

(b)Role. The JSC shall (i) provide a forum for the discussion of the Parties’ activities under this Agreement; (ii) review and discuss the overall strategy for the Development of Licensed Products for use in the Territory; (iii) review and discuss the strategy and progress of obtaining Regulatory Approvals for Licensed Products in the Territory; (iv) review and discuss commercialization and market access planning and strategy, branding, marketing, distribution and promotional activities pursuant to Section 7.2; (v) review Licensee’s plans and sequence for launch (or non-launch) of the Licensed Product in the countries in the Territory; (vi) review and discuss Manufacturing of Licensed Products; (vii) review and approve all amendments to the Development Plan (including with respect to any on-going or new Clinical Trial and the budgets therefor, provided that the JSC does not have the authority to increase either Party’s financial obligations under this Agreement); (viii) establish and oversee Working Groups as necessary or advisable to further the purposes of this Agreement; (ix) resolve any unresolved disputes arising in the Working Groups;  (x) perform such other functions as expressly set forth in this Agreement or allocated to the JSC by the Parties’ written agreement; (xi) discuss Post-Regulatory Approval Studies, (xii) discuss any life cycle management (LCM) opportunities for the Licensed Product in the Territory taking into account, inter alia, the commercial feasibility of such LCM activities in the Territory, provided, however, that any cost sharing with respect to LCM opportunities shall be subject to a separate written agreement by the Parties as set forth in Section 4.4 c) of this Agreement.

(c)Working Groups. From time to time, the JSC may establish joint working groups (each, a “Working Group”) on an as-needed basis to oversee specific functional areas or activities and coordinate the day-to-day performance of such activities under this Agreement, including Development and global branding initiatives and Manufacturing and supply of Licensed Products, which establishment of Working Groups shall be reflected in the minutes of the meetings of the JSC. Each such Working Group shall be constituted, shall meet as frequently and in such manner as, and shall operate as, the JSC may determine. Each Working Group and its activities shall be subject to the oversight of, and shall report to, the JSC, and the JSC shall resolve all disputes that arise within a Working Group. In no event shall the authority of any Working Group exceed the authority of the JSC. Each Party shall be responsible for all of its own expenses of participating in any Working Group.

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3.3JSC Authority; Meetings; Attendance.

(a)Limitation of Authority. The JSC shall only have the powers expressly assigned to it in this Article 3 and elsewhere in this Agreement and shall not have the authority to: (i) modify or amend the terms and conditions of this Agreement; (ii) waive either Party’s compliance with the terms and conditions of this Agreement; or (iii) determine any issue in a manner that would conflict with the express terms and conditions of this Agreement.

(b)Meetings. The JSC shall hold meetings at such times as it elects to do so, but shall meet no less frequently than four (4) times per Calendar Year until the first Regulatory Approval of a Licensed Product in the Field in the Territory, and thereafter, no less frequently than twice per Calendar Year unless otherwise mutually agreed by the Parties. The first JSC meeting shall be within sixty (60) days of the Effective Date. In addition, special meetings of the JSC may be convened by either Party’s Alliance Manager upon not less than thirty (30) days’ (or, if such meeting is proposed to be conducted by teleconference, as soon as reasonably practicable) written notice to the other Alliance Manager. The Alliance Managers shall jointly prepare and circulate an agenda for each meeting, which shall include agenda items proposed by either Party reasonably in advance of the meeting. The JSC may meet in person or by means of teleconference, Internet conference, videoconference or other similar communication method; provided that at least twice each Calendar Year until the first Regulatory Approval of a Licensed Product in the Field in the Territory and, thereafter, at least once each Calendar Year, such meetings will be conducted in person at locations selected alternatively by Marinus and Licensee or such other location as the Parties may agree, unless in person meetings are not reasonable for reasons of public health or travel restrictions. Each Party shall bear its own expenses related to participation in and attendance at such meetings by its respective JSC representatives. The Alliance Managers shall jointly prepare and circulate minutes for each JSC meeting within thirty (30) days of each such meeting and shall ensure that such minutes are reviewed and approved by their respective companies within thirty (30) days thereafter.

(c)Non-Member Attendance. Each Party may from time to time invite a reasonable number of participants, in addition to its JSC representatives, to attend a meeting of the JSC (in a non-voting capacity) in the event that the planned agenda for such JSC meeting would require such participants’ expertise; provided that if either Party intends to have any Third Party (including any consultant) attend such a meeting, such Party shall provide prior written notice to the other Party, shall obtain approval from such other Party for such Third Party to attend, and shall ensure that such Third Party is bound by confidentiality and non-use obligations consistent with the terms of this Agreement.

3.4Decision-Making. All matters requiring the approval of the JSC shall be made by consensus, with each Party’s representatives having, collectively, one vote. If after reasonable discussion and good faith consideration of each Party’s view on a particular matter before the JSC, the JSC cannot reach consensus as to such matter within twenty (20) days after such matter was brought to the JSC for resolution, such matter shall be referred to the Chief Executive Officer of Marinus (or an executive officer of Marinus designated by the Chief Executive Officer of Marinus who has the power and authority to resolve such matter) and the Chief Executive Officer of

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Licensee (or an executive officer of Licensee designated by the Chief Executive Officer of Licensee who has the power and authority to resolve such matter) (collectively, the “Executive Officers”) for resolution. If the Executive Officers cannot resolve such matter within twenty (20) days after such matter has been referred to them, then: (a) Marinus shall have final decision-making authority with respect to all matters within the scope of the JSC’s decision-making authority that relate to Development (including Clinical Trials and the protocol and design  of any Post-Regulatory Approval Studies) and Manufacturing activities, excluding 1)  any right to increase Licensee’s financial obligations under this Agreement, (2) other issues related to Post-Regulatory Approval Studies conducted and/or sponsored or supported by Licensee, 3) Manufacturing activities for which Licensee is responsible pursuant to this Agreement and/or the Supply Agreement; and (b) Licensee shall have final decision-making authority with respect to all matters within the scope of the JSC’s decision-making authority that relate to 1) Commercialization of the Licensed Products in the Field in the Territory, 2) except as set forth above, Post-Regulatory Approval Studies conducted and/or sponsored or supported by Licensee and 3) Manufacturing activities for which Licensee is responsible pursuant to this Agreement and/or the Supply Agreement, and (c)  with respect to any and all other matters within the scope of the JSC’s decision-making authority, neither Party shall have final decision-making authority, such that no action will be taken with respect to the proposed matter unless and until ultimately approved by the JSC or the Parties or as otherwise authorized by this Agreement such as regulatory activities which shall be controlled by Marinus pursuant to Article 5 of this Agreement.

Notwithstanding anything to the contrary contained in this Agreement, in exercising its final decision-making authority described in this Section 3.4, neither Party shall have the right to: (i) make a decision that is stated to require the mutual agreement or the mutual consent of the Parties (as would be the case for any decision that would increase the other Party’s costs or responsibilities); (ii) interpret, amend, modify, or determine or waive compliance with, this Agreement or otherwise act in contravention of the terms of this Agreement; (iii) resolve any dispute regarding whether a Development/Regulatory Milestone Event or a Commercialization Milestone Event has been achieved; or (iv) require the other Party to perform any act that such other Party reasonably believes would violate Applicable Law.

3.5Discontinuation of JSC and Working Groups. The JSC and any Working Groups shall continue to exist until the Parties mutually agree to disband the JSC. Once the JSC is disbanded, the JSC and Working Groups shall have no further authority or responsibilities under this Agreement and, thereafter, the Alliance Managers shall be the points of contact for the exchange of information under this Agreement and decisions between the Parties shall be decisions of the JSC, subject to the other terms and conditions of this Agreement.

ARTICLE 4

DEVELOPMENT

4.1Overview of Development. Except to the extent provided otherwise in the Development Plan and except for Licensee’s right to conduct Post-Regulatory Approval Studies, as between the Parties, Marinus shall be responsible for all Development of Licensed Products, including conducting and sponsoring all Clinical Trials. Each Party shall conduct the activities

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allocated to such Party under the Development Plan in accordance with the Development Plan and in compliance with all Applicable Laws, including GLP, GCP, GMP and Data Protection Laws. To the extent either Party transfers any Personal Data to the other Party or its Affiliates outside of the European Union or European Economic Area,  excluding, however, such countries, which are deemed by the European Commission to provide adequate protection to data subjects (pursuant to Article 45 of the EU GDPR), the Parties agree that the EU standard contractual clauses for the transfer of personal data to third countries pursuant to Regulation (EU) 2016/679 of the European Parliament and of the Council (EU Commission Decision 2021/914 of 4 June 2021 ), as applicable, shall be signed by the Parties. For the purposes of such transfer and processing of Personal Data, the Parties will determine and document in good faith the Parties’ respective roles as a data controller, data processor or joint controller.

4.2Development Plan.

(a)All Clinical Trials and other material Development activities with respect to Licensed Products in the Field in the Territory shall be conducted in accordance with a written development plan and budget (such plan and budget, as amended from time to time, the “Development Plan”). Without limiting the foregoing, the Development Plan shall include (i) an outline of all such Development activities (including all Contemplated Clinical Trials and any Future Clinical Trials) for Licensed Products, (ii) details and timelines of any Development activities assigned to Licensee, and (iii) subject to Section 4.5(b), a budget for each such Clinical Trial.

(b)The Development Plan is attached hereto as Exhibit B (the “Initial Development Plan”). The Development Plan shall be effective from the Effective Date until amended in accordance with Section 4.2(c).

(c)From time to time after the Effective Date, either Party may propose amendments to the Development Plan and submit such proposed amendments to the Development Plan to the JSC for its review, discussion and approval. Upon the JSC’s approval, such proposed amendments shall become effective.

4.3Diligence. Each Party shall use Commercially Reasonable Efforts to perform the Development activities assigned to such Party under the Development Plan.

4.4Clinical Trials and Future Clinical Trials.

(a)The JSC will discuss the design of each proposed Clinical Trial; provided that, for clarity, Marinus shall have final decision-making authority with respect to such design and the protocol for each Clinical Trial; provided, further, that Marinus will implement any scientific advise provided by the competent Regulatory Authority in the Territory as well as consider in good faith any comments to such design or protocol timely provided by Licensee’s JSC representatives that are directed to Clinical Trial sites in the Territory or which are intended to generate Clinical Data that would support Regulatory Approval for any Licensed Product in the Field and Territory.

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(b)Except to the extent provided otherwise in the Development Plan, as between the Parties, Marinus will be responsible for all other Development activities and costs (whether clinical or non-clinical) and day-to-day operational matters, and be the regulatory sponsor for each Clinical Trial (excluding Post-Regulatory Approval Studies conducted and/or sponsored (unless such study is required by Applicable Laws to be sponsored by Marinus) or supported by Licensee).

(c)In the event Marinus proposes to conduct a Future Clinical Trial, Marinus shall provide written notice to Licensee, which notice shall include in reasonable detail a description of the Future Clinical Trial, including the proposed Indication or the proposed new formulation (including any prodrug) of the Licensed Product and means of administration which would be studied pursuant to such Future Clinical Trial, a summary of any Clinical Data supporting Marinus’ decision to pursue the Future Clinical Trial, a draft protocol for the Future Clinical Trial, a proposed budget and  proposed sharing of Development Costs between the Parties for the Future Clinical Trial, and any information and calculation that Marinus may have showing the reasons that Marinus believes it is commercially feasible and useful to conduct the Future Clinical Trial (the “Clinical Trial Notice”). The Parties shall,  upon Licensee’s receipt of the Clinical Trial Notice,  discuss in good faith any Future Clinical Trial taking into account, inter alia, a) commercial feasibility of conducting the Future Clinical Trial, b) expected research and development costs necessary to Develop and Commercialize the New Indication or the new formulation of the Licensed Product in the Territory, c) the market opportunity the Future Clinical Trial represents to either Party (considering e.g. the usefulness, market potential and/or strategic value of the proposed New Indication or the proposed new formulation of the Licensed Product in the Territory).  [***] [***] ([***]) days after receipt of Marinus’ Clinical Trial Notice, Licensee shall notify Marinus whether or not it is interested in Commercializing the related reformulated Licensed Product or New Indication in the Territory in the Field.  If  Licensee notifies such interest to Marinus, then the Parties shall [***] [***] ([***]) days, from the date of Marinus’ receipt of Licensee’s notice to negotiate in good faith an amendment to this Agreement for Licensee to obtain the right to Commercialize Licensed Products in such Indication or with such new formulation, [***] [***] which is the subject of such Future Clinical Trial, which negotiations shall take into [***] [***]. In the event the Parties enter into an amendment to this Agreement within such [***] ([***]) day period, then the results of such Future Clinical Trial will constitute Clinical Data, other data and/or results for the purposes of the Parties’ rights and obligations set forth in Section 4.8 and be included within the License.  If either (i) Licensee does not notify Marinus of its interest within the time period set forth in this Section 4.4(c), or (ii) if the Parties are not able to reach agreement on an amendment to this Agreement within such [***] period and either Party terminates negotiations by notice to the other Party, then (a) Marinus will have the right to conduct such Future Clinical Trial independently or in collaboration with a Third Party (including amending the protocol for such Clinical Trial to include or exclude trial sites in the Territory or otherwise); (b) the results of such Future Clinical Trial will neither constitute Clinical Data or other data or results for the purposes of the Parties’ rights and obligations set forth in Section 4.8 nor be included within the License; (c) Licensee will have no right to use such results for any purpose (except for safety and other mandatory reporting) regardless of subsequent publication, provided that in no event shall Licensee’s right to use any published data be more limited than any Third Party’s who is not Marinus’ licensee or sublicensee;

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(d) Licensee shall have no further rights with respect to such new formulation or New Indication(s), and (e) Marinus shall, either alone or in collaboration with a Third Party, be entitled to Develop and Commercialize (under an independent Regulatory Approval and a Product Mark other than the one used by Licensee) the new formulation and New Indication(s), as applicable, provided that, for a period of [***] after the occurrence of (ii) above, should Marinus offer or be prepared to accept more favourable terms and conditions for such new formulation and New Indication(s) to any Third Party than those offered to Licensee in the Clinical Trial Notice and/or in the course of the above mentioned negotiations, then Marinus shall again offer them first to Licensee before granting a license to any Third Party to Commercialize such new formulation or New Indication in the Field in the Territory. Within fifteen (15) days from receipt of Marinus’ offer (which shall include the material transactional terms), Licensee shall notify Marinus whether or not Licensee accepts such Marinus’ offer. Licensee’s failure to give a notice of acceptance within said fifteen (15) day period shall be deemed a full and final waiver of Licensee’s rights as to such Marinus’ offer.

4.5Development Costs.

(a)Licensee will reimburse Marinus for a maximum of seven million Euros (€7,000,000.00)   of the Development Costs for the Contemplated Clinical Trials set forth on Schedule 1.20. For clarity, the amount of €7,000,000 is for the amount to be reimbursed by Licensee to Marinus and shall not be reduced by any Development Costs of Licensee or other costs of the Licensee. Subject to the aforementioned in this Section 4.5 (a), Licensee’s above mentioned reimbursement amount shall be used for reimbursement for Development Costs incurred by Marinus for TSC and RSE Development and any required post approval pediatric studies for CDD.  At the end of each Calendar Quarter, Marinus will invoice Licensee in the amount of the lesser of Development Costs actually incurred by Marinus or [***] ([***])[***]incurred by Marinus in a Calendar Quarter in excess of [***] ([***]) shall be included in the Marinus invoices for one or more subsequent Calendar Quarters.

(b)Prior to November 30 of each Calendar Year, the JSC will approve a budget (or amended budget, as applicable) for each Contemplated Clinical Trial for which the Parties have agreed to share costs pursuant to Schedule 1.20 and which will be conducted during the subsequent Calendar Year and for each Future Clinical Trial for which the Parties have agreed to share costs pursuant to Section 4.4 (c) above and which will be conducted during the subsequent Calendar Year. Upon approval by the JSC, such budget shall be part of the Development Plan.

(c)Marinus shall, within thirty (30) days following each Calendar Quarter during which it incurs Development Costs, submit to a finance officer designated by Licensee (the “Finance Officer”) a report which sets forth the Development Costs incurred by it during such Calendar Quarter. Each such report will specify in reasonable detail FTE Development Costs and Out-of-Pocket Development Costs with respect to the applicable Calendar Quarter.  Each such report will be submitted together with an invoice for the amount payable to Marinus by Licensee.

(d)Licensee shall submit the amount of such payment to Marinus within thirty (30) days of receipt of Marinus’ invoice for the amount thereof.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

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4.6Development Records. Each Party shall maintain reasonably complete, current and accurate records of all Development activities conducted by or on behalf of such Party, its Affiliates or its sublicensees pursuant to this Agreement and all data and other information resulting from such activities, in each case in accordance with all Applicable Laws. Each Party shall maintain such records during the Term and for a period of time after the Term consistent with Applicable Laws and reasonable industry practices on record retention and destruction (which shall not be less than three (3) years). Such records shall fully and properly reflect all material activities conducted and results achieved by or on behalf of such Party in the performance of the Development activities in the Territory hereunder, in good scientific manner appropriate for regulatory and patent purposes. Each Party shall document all non-clinical studies and Clinical Trials of the Licensed Product in formal written study reports in accordance with Applicable Laws and national and international guidelines (e.g., GCP, GLP and GMP). Upon the other Party’s request, each Party shall, and shall cause its Affiliates and sublicensees to, promptly provide the other Party with copies of such records.

4.7Development Reports.

(a)Marinus shall provide Licensee with written reports, at each regular JSC meeting, summarizing its, its Affiliates’ and its sublicensees’ activities with respect to the Development of Licensed Products for use in the Field in the Territory. Such reports and all data therein shall constitute Confidential Information of Marinus pursuant to Article 9.

(b)Licensee shall provide Marinus with written reports, at each regular JSC meeting, summarizing its, its Affiliates’ and its sublicensees’ activities with respect to Development of Licensed Products for use in the Field in the Territory. Such reports and all data therein shall constitute Confidential Information of Licensee pursuant to Article 9.

4.8Data Ownership, Exchange and Use. As between the Parties, all Clinical Data and other data and results generated by or on behalf of Marinus in connection with Development activities conducted under this Agreement will be owned by Marinus and be subject to Licensee’s rights to use such data and results as set forth in this Agreement. As between the Parties, all Clinical Data and other data and results generated by or on behalf of Licensee in connection with Post-Regulatory Approval Studies conducted by it under this Agreement will be owned by Licensee and be subject to Marinus’ rights to use such data and results as set forth in this Agreement. In addition to its adverse event and safety data reporting obligations pursuant to Section 5.3,  each Party shall promptly (but in any event no later than thirty (30) days from the other Party’s reasonable request) provide the other Party with copies of and access to all data and results, including all Clinical Data, and all supporting documentation (e.g. protocols, case report forms, analysis plans) Controlled by such Party or its Affiliates that are generated by or on behalf of such Party or any of its Affiliates or sublicensees, if applicable, in the Development of Licensed Products. Subject to the other terms and conditions of this Agreement, including Sections 4.4(c) and 0, Licensee shall have the right to use and reference such data and results, without additional consideration, for purposes of Development or Commercialization activities (including any regulatory activities and filing any Patent Rights covering Licensee Inventions) in accordance with this Agreement. Marinus and its designees shall have the right to use and reference such data and

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results provided by Licensee, without additional consideration, for the purpose of Developing, Manufacturing and Commercializing (outside the Territory) Licensed Products, filing Patent Rights covering Marinus Inventions and obtaining and maintaining Regulatory Approvals for Licensed Products. For clarity, any such data or results that are Inventions will be owned in accordance with Section 12.1 and subject to the licenses, rights and obligations set forth herein.

4.9Subcontractors.

(a)Marinus may conduct any activities assigned to it under the Development Plan or for which it is responsible under this Agreement through one or more Affiliates or subcontractors for example, contract research organizations. Marinus shall cause any subcontractor engaged by it to be bound by written obligations of confidentiality and non-use that are substantially equivalent to those provided in this Agreement prior to performing any activities. Marinus shall cause its subcontractors to assign to Marinus all intellectual property that specifically and necessarily incorporate Licensed Products and are discovered and reduced to practice by such subcontractors in the course of performing such subcontracted work. Marinus shall remain directly responsible for any obligations under this Agreement that have been delegated or subcontracted to any subcontractor and shall be directly responsible for the performance of its subcontractors.

(b)Licensee may conduct activities assigned to it under the Development Plan or for which it is responsible under this Agreement through one or more Affiliates or subcontractors for example contract research organizations. Licensee shall cause any subcontractor engaged by it to be bound by written obligations of confidentiality and non-use that are substantially equivalent to those provided in this Agreement prior to performing any activities. Licensee shall cause its subcontractors to assign to Licensee all intellectual property that specifically and necessarily incorporate Licensed Products and are discovered and reduced to practice by such subcontractor in the course of performing such subcontracted work. Licensee shall remain directly responsible for any obligations under this Agreement that have been delegated or subcontracted to any subcontractor and shall be directly responsible for the performance of its subcontractors.

ARTICLE 5

REGULATORY

5.1Holder of Regulatory Approvals and Regulatory Submissions; Regulatory Responsibilities. A Marinus Affiliate located in the European Union, Marinus Pharmaceuticals Emerald Limited, limited liability company formed corporation incorporated and existing under the laws of Ireland, registration number 688211, having a principal registered address place of business at 10 Earlsfort Terrace, Dublin 2, D02 T380, Ireland, or another  Marinus Affiliate located in the European Union will be the initial marketing authorization holder for all Regulatory Approvals of Licensed Products in the Territory. Marinus shall have the right to transfer the Regulatory Approvals to other Marinus wholly owned subsidiaries located in the Territory for tax or other corporate purposes.  Additionally, should Marinus be required to hold local Regulatory Approvals within specific countries in the Territory, Marinus shall set up such local subsidiaries as are required within such countries in the Territory.  Marinus will be

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

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responsible for the conduct of all regulatory activities with respect to Licensed Products. Marinus shall promptly inform Licensee in writing of any plan to transfer the Regulatory Approvals and the Parties shall discuss in good faith implications of such transfer. Marinus will be responsible for the conduct of all regulatory activities with respect to Licensed Products in the Field and in the Territory, including (i) developing regulatory plans, strategies and interactions with Regulatory Authorities in the Field in the Territory in support of obtaining such Regulatory Approvals, and (ii) preparing, obtaining, submitting, engaging and maintaining Regulatory Submissions for Licensed Products and obtaining and maintaining Regulatory Approvals of Licensed Products in the Field in any country in the Territory and Licensee shall provide such information, data and support to Marinus (including information and data with respect to Licensee’s conduct of Post-Regulatory Approval Studies) as may be reasonably requested by Marinus from time to  time, provided, however, that details of such support shall be subject to a separate written agreement by the Parties. Marinus shall promptly inform Licensee about any Regulatory Approvals of the Licensed Products in the Territory. Notwithstanding the foregoing, as part of its Commercialization activities, Licensee shall be responsible for using Commercially Reasonable Efforts for obtaining all pricing and reimbursement approvals for Licensed Products in the Field in the Territory.

5.2Updates. Each Party shall keep the other Party reasonably informed of regulatory developments related to Licensed Products in the Field in the Territory of which it becomes aware and shall promptly notify the other Party in writing or through the JSC of any material decision by any Regulatory Authority in the Field in the Territory of which it becomes aware regarding any Licensed Product.

5.3Pharmacovigilance Activities.

(a)Within one hundred eighty (180) days after the Effective Date or such earlier date as may be required to comply with Applicable Laws, and in no case later than Marinus obtaining Regulatory Approval for a Licensed Product in the Field in the Territory, Licensee and Marinus shall develop and agree in a written agreement to safety and pharmacovigilance procedures for the Parties with respect to Licensed Products, such as safety data sharing and exchange, adverse events reporting and prescription events monitoring (the “Pharmacovigilance Agreement”). The Pharmacovigilance Agreement will be appended to the Supply Agreement.

(b)Marinus shall maintain a global adverse event database for Clinical Trials conducted under the Development Plan and with respect to the Commercialization of the Licensed Product. Licensee will forward any adverse event reports in the Territory to Marinus (in accordance with the Pharmacovigilance Agreement) for inclusion in Marinus’ global safety database. Marinus as the holder of the Regulatory Approvals for the Licensed Products shall be responsible for all regulatory reporting obligations in the Territory.

5.4Safety and Regulatory Inspections. Licensee shall promptly (but in any event no later than forty-eight (48) hours after receiving the applicable notice) notify Marinus of any audit or inspection of Licensee, its Affiliates, its Third Party sublicensees or subcontractors (including Clinical Trial sites, if any) by any Regulatory Authority relating to Licensed Products and shall

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provide Marinus with all information in Licensee’s Control pertinent thereto. Without limiting the foregoing, (i) Licensee shall permit Regulatory Authorities outside the Territory to conduct audits or inspections of Licensee, its Affiliates, sublicensees or subcontractors (including Clinical Trial sites, if any) relating to Licensed Products, and shall ensure that such Affiliates, sublicensees and subcontractors permit such inspections. Subject to any required approvals of the Regulatory Authority and of any relevant Third Party, Marinus shall have the right, but not the obligation, to be present at and participate in any such audit or inspection described in this Section 5.4 relating to Licensed Products, at its sole cost and expense. Licensee will provide Marinus with a written summary of any findings of a Regulatory Authority relating to Licensed Products following a regulatory audit or inspection within ten (10) Business Days following Licensee’s receipt of Regulatory Authority’s final report for any such audit or inspection, unless otherwise agreed in a Quality Assurance Agreement by and between the Parties. Marinus shall promptly (but in any event no later than forty-eight (48) hours after receiving the applicable notice) notify Licensee of any audit or inspection of Marinus, its Affiliates, its Third Party sublicensees or subcontractors (including Clinical Trial sites, if any) by any Regulatory Authority relating to Licensed Products in the Territory and shall provide Licensee with all information in Marinus’s Control pertinent thereto. Without limiting the foregoing, (i) Marinus shall permit Regulatory Authorities in the Territory to conduct audits or inspections of Marinus, its Affiliates, sublicensees or subcontractors (including Clinical Trial sites, if any) relating to Licensed Products, and shall ensure that such Affiliates, sublicensees and subcontractors permit such inspections. Subject to any required approvals of the Regulatory Authority’s and of any relevant Third Party, Licensee shall have the right, but not the obligation, to be present at and participate in any such audit or inspection described in this Section 5.4 relating to Licensed Products, at its sole cost and expense. Marinus will provide Licensee with a written summary of any findings of a Regulatory Authority relating to Licensed Products following a regulatory audit or inspection within ten (10) Business Days following Marinus’ receipt of Regulatory Authority’s final report for any such audit or inspection, unless otherwise agreed in a Quality Assurance Agreement by and between the Parties.

5.5Adverse Regulatory Actions. If any Regulatory Authority takes or gives notice of its intent to take any regulatory action with respect to any activity of a Party relating to a Licensed Production the Territory, then such Party shall notify the other Party of such notice within forty-eight (48) hours of its receipt thereof. The other Party shall have the right to review and comment on any responses to Regulatory Authorities that pertain to a Licensed Product promptly and in any event within ten (10) Business Days of receipt of such proposed response. The costs and expenses of any such regulatory action arising from any activity of Licensee relating to a Licensed Product in the Territory will be borne by Licensee. The costs and expenses of any such regulatory action arising from any activity of Marinus relating to a Licensed Product will be borne by Marinus. In addition, each Party shall promptly notify the other Party of any information it receives regarding any threatened or pending action, inspection or communication by or from a Third Party that, in the case of notice to Marinus, would reasonably be expected to materially affect the Development, Manufacture or Commercialization of the Licensed Products, and in the case of notice to Licensee, would reasonably be expected to materially affect the Development or Commercialization of the Licensed Products in the Field in the Territory.

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5.6 Right to Audit. Upon reasonable notice and during regular business hours, and not more than once every Calendar Year (except in the case of a for-cause audit), each Party or its designee may inspect the other Party’s facilities and may audit the other Party’s records to the extent that such facilities or records relate to the Development, Manufacture, distribution, storage, warehousing or, subject to Section 8.9 b), Commercialization of Licensed Products in and/or for the Territory. Each Party will make all such records available and will provide reasonable assistance in each such inspection or audit. The Parties acknowledge that Licensee has been able to conduct a virtual inspection of Marinus’ facilities prior to the Effective Date of this Agreement. Licensee shall have the right to audit such facilities through a physical on-site audit as soon as practically possible after the Effective Date of this Agreement.

ARTICLE 6

MANUFACTURING

6.1Manufacture of Licensed Product for the Territory. Subject to the terms and conditions of this 0, Licensee shall purchase all of its requirements of Licensed Products  Manufactured by or on behalf of Marinus from Marinus or its Affiliates pursuant to the Supply Agreement (as defined below).

6.2Supply. The Parties shall, as of the Effective Date, enter into the Supply  Agreement attached to this Agreement as Exhibit C, which shall govern the supply by Marinus to Licensee of Licensed Products for Development and Commercialization by Licensee in the Field in the Territory (including a Quality Assurance Agreement; the “Supply Agreement”) .

Marinus will be responsible for ensuring that Marinus and its Third Party manufacturers and suppliers at all times have the capacity and capabilities to timely supply Licensed Products for the Territory in accordance with and subject to Licensee’s forecasts and all other terms and conditions set forth in the Supply Agreement.

6.3Per Unit Supply Price. For each unit of conforming Licensed Product Manufactured and supplied to Licensee by Marinus pursuant to the Supply Agreement, Licensee shall pay Per Unit Supply Price (as set forth in the Supply Agreement), [***][***] [***] [***] [***] [***] [***] [***]. [***]  invoice Licensee for the applicable Licensed Product upon delivery in accordance with the Supply Agreement. Licensee shall, subject to the terms of the Supply Agreement, pay the undisputed invoiced amounts with respect to such Licensed Product within the timeframe set forth in the Supply Agreement. Marinus shall supply to Licensee free-of-charge reasonable and customary quantities of Licensed Products (to be agreed in good faith and in writing by the Parties) for research, development and quality assurance purposes and, as agreed by the Parties and to the extent allowed under Applicable Laws, for use as samples and donations.

ARTICLE 7

COMMERCIALIZATION

7.1Commercialization Responsibility.

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(a)Licensee shall be solely responsible, at its sole cost and expense, for Commercializing Licensed Products in the Field in the Territory in accordance with this Article 7, including booking all sales of and setting the price for such Licensed Products in the Field in the Territory. Licensee shall use Commercially Reasonable Efforts to Commercialize each Licensed Product in the Field in the Territory. Licensee shall conduct all Commercialization of Licensed Products in accordance with all Applicable Laws.

(b)Licensee may conduct Commercialization activities for which it is responsible under this Agreement through engaging subcontractors in the ordinary course provided that Licensee shall not engage any subcontractor who has been debarred or disqualified by any Regulatory Authority or by Applicable Law or is subject of debarment or disqualification proceedings by a Regulatory Authority Licensee shall cause any subcontractor engaged by it to be bound by written obligations of confidentiality and non-use that are substantially equivalent to those provided in this Agreement prior to performing any activities. Licensee shall cause its subcontractors to assign to Licensee all intellectual property that specifically and necessarily incorporate Licensed Products and are discovered and reduced to practice by such subcontractor in the course of performing such subcontracted work. Licensee shall remain directly responsible for any obligations under this Agreement that have been delegated or subcontracted to any subcontractor and shall be directly responsible for the performance of its subcontractors.

7.2Commercialization Plan; Forecasts; Reports

(a)At least six (6) months prior to the anticipated First Commercial Sale of a Licensed Product in the Territory, Licensee shall prepare and provide to the JSC a written Commercialization plan (the “Commercialization Plan”) describing in reasonable detail the planned brand, positioning and launch strategies and messages, and marketing/promotional activities for Commercialization of the applicable Licensed Product in the Territory for the balance of the then-current Calendar Year and the following Calendar Year. Licensee shall use Commercially Reasonable Efforts to Commercialize Licensed Products in a manner consistent with the Commercialization Plan. A revised Commercialization Plan shall be delivered annually  (no later than thirty (30) days prior to the beginning of a Calendar Year) for the following Calendar Year.

(b)With each Commercialization Plan, Licensee shall also deliver to the JSC a  good-faith estimate (prepared in accordance with Licensee’s standard forecasting practices consistently applied) for Net Sales in the Territory over the balance of the then current Calendar Year and the following Calendar Year  (the “Forecast”). In the event that Licensee’s actual Net Sales in any Calendar Year fall below the estimated Net Sales for such Calendar Year set forth in the Forecast (a “Sub-Forecast Year”), Licensee may not estimate Net Sales in a Calendar Year  thereafter as less than the actual Net Sales during the most recent Sub-Forecast Year, except in case of material adverse changes in the overall economic conditions in the Territory as reasonably demonstrated  by Licensee.

(c)For each Calendar Year following receipt of the first Regulatory Approval for any Licensed Product in any country in the Territory, Licensee shall provide to the JSC within

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forty-five (45) days after the end of such Calendar Year a written report that summarizes the Commercialization activities on a Licensed Product-by-Licensed Product basis, as applicable, performed by or on behalf of Licensee, its Affiliates and sublicensees in the Territory, and in each of the five (5) largest major country markets within the Territory, since the prior report provided by Licensee.

(d)Licensee shall keep Marinus reasonably informed on the status of any application for reimbursement approval for Licensed Products in the Field in the Territory. Licensee shall have the right, subject to compliance with Applicable Laws, to determine the price of Licensed Products sold in the Territory.

7.3Diversion. Except as contemplated by Section 2.6, each Party covenants and agrees that it shall not, and shall ensure that its Affiliates and sublicensees shall not, either directly or indirectly, knowingly or actively promote, market, distribute, import, sell or have sold any Licensed Products, including via the Internet or mail order, to any Third Party or to any address or Internet Protocol address or the like in the other Party’s territory; provided that each Party shall have the right to attend conferences and meetings of congresses in the other Party’s territory and to promote and market Licensed Products to Third Party attendees at such conferences and meetings, subject to this Section 7.3 and coordination through the JSC. Except as contemplated by Section 2.6, neither Party shall engage, nor permit its Affiliates or sublicensees to engage, in any advertising or promotional activities relating to any Licensed Products for use directed primarily to customers or other buyers or users of Licensed Products located in any country or jurisdiction in the other Party’s territory, or solicit orders from any prospective purchaser located in any country or jurisdiction in the other Party’s territory.

7.4Licensee’s Promotional Materials. Upon Marinus’ reasonable request, Licensee shall supply to Marinus samples of the relevant marketing, advertising and/or promotional materials, training manuals and/or educational materials solely for the Licensed Products and that are developed, generated or otherwise prepared by or on behalf of Licensee or its Affiliates or sublicensees in the Territory, which Marinus, its Affiliates and sublicensees may adapt for use outside the Field and outside the Territory to the extent that the same are in Licensee’s Control (excluding any information on prices). Licensee will use Commercially Reasonable Efforts to negotiate a sublicensable license to use Licensed Product promotional materials developed, generated or otherwise prepared by or on behalf of Licensee or its Affiliates or sublicensees, including results of any market surveys.

7.5Marinus’ Promotional Materials. Upon Licensee’s reasonable request, Marinus shall supply to Licensee samples of the relevant marketing, advertising and/or promotional materials, training manuals and/or educational materials solely for the Licensed Products and which are developed, generated or otherwise prepared by or on behalf of Marinus or its Affiliates or sublicensees, which Licensee, its Affiliates and sublicensees may adapt for use in the Field in the Territory to the extent that the same are in Marinus’ Control (excluding any information on prices). Marinus will use Commercially Reasonable Efforts to negotiate a sublicensable license to use promotional materials for the Licensed Products and which are developed, generated or

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otherwise prepared by or on behalf of Marinus or its Affiliates or sublicensees, including results of any market surveys.

ARTICLE 8

PAYMENTS

8.1Fees. Licensee shall, within five (5) Business Days of the Effective Date, provided that Licensee has received Marinus’ relevant invoice, pay an upfront payment of twenty-five Million Euros (€ 25,000,000.00) to Marinus. Marinus shall be solely responsible for any payments due to Third Parties based on such upfront payment paid to Marinus by Licensee.  Licensee shall make the said payment against Marinus’ invoice by wire transfer using the bank account in Marinus’ name the bank account information to be provided in writing by Marinus. Marinus shall be solely responsible for paying any fees due to the bank whose services Marinus uses for receiving such wire transfer. Licensee shall be solely responsible for paying any fees due to the bank whose services Licensee uses for making such wire transfer. The Parties acknowledge that Marinus shall conduct a certain genotoxicity study “Combined Micronucleus & Comet study in vivo” promptly after the Effective Date. In the event results of such study are positive based on the criteria set forth in the protocol for such study, then Licensee shall have the right, upon written notice to Marinus within ninety (90) days after Licensee’s receipt of the final report of the genotoxicity study, to terminate this Agreement and Marinus shall  refund to Licensee seventy-five percent (75 %) of the above mentioned upfront payment  paid by Licensee in accordance with this section 8.1 and Licensee shall have no further rights to any Licensed Products. Such refund shall be paid within thirty (30) days after termination.

8.2Development/Regulatory Milestones. Following the achievement of each milestone event set forth in the table below with respect to the Licensed Products (each, a “Development/Regulatory Milestone Event”), Licensee shall make the corresponding milestone payment to Marinus (each, a “Development Milestone Payment”) in accordance with Section 8.6(a).

Development Milestone Event

Milestone Payment

1. Upon receipt of the positive data readout from the EU RSE Phase III Clinical Trial for the Licensed Product. The positive data readout means that the primary endpoint for the above Clinical Trial have been met as defined in the study protocol for the said Clinical Trial. For clarity, the JSC shall have no decision-making authority with respect to whether or not the primary endpoints have been met.

[***] [***]

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In the event that Licensee does not make the Development Milestone Payment, then Licensee shall have no further rights to Develop or Commercialize a Licensed Product for RSE and RSE shall be deleted for all purposes from the definition of Licensed Product and Competing Indication.

8.3Commercialization Milestones. Upon the first achievement of each milestone event set forth in the table below with respect to Licensed Products (each, a “Commercialization Milestone Event”), Licensee shall make the corresponding milestone payment to Marinus (each, a “Commercialization Milestone Payment”) in accordance with Section 8.6(b):

Commercial Milestone Event	Milestone Payment
1.    Upon the earlier of (a) First Commercial Sale of the Licensed Product in two of the following countries: Germany, France, Italy, Spain or the United Kingdom or, (b) the 18 month anniversary of First Commercial Sale of the Licensed Product in the Territory:	a)     [***] b)     [***]
	c)     [***]
a)   CDD
b)    TSC
c)   RSE
	[***]
2.    For oral formulation of Licensed Product:
a)   Upon the first achievement of Annual Net Sales of the Licensed Product in the Territory of [***]
	[***]
b)   Upon the first achievement of Annual Net Sales of the Licensed Product in the Territory of [***]
c)   Upon the first achievement of Annual Net Sales of the Licensed Product in the Territory of [***]	[***]
3.    For i.v. formulation of Licensed Product:
a)   Upon the first achievement of Annual Net Sales of the Licensed Product in the Territory of [***]	[***]

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Commercial Milestone Event	Milestone Payment
b)   Upon the first achievement of Annual Net Sales of the Licensed Product in the Territory of [***]	[***]
c)   Upon the first achievement of Annual Net Sales of the Licensed Product in the Territory of [***]	[***]

For the avoidance of doubt, no milestone payment shall be made more than once irrespective of the number of Licensed Products that have achieved the milestone. In the event that more than one Commercialization Milestone Event is achieved in a given Calendar Year, Licensee shall pay Marinus the Commercialization Milestone Payment associated with each such Commercialization Milestone Event achieved during such Calendar Year. For example, if Annual Net Sales for the oral formulation of the Licensed Product in the first Calendar Year after First Commercial Sale of any oral formulation of the Licensed Product equal EUR [***], Licensee shall pay Marinus EUR [***] in Commercialization Milestone Payments pursuant to this Section 8.3, representing payment for achieving both Commercial Milestone Events 2(a) and 2(b).

8.4Royalty Payments to Marinus.

(a)Royalty Rates. Licensee shall, during each applicable Royalty Term for a given Licensed Product, pay to Marinus a royalty on Annual Net Sales of such Licensed Product, at the percentage rates set forth below (subject to adjustment in accordance with Section 8.4(a)). The Royalty Rates set forth in Section I below shall, for all Licensed Products, be replaced by the Royalty Rates in Section II below on the first day of the first Calendar Quarter after the [***] ([***]) [***] Territory.

For Annual Net Sales of Licensed Product	I. Royalty Rate (%)	II. Royalty Rate (%)
1. For oral formulation of Licensed Product:
a) The Annual Net Sales of the Licensed Product are less than or equal to [***]	[***]	[***]
b) For the portion of the Annual Net Sales of the Licensed Product that [***] [***] ([***]) [***] [***] ([***])	[***]	[***]

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For Annual Net Sales of Licensed Product	I. Royalty Rate (%)	II. Royalty Rate (%)
c) For the portion of the Annual Net Sales of the Licensed Product that [***] [***] ([***])	[***]	[***]
2.    For i.v. formulation of Licensed Product:
a) The Annual Net Sales of the Licensed Product are less than or equal [***] [***] ([***])	[***]	[***]
b) For the portion of the Annual Net Sales of the Licensed Product that exceed [***] ([***]) [***] [***]	[***]	[***]
c) For the portion of the Annual Net Sales of the Licensed Product that exceed [***]	[***]	[***]

(b)Royalty Term. Licensee’s obligation to make royalty payments with respect to each Licensed Product in each country in the Territory will commence on the date of First Commercial Sale of such Licensed Product in such country and continue until the latest of (i) ten (10) years following the First Commercial Sale of such Licensed Product in such country, (ii) the expiration of the last to-expire Valid Claim of any Licensed Patent Rights that Covers such Licensed Product or its Manufacture or use in such country and (iii) the expiration of Regulatory Exclusivity for such Licensed Product in such country (the “Royalty Term”).

(c)Generic Competition.  If a Generic Version of a Licensed Product is sold by a Third Party in a country in the Territory after which sales of Licensed Product by Licensee, its Affiliates and sublicensees in any two consecutive Calendar Quarters [***] [***]  percent ([***]) or less of the combined sales (in value) of Licensed Product and Generic Versions of Licensed Product in each of such Calendar Quarters according to generally accepted third party industry market share data in such country for such Calendar Quarters, then the applicable royalty rate pursuant to Section 8.4(a) in such country shall be reduced by [***] ([***]), effective on the first day of the first calendar month following such two consecutive Calendar Quarters.  Notwithstanding the foregoing, if, at any time during the [***] ([***])[***], [***] on the market in such country, then royalties shall resume with respect to Net Sales of such Licensed Product in such country.  In the event of the introduction of a Generic Version of a Licensed Product in any country in the Territory, the parties may cooperate to challenge (but have no obligation to challenge) such introduction in a legal and appropriate manner, including pursuant to Section 12.3. In no event, however, will the royalty at any time be reduced to less than [***] ([***]).

8.5Payments to Third Parties. Each Party shall be solely responsible for any payments due to Third Parties under any agreement entered into by such Party with respect to the

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

“[***]”, HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE

THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

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Licensed Product, as a result of activities hereunder. Without limiting the foregoing, Marinus will be solely responsible for any payments due pursuant to any contract or agreement with any Third Party pursuant to which Marinus in-licenses or otherwise maintains Control of Patent Rights, Know-How or other intellectual property rights encompassing the Licensed Products without recourse to Licensee.

8.6Payment Terms.

(a)Development Milestone Payments. In the event that any Development Milestone Event is achieved by or on behalf of a Party, its Affiliates or sublicensees, such Party shall provide the other Party with notice of such achievement within ten (10) days thereafter, which, in the case of a Development Milestone Event achieved by Marinus, shall include an invoice for the corresponding Development Milestone Payment. In the case of a Development Milestone Event achieved by Licensee, Marinus will invoice Licensee for the corresponding Development Milestone Payment, following receipt of such notice. Licensee will make the corresponding Development Milestone Payment within thirty (30) days after receipt of Marinus’ invoice.

(b)Commercialization Milestone Payments and Royalty Payments. During the Term, beginning upon the initial First Commercial Sale of any Licensed Product in the Territory and continuing through the remainder of the Term, Licensee shall furnish to Marinus a written report for each Calendar Quarter showing  Net Sales of each Licensed Product sold by Licensee and its Affiliates and sublicensees in each country of the Territory  during the reporting Calendar Quarter and the Licensed Product royalties payable under this Agreement  in sufficient detail to allow Marinus to verify the amount of Licensed Product royalties paid by Licensee with respect to such Calendar Quarter. Without limiting the foregoing, each such report shall include, on a country-by-country and Licensed Product-by-Licensed Product basis, for such Calendar Quarter: (i) the number of units sold and the gross amount invoiced for such Licensed Product in such country; (ii)  deductions permitted by the definition of Net Sales; (iii) the Net Sales of such Licensed Product in such country;  (iv) the Licensed Product royalties (in EUR) payable for each Licensed Product in each country and in total for all Licensed Products in all countries; and (v) the manner and basis for any currency conversion in accordance with Section 8.7. In addition, such report shall specify if any Commercialization Milestone Event has been achieved during such Calendar Quarter. A final written report shall be due within thirty (30) calendar days following the end of each Calendar Quarter. The corresponding Commercialization Milestone Payment(s) and Licensed Product royalties shown to have accrued by each report provided under this Section 8.6(b) shall be due and payable within thirty (30) days after receipt of Marinus’ invoice.

(c)Shared Development Costs. For clarity, Section 4.5 shall govern the payment terms with respect to shared Development Costs.

8.7Payment Currency; Exchange Rate. Unless otherwise specified herein, all payments to be made under this Agreement shall be made in EUR. Payments to Marinus shall be made by electronic wire transfer of immediately available funds to the bank account of Marinus, as designated in Section 8.1. If any currency conversion is required in connection with the

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THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

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calculation of amounts payable hereunder, such conversion shall be made in a manner consistent with Licensee’s normal practices used to prepare its audited financial statements for external reporting purposes; provided that such practices use a widely accepted source of published exchange rates.

8.8Late Payments. Any payments or portions thereof due hereunder that are not paid on the date such payments are due under this Agreement shall bear annual interest at a rate equal to the lesser of: (a) two (2) percentage points above the prime rate as published by The Financial Times Europe Edition or any successor thereto or (b) the maximum rate permitted by Applicable Laws.

8.9Records and Audit Rights.

(a)Records. Licensee will keep (and will cause its Affiliates and sublicensees to keep) complete, true and accurate books and records in sufficient detail for Marinus to determine payments due to Marinus under this Agreement, including Licensed Product royalty payments. Licensee will keep such books and records for at least three (3) years following the end of the Calendar Year to which they pertain (or such longer period to the extent required by applicable law).

(b)Audit Rights. Marinus shall have the right during the period described in Section 8.9(a) to (A) appoint at its expense an independent certified public accountant of internationally recognized standing reasonably acceptable to Licensee (the “Accounting Firm”) to audit the relevant records of Licensee and its Affiliates to verify that the amount of such payments were correctly determined or (B) require Licensee to (x) appoint such an Accounting Firm to conduct such an audit of the applicable sublicensee and (y) provide the results of such audit to Marinus. Licensee and its Affiliates shall each make its records available for audit by the Accounting Firm during regular business hours at such place or places where such records are customarily kept, upon reasonable notice from Marinus, solely to verify the payments hereunder were correctly determined. Such audit right shall not be exercised by Marinus more than once in any Calendar Year nor more than once with respect to sales of a particular Licensed Product in a particular period and may cover a period ending not more than thirty-six (36) months prior to the date of such request. All records made available for audit pursuant to this Section 8.9(b) shall be deemed to be Confidential Information of Licensee. The results of each audit, if any, shall be binding on both Parties, unless the amount in dispute exceeds two million Euros (€ 2,000,000.00). In such case the results serve as an expert opinion and shall be without prejudice to any remedies available to either Party under this Agreement. If the amount of any payment hereunder was underpaid, and not disputed under Section 14.5 (Dispute Resolution), as applicable, Licensee shall promptly (but in any event no later than forty-five (45) days after its receipt of the Accounting Firm’s report so concluding) make payment to Marinus of the underpaid amount, including interest from the due date as set forth in Section 8.8 of this Agreement. If the amount of payment hereunder was overpaid, and not disputed under Section 14.5 (Dispute Resolution), as applicable, Licensee will credit such overpayment against future royalties or other payments which would otherwise be due and owing under this Agreement. Marinus shall bear the full cost of an audit that it conducts pursuant to this Section 8.9(b) unless such audit discloses an undisputed underpayment by

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Licensee of more than five percent (5%) of the aggregate amount of the payments due hereunder described in the records subject to the audit, in which case Licensee shall reimburse Marinus for the reasonable audit fees for such audit, in addition to paying the underpaid amount. If such amount is disputed and later resolved in favor of Marinus, such fees shall be reimbursed promptly upon such resolution.

8.10Taxes and Blocked Currency.

(a)Taxes. Each Party shall be responsible for its own tax liabilities arising under this Agreement. Subject to this Section 8.10, Marinus shall be liable for all of its income and other taxes (including interest) (“Taxes”) imposed upon any payments made by Licensee to Marinus under this Agreement (“Agreement Payments”). If Applicable Laws require the withholding of Taxes, Licensee shall make such withholding payments in a timely manner and shall subtract the amount thereof from the Agreement Payments. Licensee shall promptly (as available) submit to Marinus appropriate proof of payment of the withheld Taxes as well as the official receipts within a reasonable period of time. Licensee shall provide Marinus reasonable assistance in order to allow Marinus to obtain the benefit of any present or future treaty against double taxation or refund or reduction in Taxes which may apply to the Agreement Payments. Without limiting the generality of the foregoing, if Marinus is entitled under any applicable tax treaty to a reduction of rate of, or the elimination or recovery of, applicable withholding Taxes, it may deliver to Licensee or the appropriate Governmental Authority in the Territory the prescribed forms necessary to reduce the applicable rate of withholding or to relieve Licensee of its obligation to withhold Taxes. In such case, Licensee shall apply the reduced rate of withholding, or not withhold, as the case may be.

(b)Blocked Currency. If, by Applicable Law in a country  in the Territory, conversion into EUR or transfer of funds of a convertible currency to the United States becomes materially restricted, forbidden or substantially delayed, then Licensee shall promptly notify Marinus and, thereafter, amounts accrued in such country  under this Article 8 shall be paid to Marinus (or its designee) in such country  in local currency by deposit in a local bank account of Marinus designated in writing by Marinus and to the credit of Marinus, unless the Parties otherwise agree.

8.11No Refunds; Offsets. All payments under this Agreement shall be irrevocable, non-refundable, and non-creditable once paid, except as otherwise provided in Section 8.1 of this Agreement or the Supply Agreement. Neither Party will have any right to offset, set off, or deduct any amounts from or against the amounts due to the other Party hereunder.

ARTICLE 9

CONFIDENTIALITY

9.1Duty of Confidence. During the Term and for ten (10) years thereafter, all Confidential Information disclosed by a Disclosing Party or any of its Affiliates to a Receiving Party or any of its Affiliates hereunder shall be maintained in confidence by the Receiving Party and shall not be disclosed to any Third Party or used for any purpose, except as set forth herein,

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without the prior written consent of the Disclosing Party. The Receiving Party may only use Confidential Information of the Disclosing Party for purposes of exercising its rights and fulfilling its obligations under this Agreement and may disclose Confidential Information of the Disclosing Party and its Affiliates to its Affiliates and employees, personnel, agents, contractors, consultants and advisers of the Receiving Party and its Affiliates, licensees and sublicensees to the extent reasonably necessary for such purposes; provided that such Persons are bound by obligations of confidentiality and non-use of the Confidential Information consistent with the confidentiality provisions of this Agreement as they apply to the Receiving Party.

9.2Exceptions. The obligations under this Article 9 shall not apply to any information to the extent the recipient Party can demonstrate by competent evidence that such information:

(a)is (at the time of disclosure) or becomes (after the time of disclosure) known to the public or part of the public domain through no breach of this Agreement by the Receiving Party or its Affiliates;

(b)was known to, or was otherwise in the possession of, the Receiving Party or its Affiliates prior to the time of disclosure by the Disclosing Party, as evidenced by the Receiving Party’s written records;

(c)is disclosed to the Receiving Party or an Affiliate on a non-confidential basis by a Third Party that, to the knowledge of the Receiving Party, is entitled to disclose it without breaching any confidentiality obligation to the Disclosing Party or any of its Affiliates; or

(d)is or was independently developed by or on behalf of the Receiving Party or its Affiliates, as evidenced by its written records, without use of or reference to the Confidential Information disclosed by the Disclosing Party or its Affiliates under this Agreement.

9.3Authorized Disclosures. Subject to this Section 9.3, the Receiving Party may disclose Confidential Information belonging to the Disclosing Party to the extent permitted as follows:

(a)disclosure by a Receiving Party or its Affiliates to such Receiving Party’s attorneys, independent accountants or financial advisors for the sole purpose of enabling such attorneys, independent accountants or financial advisors to provide advice to the Receiving Party in connection with this Agreement, on the condition that such attorneys, independent accountants and financial advisors are bound by customary confidentiality and non-use obligations;

(b)disclosure by a Receiving Party or its Affiliates to governmental or other regulatory agencies in order to obtain and maintain Patent Rights consistent with Article 12;

(c)disclosure by a Receiving Party to any Affiliate, or to its or its Affiliates’ employees, personnel, consultants, contractors, subcontractors, agents or sublicensees, on a need-to-know basis in order to enable such Receiving Party to exercise its rights, or to carry out its responsibilities, under this Agreement including, with respect to Licensee as the Receiving Party, to any Third Party that is engaged by Licensee to perform services in connection with the

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

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THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

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Development or Commercialization of any Licensed Products in the Field in the Territory in accordance with this Agreement; provided, in each case, that such Persons are bound by confidentiality and non-use obligations consistent with those contained in this Agreement as they apply to the Receiving Party;

(d)disclosure by Licensee or a Licensee Affiliate or sublicensee as reasonably necessary to Develop and Commercialize Licensed Products in the Field in the Territory, in each case, in accordance with this Agreement;

(e)disclosure by Marinus or a Marinus Affiliate or sublicensee as reasonably necessary to gain or maintain approval to conduct Clinical Trials for a Licensed Product, to obtain and maintain Regulatory Approval or to otherwise Develop, Manufacture and Commercialize Licensed Products outside the Territory;

(f)disclosure by a Party required in connection with any judicial or administrative process relating to or arising from this Agreement (including any enforcement hereof) or to comply with applicable laws, court orders or governmental regulations (or the rules of any recognized stock exchange or quotation system); or

(g)disclosure by a Party to potential or actual investors or potential or actual acquirers or actual or potential sublicensees in connection with due diligence or similar investigations by such Third Parties; provided, in each case, that any such potential or actual investor or acquirer or sublicensee agrees to be bound by confidentiality and non-use obligations  consistent with those contained in this Agreement as they apply to the Receiving Party.

If the Receiving Party or its Affiliate is required by judicial or administrative process to disclose Confidential Information that is subject to the non-disclosure provisions of this Article 9, such Receiving Party shall, to the extent reasonably possible and legally permissible, promptly inform the Disclosing Party of the disclosure that is being sought in order to provide the Disclosing Party an opportunity to challenge or limit the disclosure obligations, and, if requested by the Disclosing Party, cooperate in all reasonable respects with the Disclosing Party’s efforts to obtain confidential treatment or a protective order with respect to any such disclosure, at the Disclosing Party’s expense. Confidential Information that is disclosed as permitted by this Section 9.3 shall remain otherwise subject to the confidentiality and non-use provisions of this Article 9, and the Party disclosing Confidential Information as permitted by this Section 9.3 shall take all steps reasonably necessary, including seeking an order of confidentiality and otherwise cooperating with the other Party, to ensure the continued confidential treatment of such Confidential Information.

9.4Publications.   This Section 9.4 shall govern the review of all scientific publications made or authorized by the Parties in relation to Contemplated Clinical Trial results, Future Clinical Trial results for Clinical Trials which are cost-shared by the Parties, results of Post-Regulatory Approval Studies, Clinical Data associated with such trials and studies, and non-clinical data or any associated results or conclusions of any such Clinical Trial.  As between the parties, Marinus  shall have the sole right to publish or present scientific publications pertaining to the results of

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

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THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

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Contemplated Clinical Trials and Future Clinical Trials and (ii) Licensee shall have the sole right to publish or present scientific publications only pertaining to Post-Regulatory Approval Studies conducted by Licensee, all in each case, subject to the prior review and comment by the other Party for (i) patentability, (ii) protection of the reviewing Party’s Confidential Information or (iii) possible presentation at a scientific congress or meeting whose rules may require material to be presented not to have been previously published. The publishing Party shall provide to other Party the opportunity to review any proposed abstracts, manuscripts or summaries of presentations which cover any Licensed Product.  Each Party shall designate a person who shall be responsible for coordinating review of such publications.  Such designated person shall respond in writing promptly and in no event later than fifteen (15) Business Days after receipt of the proposed material with a statement of any specific concerns, based upon the criteria set forth above. In the event of any such concern, the publishing Party agrees not to submit such publication or to make such presentation that contains such information until the other Party’s Confidential Information has been removed and agrees to consider in good faith other concerns raised by such designated person. With respect to any proposed abstracts, manuscripts or summaries of presentations by investigators or other Third Parties, the Parties will make Commercially Reasonable Efforts to provide such materials for review under this Section 9.4 to the extent that the Parties have the right to do so.

9.5Attorney-Client Privilege.In the event of a dispute or potential dispute with any Third Party where the Parties: (a) share a common legal and commercial interest in such disclosure that is subject to attorney work product protections, attorney-client privileges or similar protections and privileges; (b) are or may become joint defendants in proceedings to which the information covered by such protections and privileges relates; (c) intend that such privileges and protections remain intact should either Party become subject to any actual or threatened proceeding to which the Disclosing Party’s Confidential Information covered by such protections and privileges relates; and (d) intend that both the Receiving Party and the Disclosing Party will have the right to assert such protections and privileges, the Parties may negotiate and enter into a common or joint defense agreement. Notwithstanding the foregoing, nothing in this Section 9.4 will apply with respect to a Dispute between the Parties (including their respective Affiliates).

9.6Publication and Listing of Clinical Trials. Each Party agrees to comply, with respect to the listing of Clinical Trials or the publication of Clinical Trial results with respect to Licensed Products  to the extent applicable to its activities conducted under this Agreement, with (a) the Pharmaceutical Research and Manufacturers of America (PhRMA) Guidelines on the listing of Clinical Trials and the publication of Clinical Trial results, (b) https://clinicaltrials.gov/, https://www.clinicaltrialsregister.eu/ and any other register in which registration is required by Applicable Laws, and (c) any Applicable Law or applicable court order, stipulations, consent agreements and settlements entered into by such Party.

9.7Publicity.

(a)The Parties will mutually agree to a joint press release with respect to this Agreement promptly after the Effective Date. Either Party may make subsequent public disclosure of the contents of such press release. Subject to the foregoing, each Party agrees not to issue any press release or other public statement, whether oral or written, disclosing the terms hereof or any

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of the activities conducted hereunder without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed), provided, however, that neither Party will be prevented from complying with any duty of disclosure it may have pursuant to Applicable Laws or pursuant to the rules of any recognized stock exchange or quotation system, subject to, if reasonably possible and legally permissible, that Party notifying the other Party of such duty and limiting such disclosure as reasonably requested by the other Party (and using reasonable efforts to give the other Party sufficient time to review and comment on any proposed disclosure).

(b)For clarity, to the extent required by Applicable Laws or by any Securities Regulator, Marinus has the right to publicly disclose (i) the achievement of any milestones under this Agreement, (ii) the amount of any payment received by Marinus under this Agreement, and (iii) subject to Section 9.4, the commencement, completion, data and results of Clinical Trials conducted under this Agreement. After a publication has been made available to the public, each Party may post such publication or link to it on its corporate website without the prior written consent of the other party.

(c)The Parties hereby acknowledge and agree that either Party may be required by Applicable Laws to submit a copy of this Agreement to the U.S. Securities and Exchange Commission (the “SEC”) or any national or sub-national securities regulatory body in any jurisdiction (collectively, the “Securities Regulators”). If a Party is required by Applicable Laws to submit a description of the terms of this Agreement to or file a copy of this Agreement with any Securities Regulator, such Party agrees to consult and coordinate with the other Party with respect to such disclosure or the preparation and submission of a confidential treatment request for this Agreement. Notwithstanding the foregoing, if a Party is required by Applicable Laws or any Securities Regulator to submit a description of the terms of this Agreement to or file a copy of this Agreement with any Securities Regulator and such Party has (a) promptly notified the other Party in writing of such requirement and any respective timing constraints, (b) provided copies of the proposed disclosure or filing to the other Party reasonably in advance of such filing or other disclosure (with a goal of providing such proposed filing at least five (5) Business Days in advance) and (c) given the other Party a reasonable time under the circumstances to comment upon and request confidential treatment for such disclosure, then such Party will have the right to make such disclosure or filing at the time and in the manner it reasonably determines to be required by Applicable Laws or the applicable Securities Regulator. If a Party seeks to make a disclosure or filing as set forth in this Section 9.7(c) and the other Party provides comments within the respective time periods or constraints specified herein, the Party seeking to make such disclosure or filing will in good faith consider incorporating such comments.

ARTICLE 10

REPRESENTATIONS, WARRANTIES, AND COVENANTS

10.1Representations and Warranties of Each Party. Each Party represents and warrants to the other Party as of the Effective Date that:

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(a)it is an entity duly incorporated or organized, validly existing, and in good standing under the laws of the jurisdiction of incorporation or formation;

(b)it has full corporate power and authority to execute, deliver, and perform this Agreement, and has taken all corporate action required by Applicable Laws and its organizational documents to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement;

(c)this Agreement constitutes a valid and binding agreement enforceable against it in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy, bank moratorium or similar laws affecting creditors’ rights generally and laws restricting the availability of equitable remedies and may be subject to general principles of equity, whether or not such enforceability is considered in a proceeding at law or in equity); and

(d)the execution and delivery of this Agreement and all other instruments and documents required to be executed pursuant to this Agreement, and the consummation of the transactions contemplated hereby do not and shall not (i) conflict with or result in a breach of any provision of its organizational documents, (ii), result in a breach of any agreement to which it is a party; or (iii) violate any Applicable Laws.

10.2Representations and Warranties of Marinus. Except as set forth in the Schedule of Exceptions referencing this Section 10.2 and provided by Marinus to Licensee on or prior to the Effective Date, Marinus represents and warrants to Licensee as of the Effective Date that:

(a)Exhibit A sets forth a complete and accurate list of all Licensed Patent Rights Controlled by Marinus as of the Effective Date;

(b)Marinus Controls all right, title, and interest in and to the Licensed Patent Rights set forth on Exhibit A;

(c)Marinus has the right under the Licensed IP to grant the License to Licensee, and it has not granted any license or other right under the Licensed IP that is inconsistent with the License.

(d)there are no written claims, judgments or settlements against Marinus pending, or to Marinus’ knowledge, threatened that invalidate or seek to invalidate any Licensed Patent Rights in the Field in the Territory;

(e)The Licensed IP is free from any lien, restriction and other Encumbrance;

(f)Marinus is not a party to any agreement with any Governmental Authority or an agency thereof pursuant to which such Governmental Authority or such agency provided funding for the development of any of the Licensed Patent Rights or Licensed Know-How and which gives such Governmental Authority or such agency any rights to any Licensed Patent Rights or Licensed Know-How that conflicts with, or limits the scope of, the License granted to Licensee hereunder;

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY

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THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

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(g)to Marinus’ knowledge, the Development, manufacture, use, sale, offer for sale or importation of the Licensed Products currently under Development by Marinus as of the Effective Date does not infringe the Patent Rights of any Third Party; to its knowledge, Marinus has complied in all material respects with all Applicable Laws applicable to its Development and Manufacture of Licensed Products in the Field;

(h)There is no contract or agreement with any Third Party pursuant to which Marinus in-licenses or otherwise maintains Control of Patent Rights, Know-How, or other intellectual property rights that constitute Licensed IP for purposes of this Agreement in effect as of the Effective Date.

(i)Marinus and its Affiliates are not, and have not been, debarred or disqualified by any Regulatory Authority;

(j)none of Marinus’ or its Affiliates’ employees or contractors who will be involved in the Development, Manufacture or Commercialization of the Licensed Products are, or have been, debarred or disqualified by any Regulatory Authority;

(k)to Marinus’ knowledge, there is no material infringement of any of the Licensed IP by any Third Party;

(l)Marinus and its Affiliates have duly paid all registration, application, filing, recordation and maintenance fees concerning the Licensed IP as they have become due;

(m)There is no action, suit, litigation, proceeding, claim, governmental investigation or administrative action to which Marinus is a party pending or, to Marinus’ knowledge, threatened involving the Licensed Products prior to the Effective Date;

(n)To the best of Marinus’ knowledge, all Personal Data and/or other coded data relating to Clinical Trial patients enrolled in Clinical Trials conducted by or on behalf of Marinus has been collected and processed in accordance with the applicable Data Protection Laws; Marinus is fully entitled to transfer such data to Licensee;

(o)Marinus has not withheld from Licensee any material information in Marinus’ Control relating to the Licensed Product.

10.3Representations and Warranties of Licensee. Licensee represents and warrants to Marinus as of the Effective Date that:

(a)Licensee and its Affiliates are not, and have not been, debarred or disqualified by any Regulatory Authority;

(b)none of Licensee or its Affiliates’ employees or contractors who will be involved in the Development or Commercialization of the Licensed Products are, or have been, debarred or disqualified by any Regulatory Authority; and

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(c)neither Licensee nor any of its Affiliates (i) is on the Effective Date directly or indirectly, either alone or with any Third Party Developing or Commercializing any Competing Product for the treatment or prevention of TSC, RSE, or CDD for Commercialization in the Territory, or (ii) has granted a license, sublicense, option or other rights to any Third Party to conduct any of the activities in the foregoing clause (i).

10.4Covenants of Licensee. Licensee covenants to Marinus that:

(a)in the course of performing its obligations or exercising its rights under this Agreement, Licensee shall comply with all Applicable Laws, including, as applicable, GMP, GCP, and GLP standards and applicable Data Protection Laws, and shall not employ or engage any Person who has been debarred or disqualified by any Regulatory Authority or is the subject of debarment or disqualification proceedings by a Regulatory Authority;

(b)Licensee will only engage Clinical Trial sites under the Development Plan that conduct all Clinical Trials in compliance with Applicable Laws, including GCP and the ICH Guidelines, and are approved by the applicable Regulatory Authority;

(c)Licensee and its Affiliates will not use any employees or contractors in the Development or Commercialization of the Licensed Products who are, or have been, debarred or disqualified by any Regulatory Authority;

(d)except as otherwise expressly permitted in this Agreement, commencing on the Effective Date and continuing until the end of the Term, Licensee and its Affiliates will not (i) assign or otherwise transfer ownership of any Licensee Inventions outside the Territory, except to the extent such assignment or transfer does not conflict with any of the licenses granted to Marinus hereunder, or (ii) grant to any Third Party any license rights to any Licensee Inventions or Licensee IP outside the Territory or the Field if such license grant conflicts with any of the licenses granted to Marinus hereunder; and

(e)Licensee shall notify Marinus promptly upon learning of any actual or suspected misappropriation or unauthorized access to, or disclosure or use of Personal Data collected, processed, hosted or transmitted (a “Data Breach”) in performance by Licensee, its Affiliates or sublicensees of activities under this Agreement.

(f)Neither Licensee nor its Affiliates nor any member of their board of directors nor any of their managing directors are a) listed in any sanctions list, b) except for Licensee’s Affiliate in Russia, located in or incorporated under the laws of a country or territory that is the target of country-wide or territory-wide sanctions, or c) otherwise a target of economic sanctions, embargoes or other restrictive measures administered, implemented or enforced by competent Governmental Authorities or imposed pursuant to the United Nations Security Council Resolution; Licensee and its Affiliates will not do business with any Person that is a target of such sanctions; Licensee acknowledges that should Licensee or any of its Affiliates become a sanctioned party or do business with a sanctioned party, Marinus cannot effect any payments to Licensee under this Agreement until a relevant party is no longer a target of sanctions.

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10.5Covenants of Marinus. Marinus covenants to Licensee that:

(a)in the course of performing its obligations or exercising its rights under this Agreement, Marinus shall comply with all Applicable Laws, including, as applicable, GMP, GCP, and GLP standards and applicable Data Protection Laws, and shall not employ or engage any Person who has been debarred by any Regulatory Authority or is the subject of debarment or disqualification proceedings by a Regulatory Authority;

(b)Marinus will only engage Clinical Trial sites under the Development Plan that conduct all Clinical Trials in compliance with Applicable Laws, including GCP and the ICH Guidelines, and are approved by the applicable Regulatory Authority;

(c)Marinus and its Affiliates will not use any employees or contractors in the Development or Manufacture of the Licensed Products who are, or have been, debarred or disqualified by any Regulatory Authority;

(d)except as otherwise expressly permitted in this Agreement, commencing on the Effective Date and continuing until the end of the Term, Marinus and its Affiliates will not (i) assign or otherwise transfer ownership of any Licensed Patent Rights or Licensed Know-How in the Territory, except to the extent such assignment or transfer does not conflict with the License granted to Licensee hereunder, or (ii) grant to any Third Party any license rights to any Licensed Patent Rights or Licensed Know-How in the Field in the Territory if such license grant conflicts with the License granted to Licensee hereunder; and

(e)Marinus shall notify Licensee promptly upon learning of any actual or suspected Data Breach in performance by Marinus or its Affiliates or sublicensees of activities under this Agreement.

(f)Neither Marinus nor its Affiliates nor any member of their board of directors nor any of their managing directors are a) listed in any sanctions list, b) located in or incorporated under the laws of a country or territory that is the target of country-wide or territory-wide sanctions, or c) otherwise a target of economic sanctions, embargoes or other restrictive measures administered, implemented or enforced by competent Governmental Authorities or imposed pursuant to the United Nations Security Council Resolution; Marinus and its Affiliates will not do business with any Person that is a target of such sanctions; Marinus acknowledges that should Marinus or any of its Affiliates become a sanctioned party or do business with a sanctioned party, Licensee cannot effect any payments to Marinus under this Agreement until a relevant party is no longer a target of sanctions.

(g)Marinus shall fulfil all Marinus’ obligations under the Third Party agreements material to Licensee’s rights hereunder wherein the failure to so fulfill the obligations would (if uncured) have a material adverse effect on Licensee’s rights under this Agreement.

10.6NO OTHER WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED (AND

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EACH PARTY HEREBY EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS AND WARRANTIES NOT EXPRESSLY PROVIDED IN THIS AGREEMENT), INCLUDING WITH RESPECT TO ANY PATENT RIGHTS OR KNOW-HOW, INCLUDING WARRANTIES OF VALIDITY OR ENFORCEABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR USE OR PURPOSE, PERFORMANCE, AND NON-INFRINGEMENT OF ANY THIRD PARTY PATENT OR OTHER INTELLECTUAL PROPERTY RIGHT. WITHOUT LIMITING THE FOREGOING, THE PARTIES AGREE THAT THE DEVELOPMENT/REGULATORY MILESTONE EVENTS, COMMERCIALIZATION MILESTONE EVENTS, AND ANNUAL NET SALES LEVELS SET FORTH IN THIS AGREEMENT OR THAT HAVE OTHERWISE BEEN DISCUSSED BY THE PARTIES ARE MERELY INTENDED TO DEFINE THE DEVELOPMENT/REGULATORY MILESTONE PAYMENTS, COMMERCIALIZATION MILESTONE PAYMENTS, AND ROYALTY OBLIGATIONS IF SUCH DEVELOPMENT/REGULATORY MILESTONE EVENTS, COMMERCIALIZATION MILESTONE EVENTS, OR ANNUAL NET SALES LEVELS ARE ACHIEVED. NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, THAT IT WILL BE ABLE TO SUCCESSFULLY DEVELOP, MANUFACTURE, OR COMMERCIALIZE LICENSED PRODUCTS OR, IF COMMERCIALIZED, THAT ANY PARTICULAR SALES LEVEL OF SUCH LICENSED PRODUCTS WILL BE ACHIEVED.

10.7Compliance with Anti-Corruption Laws.

(a)Notwithstanding anything to the contrary in this Agreement, each Party agrees that:

(i)it shall not, in the performance of this Agreement, perform any actions that are prohibited by local and other anti-corruption laws (including the provisions of the United States Foreign Corrupt Practices Act and the UK Bribery Act) (the “Anti-Corruption Laws”) that may be applicable to it;

(ii)it shall adhere to its own internal anti-corruption policies and shall not, in the performance of this Agreement, directly or indirectly, make any payment, or offer or transfer anything of value, or agree or promise to make any payment or offer or transfer anything of value, to a government official or government employee, to any political party or any candidate for political office or to any other Third Party, in each case, with the purpose of influencing decisions related to either Party or its business in a manner that would violate Anti-Corruption Laws;

(iii)it will (A) promptly provide written notice to the other Party of any violations of Anti-Corruption Laws by it, its Affiliates or sublicensees, or persons employed by or subcontractors used by it or its Affiliates or sublicensees in the performance of this Agreement of which it becomes aware; and (B) no later than forty-five (45) days following the other Party’s written request at the end of each Calendar Year, verify in writing that, to the best of its knowledge, there have been no violations of Anti-Corruption Laws by it, its Affiliates or sublicensees, or

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persons employed by or subcontractors used by it or its Affiliates or sublicensees in the performance of this Agreement, or shall provide details of any exception to the foregoing; and

(iv)it shall maintain according to its standard practices (as consistently applied) records (financial and otherwise) and supporting documentation related to the subject matter of this Agreement in order to document or verify compliance with the provisions of this Section 10.7.

(b)Each Party represents and warrants to the other Party that, to its knowledge,   neither such Party nor any of its Affiliates, or its or their directors, officers, employees, distributors, agents, representatives, sales intermediaries or other Third Parties acting on behalf of such Party or any of its Affiliates, has been alleged to:

(i)have taken any action in violation of any applicable Anti-Corruption Laws; or

(ii)have corruptly offered, paid, given, promised to pay or give, or authorized the payment or gift of, anything of value, directly or indirectly, to any Public Official for the purposes of:

(1)influencing any act or decision of any Public Official in his or her official capacity;

(2)inducing such Public Official to do or omit to do any act in violation of his or her lawful duty;

(3)securing any improper advantage; or

(4)inducing such Public Official to use his or her influence with a government, governmental entity, or commercial enterprise owned or controlled by any government (including state-owned or controlled veterinary, laboratory or medical facilities) in obtaining or retaining any business whatsoever.

(c) Each Party further represents and warrants to the other Party that, as of the Effective Date, none of the officers, directors or employees of such Party or of any of its Affiliates or agents acting on behalf of such Party or any of its Affiliates is a Public Official, other than such who may lawfully be active in city, municipal or local government, or lawfully be an representative of any commercial enterprise owned or controlled by government or of any public international organization.

(d)For purposes of this Section 10.7, “Public Official” means (i) any officer, employee or representative of any regional, federal, state, provincial, county or municipal government or government department, agency or other division; (ii) any officer, employee or representative of any commercial enterprise that is owned or controlled by a government, including any state-owned or controlled veterinary, laboratory or medical facility; (iii) any officer, employee or representative of any public international organization, such as the African Union, the

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International Monetary Fund, the United Nations or the World Bank; or (iv) any person acting in an official capacity for any government or government entity, enterprise or organization identified above.

ARTICLE 11

INDEMNIFICATION

11.1Indemnification by Licensee. Licensee shall indemnify and hold harmless Marinus, its Affiliates, and their respective directors, officers, employees, contractors, agents and permitted assigns (individually and collectively, the “Marinus Indemnitee(s)”) from and against all losses, liabilities, damages and expenses (including reasonable attorneys’ fees and costs) (individually and collectively, “Losses”) incurred in connection with any claims, demands, actions or other proceedings by any Third Party for damage to physical property or personal injury (including loss of injured person’s earnings) or death (including such claims made on the basis of product liability) or other direct damage (individually and collectively, “Claims”) against such Marinus Indemnitee(s) to the extent arising from (a) Licensee’s actions in the Development (to the extent applicable for the Territory) or Commercialization of Licensed Products by or on behalf of Licensee or any of its Affiliates or sublicensees, in the Territory (b) the gross negligence or willful misconduct of Licensee or its Affiliates or sublicensees, (c) Licensee’s breach of any of its representations or warranties made in this Agreement or any covenants or obligations set forth in this Agreement,  (d) the failure of Licensee or its Affiliates or sublicensees to abide by any Applicable Laws, or (e) Licensee acting in the name of Marinus in instituting and/or directing legal proceedings irrespective of whether or not it occurs with the consent of Marinus, in each case of clauses (a) through (e) above, except to the extent such Losses or Claims arise out of a Marinus Indemnitee’s gross negligence or willful misconduct, breach of this Agreement, or material failure to abide by any Applicable Laws. For the avoidance of doubt, infringement of third party patent rights are not subject to indemnification hereunder and are governed solely by Section 12.4 hereunder.

11.2Indemnification by Marinus. Marinus shall indemnify and hold harmless Licensee, its Affiliates, and their directors, officers, employees, contractors, agents and permitted assigns (individually and collectively, the “Licensee Indemnitee(s)”) from and against all Losses incurred in connection with Claims against such Licensee Indemnitee(s) to the extent arising from (a) the Development, patient use of Licensed Product, Manufacture, supply of Licensed Products to Licensee, or Commercialization of Licensed Products by or on behalf of Marinus or any of its Affiliates, licensees or sublicensees (not including Licensee or its Affiliates or sublicensees), including Claims with respect to product liability  except to the extent such Claims would be indemnifiable pursuant to Section 11.1 of this Agreement,  (b) the gross negligence or willful misconduct of Marinus or its Affiliates, licensees or sublicensees, (c) Marinus’ breach of any of its representations or warranties made in this Agreement or any covenants or obligations set forth in this Agreement, (d) failure of Marinus or its Affiliates, licensees or sublicensees to abide by any Applicable Laws, or e) Marinus acting in the name of Licensee in instituting and/or directing legal proceedings irrespective of whether or not it occurs with the consent of Licensee, in each case of clauses (a) through (e) above, except to the extent such Losses or Claims arise out of any of a Licensee Indemnitee’s gross negligence or willful misconduct, breach of this Agreement or

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material failure to abide by any Applicable Laws.  For the avoidance of doubt, infringement of third party patent rights are not subject to indemnification, hereunder and are governed solely by Section l2.4 hereunder.

11.3Indemnification Procedure.

(a)Notification. If either Party is seeking indemnification under Sections 11.1 or 11.2 (the “Indemnified Party”), it shall inform the other Party (the “Indemnifying Party”) of the Claim giving rise to the obligation to indemnify pursuant to such Section as soon as reasonably practicable after receiving notice of the Claim; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party will relieve the Indemnifying Party from any obligation hereunder unless (and then only to the extent that) the Indemnifying Party is prejudiced thereby.

(b)Control. The Indemnifying Party shall have the right, exercisable by notice to the Indemnified Party within thirty (30) days after receipt of notice from the Indemnified Party of the commencement of or assertion of any Claim, to assume the direction and control of the defense, litigation, settlement, appeal or other disposition of any such Claim for which it is obligated to indemnify the Indemnified Party (including the right to settle the Claim solely for monetary consideration) with counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnified Party. During such time as the Indemnifying Party is controlling the defense of such Claim, the Indemnified Party shall reasonably cooperate with the Indemnifying Party. In the event that the Indemnifying Party does not notify the Indemnified Party of the Indemnifying Party’s intent to defend any Claim within thirty (30) days after notice thereof, the Indemnified Party may (with notice to the Indemnifying Party) undertake the defense thereof with counsel of its choice and at the Indemnifying Party’s expense (including reasonable, out-of-pocket attorneys’ fees and costs and expenses of enforcement or defense). The Indemnifying Party or the Indemnified Party, as the case may be, shall have the right to participate (including the right to conduct discovery, interview and examine witnesses and participate in all settlement conferences), but not control, at its own expense and with counsel of its choice, in the defense of any Claim that has been assumed by the other Party.

(c)Settlement. Neither Party shall have the obligation to indemnify the other Party in connection with any settlement made without the Indemnifying Party’s written consent, which consent shall not be unreasonably withheld or delayed. If the Parties cannot agree as to the application of Section 11.1 or 11.2 as to any Claim, pending resolution of such dispute, the Parties may conduct separate defenses of such Claims, with each Party retaining the right to claim indemnification from the other Party in accordance with Section 11.1 or 11.2 upon resolution of the underlying Claim.

11.4Mitigation of Loss. Each Indemnified Party shall take and shall cause its Affiliates to take all such reasonable steps and action as are reasonably necessary in order to mitigate any Losses under this Article 11. Nothing in this Agreement shall or shall be deemed to relieve any Party of any common law or other duty to mitigate any losses incurred by it.

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11.5Limitation of Liability. NEITHER MARINUS NOR LICENSEE, NOR ANY OF THEIR RESPECTIVE AFFILIATES, WILL BE LIABLE TO THE OTHER PARTY TO THIS AGREEMENT OR SUCH OTHER PARTY’S AFFILIATES UNDER OR IN CONNECTION WITH THIS AGREEMENT FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING LOST PROFITS OR LOST REVENUES), WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT PRODUCT LIABILITY), INDEMNITY, CONTRIBUTION OR OTHERWISE, AND IRRESPECTIVE OF WHETHER MARINUS OR LICENSEE, AS APPLICABLE, OR ANY REPRESENTATIVE OF THE APPLICABLE PARTY HAS BEEN ADVISED OF, OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF, ANY SUCH LOSS OR DAMAGE. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 11.5 IS INTENDED TO OR SHALL LIMIT OR RESTRICT (1)THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY FOR THIRD PARTY CLAIMS UNDER SECTIONS ‎11.1 OR ‎11.2, OR (2) DAMAGES AVAILABLE FOR A PARTY’S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 9, OR (3) DAMAGES AVAILABLE FOR A PARTY’S GROSS NEGLIGENCE OR WILFUL MISCONDUCT.

11.6Insurance. Each Party shall procure and maintain insurance, including product liability insurance, with respect to its activities hereunder and which is consistent with Applicable Laws and normal business practices of prudent companies similarly situated at all times during which any Licensed Product is being clinically tested in human subjects or commercially distributed or sold in the Territory or outside of the Territory. All such insurance coverage may be maintained through one or more policies, including an umbrella policy; provided, however, that the other Party will provide to the requesting Party a certificate of insurance evidencing such coverage in accordance with this Agreement. Each Party will maintain such insurance coverage without interruption during the Term and thereafter until the expiry of the approved shelf life of the last batch of Licensed Products delivered to Licensee under the Supply Agreement, and, if applicable, will provide certificates or letters evidencing such insurance coverage without interruption as reasonably requested during the period of time for which such coverage must be maintained. Each Party will be provided at least thirty (30) days’ prior written notice of any cancellation or material decrease in the other Party’s insurance coverage limits described above. Notwithstanding the foregoing, either Party’s failure to maintain adequate insurance will not relieve that Party of its obligations set forth in this Agreement.

ARTICLE 12

INTELLECTUAL PROPERTY

12.1Inventions.

(a)Ownership. Subject to this Section 12.1(a), as between the Parties, (i)  Licensee will solely own all Inventions conceived and first reduced to practice solely by employees or agents of Licensee or any of its Affiliates (“Licensee Inventions”), (ii) Marinus will solely own all Inventions conceived and first reduced to practice solely by employees or agents of Marinus or any of its Affiliates (“Marinus Inventions”), and (iii) Inventions conceived and first reduced to

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practice jointly by employees or agents of Licensee and Marinus or their respective Affiliates (“Joint Inventions”) will be jointly owned, with each Party having the right to freely practice, license and convey their ownership interest in any such jointly-owned Inventions without seeking consent of or accounting to the other Party, subject to and under the terms of the Agreement. Notwithstanding the foregoing, as between the Parties, any Invention conceived and first introduced to practice by employees or agents of Marinus or any of its Affiliates that relates to Ganaxolone or any Licensed Product shall be solely owned by Marinus (any such Inventions, “Marinus Improvement Inventions”). Any Invention conceived and first introduced to practice by employees of agents of Licensee or any of its Affiliates that relates to Ganaxolone or any Licensed Product shall be solely owned by Licensee (any such Inventions, “Licensee Improvement Inventions”) and Licensee hereby grants to Marinus a non-exclusive , fully paid-up, perpetual  license, under such Licensee Improvement Inventions, to Develop, Manufacture and Commercialize the Licensed Products, provided that, for the Term, such license is limited to such use outside of the Field and outside of the Territory, except to the extent necessary for Marinus to perform its obligations under this Agreement. Licensee agrees to take such further actions and execute such further documents as may be reasonably requested by Marinus with respect to the license granted to Marinus under this section.

(b)Disclosure.  Each Party shall promptly disclose to the other Party all Inventions, including all invention disclosures or other similar documents submitted to such Party by its or its Affiliates’ employees, agents, or independent contractors relating thereto, and shall also promptly respond to reasonable requests from the other Party for additional information relating thereto. Each Party shall be solely liable for dealing with, paying out or settling any employee-inventor or similar claims against it or any of its Affiliates or sublicensees and for ensuring that any rights claimed or asserted by the same are purchased or exhausted in accordance with Applicable Laws to the extent needed for it to comply with its obligations under this Section 12.1 or otherwise under this Agreement.

(c)Joint Inventions. Subject to the rights granted under and the restrictions set forth in this Agreement, it is understood that neither Party shall have any obligation to account to the other Party for profits, or to obtain any approval of the other Party to license, assign or otherwise exploit any Joint Inventions (or any Patent Rights claiming the same, “Joint Patent Rights”), by reason of joint ownership thereof, and each Party hereby waives any right it may have under the Applicable Law of any jurisdiction to require any such approval or accounting.

12.2Patent Prosecution.

(a)Licensed Patent Rights.

(i)Subject to Section 12.2(c), as between the Parties, Marinus shall have the sole right to control the Patent Prosecution of all Licensed Patent Rights at Marinus’ expense.

(ii)Marinus shall provide Licensee with a reasonable opportunity to consult with Marinus regarding, and keep Licensee reasonably informed of, the Patent Prosecution

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of the Licensed Patent Rights in the Field in the Territory. Marinus shall provide Licensee with a reasonable opportunity to review and comment on material communications from any patent authority regarding such Licensed Patent Rights in the Field in the Territory and drafts of any material filings or responses to be made to such patent authorities in advance of submitting such filings or responses. Further, Marinus shall promptly notify Licensee of any decision to cease Patent Prosecution or maintenance of any Licensed Patent Rights in the Field in the Territory. Marinus will consider Licensee’s timely-provided comments on Patent Prosecution in good faith but will have final decision-making authority under this Section 12.2(a)(ii).

(iii)If Marinus notifies Licensee in accordance with Section 12.2 (a)(ii) of its decision to cease Patent Prosecution or maintenance of any Licensed Patent Rights, Licensee shall have the right, but not the obligation, to require Marinus to continue such prosecution at Licensee’s sole expense and control.

(b)Licensee Patent Rights. As between the Parties, Licensee shall have the sole right to control the Patent Prosecution of all Licensee Patent Rights throughout the world, at Licensee’s own cost and expense.

(c)Joint Patent Rights. In the event that any Joint Invention is conceived and first reduced to practice hereunder, at either Party’s request, the Parties shall discuss a mutually acceptable filing and prosecution strategy for any Joint Patent Rights; provided that absent such agreement, Marinus shall control the Patent Prosecution of any Joint Patent Rights, as set forth in this Section 12.2(c). Unless the Parties agree in writing on an alternative arrangement, Marinus shall be responsible for all of its costs of Patent Prosecution of Joint Patent Rights. Marinus shall (A) consult with Licensee regarding such Joint Patent Rights, and any amendment, submission or response with respect to such Joint Patent Rights and keep Licensee reasonably informed of the Patent Prosecution of the Joint Patent Rights, and (B) provide Licensee with all material correspondence received from any patent authority in connection therewith in sufficient time to allow for review and comment by Licensee. Further, Marinus shall promptly notify Licensee of any decision to cease Patent Prosecution of any Joint Patent Rights in the Field in the Territory. Marinus will consider Licensee’s timely-provided comments on Patent Prosecution of the Joint Patent Rights in good faith but will have final decision-making authority under this Section 12.2(c). If Marinus notifies Licensee in accordance with this Section 12.2(c) of its decision to cease Patent Prosecution or maintenance of any Joint Patent Rights, Licensee shall have the right, but not the obligation, to take over and control the Patent Prosecution of the Joint Patent Rights, as applicable, in the Field in the Territory at its sole expense as it determines appropriate.

(d)Cooperation. Each Party shall provide the other Party with all reasonable assistance and cooperation in the Patent Prosecution efforts under this Section 12.2, including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution. For the avoidance of doubt, Licensee’s obligation to cooperate with Marinus pursuant to this Article 12 shall not include any obligation to litigate.

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12.3Patent Enforcement.

(a)Notice. Each Party shall notify the other within ten (10) Business Days of becoming aware of any alleged or threatened infringement by a Third Party of (i) any of the Licensed Patent Rights or Joint Patent Rights in the Territory or (ii) any of the Licensee Patent Rights in the Territory, which infringement of such Licensee Patent Rights adversely affects or is reasonably expected to adversely affect any Licensed Product in the Field in the Territory, and, in each case, any related declaratory judgment or equivalent action alleging the invalidity, unenforceability or non-infringement of any Licensed Patent Rights or Joint Patent Rights in the Field in the Territory or any such Licensee Patent Rights in the Territory (collectively, “Product Infringement”). For clarity, Product Infringement excludes any adversarial Patent Prosecution proceedings.

(b)Enforcement Rights.

(i)As between the Parties, Marinus shall have the first right to bring and control any legal action to enforce Licensed Patent Rights or Joint Patent Rights against any Product Infringement in the Territory at its sole expense as it reasonably determines appropriate; provided that: if Marinus does not intend to prosecute or defend a Product Infringement, or ceases to diligently pursue an enforcement with respect to such a Product Infringement, it shall promptly inform Licensee in such a manner that such enforcement will not be prejudiced and Section 12.3(b)(ii) shall apply.

(ii)If Marinus or its designee fails to abate such Product Infringement in the Field in the Territory or to file an action to abate such Product Infringement in the Field in the Territory within six (6) months after receiving or providing notice thereof pursuant to Section 12.3(a), or if Marinus discontinues the prosecution of any such action after filing without abating such Product Infringement, then Licensee shall have the right, but not the obligation, to enforce the Licensed Patent Rights or Joint Patent Rights, as applicable, against such Product Infringement in the Field in the Territory at its sole expense as it reasonably determines appropriate and shall keep Marinus reasonably informed with respect to any such enforcement action; provided that Licensee shall not enter into any settlement admitting the invalidity of, or otherwise impairing, any Licensed Patent Rights or Joint Patent Rights in the Field in the Territory without the prior written consent of Marinus, which consent shall not be unreasonably withheld, delayed or conditioned.

(iii)As between the Parties, Licensee shall have the sole right, but not the obligation, to bring and control any legal action to enforce Licensee Patent Rights against any Product Infringement in the Territory at its sole expense as it reasonably determines appropriate, and shall keep Marinus reasonably informed with respect to any such legal action.

(iv)For clarity, Licensee shall not have the right to enforce any Licensed Patent Rights or Joint Patent Rights outside of the Territory or outside the Field. Marinus shall have the sole right to enforce any Licensed Patent Rights or Joint Patent Rights outside of the Territory and outside of the Field.

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(c)Cooperation. At the request of the Party bringing an action related to Product Infringement, the other Party shall provide reasonable assistance in connection therewith, including by executing reasonably appropriate documents, cooperating in discovery and, subject to a separate written agreement by the Parties, joining as a party to the action if required by Applicable Laws to pursue such action, at each such Party’s sole cost and expense, unless otherwise agreed in a separate written agreement by the Parties.

(d)Recoveries. Any recoveries resulting from an enforcement action relating to a claim of Product Infringement in the Territory will first be applied to costs and expenses incurred by each Party in connection with such action (including, for this purpose, a reasonable allocation of expenses of internal counsel) (provided that if the amount of such recovery is not sufficient to cover all such costs and expenses of each Party, then the amount of the recovery will be proportionately shared by the Parties based on the amount of such costs and expenses incurred by each Party), and, with respect to any remaining proceeds, (i) the Parties shall negotiate in good faith an appropriate allocation of such remaining proceeds to reflect the economic interests of the Parties under this Agreement with respect to such Product Infringement and (ii) unless otherwise agreed in subsection (i), seventy-five percent (75%) of such remaining proceeds will be allocated to the enforcing Party and twenty-five percent (25%) of such remaining proceeds will be allocated to the non-enforcing Party.

12.4Infringement of Third Party Rights. Subject to the Parties’ rights and obligations under Article 11, in the event that a claim is brought against either Party alleging the infringement, violation or misappropriation of any Third Party intellectual property right based on the manufacture, use, sale, offer for sale or importation of the Licensed Products in the Field in the Territory, the Parties shall promptly meet to discuss the defense of such claim, and the Parties may, as appropriate, enter into a joint defense agreement with respect to the common interest privilege protecting communications regarding such claim in a form reasonably acceptable to the Parties. The Parties shall cooperate to minimize any potential damages that may accrue to the third party asserting infringement.  Without prejudice to the foregoing, should it become necessary in order to defend against or avoid any such claim, for Marinus to enter into a license with the Third Party, (i) for claims relating to intellectual property rights listed on Schedule 10.2(g), the amounts payable to said Third Party under  such license (to the extent that they pertain to the Territory), to the extent not covered by Marinus, may be paid directly to such Third Party by Licensee and upon such payment deducted in full by Licensee from the amounts payable by Licensee to Marinus under this Agreement and (ii) for all other claims alleging infringement based on the Commercialization of Licensed Product as supplied by Marinus in accordance with this Agreement and the Supply Agreement, the Parties shall share equally the amounts payable to the Third Party under such license (as they pertain to the Territory). Insofar as such license would not be available under commercially reasonable terms and should the infringement persist, or in the event that there is an injunction issued that remains in place for greater than 90 days, the Parties shall discuss in good faith the appropriate course of action, provided, however, that should the Parties fail to agree on a mutually acceptable solution, then, notwithstanding any other provision of this Agreement, Licensee shall have the right to terminate this Agreement forthwith by written notice to Marinus and  without further obligation or liability of either Party of any kind whatsoever, except as necessary to the orderly winding up of this Agreement.  NEITHER MARINUS NOR LICENSEE, NOR ANY OF THEIR RESPECTIVE AFFILIATES,

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WILL BE LIABLE TO THE OTHER PARTY TO THIS AGREEMENT OR SUCH OTHER PARTY’S AFFILIATES UNDER OR IN CONNECTION WITH THIS AGREEMENT FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING LOST PROFITS OR LOST REVENUES) SUFFERED BY SUCH PARTY AS A RESULT OF INFRINGEMENT OF THIRD PARTY RIGHTS, HOWEVER SUCH LIABILITY IS ASSERTED AND IRRESPECTIVE OF WHETHER MARINUS OR LICENSEE, AS APPLICABLE, OR ANY REPRESENTATIVE OF THE APPLICABLE PARTY HAS BEEN ADVISED OF, OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF, ANY SUCH LOSS OR DAMAGE.

12.5Patent Rights Licensed from Third Parties. Each Party’s rights under this Article 12 with respect to the prosecution and enforcement of any Licensed Patent Rights that is licensed by Marinus from a Third Party,  shall be subject to the rights of such Third Party to prosecute and enforce such Patent Rights as such rights are set forth in the said agreement. The Parties acknowledge that as of the Effective Date there are no Patent Rights within the Licensed IP that are licensed by Marinus from Third Parties.

12.6Patent Term Extensions. Licensee will reasonably cooperate with Marinus, including providing reasonable assistance to Marinus in its efforts to seek and obtain patent term restoration or supplemental protection certificates or the like or their equivalents in any country in the Territory, where applicable to Licensed Patent Rights, including as may be available to the Parties under the provisions of Regulation (EC) No 469/2009 or comparable laws in other jurisdictions, in each case, in connection with any Licensed Product. Notwithstanding anything to the contrary contained herein, if elections with respect to obtaining such patent term restoration or supplemental protection certificates or the like or their equivalents in the Territory are to be made in connection therewith, the Parties will mutually agree upon the election. In the event that the Parties are unable to agree upon the election, Marinus shall have the right to make the election in its discretion.

12.7Product Trademarks.

(a)Licensee shall have the right, but not the obligation, after consultation with Marinus, to brand the Licensed Products using trademarks and trade names it determines appropriate in its sole discretion for the Licensed Products, which may vary within the Territory and/or which may be the same trademark and/or trade name Marinus uses for the Licensed Product outside the Territory (the “Product Marks”). Marinus shall own all right, title and interest in and to the Product Marks in the Territory and shall register and maintain the Product Marks to the extent it determines reasonably necessary. For the avoidance of doubt, Marinus shall not own any title, right, license or interest in Licensee’s Orion, Orion Corporation, Orion Pharma company names/marks nor Licensee’s logos for the same.  The Parties shall establish a Working Group to discuss a global brand for the Licensed Product. In the event this Agreement is terminated by Marinus at the end of the Initial Term for any reason other than Licensee’s material breach of this Agreement, then upon such termination, with regard to relevant country/ies of the Territory, as compensation for Licensee’s costs and efforts for creating goodwill in the Product Mark(s), Marinus shall pay Licensee a running royalty [***] [***] ([***]) of Net Sales of the Products sold under the Product Marks in the relevant country/ies of the Territory for a period of three (3) years

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from the effective date of termination of the Agreement with regard to such country/ies of the Territory.

(b)Licensee shall use the Product Marks to Commercialize the applicable Licensed Product in the Territory. Marinus hereby grants to Licensee a limited license to use Product Marks solely to perform its obligations under this Agreement and in connection with the packaging, labeling and Commercialization of the applicable Licensed Product. All use of the Product Marks shall comply with Applicable Laws.

12.8Patent Marking. Licensee shall mark all Licensed Products in accordance with Applicable Laws, including the applicable patent marking laws, and shall require all of its Affiliates and sublicensees to do the same. To the extent permitted by Applicable Laws, Licensee shall indicate on the product packaging, advertisement and promotional materials that certain of Licensee’s rights with respect to such Licensed Product are in-licensed from Marinus.

ARTICLE 13

TERM AND TERMINATION

13.1Term. This Agreement shall be effective as of the Effective Date, and shall continue in effect, on a country-by-country basis for a period ending upon expiration of the  Royalty Term in such country (with respect to each country, the “Initial Term”). Upon expiration of the Initial Term for a country, this Agreement shall automatically renew for additional, successive two (2) year terms (each, an “Automatic Renewal Term,” and any Automatic Renewal Terms, together with the Initial Term for a country, constituting the “Term” for such country), until either Party delivers notice of its intent not to renew at least six (6) months prior to end of either the Initial Term or the then-applicable Automatic Renewal Term for such country.

13.2Termination.

(a)Termination for Material Breach.

(i)If either Licensee or Marinus is in material breach of this Agreement, the non-breaching Party may give notice to the breaching Party specifying the claimed particulars of such breach (a “Breach Notification”). If the Party receiving a Breach Notification fails to cure, or fails to dispute, that material breach on or before sixty (60) days from the date of the Breach Notification (or thirty (30) days from the date of the Breach Notification in the event the Breach Notification relates to a failure to pay any amounts due under this Agreement) (the “Applicable Cure Period”), then, the Party delivering the Breach Notification may terminate this Agreement upon fifteen (15) days prior written notice to the other Party.

(b)Termination for Patent Challenge. Marinus may terminate this Agreement upon sixty (60) days’ written notice to Licensee in the event that Licensee or any of its Affiliates or sublicensees challenges or contests, or materially assists any other person to challenge or contest, the validity, enforceability or scope of any of the Licensed Patent Rights, unless, prior to the expiration of such sixty (60)-day period, Licensee or its Affiliate or sublicensee withdraws such challenge or contest; provided, however, that Marinus shall not be entitled to terminate this

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Agreement if Licensee or its Affiliate or sublicensee so challenges the Licensed Patent Rights in connection with defense, cross-claim or counterclaim to an action brought by Marinus or any of its Affiliates with respect to a product other than a Licensed Product; and further provided that Marinus shall not be entitled to terminate this Agreement if the challenge was initiated by an Affiliate of Licensee prior to such Affiliate being an Affiliate of Licensee (e.g., through an acquisition or other Change of Control) (provided, that Licensee causes such Affiliate to withdraw such challenge or contest within sixty (60) days following the consummation of such acquisition or other Change of Control).

(c)Termination for Forecast Failure. If at any time after the fifth (5th) anniversary of the First Commercial Sale of a given Licensed Product formulation, Annual Net Sales of units of such Licensed Product formulation by Licensee for a Calendar Year are equal to or less than [***] ([***]) of the projected unit Net Sales set forth in the Forecast (the “Forecast Threshold”) for such Calendar Year, Licensee shall provide written notice to Marinus of such failure. Licensee shall have an opportunity to cure such failure by returning Annual Net Sales in the subsequent Calendar Year to at least the Forecast Threshold for such subsequent Calendar Year, and if Annual Net Sales in such subsequent Calendar Year do not meet or exceed the Forecast Threshold for such subsequent Calendar Year, then Marinus shall, insofar as such failure has not been outside of Licensee’s control as provided in Section 14.6 of this Agreement, have the right (as its sole remedy), but not the obligation, to, at its option, either terminate this Agreement on a country-by-country basis and upon ninety (90) days written notice to Licensee or convert Licensee’s exclusive License to such Licensed Product formulation into a non-exclusive License, provided, however, that in either case Marinus shall so notify Licensee within sixty (60) days after receipt of Licensee’s sales and royalty report to Marinus for such Calendar Year.

(d)Termination for Insolvency. Each Party shall have the right to terminate this Agreement upon delivery of written notice to the other Party in the event that (i) such other Party files in any court or agency pursuant to any statute or regulation of any jurisdiction a petition in bankruptcy or insolvency or for reorganization or similar arrangement for the benefit of creditors or for the appointment of a receiver or trustee of such other Party or its assets, (ii) such other Party is served with an involuntary petition against it in any insolvency proceeding and such involuntary petition has not been stayed or dismissed within sixty (60) days of its filing, or (iii) such other Party makes an assignment of all or substantially all of its assets for the benefit of its creditors.

(e)Termination for Force Majeure. Each Party may terminate this Agreement in accordance with Section 14.6.

(f)Full Force and Effect During Notice Period. This Agreement shall remain in full force and effect until the expiration of the Applicable Cure Period or other termination notice period. For clarity, if any milestone event is achieved under Section 8.2 or 8.3 or royalty payments become payable under Section 8.4 during the termination notice period, the corresponding milestone payment or royalty payment, as applicable, is accrued and Licensee shall remain responsible for the payment of such milestone payment or royalty payment, as applicable, even if the due date of such milestone payment or royalty payment, as applicable, may come after the effective date of the termination.

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13.3Effect of Termination. Except as provided in Section 13.4, if this Agreement is terminated the following shall apply:

(a)License Grant to Licensee.  Except as otherwise specifically set forth in this Agreement, the License and all other rights granted by Marinus to Licensee under the Licensed IP pursuant to this Agreement shall terminate.

(b)License. Licensee shall grant and hereby grants (effective upon the effective date of such termination) to Marinus (i) an non-exclusive, fully-paid, royalty-free and sublicensable (through multiple tiers) license under the Licensee Inventions to Develop, Manufacture and Commercialize any Licensed Products in and outside of the Field and the Territory, and (ii) a non-exclusive, fully-paid, royalty-free and sublicensable (through multiple tiers) license under the Licensee IP to Develop, Manufacture and Commercialize any Licensed Products in the Field and the Territory.

(c)Regulatory Submissions and Approvals. Upon Marinus’ written request to the extent delivered on or before the effective date of termination or within thirty (30) days thereafter and to the extent permissible under Applicable Law, Licensee shall provide Marinus with copies of all Regulatory Submissions, Regulatory Approvals and pricing and reimbursement approvals for Licensed Products in the Territory. To the extent permissible under Applicable Law, Licensee shall assign to Marinus or shall provide Marinus with a right of reference with respect to such Regulatory Submissions, Regulatory Approvals and pricing and reimbursement approvals, in each case, as the Parties determine in good faith, at Marinus cost and expense. In addition, upon Marinus’ written request, Licensee shall, at Marinus’ cost and expense, provide to Marinus copies of all material related documentation, including material non-clinical, preclinical and clinical data that are held by or reasonably and readily available to Licensee or its Affiliates. The Parties shall discuss and establish appropriate arrangements with respect to safety data exchange.

(d)Inventory. At Marinus’ election and request, Licensee shall, to the extent reasonably possible and legally permissible, transfer to Marinus or its designee some or all inventory of Licensed Products (including all final product, bulk drug substance, intermediates, works-in-process, formulation materials, reference standards, drug product clinical reserve samples, packaged retention samples, and the like) then in the possession or control of Licensee or its Affiliates or sublicensees; provided that, subject to Licensee providing customary warranties with respect to such inventory, Marinus will pay Licensee a price equal to the price paid by Licensee to Marinus for such transferred Licensed Products. Except in the case of termination of this Agreement pursuant to Section 13.2(a) in connection with Licensee’s material breach of this Agreement, Licensee will have the right to sell all remaining inventory of Licensed Products if Marinus does not purchase such inventory pursuant to this Section 13.3(d)).

(e)Access to Third Party Rights.  In the event that this Agreement is terminated by Licensee pursuant to Sections 13.2(a) or (d) or in the event of termination of any Third Party agreement material to Licensee’s rights hereunder wherein such termination would have a material adverse effect on Licensee’s rights under this Agreement, then Marinus shall use Commercially Reasonable Efforts to secure, by sublicense or otherwise, continuing rights for

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Licensee to any Third Party Patent Rights or Know-How Controlled by Marinus, if any, necessary for Licensee to continue to Commercialize, in the Field in the Territory those Licensed Products that are being Commercialized by Licensee on the date of such termination.

(f)Wind Down and Transition. Licensee shall be responsible, at its own cost and expense, for the wind-down of Licensee’s and its Affiliates’ and its sublicensees’ Development and Commercialization activities for Licensed Products. Licensee shall, and shall cause its Affiliates and its sublicensees to, reasonably cooperate with Marinus to facilitate the orderly transition of the Development and Commercialization of the Licensed Products to Marinus or its designee, including (i) assigning or amending, as appropriate and to the extent reasonably possible, upon request of Marinus, any agreements or arrangements with Third Party vendors (including distributors) to Develop, promote, distribute, sell or otherwise Commercialize Licensed Products or, to the extent any such Third Party agreement or arrangement is not assignable to Marinus, reasonably cooperating with Marinus to arrange to continue to provide such services for a reasonable time after termination, subject to a separate written agreement by the Parties; and (ii) to the extent that Licensee or its Affiliate is performing any activities described above in (i), use Commercially Reasonable Efforts to cooperate with Marinus or such Affiliate to transfer such activities to Marinus or its designee and continuing to perform such activities on Marinus’ or its Affiliate’s behalf for a reasonable time after termination until such transfer is completed, subject to a separate written agreement by the Parties.

(g)Ongoing Clinical Trials. If, at the time of such termination, Licensee or its Affiliates are conducting any Clinical Trials for a Licensed Product, then, at Marinus’ election on a Clinical Trial-by-Clinical Trial basis to the extent delivered on or before the effective date of termination: (i) to the extent permissible under Applicable Law, Licensee shall, and shall cause its Affiliates to, cooperate with Marinus to transfer the conduct of such Clinical Trial to Marinus or its designees and complete such transfer promptly and, in any case, within six (6) months after the termination effective date, and Marinus shall assume any and all liability for the conduct of such transferred Clinical Trial after the effective date of such transfer (except to the extent arising prior to the transfer date from any willful misconduct or negligent act or omission by Licensee, its Affiliates or their respective employees, agents and contractors); or (ii) except to the extent prohibited by Applicable Law, Licensee shall, at its cost and expense, orderly wind-down the conduct of any such Clinical Trial that is not assumed by Marinus under clause (i) above.

(h)Return of Confidential Information. At the Disclosing Party’s election, the Receiving Party will return (at the Disclosing Party’s expense) or destroy all tangible materials comprising, bearing, or containing any Confidential Information of the Disclosing Party or any of its Affiliates that are in the Receiving Party’s or its Affiliates’ possession or control and provide written certification of such destruction (except to the extent any information is the Confidential Information of both Parties or to the extent that the Receiving Party has the continuing right to use the Confidential Information under this Agreement); provided that, the Receiving Party may retain one copy of such Confidential Information for its legal archives. Notwithstanding anything to the contrary set forth in this Agreement, the Receiving Party will not be required to destroy electronic files containing such Confidential Information that are made in the ordinary course of its business information back-up procedures pursuant to its electronic record retention and destruction

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practices that apply to its own general electronic files and information; provided, however, that any Confidential Information so maintained shall remain subject to the non-use and non-disclosure obligations set forth herein until such time as such Confidential Information is fully and finally destroyed.

13.4Survival. Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination. Without limiting the foregoing, the provisions of Article I, Section 2.4 (a) (License Grants to Marinus), 5.3 (Safety and Regulatory Inspections), 5.4 (Adverse Regulatory Actions),  8.9 (Records and Audit Rights), Article 9 (Confidentiality), Section 10.6 (No other Warranties), Article 11 (Indemnification), Section 12.1 (Ownership), Section 12.4 (Infringement of Third Party Rights), Section 12.7 (Product Trademarks), Section 13.3 (Effects of Termination), Section 13.5 (Termination Not Sole Remedy) of  Article 14 (Miscellaneous) shall survive the expiration or termination of this Agreement.

13.5Termination Not Sole Remedy. Except only as provided in Section 12.4 and Section 13.2 (c) of this Agreement, termination is not the sole remedy under this Agreement and, whether or not termination is affected and notwithstanding anything contained in this Agreement to the contrary, all other remedies shall remain available except as agreed to otherwise herein.

13.6Termination for Safety. If, at any time during the Term,  a) Marinus or its Affiliate decides not to file an application for Regulatory Approval for the Licensed Product (or a dosage form) in the Territory or decides to withdraw such application due to legitimate and documented adverse reactions or other safety issues with the Licensed Product (collectively, “Safety Issues”), b) Marinus’ or its Affiliate’s application for Regulatory Approval is rejected in the Territory due to Safety Issues, c) Marinus’ or its Affiliate’s application for Regulatory Approval in the Territory is subsequently withdrawn because of Safety Issues, d) the Licensed Product is recalled or withdrawn from the market because of Safety Issues, or e) the Development of the Licensed Product is discontinued due to Safety Issues, then either Party shall have the right to terminate this Agreement upon thirty (30) days prior written notice to the other Party. Prior to such termination, the Parties shall discuss and give good faith consideration to the other Party’s views (including without limitation those regarding label restrictions and/or warnings) regarding such termination.

ARTICLE 14

MISCELLANEOUS

14.1Assignment. Except as provided in this Section 14.1, this Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or otherwise transferred, by either Party without the consent of the other Party; provided, however, that (and notwithstanding anything elsewhere in this Agreement to the contrary) (a) either Party may, without the written consent of the other Party, assign or otherwise transfer this Agreement or any of its rights and obligations hereunder, in whole or in part: (i) to an Affiliate of such Party or (ii) in connection with the transfer or sale of all or substantially all of its assets or business that relate to the Licensed Product, or in the event of its merger or consolidation or similar transaction constituting a Change of Control of such Party; (b) Marinus may, without the written consent of Licensee, sell or transfer its right to receive unpaid royalty or other payments hereunder to a Third

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Party; and (c) Marinus may, without the consent of Licensee, assign its rights and obligations under this Agreement to a Third Party in connection with Marinus’ divestiture of rights related to a Licensed Product. Any attempted assignment not in accordance with this Section 14.1 shall be void. Any permitted assignee shall assume all assigned obligations of its assignor under this Agreement. Any permitted assignment of this Agreement to an Affiliate shall not operate to release the assigning Party from any of its obligations under this Agreement that have accrued prior to the assignment of this Agreement unless the Parties otherwise agree in writing.

14.2Extension to Affiliates. Except as expressly set forth otherwise in this Agreement, each Party shall have the right to extend the rights and obligations granted in this Agreement to one or more of its Affiliates by providing written notice to the other Party. All applicable terms and provisions of this Agreement, except this right to extend, shall apply to any such Affiliate to which this Agreement has been extended to the same extent as such terms and provisions apply to the Party extending such rights and obligations. The Party extending the rights and obligations granted hereunder shall remain primarily liable for any acts or omissions of its Affiliates.

14.3Severability. Should one or more of the provisions of this Agreement become void or unenforceable as a matter of Applicable Laws, then this Agreement shall be construed as if such provision were not contained herein and the remainder of this Agreement shall be in full force and effect, and the Parties will use their best efforts to substitute for the invalid or unenforceable provision a valid and enforceable provision which conforms as nearly as possible with the original intent of the Parties.

14.4Governing Law; English Language. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to any rules of conflict of laws. This Agreement was prepared in the English language, which language shall govern the interpretation of, and any dispute regarding, the terms of this Agreement. All reports and other communications under or in connection with this Agreement shall be in the English language.

14.5Dispute Resolution.

(a)If any dispute, claim or controversy of any nature arising out of or relating to this Agreement, including any action or claim based on tort, contract or statute, or concerning the interpretation, effect, termination, validity, performance or breach of this Agreement (each, a “Dispute”), arises between the Parties and the Parties cannot resolve such Dispute through good faith discussions, within thirty (30) days of a written request by either Party to the other Party (“Notice of Dispute”), either Party may refer the Dispute to Executive Officers of each Party for resolution. Each Party, within five (5) Business Days after a Party has received such written request from the other Party to so refer such Dispute, shall notify the other Party in writing of the Executive Officer to whom such dispute is referred. If, after an additional thirty (30) days after the Notice of Dispute, such Executive Officers have not succeeded in negotiating a resolution of the Dispute, and a Party wishes to pursue the matter, each such Dispute shall be finally resolved by binding arbitration administered by the International Chamber of Commerce (“ICC”) (or any successor

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entity thereto) pursuant to the rules of  arbitration of the International Chamber of Commerce  then in effect (the “Rules”) by one or more arbitrators appointed in accordance with the said Rules.

(b) The place of arbitration shall be New York City and all proceedings and communications shall be in English.

(c) Decisions of the panel of arbitrators shall be based on the application of the governing law in accordance with Section 14.4 and, absent manifest error, shall be final and binding on the Parties. Judgment on the award so rendered may be entered in any court having competent jurisdiction thereof and the Parties hereby consent to the jurisdiction of any such court for purposes of enforcement of such award. No arbitrator (nor the panel of arbitrators) shall have the power to award punitive damages under this Agreement and such award is expressly prohibited, except to the extent allowed under Section 11.5.  The fees of the arbitrators and the costs of arbitration shall be paid by the Parties as the arbitrators determine. Except in a proceeding to enforce the results of the arbitration or as otherwise required by Applicable Laws, neither Party nor any arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both Parties.

(d)In no event shall an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy or claim would be barred by the applicable New York statute of limitations if brought in a court of the State of New York.

(e)Notwithstanding anything to the contrary in this Agreement, a Party may seek a temporary restraining order or a preliminary injunction from any court of competent jurisdiction in order to prevent immediate and irreparable injury, loss or damage on a provisional basis, pending the decision of the arbitrators on the ultimate merits of any Dispute under this Section 14.5.

14.6Force Majeure. Neither Party shall be responsible to the other Party for any failure or delay in performing any of its obligations under this Agreement or for other nonperformance hereunder (excluding, in each case, the obligation to make payments when due) if such delay or nonperformance is caused by pandemic, epidemic, strike, fire, flood, earthquake, accident, war, act of terrorism, act of God or of the government of any country or of any local government, or by any other cause unavoidable or beyond the reasonable control of such Party. In such event, the Party affected will use reasonable efforts to resume performance of its obligations and will keep the other Party informed of actions related thereto. If any such failure or delay in a Party’s performance of its material obligations hereunder continues for more than one hundred eighty (180) days, the other Party may terminate this Agreement upon written notice to the delayed Party.

14.7Waivers and Amendments. The failure of any Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other Party. No waiver shall be effective unless it has been given in writing and signed by

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the Party giving such waiver. No provision of this Agreement may be amended or modified other than by a written document signed by authorized representatives of each Party.

14.8Relationship of the Parties. Nothing contained in this Agreement shall be deemed to constitute a partnership, joint venture, or legal entity of any type between Marinus and Licensee, or to constitute one as the agent of the other. Each Party shall act solely as an independent contractor, and nothing in this Agreement shall be construed to give any Party the power or authority to act for, bind, or commit the other Party.

14.9Notices. All notices, consents or waivers under this Agreement shall be in writing and will be deemed to have been duly given when (a) scanned and converted into a portable document format file (i.e., pdf file) and sent as an attachment to an e-mail message (and promptly confirmed by registered letter or overnight courier by an internationally recognized overnight delivery service (receipt requested)), or (b) the earlier of when received by the addressee or five (5) days after it was sent, if sent by registered letter or overnight courier by an internationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and e-mail addresses set forth below (or to such other addresses and e-mail addresses as a Party may designate by notice):

If to Marinus:	Marinus Pharmaceuticals, Inc.
	5 Radnor Corporate Center, 100 Matsonford Road
	100 Matsonford Road, Suite 500
	Radnor, PA 19087
	Attention: [***]
	Tel: [***]
	with a copy to (which shall not constitute notice):
	Hogan Lovells US LLP
	1735 Market Street, Floor 23
	Philadelphia, PA 19103
	Attention: Steve J. Abrams
	[***]: [***]
If to Licensee:	Orion Corporation
	Orionintie 1,
	02200 Espoo,
	Finland
	Attn: [***]
	[***]: [***]
	with a copy to (which shall not constitute notice):

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Orion Corporation Legal Affairs

Orionintie 1,

02200 Espoo, Finland

Attn: [***]

[***]: [***]

14.10Further Assurances. Licensee and Marinus hereby covenant and agree, without the necessity of any further consideration, to execute, acknowledge and deliver any and all documents and take any action as may be reasonably necessary to carry out the intent and purposes of this Agreement.

14.11Compliance with Law. Each Party shall perform its obligations under this Agreement in accordance with all Applicable Laws. No Party shall, or shall be required to, undertake any activity under or in connection with this Agreement which violates, or which it believes, in good faith, may violate, any Applicable Laws.

14.12No Third Party Beneficiary Rights. This Agreement is not intended to and shall not be construed to give any Third Party any interest or rights (including any Third Party beneficiary rights) with respect to or in connection with any agreement or provision contained herein or contemplated hereby, except as otherwise expressly provided for in this Agreement.

14.13Entire Agreement. This Agreement, together which the Exhibits hereto, sets forth the entire agreement and understanding of the Parties as to the subject matter hereof and supersedes all proposals, oral or written, and all other communications between the Parties with respect to such subject matter. The Parties acknowledge and agree that, as of the Effective Date, all Confidential Information disclosed pursuant to the Confidentiality Agreement by a Party or its Affiliates shall be included in the Confidential Information subject to this Agreement and the Confidentiality Agreement is hereby superseded in its entirety; provided that the foregoing shall not relieve any Person of any right or obligation accruing under the Confidentiality Agreement prior to the Effective Date. “Confidentiality Agreement” means the Confidential Disclosure Agreement between Marinus and Licensee dated November 22, 2020.

14.14Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

14.15Expenses. Except as otherwise set forth in this Agreement, each Party shall pay its own costs, charges and expenses incurred in connection with the negotiation, preparation, completion and performance of this Agreement.

14.16Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective legal representatives, successors and permitted assigns.

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14.17Construction. The Parties hereto acknowledge and agree that: (a) each Party and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its revision; (b) the rule of construction to the effect that any ambiguities are resolved against the drafting Party shall not be employed in the interpretation of this Agreement; and (c) the terms and provisions of this Agreement shall be construed fairly as to all Parties and not in a favor of or against any Party, regardless of which Party was generally responsible for the preparation of this Agreement.

14.18Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive unless explicitly stated to be so, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

14.19Export. Each Party acknowledges that the laws and regulations of the United States may restrict the export and re-export of certain commodities and technical data of United States origin. Each Party agrees that, to the extent applicable to the collaboration under this Agreement, it will not export or re-export restricted commodities or the technical data of the other Party in any form without appropriate United States and foreign government licenses.

IN WITNESS WHEREOF, the Parties intending to be bound have caused this Agreement to be executed by their duly authorized representatives.

MARINUS PHARMACEUTICALS, INC.

By:	/s/ Steven Pfanstiel
Name:	Steven Pfanstiel
Title:	Chief Financial Officer

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ORION CORPORATION

By:	/s/ Satu Ahomäki
Name:	Satu Ahomäki
Title:	Senior Vice President, Commercial Operations

By:	/s/ Timo Lappalainen
Name:	Timo Lappalainen
Title:	President & CEO

[Signature Page to Collaboration Agreement]

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List of Exhibits
Exhibit A:	Licensed Patent Rights and Product Marks
Exhibit B:	Initial Development Plan
Exhibit C:	Supply Agreement
Schedule 1.20	Contemplated Clinical Trials
Schedule 10.2:	Exceptions

[List of Exhibits]

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EXHIBIT A

LICENSED PATENT RIGHTS

[***]

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EXHIBIT A

PRODUCT MARKS

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EXHIBIT B

INITIAL DEVELOPMENT PLAN*

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EXHIBIT C

SUPPLY AGREEMENT

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MANUFACTURING AND SUPPLY AGREEMENT

THIS MANUFACTURING AND SUPPLY AGREEMENT (this “Agreement”) is made and entered into as of the Effective Date of the Collaboration Agreement (as defined below) (the “Effective Date”), by and between  Orion Corporation, a corporation incorporated and existing under the laws of Finland, business identity code 1999212-6  having a principal place of business at Orionintie 1, 02200 Espoo, Finland (“Customer”), on the one hand, and Marinus Pharmaceuticals, Inc. a corporation incorporated and existing under the laws of the State of Delaware  having a principal place of business at 5 Radnor Corporate Center, 100 Matsonford Rd, Suite 500, Radnor, PA 19087 USA, together with its Affiliates including Marinus Pharmaceuticals Emerald Limited, a limited liability company formed  and existing under the laws of Ireland, registration number 688211, having registered address at 10 Earlsfort Terrace, Dublin 2, D02 T380, Ireland, all as the context requires (“Supplier”), on the other hand.  Customer and Supplier are collectively referred to herein as the “Parties”, and each, a “Party”.

RECITALS

WHEREAS, Supplier through its subcontractors has the capability to manufacture Ganaxolone   oral suspension and Ganaxolone IV (as further defined in the definition of “Licensed Product” in the Collaboration Agreement between the Parties dated as of July 30, 2021 (the “Collaboration Agreement”)) finished drug product in bulk packaged form, such bulk packaged form including the primary packaging and the packaging necessary for delivery to Customer (“Primary Packaging”) meeting (i) the Specifications (as defined below) and  (ii) other requirements set forth in Supplier’s warranties under this Agreement (the “Product”);

WHEREAS, Pursuant to the Collaboration Agreement, Customer intends to market and sell Products in the Territory (as defined in the Collaboration Agreement); and

WHEREAS, Customer desires to purchase from Supplier the bulk Product in Primary Packaging for delivery to Customer and Supplier desires to supply the bulk Product in Primary Packaging to Customer on the terms and subject to the conditions set forth herein.

WHEREAS,  Supplier desires to have Customer pack the Product in finished consumer packs and to have Customer’s Qualified Person (QP) release the finished Product to the market in the Territory and Customer desires to do so on the terms and subject to the conditions set forth herein;  Customer shall act as the EU release site for Marinus who shall be the holder of the Regulatory Approval for the Product in the Territory.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

1. DEFINITIONS

1.1Definitions.  As used in this Agreement, the following capitalized terms have the meanings indicated below:

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1.1.1“Affiliate” means, with respect to a Person, any other Person which, directly or indirectly through one (1) or more intermediaries, controls, is controlled by or is under common control with such Person. For purposes of this definition, the term “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) as used with respect to a Person means (a) direct or indirect ownership of more than fifty percent (50%) of the voting securities or other voting interest of any Person, or (b) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract, as a general partner,  or otherwise. The Parties acknowledge that in the case of certain entities organized under the laws of certain countries outside the United States, the maximum percentage ownership permitted by law for a foreign investor may be less than fifty percent (50%), and that in such case such lower percentage will be substituted in the preceding sentence, provided that such foreign investor has the power to direct the management and policies of such entity.

1.1.2“Agreement” and “Collaboration Agreement” have the meanings set forth in the preamble hereto.

1.1.3“Supplier” has the meaning set forth in the preamble hereto.

1.1.4“Supplier Improvement” means any Invention that is developed  during the Term by Supplier  under this Agreement or any other written agreement between the Parties for the manufacture (including, for the avoidance of doubt, the Manufacture) and supply of Products and either relates exclusively to (i) Supplier Technology or (ii) manufacturing, processing or packaging pharmaceutical products generally.

1.1.5“Supplier Representatives” has the meaning set forth in Section 11.2.

1.1.6“Supplier Technology” means (a) all intellectual property and embodiments thereof, including any Inventions, owned by Supplier or its Affiliates as of the Effective Date hereof and (b) the Supplier Improvements.

1.1.7“Applicable Laws” has the meaning set forth in Section 6.1.

1.1.8“Backup Supplier” has the meaning set forth in Section 3.2.

1.1.9“Batch” means, at any given time, a discrete output or isolation from a set of unit operations described in the then-current batch record instructions for the Product.  The batch size for the Product shall be related to the capacity of a given equipment train and is dependent on the maximum utilization of the bottle-neck reactor or vessel.  As of the Effective Date, a Batch of the Product shall mean[  * ]units  of Product, which batch size may be modified from time to time. ¹

1.1.10“Business Day” means a day on which banking institutions in the United States and Finland are open for business.

1.1.11“Calendar Quarter” means, with respect to any given Calendar Year, the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30

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or December 31; provided, however, that (a) the first Calendar Quarter of the Term shall end on  the last day of the Calendar Quarter in which the Effective Date falls and (b) the last Calendar Quarter of the Term shall end upon the effective date of expiration or termination of this Agreement.

1.1.12“Calendar Year” means each successive period of twelve (12) consecutive months commencing on January 1 and ending on December 31; provided, however, that (a) the first Calendar Year of the Term shall begin on the Effective Date and end on December 31, 2021 and (b) the last Calendar Year of the Term shall end on the effective date of expiration or termination of this Agreement.

1.1.13“Claims” has the meaning set forth in Section 11.1.

1.1.14“Confidential Information” of a Party (a “Disclosing Party”) means, subject to Section 9.2 (Exceptions) of the Collaboration Agreement, all technical, scientific, trade, research, business, financial, marketing, product, supplier, intellectual property, and other non-public or proprietary data or information that is disclosed by a Disclosing Party or its Affiliates to the other Party (a “Receiving Party”) or any of its Affiliates pursuant to this Agreement (or any such information disclosed prior to the Effective Date pursuant to the Confidentiality Agreement), whether made available orally, in writing, or in electronic form. For purposes of clarity such information shall include, but not be limited to, the formulation of pharmaceutical dosage forms and compounds, manufacturing procedures, manufacturing processes, manufacturing equipment, manufacturing batch records, plant layouts, product volumes, quality control procedures, and quality control standards and the like; any combination of Confidential Information shall not be considered in the public domain or in the possession of the Receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the Receiving Party unless the combination and its principles are in the public domain or in the possession of the Receiving Party; and  the existence and terms of this Agreement shall be deemed Confidential Information of both of the Parties.

1.1.15“Current Good Manufacturing Practice” or “cGMP” means, at any given time, the applicable current standards for the manufacture of pharmaceuticals, as set forth in the FD&C Act, 21 C.F.R Parts 4, 210, 211, 601, 610 and 820 and applicable regulations promulgated thereunder, as amended from time to time, and such standards of good manufacturing practice as are required by the applicable laws and regulations of the United States, the European Union (including, but not limited to, Commission Directive 2003/94/EC and Eudralex 4) and any relevant countries in which the applicable laws and regulations correspond to the aforementioned.

1.1.16“Effective Date” has the meaning set forth in the preamble hereto.

1.1.17“Facility” means the manufacturing facilities listed on Exhibit B, attached hereto,    any other facility approved in writing by the Parties and the competent Regulatory Authority for the Manufacture of the Product and referenced in the relevant Regulatory Approval for the Product, which  other facilities, if any, shall be added to Exhibit B at the time of  such approvals. The term “Facility” also includes all of the approved equipment, machinery and other facilities at such facility used in the manufacturing, handling, packaging, testing and storage of the Product.

1.1.18“FDA” means the United States Food and Drug Administration or any successor entity thereto.

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1.1.19“FD&C Act” means the Federal Food, Drug and Cosmetic Act, as the same may be amended or supplemented from time to time.

1.1.20“Force Majeure Event” has the meaning set forth in Section 0.

1.1.21“Inspection Period” has the meaning set forth in Section 7.2.1.

1.1.22“Invention”  means any process, method, composition of matter, discovery, or other invention that is conceived and first reduced to practice, constructively or actually, by or on behalf of either Party or jointly by the Parties in connection with the Parties’ activities under this Agreement.

1.1.23“Laboratory” has the meaning set forth in Section 7.3.1.

1.1.24“Latent Defect” shall mean any defect in a Product that is not reasonably discoverable through Customer’s (or Customer’s designee’s) normal incoming goods inspection,including the inspection of the Certificate of Analyses, Certificate of Conformity and other Product specific documents provided by Supplier in connection with the delivery of the Product and any   verification methods and procedures that may be agreed  in the Quality Agreement.

1.1.25“Losses” has the meaning set forth in Section 11.1.1.

1.1.26“Manufacture,” “Manufactured” or “Manufacturing” means all activities related to the manufacturing of Product or any raw material, component or ingredient thereof, including test method development,  stability testing, formulation, process development and validation, manufacturing scale-up, manufacturing any product in bulk or finished form, including filling and finishing, bulk Primary Packaging and labeling, storage, shipping and holding, in-process and finished bulk product testing, release of Product or any component or ingredient thereof, quality assurance and quality control activities related to manufacturing and release of Product, and regulatory activities related to any of the foregoing, as well as  disposal of any residues or wastes generated thereby.

1.1.27“Materials” means all materials, including all raw materials, and ingredients required for the Manufacture of the Product, the specifications for which are set out in the Specifications.

1.1.28“Methods of Analysis” means the methods of analysis for the Product set forth in the Regulatory Dossier for the Product and/or the Quality Agreement.

1.1.29“Customer” has the meaning set forth in the preamble hereto.

1.1.30“Customer Licensee” means any Third Party to whom Customer grants, pursuant to the terms and conditons of the Collaboration Agreement, a license or a right to sell the Product.

1.1.31“Customer Representatives” has the meaning set forth in Section 11.1.1.

1.1.32“Party” and “Parties” have the meaning set forth in the preamble hereto.

1.1.33“Person” means any individual, corporation, company, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof.

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1.1.34“Product” has the meaning set forth in the recitals hereto.

1.1.35“Quality Agreement” means the written Quality Agreement between the Parties that will be concluded within  ninety (90) days of the Effective Date.

1.1.36“Recall” means any recall, withdrawal or similar corrective action (whether voluntary or mandatory) or issue of an “NDA Field Alert” (as defined in 21 CFR 314.81).

1.1.37“Regulatory Approval”  means, with respect to a given country, approval from the relevant Regulatory Authority (which approval may be in the form of an amendment or supplement to an existing approval) necessary to initiate marketing and selling of  Product in such country, excluding pricing and reimbursement approval. For clarity, any such approval to initiate marketing and selling of Product for a New Indication shall constitute a Regulatory Approval.

1.1.38“Regulatory Authority”    means any applicable Governmental Authority with authority over the distribution, importation, exportation, manufacture, production, use, storage, transport, research, non-clinical testing, clinical testing or sale of Product.

1.1.39“Regulatory Dossier” shall mean all updated documents, information, processes, techniques and data relating to the Product (including, without limitation, its Specifications, reports from a validation with EURS Validation Engine or other qualified NeeS or eCTD validation tool, as applicable, risk management plan (RMP) and readability test results required to obtain and maintain the Regulatory Approval in the Territory), written in English and (I) compiled according to the requirements of Applicable Laws in force from time to time in the Territory including those of the EU Notice to Applicants, and (II) in such form and content as is required by the Regulatory Authority, in order for them to accept the application for, grant and maintain the Regulatory Approval.

1.1.40“Rejection Notice” has the meaning set forth in Section 7.2.1.

1.1.41“Rolling Commercial Forecast” has the meaning set forth in Section 2.2.

1.1.42“Serialisation” means the serialisation of a Product as required to track and trace the passage of a Product through the entire supply chain process ensuring visibility and full traceability, including but not limited to printing the unique serial number or barcode on all packaging to include the required information, such as the product number, batch number, serial number and expiry date.

1.1.43“Seizure” means any action by FDA or any other Regulatory Authority to detain or destroy the Product or prevent the release of the Product.

1.1.44“Sourcing Requirement” has the meaning set forth in Section 3.1.1.

1.1.45“Specifications” means the specifications for the Product set forth in the Regulatory Dossier for the Product and/or Quality Agreement, as such may be amended from time to time in accordance with its terms.

1.1.46“Per Unit Supply Price” has the meaning set forth in Section 5.1.

1.1.47“Term” has the meaning set forth in Section 13.1 of the Collaboration Agreement.

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1.1.48“Territory” shall have the meaning set forth in Section 1.66 of the Collaboration Agreement.

1.1.49“Third Party” means any Person other than Customer, Supplier and their respective Affiliates.

1.2Construction of Certain Terms and Phrases.  Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the term “or” shall have the inclusive meaning of the term “and/or”; (iv) “including” and its cognates shall have the non-limiting meaning of “including, without limitation”; (v) the term “will” shall have the same meaning and import as the term “shall”; (vi) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement; (vii) the terms “Article” or “Section” refer to the specified Article or Section of this Agreement; and (viii) Article and Section headings shall not affect the meaning or construction of any provision of this Agreement. Unless otherwise defined herein, whenever this Agreement uses a term defined in the Collaboration Agreement, such term shall have the meaning set forth in the Collaboration Agreement.

1.3Marinus Pharmaceuticals, Inc. shall be responsible for the performance of its Affiliates and subcontractors under this Agreement.

2. GENERAL; FORECASTS, ORDERS, MATERIALS, SAFETY STOCKS

2.1Manufacture. Supplier shall supply bulk Product Manufactured, packaged in Primary Packaging and primary labeled to Customer or Customer’s designee in such quantities and at such times as ordered by Customer, in accordance with the Specifications and otherwise pursuant to the terms of this Agreement in exchange for payment of the applicable Per Unit Supply Price for such Product. During the Term, Supplier shall maintain access to the resources necessary to Manufacture the Product pursuant to the terms of this Agreement.

2.2Forecasts. By the end of each calendar month during the Term, Customer shall submit to Supplier a rolling monthly forecast of commercial supply of the Product that Customer anticipates ordering from Supplier during the eighteen(18) month period (broken down by month) following the date of such forecast  (each, a “Rolling Commercial Forecast”). The quantities for delivery in the first three (3) months of each Rolling Commerical Forecast shall be a firm purchase commitment by Customer and Customer shall place purchase orders for at least such quanitiy of Product.. The quantities for delivery in the last fifteen (15)  months of each Rolling Commercial Forecast shall be good faith estimates and shall not be binding commitments. Supplier may place orders with its suppliers for Materials or packaging materials as reasonably necessary in order to Manufacture the quantities of the Product specified in the first six (6) months of each Rolling Commercial Forecast. In addition, Customer shall annually submit to Supplier a non-binding forecast of its estimated requirements of the Product for the next three (3) Calendar Years for capacity planning purposes.

2.3Orders.  Customer may submit purchase orders for the Product to Supplier from time to time during the Term and at least ninety (90) days prior to the requested date of delivery. If, despite Supplier having used Commercially Reasonable Efforts, Supplier is not able to Manufacture or have the Product Manufactured and supplied to Customer within the said delivery time, the Parties shall discuss in

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good faith a reasonable extension of the said delivery time, such discussion to take place prior to Customer’s first purchase order of the Product to Customer. Supplier shall provide reasonable support and justification for such extension. Each purchase order shall specify (a) the quantity of the Product ordered for delivery; and (b) the delivery date for that order.  Supplier shall have Manufactured and shall supply the Product in accordance with this Agreement and each applicable purchase order.  Upon the fifth (5th) Business Day after receiving any purchase order from Customer, Supplier shall be deemed to have accepted such purchase order if such purchase order has not been rejected by Supplier in accordance with the terms and conditions of this Agreement.  On or prior to such acceptance, Supplier shall provide Customer with a Manufacturing schedule for the Product subject to such purchase order.  With respect to any of the first three (3) calendar months in the then most recent Rolling Commercial Forecast, Supplier may reject, by written notice to Customer, any portion of any purchase order to the extent that fulfilling the entirety of such purchase order would cause the aggregate number of units of the Product supplied by Supplier during such month to exceed one-hundred twenty percent (120%) of the units of such Product forecast for such calendar month in the applicable Rolling Commercial Forecast; provided, however, that Supplier will use its Commercially Reasonable Efforts to, but shall not be obligated to, supply such Product in excess of such one-hundred twentypercent (120%) quantity.

2.4Cancellations.  Customer may cancel any firm purchase order (in whole or in part) at any time prior to the delivery for any quantity of the Product that Supplier has not completed Manufacturing pursuant to such purchase order at the time that notice of cancellation is received by Supplier.  If, at the time of Customer’s cancellation of a purchase order:

2.4.1it is more than 90 days prior to the delivery date of such purchase order, Customer will reimburse Supplier for the cost of any Material purchased by Supplier pursuant to Section 2.2 above specifically to fill the cancelled purchase order to the extent such Material is unique to such Product and cannot otherwise be used in Supplier’s operations; provided that in no event shall Customer be responsible for reimbursing Supplier for more than the Per Unit Supply Price for each unit of the Product (as defined in Exhibit A) not purchased under the cancelled purchase order;

2.4.2it is less than 90 days prior to the delivery date of such purchase order, but Supplier has not commenced Manufacture of Products pursuant to such purchase order, Customer will reimburse Supplier for (a) the cost of any Material purchased by Supplier pursuant to Section 2.2 above specifically to fill the cancelled purchase order to the extent such Material cannot otherwise be used in Supplier’s operations and (b) the cost of the capacity reasonably reserved in the Facility for production of the purchase order that cannot, using Commercially Reasonable Efforts, be filled with alternative projects; provided that in no event shall Customer be responsible for reimbursing Supplier for more than the Per Unit Supply Price for each unit of the Product not purchased under the cancelled purchase order; or

2.4.3if Supplier has commenced Manufacture of Products pursuant to such purchase order, Customer shall reimburse Supplier for (a) Material and reasonable labor costs in respect of any works-in-progress pursuant to such cancelled purchase order (or part thereof) at the time notice of cancellation is received by Supplier; (b) the cost of any other unused Material purchased by Supplier specifically to fill the cancelled purchase order to the extent such Material cannot otherwise be used in Supplier’s operations and (c) the cost of the unused capacity reasonably reserved in the Facility for production of the purchase order that cannot, using Commercially Reasonable Efforts, be filled with alternative projects; provided that in no event shall Customer be responsible for reimbursing Supplier for

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more than the Per Unit Supply Price for each unit of the Product not purchased under the cancelled purchase order.

2.5Materials.  Supplier shall be responsible for obtaining the Materials for the Manufacture of Products.  The cost of Materials paid by Supplier and incurred in accordance with this Agreement shall be deemed included in the Per Unit Supply Price for each unit of the Products. Supplier shall secure availability of Materials, including entering into supply agreements with relevant suppliers and Backup Suppliers and keeping safety stocks.

2.6Priority of Supply.  Supplier and its Affiliates shall use Commercially Reasonable Efforts to maintain capacity to fill Customer’s forecasted orders for the Product in a manner consistent with this Agreement, including purchase orders placed hereunder.

2.7Safety Stocks.   In order to secure the availability of the Product to Customer, Supplier undertakes to keep at all times, at its sole cost, in its premises or the premises of its suppliers a safety stock of (i) bulk Product and (ii) Primary Packaging materials, that shall correspond to at least the first three (3) months of the then-current Customer’s Rolling Commercial Forecast submitted to Supplier in accordance with Section 2.2 above. For the avoidance of doubt, the Parties expressly agree that the costs and expenses incurred by Supplier as a result of keeping such safety stock shall be deemed included in the Per Unit Supply Price for each unit of the Product. The Parties will agree upon the process for maintaining and monitoring the availability of such safety stock.  Customer also undertakes to keep at all times, at its sole cost, in its premises a safety stock of   Product  that shall correspond to at least the first  two (2) months of the then-current Customer’s Rolling Commercial Forecast submitted to Supplier in accordance with Section 2.2 above and one (1) month of which will be held as bulk drug Product and one (1) month of which will be held as finished stock Product.

2.8Allocation of Materials and Capacity for Manufacture. In the event that Materials or Manufacturing capacity required to Manufacture Products are short in supply, Supplier shall notify Customer in writing of such circumstances as soon as possible, including without limitation the underlying reasons for such shortage, proposed remedial measures, the date such shortage is expected to end and the amount of Materials and/or capacity allocated to Customer. Supplier shall allocate to Customer a proportionate share of the Materials and capacity, first by taking into account the outstanding purchase orders of Customer and other customers of Supplier and Supplier’s own requirements, and then Customer’s projected demand for Product for the relevant one-year period divided by the total demand by Supplier and all of Supplier’s customers (including Customer) for the corresponding period. In making any such allocation, Supplier shall not give any priority to its own requirements or those of its Affiliates other than reasonable amounts for clinical trial supplies.

2.9Continuous Improvement Actions.    Supplier shall exercise Commercially Reasonable Efforts to realize efficiencies in the supply chain for Product. These efforts may include, but may not be limited to, Manufacturing related improvement actions, actions to optimize work flow, actions to optimize Materials management, actions to optimize capacity utilization, actions to optimize forecasting, ordering and shipping, and actions to manage overhead costs and capital expenses.

3. EXCLUSIVITY AND ALTERNATIVE SUPPLY

3.1Exclusivity.

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3.1.1Beginning on the First Commercial Sale of a Product in the Territory and ending on the termination or expiration of the Collaboration Agreement, Customer agrees to purchase one-hundred percent (100%) of its requirements of Product Manufactured by or on behalf of Marinus Pharmaceuticals, Inc. from Supplier (the “Sourcing Requirement”).

3.2Alternative Supply.  At any time during the Term, Supplier may elect to qualify one (1) or more additional alternative manufacturing facilities (whether owned by Supplier or a Third Party) to Manufacture the Product (each, a “Backup Supplier”).  Supplier shall be responsible for any and all costs associated with qualifying Backup Suppliers. Customer or its designee shall have the right to inspect the Backup Suppliers’ facilities and audit its records pursuant to Section 5.6 of the Collaboration Agreement. The Parties  shall from time to time at either Party’s request cooperate to  evaluate a long term demand for the Product against the available production capacity and determine whether to  qualify a Backup Supplier for  supply of the Product.

4. DELIVERY; FAILURE TO SUPPLY

4.1 Delivery. All Product shall be delivered to Customer [***] (Incoterms 2020) the Facility within [ *²] days from Customer’s purchase order for the Product, unless otherwise agreed by the Parties pursuant to Section 2.3 above. Supplier will notify Customer at least five (5) Business Days prior to any shipment of the Product. Delivery shall be made at such time as [***]. [***]

4.2Delivery Delays.  Without limiting any other right or remedy of Customer under law or this Agreement, should all or part of a firm purchase order for Product be delivered more than ten (10) Business Days later than the delivery date specified in a firm purchase order (“Late Delivery”), the Parties may meet as necessary to amicably resolve the reasons for the Late Delivery and to agree on corrective actions within one (1) month of the agreed delivery date. Supplier shall be liable to compensate Customer for any and all direct costs and/or direct damages suffered by Customer due to delay in delivery and Customer will use Commercially Reasonable Efforts to mitigate such costs and damages.

Without limiting any other right or remedy of Customer under law or this Agreement, in the event of two (2) successive delays in delivery in excess of ten (10) Business Days after the agreed delivery date, or any delay in delivery in excess of thirty (30) Business Days, the Parties shall engage in good faith discussions in accordance with Section 4.7 below regarding the reasons for such delays and possible steps to prevent or mitigate the impact of such delays. If there is a third (3^rd) successive delay in delivery in excess of ten(10) Business Days after the agreed delivery day, or any delay in delivery in excess of ninety (90) Business Days, unless otherwise mutually agreed by the Parties or unless such delay is not due to an act or omission of Supplier, any Supplier Representative or any of their respective Affiliates, then, unless Supplier can reasonably demonstrate to Customer that it will be able to provide uninterrupted supply, (a) Customer shall no longer have any obligation, subject to this Section 0, to satisfy the Sourcing Requirement, and (b) the Parties shall enter good faith discussions regarding any other appropriate remedies.  Nothing in this Section 0, including any exercise by Customer of its rights hereunder, shall serve to limit or eliminate any remedy of Customer under this Agreement or under law.  In the event that Customer is relieved of its obligation to satisfy the Sourcing Requirement  under this Section 0, if Supplier can demonstrate to Customer’s reasonable good faith satisfaction that it is able to perform its obligations under this Agreement in a timely fashion (i.e. fulfilling a purchase order within the delivery time set forth

² * [***]

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in Section 4.1 of this Agreement), Customer’s obligation to satisfy the Sourcing Requirement  shall be reinstated eighteen (18) months after the third ten (10) Business Day delay, or the number of days of the delivery period set forth in Section 4.1, as applicable.

4.3Delivery Documentation.  Delivery of the Products shall be made together with the relevant batch documentation, including the CoA and the CoC, as required for release and in accordance with the Quality Agreement, unless otherwise agreed in writing between the Parties from time to time. Supplier shall, at Customer’s ’s cost (to be reimbursed to Supplier by Customer), equip each delivery with a data logger to monitor the temperature during the transportation of the Product to Customer.

4.4​ ​Manufacturing Date. Supplier shall schedule its Manufacturing operations so that, unless otherwise agreed in writing at least [ * %] for oral suspension Product and [ *%³ ] for IV Product of the approved shelf life of the Products will remain on delivery of the Products. If, despite Supplier having used Commercially Reasonable Efforts, Supplier is not able to fulfil the above requirement, the Parties shall discuss in good faith a maximum ten percent (10%) reduction of the remaining shelf life (at the time of delivery) for the Products.

4.5Risk of Loss.  Supplier shall ensure that all Product held in storage is stored in accordance with the Specifications until delivery to Customer under this Agreement and that all storage areas meet cGMP requirements. Supplier shall hold title to and bear all risk of loss or damage to all Materials and to Products prior to delivery thereof to Customer or its designee hereunder, except as expressly set forth below in this Section 0.

Without limiting any other remedy of Customer under law or this Agreement, if any Product, during storage, changes chemical composition so as to be out of Specifications, then the Parties will agree in writing upon a plan for disposition  of the Product. If the Product has changed chemical composition due to Supplier’s breach of this Agreement or negligence (including the Manufacture, storage or use of such Materials or Products in a manner inconsistent with Specifications, Applicable Law or written instructions given to Supplier by Customer) or gross negligence or misconduct, then the cost of disposal shall be borne by Supplier.

4.1Delay in Supply Caused by Customer.  If Customer causes any delay to Supplier’s provision of Manufacture of Product, for reasons within Customer’s control including but not limited to delay in providing information on the Product reasonably requested by Supplier pursuant to this Agreement and reasonably available to Customer, Supplier shall be entitled to charge Customer for the cost of the capacity reasonably reserved in the Facility for performance of the production of the applicable purchase order that cannot, using Commercially Reasonable Efforts, be filled with (an) alternative project(s); provided that in no event shall Customer be charged or otherwise responsible for costs in excess of the Per Unit Supply Price for each unit of Product ordered under the delayed purchase order and provided further that Supplier shall use Commercially Reasonable Efforts to mitigate any consequences of a delay caused by Customer, including financial and supply consequences and to revise its manufacturing schedule in order to accommodate the delay and to timely manufacture Products under Customer’s submitted purchase orders and, further provided, that Customer shall still pay the Per Unit Supply Price for any such Product as is subsequently delivered to and accepted by Customer.

³ * [***]

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4.2Notice of Failure to Supply.   If Supplier is unable or anticipates that it will be unable to supply Product meeting Customer’s forecasted requirements in a timely manner at any time during the Term, Supplier shall provide prompt written notice to Customer.  Following such notice, the Parties shall discuss in good faith how to prevent or mitigate such inability to supply, including the elimination, amendment or suspension of the Sourcing Requirement.  Supplier shall consider in good faith any reasonable suggestions of Customer to prevent or mitigate such inability to supply, the costs associated with such suggestions to be allocated as mutually agreed by the Parties. For clarity, nothing in this Section 4.7 shall serve to limit or eliminate any liability of Supplier for timely deliveries of Products or any remedy of Customer under law or this Agreement.

4.3Supplier acknowledges that certain amounts of Products may be required to be maintained as mandatory reserve supplies in accordance with Applicable Laws in the Territory for the purpose of ensuring the availability of such Products in circumstances in which such availability is restricted or prevented as a result of a suspension of deliveries, serious crisis or other similar reason. Subject to the terms and conditons of this Agreement, Supplier undertakes to reasonably cooperate with Customer and timely deliver the amounts of Products ordered by Customer in order for the requirements for such mandatory reserve supplies to be met.

5. PRICE AND PAYMENT

5.1Supply Price.  The price of the Product to be sold to Customer during the Term shall be as set forth in Exhibit A attached hereto (such price for the Product, the “Per Unit Supply Price”).

5.2Payment.  Supplier shall invoice Customer upon delivery of the Products, in accordance with the delivery provisions set forth at Section 4.1  above and shall only charge Customer for Products that are shipped to Customer or Customer’s designee pursuant to this Agreement.  Customer shall pay Supplier for all supplied quantities of conforming Products within thirty (30) days from the date of invoice  if shipped by air and  forty-five (45) days from the date of invoice if shipped by sea; provided that, pending resolution regarding any disagreement between the Parties as to conformance of a Product to the requirements of this Agreement or the Quality Agreement, Customer is not obligated for any payment with respect to any Product Customer believes to be non-conforming.

5.3Taxes and Other Charges.  All Product Per Unit Supply Prices are stated exclusive of sales or other similar taxes, Third Party shipping costs and customs duties, which shall be invoiced to Customer separately and paid by Customer, as applicable.  Customer and Supplier shall reasonably cooperate to eliminate or minimize the amount of any such taxes imposed on the transactions contemplated in this Agreement.  Customer is not responsible for any penalties or interest related to the failure of Supplier to collect sales, use, VAT or similar taxes.

6. COMPLIANCE, QUALITY, SERIALISATION AND ENVIRONMENTAL

6.1Compliance with Law.  Supplier shall have Product Manufactured in compliance with cGMP and all other applicable laws and regulations (including, but not limited to, those dealing with occupational safety and health, those dealing with public safety and health, those dealing with protecting the environment, and those dealing with disposal of wastes), ordinances, decrees, judicial and administrative orders (and any license, franchise, permit or similar right granted under any of the foregoing), including Data Protection Laws and Anti-Corruption Laws, and any policies and other

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requirements of any applicable Governmental Authority that govern or otherwise apply to Supplier’s activities in connection with this Agreement (“Applicable Laws”), and in compliance with all applicable provisions of this Agreement and the Quality Agreement.  Supplier shall ensure that all necessary registrations and permits pertaining to its activities contemplated by this Agreement and the Quality Agreement are in place.  Supplier shall comply with Customer’s Third Party Code of Conduct attached hereto as Exhibit 2.

6.2Manufacturing Quality. Marinus represents and warrants that all Products Manufactured and supplied to Customer have been Manufactured at the Facility and in accordance with the Regulatory Approval (including approved Specifications therein) for the Product in the Territory, Quality Agreement and Applicable Laws. Supplier shall sample and analyze Materials in accordance with the requirements of the Registration Dossier (including approved Specifications therein), Applicable Laws (including the cGMP) and/or the Quality Agreement upon receipt to ensure that such Materials are free of defects and meet the applicable specifications therefor. Supplier shall take all steps reasonably necessary to prevent contamination and cross contamination of the Product and ensure that the Product is unadulterated and free from contamination, diluents and foreign matter.

6.3Stability testing. Supplier shall, at Supplier’s cost, conduct stability studies for the bulk and finished Product for the Territory required from time to time under Applicable laws and guidelines, including the ICH guidelines. Such stability studies will be conducted for the first three (3) production batches and thereafter during the period of the Manufacture, as required by the cGMP.

6.4Product Quality Reviews. Supplier shall conduct, at Supplier’s cost, periodic product quality reviews for the Product as may be required by Applicable Laws and guidelines and without undue delay provide Customer such reports and other results.

6.5Secondary packaging and Serialisation.   Customer shall be responsible for secondary packaging (including Serializing) of the bulk Products delivered to Customer in finished Primary Packaging unlabeled vials and for the QP release of such finished Products to the market in the Territory. For clarity, the Parties acknowledge that, based on the cGMP, Customer shall act as the EU release site  for the Products in the Field in the Territory.

6.5.1Supplier and Customer shall (each at its own cost) use Commercially Reasonable Efforts to cooperate in good faith to provide to each other without undue delay all documents, information and/or other support reasonably requested by either of them and/or required by Applicable Laws, including, but not limited to, Supplier providing (i) information in its possession or control relating to approved packaging requirements, (ii) Serialisation numbers, and (iii) notices, documents and/or information received from the Regulatory Authorities. For clarity, Supplier shall be responsible to ensure that the contents of all packaging materials, including, but not limited to, labeling, packaging leaflets and specific product characteristics and the language versions of the same, meet the requirements of the Regulatory Approval (including approved packaging specifications therein) and Applicable Laws and Customer shall provide to Supplier all information in its possession and control that Supplier may reasonably require related thereto. To the extent required by Applicable Laws, Supplier shall, at its own cost, set up and maintain a relevant Serialisation system meeting the requirements of the Applicable Laws and, to the extent necessary for Customer’s performance under this Agreement and/or the Collaboration Agreement, Supplier shall ensure that Customer shall have access to Supplier’s technical system and the right to use such system solely to such extent and for such need,

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for the Term of this Agreement. Details of the above support may be agreed in a separate written agreement by the Parties, e.g. in the Quality Agreement. Each Party shall promptly inform the other Party of any enquiries by the competent Regulatory Authorities. For clarity, Marinus Pharmaceutical, Inc,’s Affiliate as the holder of the Regulatory Approvals for the Products in the Territory shall be responsible for responding to any enquiries from the Regulatory Authorities with respect to Manufacture (including Serialization) of the Product.

7. QUALITY AUDITS; TESTING AND INSPECTION OF THE PRODUCT

7.1Inspection and Auditing Rights.  Supplier shall   include Customer in  audit and inspection rights of Supplier’s Third Party suppliers, including, but not limited, to Backup Suppliers as reasonable and customary. Customer shall have the right to audit and inspect Supplier  with respect to its obligations under this Agreement and the Quality Agreement, Supplier’s compliance with Applicable Laws in the performance of its obligations under this Agreement and the Quality Agreement, and the handling, The Parties will coordinate to make joint inspections of Supplier’s Third Party suppliers whenever possible.  Manufacture, testing, inspection, storage, disposal and transportation of the Product by Supplier and its permitted subcontractors, during normal business hours and, for any for-cause audit, upon at least seven (7) Business Days’ prior written notice, and, for any other audit, upon at least thirty (30) Business Days’ prior notice unless otherwise set forth in the Quality Agreement.  Supplier shall make available to Customer all relevant records and reports during such audit or inspection.  Supplier agrees to respond to Customer’s audit findings within thirty (30) days of receipt of Customer’s audit report (such response may not be final but shall be responsive to the findings), to take prompt corrective action to remedy any observed violations of the terms of this Agreement, the Quality Agreement or of Applicable Laws and to be responsive to the recommendations contained therein.  Such audits may be conducted no more than once per Calendar Year at Customer’s expense, provided that Customer may also conduct follow-up audits or inspections at any time or times during a Calendar Year that are directed at significant or critical quality issues directly related to the Manufacture or supply of the Product, observed during the regular audit or brought to Customer’s attention through customer complaints or claims by Regulatory Authorities.  The costs associated with any follow-up audit by Customer shall be discussed in good faith and agreed between the Parties in advance.

7.2Product Rejection and Inspection.

7.2.1Customer shall have a period of thirty (30) days from the date of arrival of the delivery of a shipment of the Product to Customer’s or its designee’s facility in the Territory pursuant to Section 4.1 (the “Inspection Period”), to inspect, or cause to have inspected by a Third Party designated by Customer, such shipment of the Product to determine whether such shipment conforms to Specifications or breaches Supplier’s warranties set forth in this Agreement.  Such inspection shall include Customer’s normal  inspection protocols, including the inspection of the Certificate of Analyses, Certificate of Conformity and other Product specific documents provided by Supplier in connection with the delivery of the Product and any verification methods and procedures that may be agreed  in the Quality Agreement. Customer shall give Supplier notice of rejection (“Rejection Notice”), in accordance with Section 7.2.2, of any shipment of the Product that, in whole or part, failed to meet Specifications or which otherwise breached Supplier’s warranties set forth in this Agreement, in each case at the time of delivery pursuant to Section0.

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7.2.2If Customer determines during the Inspection Period for any shipment of the Product that such Product did not conform to Specifications or otherwise breached Supplier’s warranties set forth in this Agreement, in each case at the time of delivery pursuant to Section 4.1, it shall notify Supplier prior to the date that is five (5) Business Days after the end of the Inspection Period for such Product.  Customer’s failure to timely deliver a Rejection Notice shall be deemed its acceptance of the Product, unless a Latent Defect of such Product exists.   Customer shall accompany any Rejection Notice with reasonable supporting evidence in its possession that shows that the Product delivered to Customer by Supplier was not Manufactured in accordance with Specifications or otherwise breaches Supplier’s warranties set forth in this Agreement, in each case at the time of delivery pursuant to Section 4.1.  At Supplier’s request, Customer shall provide any evidence in its possession demonstrating that the Product has been stored and handled appropriately by Customer pursuant to applicable Specifications.

7.3Independent Testing.

7.3.1 If Customer delivers a Rejection Notice to Supplier in respect of all or any part of a shipment of the Product, then the Parties shall have thirty (30) days from the date of Supplier’s receipt of such Rejection Notice to resolve any dispute regarding whether all or any part of such shipment of the Product was Manufactured in conformance with Specifications and Supplier’s warranties set forth in this Agreement.  Either Party may request, in writing, at any time within such 30-day period that an independent laboratory (a “Laboratory”) will be used to determine whether the Product met Specifications and Supplier’s warranties set forth in this Agreement at the time of delivery.  Such Laboratory must be mutually acceptable to both Parties and shall meet all the requirements of an outside laboratory as may be specified in the Quality Agreement. Such Laboratory shall act as an expert and not as an arbitrator.

7.3.2If the Laboratory determines, and its determination is not disputed under Section 14.5 (Dispute Resolution), or the Parties otherwise agree, that the Product met Specifications and Supplier’s warranties set forth in this Agreement at the time of delivery, then Customer shall (i) pay to Supplier the Per Unit Supply Price invoiced for each unit of such Product pursuant to Section 5.1, and (ii) pay to the Laboratory the amount of the fees charged by the Laboratory for such testing, if applicable.

7.3.3If the Laboratory determines, and its determination is not disputed under Section 14.5 (Dispute Resolution), or the Parties otherwise agree, that the Product did not meet Specifications or Supplier’s warranties set forth in this Agreement at the time of delivery, then Supplier shall (i) pay to the Laboratory the amount of the fees charged by the Laboratory for such testing, if applicable, (ii) dispose of the non-conforming Product, at Supplier’s  expense, in accordance with Customer’s instructions, unless the Parties agree that Customer is to  dispose of such non-conforming Product, at Supplier’s reasonable expense, and (iii) at Customer’s option, a) have Manufactured and supply replacement Product conforming to Specifications and Supplier’s warranties set forth in this Agreement as soon as reasonably practicable, however, in any case within the delivery time set forth in Section 4.1 above or b) promptly reimburse Customer for the Per Unit Supply Price for each unit of such non-conforming Products if previously paid by Customer, provided that, wherever practicable such refund shall be as a credit against future purchases of Product by Customer and reimburse Customer for any out-of-pocket costs incurred by Customer for  the acceptance of returns from Customer’s customers resulting from such non-conforming Products.

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7.4Latent Defects.  As soon as either Party becomes aware of a Latent Defect in any Batch, and no later than later of a) twelve (12) months after delivery in accordance with Section 4.1 or b) the expiry of the shelf life of the relevant Batch, such Party shall immediately notify the other Party in writing thereof, and if the Latent Defect is due to Supplier’s failure to have the Product Manufactured in conformance with the Specification, Supplier’s breach of its warranties set forth in this Agreement or Supplier’s negligence or misconduct or breach of this Agreement, at Customer’s election, the applicable Batch shall be deemed rejected as of the date of delivery of such notice.  Should Supplier (or Customer, if applicable) within thirty (30) days, after notice of such rejection, fail to agree that such rejection was reasonable, either Party may refer the matter to a Laboratory acceptable to both Parties in accordance with Section7.3.1. If the Laboratory determines, and its determination is not disputed under Section 14.5 (Dispute Resolution), or the Parties otherwise agree, that the affected Product has not been Manufactured in conformance with the Specification or is otherwise non-conforming due to Supplier’s breach of its warranties set forth in this Agreement,  Supplier shall, without limiting any other remedies available to Customer, (a) pay to the Laboratory the amount of the fees charged by the Laboratory for such testing, if applicable, (b) dispose of the non-conforming Product, at Supplier’s expense, in accordance with Customer’s instructions and (c) at Customer’s option i)  have Manufactured and supply a replacement Batch conforming to Specifications and Supplier’s warranties set forth in this Agreement as soon as reasonably practicable pursuant to a timeline to be agreed by the Parties, however, in any case within the delivery time set forth in Section 4.1 above or ii) promptly reimburse Customer for the Per Unit Supply Price for each unit of such non-conforming Product if previously paid by Customer to Supplier, provided that wherever practical such refunds shall be as a credit against future purchases of Product by Customer   and (d) reimburse Customer for any reasonable out-of-pocket costs incurred by Customer for  the acceptance of returns from Customer’s customers resulting from such non-conforming Batch. At Supplier’s request, Customer shall provide any evidence in its possession demonstrating that the Product has been stored and handled appropriately by Customer pursuant to applicable Specifications.

7.5Samples and Record Retention.  Supplier shall retain records and retention samples of each Batch of Product in accordance with Applicable Laws and shall make the same available to Customer upon request.  During and after the Term, Supplier shall assist Customer with respect to any complaint, issue or investigation relating to the Product.

7.6Government Inspections.  Each Party shall promptly notify the other Party if such Party receives notice from a Regulatory Authority regarding a cGMP investigation or other inspection directly related to the Product.  If Supplier receives advance notice of any such investigation, inspection or visit by any Regulatory Authority to inspect the Facility or review the Manufacture of the Product, upon Customer’s request Supplier shall use Commercially Reasonable Efforts to provide Customer with a copy of any report issued by such Regulatory Authority following such visit.

7.7Recalls and Seizure.

7.7.1Each Party shall keep the other Party promptly and fully informed of any notification or other information whether received directly or indirectly which might result in the Recall or Seizure of Product(s) in the Territory.  If either Party determines that it is necessary to Recall any Product, it shall immediately notify the other Party in writing and Supplier will collaborate with Customer in connection with any Recall or Seizure in the Territory.  At Customer’s written request, the Parties shall consult  on an appropriate course of action.

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7.7.2Supplier shall, subject to Section 11.2, be liable for the out-of-pocket costs and expenses actually incurred by Customer as a result of any Recall or Seizure (including any Per Unit Supply Price paid for each unit of the Product  and any in-process or finished Product that cannot be shipped due to the Recall or Seizure), to the extent such Recall or Seizure results from the negligence, willful recklessness  or breach of this Agreement by Supplier, its Affiliates or any of its permitted subcontractors (including, for the avoidance of doubt, with respect to any Latent Defect) or any act or omission of Supplier, its Affiliates or any of its permitted subcontractors.

7.7.3Customer shall be liable for the out-of-pocket costs and expenses actually incurred by Supplier as a result of any Recall or Seizure to the extent such Recall or Seizure results from the negligence, willful recklessness or breach of this Agreement by Customer or its Affiliates or any act or omission of Customer or its Affiliates.

8. MANUFACTURING CHANGES

8.1Voluntary Changes.  Supplier shall not make any changes to the Manufacturing process, the Primary Packaging of the Product, the Specifications, the Materials, the sources of Materials or the Methods of Analysis except in accordance with the provisions of the Quality Agreement or  as may be otherwise agreed in writing by the Parties (Customer’s agreement not to be unreasonably withheld, conditioned or delayed). Should Customer request any changes to the bulk Primary Packaging or the secondary packaging of the Product, Supplier shall, subject to compliance with Applicable Laws, use Commercially Reasonable Efforts to cooperate with Customer and submit relevant applications to the Regulatory Authorities in the Territory.

8.2Required Changes.  If FDA, European Medicines Agency (“EMA”) or any other Regulatory Authority requests or requires any change in the Manufacturing process, the Manufacturing equipment, the Specifications, the Materials, the source of Materials or Methods of Analysis with respect to the Product, the Parties shall promptly (but in no event more than fifteen (15) Business Days after receipt of the Regulatory Authority’s notice) discuss an implementation plan for such change and Supplier shall, at its cost, use its Commercially Reasonable Efforts to implement such required changes.  For clarity, in no event shall Supplier be obligated to, with respect to such a change required or requested by a Regulatory Authority, continue Manufacturing any Product if such Manufacturing would not be in compliance with Applicable Laws or cGMP due to such change.

9. INTELLECTUAL PROPERTY

9.1Ownership.

9.1.1Customer acknowledges that the Supplier Technology, as of the Effective Date, may include certain proprietary Inventions, processes, know-how, trade secrets, methods, approaches, analyses, improvements, other intellectual properties and other assets including, but not limited to, analytical methods, procedures and techniques, computer technical expertise and proprietary software, and technical and conceptual expertise in the area of manufacture, packaging and supplying products, in each case, that have been developed independently by Supplier.  Supplier shall have sole ownership of all Supplier Technology, including all Supplier Improvements, and shall, subject to Customer’s secondary right (but not the obligation) to prosecute, maintain and enforce in accordance with Article 12 (Intellectual

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Property) of the Collaboration Agreement,  have the sole right to prosecute, maintain and enforce such Supplier Technology in its sole discretion.

10. REPRESENTATIONS AND WARRANTIES

10.1Representation and Warranties of Each Party.  Section 10.1 (Representations and Warranties of Each Party) of the Collaboration Agreement shall apply to this Agreement.

10.2Representations and Warranties of Supplier.  Supplier hereby further represents and warrants to Customer as follows:

10.2.1the Product at the time of delivery to Customer (i) has been Manufactured, analysed, stored, packaged and shipped in accordance with the Regulatory Approval (including approved Specifications therein) for the Product in the Territory, Quality Agreement, cGMP and other Applicable Laws; (ii) conforms to the Regulatory Approval (including approved Specifications therein), CoA and CoC, is free from defects and is merchantable; (iii) is not adulterated or misbranded within the meaning of the FD&C Act or other Applicable Laws; (iv) has been stored and handled in accordance with the procedures set forth under this Agreement, Regulatory Approval (including approved Specifications therein) for the Product in the Territory and the Quality Agreement and Applicable Laws; (v) shall meet the shelf life requirement set forth in Section 4.4 at the time of delivery pursuant to Section 4.1; and (vi) Supplier as the holder of the Regulatory Approval for the Product in the Territory has fulfilled its obligations with respect to the Serialisation and provided to Customer required Serialisation numbers;

10.2.2as of immediately prior to the delivery of the Product to Customer, Supplier has good and marketable title to such Product and such Product is free from all liens, charges, encumbrances and security interests; and

10.2.3 The Section 10.2 (g), (i) and (j) (Representations and Warranties of Marinus) of the Collaboration Agreement shall apply to this Agreement.

10.3Representations and Warranties of Customer. Customer hereby further represents and warrants to Supplier as follows:

10.3.1Immediately after the time of delivery of Product to Customer and during the approved shelf life of the Product, Customer (i) will  store, label, package and ship Product in accordance with cGMP and Applicable Laws and the Regulatory Approval (including approved Specifications therein); (ii) will not  adulterate or misbrand Product within the meaning of the FD&C Act and the Applicable Laws in the European Union; and (iii) will store and handle Product in accordance with the procedures set forth under this Agreement, Regulatory Approval (including approved Specifications therein) and/or the Quality Agreement;

10.3.2Section 10.3 (a) and (b) (Representations and Warranties of Licensee) of the Collaboration Agreement shall apply to this Agreement.

10.4Representation by Legal Counsel.  Each Party hereto represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the

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drafting hereof.  In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption shall exist or be implied against the Party which drafted such terms and provisions.

11. INDEMNIFICATION, LIMITATION OF LIABILITY AND INSURANCE

11.1Indemnification.

11.1.1 Supplier shall indemnify and hold harmless Customer, its Affiliates, and their  directors, officers, employees, and agents and permitted assigns (collectively, the “Customer Representatives”) from and against all damages, losses, liabilities, expenses, claims, demands, suits, penalties or judgments or administrative or judicial orders (including reasonable attorneys’ fees and expenses reasonably incurred) (collectively, “Losses”) incurred by the Customer Representatives  in connection with any claims, demands, actions or other proceedings by any Third Party for damage to physical property, personal injury (including loss of injured person’s earnings) or death (including such claims made on the basis of product liability) or other direct damage  (individually and collectively, “Claims”) to the extent resulting from or arising out of; (i)  the gross negligence or willful misconduct of Supplier or its Affiliates and their respective officers, directors, employees,  agents and representatives; (ii) any breach by Supplier of its representations, warranties, obligations or covenants in this Agreement;  (iii) the Development, patient use of Licensed Product, Manufacture, supply of the Product to Customer by Supplier, or Commercialization of Product by or on behalf of Supplier, including Claims with respect to product liability except to the extent such Claims would be indemnifiable pursuant to Section 11.1.2 of this Agreement; (iv)  infringment of any patent, copyright or trademark or misappropriation of any trade secret or other intellectual property of any Third Party in the use of any Supplier Technology in the Manufacture of the Product; or (v) Supplier’s failure to abide by any Applicable Law (including environmental laws, regulations and orders and any failure by Supplier to obtain and maintain any Regulatory Approvals Supplier is required to have for Manufacture of the Product and required to be obtained and maintained by Supplier under Applicable Law), except, in each case ((i) through (v)), to the extent Customer has an obligation to indemnify any Supplier Representative pursuant to Section11.1.2.  The provisions of this Section shall survive the termination or expiration of this Agreement.

11.2Customer shall indemnify and hold harmless Supplier, its directors, officers, employees and agents (collectively, the “Supplier Representatives”) from and against all Losses incurred by the Supplier Representatives in connection with any Claims against such Supplier Representatives to the extent resulting from or arising out of (i) gross negligence or willful misconduct of Customer or Customer Representatives. (ii) any breach by Customer of its representations, warranties, obligations or covenants in this Agreement; (iii) Customer’s failure to comply with any Applicable Law (including environmental laws, regulations and orders and any failure by Customer to obtain and maintain any Regulatory Approvals relating to the handling, storage and shipment of the Product conducted by Customer and required to be obtained by Customer under Applicable Law), except, in each case ((i) through (iii)), to the extent Supplier has an obligation to indemnify any Customer Representative pursuant to Section 11.1.1. The provisions of this Section shall survive the termination or expiration of this Agreement.

11.2.1The Section 11.3 (Indemnification Procedure) of the Collaboration Agreement shall apply to this Agreement.

11.3Limitations on Liability.

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11.3.1NEITHER SUPPLIER NOR CUSTOMER, NOR ANY OF THEIR RESPECTIVE AFFILIATES, WILL BE LIABLE TO THE OTHER PARTY TO THIS AGREEMENT OR SUCH OTHER PARTY’S AFFILIATES UNDER OR IN CONNECTION WITH THIS AGREEMENT FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING LOST PROFITS OR LOST REVENUES), WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT PRODUCT LIABILITY), INDEMNITY, CONTRIBUTION OR OTHERWISE, AND IRRESPECTIVE OF WHETHER SUPPLIER OR CUSTOMER, AS APPLICABLE, OR ANY REPRESENTATIVE OF THE APPLICABLE PARTY HAS BEEN ADVISED OF, OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF, ANY SUCH LOSS OR DAMAGE. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 11.5 IS INTENDED TO OR SHALL LIMIT OR RESTRICT (1),THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY FOR THIRD PARTY CLAIMS UNDER SECTIONS 11.1.1 AND 11.1.2 OR (2) DAMAGES AVAILABLE FOR A PARTY’S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 13, OR (3) DAMAGES AVAILABLE FOR A PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

11.3.2Nothing in this Section 11.3 shall be deemed to exclude or limit the liability of either Party for any form of liability that may not be excluded or limited by law, including liability for fraud.

11.3.3Supplier shall be liable for reimbursing to Customer specific penalties claimed by a tendering authority or end customers, such as hospitals, in the Territory due to non-supply of the Product caused by Supplier’s gross negligence or willful acts or breach of Supplier of its represnetations, warranties or obligations under this Agreement and provided that Customer has first exhausted all of its existing inventory of Product, as applicable.

11.4Insurance.  The Section 11.6 (Insurance) of the Collaboration Agreement shall apply to this Agreement.

12. TERM AND TERMINATION

12.1Term.  This Agreement shall commence on the Effective Date and continue, unless sooner terminated as set forth below in this Article 12 or in Article 14, for the duration of the  Term of the Collaboration Agreement.

12.2Termination for Material Breach.  In the event that either Party breaches any of its material obligations under this Agreement, the other Party may deliver written notice of such breach to the breaching Party.  If the breaching Party fails to cure such breach within ninety  (90) days following its receipt of such notice, the non-breaching Party may terminate this Agreement upon fifteen (15) days prior written notice to the breaching Party.

12.3Termination for Insolvency. Each Party shall have the right to terminate this Agreement upon delivery of written notice to the other Party in the event that (i) such other Party files in any court or agency pursuant to any statute or regulation of any jurisdiction a petition in bankruptcy or insolvency or for reorganization or similar arrangement for the benefit of creditors or for the appointment of a receiver or trustee of such other Party or its assets, (ii) such other Party is served with an involuntary

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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY “[***]”,

HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE

REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

petition against it in any insolvency proceeding and such involuntary petition has not been stayed or dismissed within sixty (60) days of its filing, or (iii) such other Party makes an assignment of all or substantially all of its assets for the benefit of its creditors.

12.4Effects of Termination.

12.4.1Termination of this Agreement for any reason shall be without prejudice to the right of either Party to receive all payments accrued and unpaid at the effective date of such termination or expiration, without prejudice to the remedy of either Party  with respect to any previous breach of any of the representations, warranties or covenants herein contained and without prejudice to any other provisions hereof which expressly or necessarily call for performance after such termination.

12.4.2Upon termination of this Agreement for any reason, at Customer’s request, Supplier shall supply Customer with its inventory of bulk Product manufactured for supply under this Agreement and Customer shall pay Supplier the Per Unit Supply Price for each unit of such bulk Product. Customer or its designee shall have the right to pack, serialise and sell a remaining inventory of finished Product and the terms and conditions of this Agreement shall apply, as applicable, to such Products so sold.

12.4.3Should either Party terminate this Agreement with regard to relevant Product/s and country/ies of the Territory, Customer will promptly provide Supplier with information related to the Product requirements for its remaining tenders with hospitals. Supplier shall use Commercially Reasonable Efforts to provide all Products required for the tenders within ninety (90) days from receipt of such information and purchase order from Customer. All the terms and conditions of this Agreement shall apply, as applicable, to that supply.

12.4.4Further to Section 4.2, in the event of a termination by Customer of  this Agreement for material uncured breach by Supplier, Customer shall be entitled to seek damages for loss of Customer’s investments in the license rights to Product, including payments and fees paid by Customer to Supplier for rights to Develop and/or Commercialize the Products in the Territory, but only to the extent Customer has not been able to recoup such investments from the sales of Products.

12.5Survival. The following provisions shall survive the expiration or termination of this Agreement: Article 1 (Definitions) (solely to the extent necessary to give meaning to other surviving sections), Section 0 (Delivery) and Section 0 (Risk of Loss) (in each case, solely with respect to Products and Materials remaining at the Facility following the effective date of expiration or termination), Section 5.2 (Payment) and Section 5.3 (Taxes and Other Charges) (in each case, solely with respect to payment obligations accruing prior to expiration or termination), Section 7.5 (Samples and Record Retention), Section 7.7(Recalls and Seizures), Section 9.1 (Ownership), Section 11.1 (Indemnification), Section 11.3 (Limitations on Liability), Section 11.4 (Insurance) (until the expiry of the approved shelf life of the last Batch of the bulk Product delivered to Customer under this Agreement), Section 12.4 (Effects of Termination), this Section 12.5 (Survival), Article 13 (Confidentiality), Article 15 (Notices) and Article 16 (General). Without limiting the foregoing, all of Supplier’s obligations under this Agreement relating to compliance with cGMP in respect of the Materials and Products shall continue in force following expiration or termination of this Agreement according to the requirements of cGMP.

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REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

12.6On a Product-by-Product and a country-by-country basis, in the event of termination or expiration of the Collaboration Agreement, this Agreement shall be automatically terminated to expire on the effective date of termination or expiration of the Collaboration Agreement.

13. CONFIDENTIALITY

13.1Nondisclosure Obligation.  The Article 9 (Confidentiality) of the Collaboration Agreement shall apply to this Agreement.

13.2Publicity.  The Section 9.7 (Publicity) of the Collaboration Agreement shall apply to this Agreement.

14. FORCE MAJEURE

If the production, delivery, acceptance, or use of the product specified for delivery under this agreement, or the performance of any other obligation of one of the parties hereunder is prevented, restricted or interfered with by reason of any cause or event beyond the reasonable control of such party and without the fault or negligence of such party (a “force majeure event”), the party so affected, upon prompt notice to the other party, shall be excused from performing such obligation during the continuance of such force majeure event.  If such force majeure event continues for a period of one hundred twenty (120) consecutive days or more the other party may terminate this agreement by notice in writing, provided that such force majeure event is continuing.  The affected party as a result of a force majeure event shall use all reasonable efforts, at its own expense, to eliminate the force majeure event and to resume performance as soon as practicable.

14.1Notices.

All notices, consents or waivers under this Agreement shall be in writing and will be deemed to have been duly given when (a) scanned and converted into a portable document format file (i.e., pdf file) and sent as an attachment to an e-mail message (and promptly confirmed by registered letter or overnight courier by an internationally recognized overnight delivery service (receipt requested)), or (b) the earlier of when received by the addressee or five (5) days after it was sent, if sent by registered letter or overnight courier by an internationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and e-mail addresses set forth below (or to such other addresses and e-mail addresses as a Party may designate by notice):

If to Marinus Pharmaceuticals, Inc.:	Marinus Pharmaceuticals, Inc.
	5 Radnor Corporate Center, 100 Matsonford Road
	100 Matsonford Road, Suite 500
	Radnor, PA 19087
	Attention: [***]
	Tel: [***]
	E-mail address: [***]
	with a copy to (which shall not constitute notice):
	Hogan Lovells US LLP

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	1735 Market Street, Floor 23
	Philadelphia, PA 19103
	Attention: Steve J. Abrams
	Tel: [***]
	E-mail address: [***]
If to Orion Corporation:	Orion Corporation
	Orionintie 1,
	02200 Espoo, Finland
	Attn: [***]
	Tel: [***]
	with a copy to (which shall not constitute notice):
	Orion Corporation Legal Affairs
	Orionintie 1,
	02200 Espoo, Finland
	Attn: [***]
	Tel: [***]

15. GENERAL

15.1Governing Law.  The Section 14.4 (Governing Law; English Language) of the Collaboration Agreement shall apply to this Agreement.

15.2Escalation of Disputes and Arbitration. The Section 14.5 (Dispute Resolution) of the Collaboration Agreement shall apply to this Agreement.

15.3In all cases where a term of this Agreement is uncertain and has yet to be definitively determined as indicated by a [ * ] in a provision of this Agreement, Supplier agrees to use Commercially Reasonable Efforts to diligently pursue a mutually agreeable resolution of such uncertainty in a timely fashion and with the goal of having all provisions complete no later than December 31, 2021 and Customer agrees to reasonably cooperate with Supplier to reach such resolution.  The Parties further agree that any such resolution of such uncertainties shall not prejudice the Customer in comparison to Supplier’s other customers or Supplier’s own operations. Resolved items shall be incorporated into the Agreement by one or more amendments to be agreed and executed by both Parties.

15.4Assignment.  The Section 14.1 (Assignment) of the Collaboration Agreement shall apply to this Agreement.

15.5Further Assurances.  Each Party shall duly execute and deliver or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts, as may be reasonably necessary or appropriate in order to carry out the purposes and intent of this Agreement.

15.6Entire Agreement.  This Agreement and all Exhibits attached hereto (as the same may be amended from time to time by the written agreement of the Parties), the Collaboration Agreement, the

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Pharmacovigilance Agreement and the Quality Agreement constitute the entire agreement between the Parties with respect to the subject matter hereof and supersedes all other documents, agreements, verbal consents, arrangements and understandings between the Parties with respect to the subject matter hereof. In the event of discrepancies between this Agreement and an  Exhibit, the terms and conditions of this Agreement shall prevail unless otherwise specifically stated to the contrary in the Exhibit. This Agreement shall not be amended orally, but only by an agreement in writing, signed by both Parties that states that it is an amendment to this Agreement. This Agreement is an integral part of the Collaboration Agreement, the terms and conditions of which shall, as applicable, apply to this Agreement to the extent not amended herein. Whenever “this Agreement” is referred to the Collaboration Agreement, such reference shall also mean this Supply Agreement to the extent the context so requires.

15.7Severability.  If and to the extent that any provision (or any part thereof) of this Agreement is held to be invalid, illegal or unenforceable, in any respect in any jurisdiction, the provision (or the relevant part thereof) shall be considered severed from this Agreement and shall not serve to invalidate the remainder of such provision or any other provisions hereof.  The Parties shall make a good faith effort to replace any invalid, illegal or unenforceable provision (or any part thereof) with a valid, legal and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

15.8Independent Contractor.  Supplier shall act as an independent contractor and neither Party shall have any authority to represent or bind the other Party in any way.

15.9No Waiver.  Any waiver by one Party of any right of such Party or obligation of the other Party must be in writing and shall not operate as a waiver of any subsequent right or obligation.

15.10Counterparts.  This Agreement may be executed in one (1) or more counterparts, each of which shall be deemed an original, and together shall constitute one and the same agreement and shall become effective when one (1) or more counterparts have been signed by each of the Parties and delivered to the other Party/ies, it being understood that the Parties need not sign the same counterpart.  This Agreement, following its execution, may be delivered via PDF copies or other form of electronic delivery, which shall constitute delivery of an execution original for all purposes.

15.11Exhibits. The following Exhibits shall be attached to this Agreement: 1) Exhibit A (Unit of Product, Per Unit Supply Price, Adjustment of Per Unit Supply Price), 2) Customer’s Third Party Code of Conduct, 3) Quality Agreement, 4) Pharmacovigilance Agreement, Exhibit B (List of Supplier’s Manufacturers).

[Signature page follows.]

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

ORION CORPORATION
By:
	Name:
	Title:
By:
	Name:
	Title:
MARINUS PHARMACEUTICALS, INC.
By:
	Name:
	Title:
MARINUS PHARMACEUTICALS EMERALD LIMITED
By:
	Name:
	Title:

[Signature page to Manufacturing and Supply Agreement]

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HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE

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EXHIBIT A

Unit of Product, Per Unit Supply Price, Adjustment of Per Unit Supply Price

[***]

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HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE

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EXHIBIT 2

Customer’s Third Party Code of Conduct

[***]

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HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE

REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

EXHIBIT 3

Quality Agreement

[***]

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EXHIBT 4

Pharmacovigiliance Agreement

[***]

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HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE

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EXHIBIT B

List of Supplier’s Manufacturers

[***]

[***]

.

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SCHEDULE 1.20

CONTEMPLATED CLINICAL TRIALS

[***]

.

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HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE THAT THE

REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

SCHEDULE 10.2

EXCEPTIONS

[***]

.

EX-10.2

Exhibit 10.2

MARINUS PHARMACEUTICALS, INC.

2014 EQUITY INCENTIVE PLAN

INCENTIVE STOCK OPTION AGREEMENT

Marinus Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby grants an option (the “Option”) to purchase shares of its common stock, par value $0.001 (the “Stock”), to the recipient (the “Grantee”) set forth on the Schedule to Incentive Stock Option Agreement attached hereto (the “Schedule”), subject to the vesting and other conditions set forth below and in the Schedule.  The terms and conditions of the Option are set forth in this Incentive Stock Option Agreement and the Schedule (collectively, the “Agreement”), as well as in the Company’s 2014 Equity Incentive Plan (as it may be amended from time to time, the “Plan”).  All capitalized terms that are used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

Incentive Stock Option

This Agreement evidences an award of an Option exercisable for that number of shares of Stock set forth on the Schedule and subject to the vesting and other conditions set forth in this Agreement and in the Plan.  This Option is intended to be an incentive stock option under Section 422 of the Code (an “Incentive Stock Option”) and will be interpreted accordingly; provided, that, the Company makes no representation or guarantee that the Option will qualify as an Incentive Stock Option.  If the aggregate Fair Market Value of the shares of Stock on the Grant Date with respect to which this Option is exercisable for the first time by you during any calendar year, under this Plan or any other stock option plan of the Company or a parent or subsidiary of the Company, exceeds $100,000, then this Option, as to the excess, shall be treated as a Nonqualified Stock Option.

Vesting & Exercisability

This Option is only exercisable before it expires and then only with respect to the vested portion of the Option.  This Option shall vest in accordance with the vesting schedule set forth on the Schedule; provided, however, that for purposes of vesting, fractional numbers of shares of Stock shall be rounded to the nearest whole number, and the number of shares of Stock that shall vest on the final vesting date shall be rounded up or down as necessary such that the total number of shares of Stock that vest pursuant to the vesting schedule shall be equal to the number of shares of Stock covered by this Option as set forth on the Schedule.   Notwithstanding the vesting schedule set forth on the Schedule, this Option shall become one-hundred percent (100%) vested upon the termination of your service as an Employee (“Service”) due to your death or Disability. Unless the termination of your Service triggers accelerated vesting or other treatment of this Option pursuant to the terms of this Agreement, the Plan or your employment agreement with the Company (the “Employment Agreement”), if any, you shall immediately and automatically forfeit the unvested portion of the Option to the Company in the event your Service terminates for any reason.  No portion of this Option that is not exercisable

	at the time of the termination of your Service shall thereafter become exercisable.
Change of Control	In the event of a Change of Control, this Option will be treated in the manner provided in Section 13 of the Plan.  Notwithstanding the foregoing, if, within twelve (12) months following the consummation of a Change of Control, your Service is terminated (i) by the Company or any of its subsidiaries (or by the acquiring or successor entity in the Change of Control transaction) without Cause (as defined below) or, (ii) if you have an Employment Agreement that has a definition of “good reason,” by you for good reason (as defined in your Employment Agreement), this Option will become fully vested and exercisable as of the date of your termination of employment.   For purposes of this Agreement, the term “Cause” shall have the meaning set forth in the Plan, or, if you have an Employment Agreement which has a definition of “Cause,” then it shall have the meaning set forth in your Employment Agreement.
Term	Notwithstanding anything in this Agreement to the contrary, this Option shall expire and you shall immediately and automatically forfeit the Option to the Company in any event at the close of business at Company headquarters on the Expiration Date, as shown on the Schedule.  This Option will expire earlier (but never later) if your Service terminates, as described below.
Regular Termination	If your Service terminates for any reason, other than due to your Retirement, death or Disability or for Cause, then this Option will expire at the close of business at Company headquarters on the ninetieth (90th) day after your termination date.
Termination for Cause	If your Service is terminated for Cause, then you shall immediately forfeit all rights to this Option (including to any vested portion of the Option) and the Option shall immediately expire.
Retirement	If your Service terminates due to your Retirement, then this Option will expire at the close of business at Company headquarters on the date that is twelve (12) months after the date of your Retirement.  During such twelve (12) month period, you may exercise the vested portion of this Option.  In the event that this Option is exercised more than 90 days after your Retirement, the Option shall lose its status as an Incentive Stock Option and shall be treated as a Nonqualified Stock Option.
Death	If your Service terminates due to your death, then this Option will expire at the close of business at Company headquarters on the date that is twelve (12) months after the date of your death.  During such twelve (12) month period, your estate or heirs may exercise the vested portion of this Option. In addition, if you die during the ninety (90) day period described in connection with a regular termination (i.e., a termination of your Service other than due to death or Disability or for Cause), and a vested portion of this Option has not yet been exercised, then such vested portion of this

	Option will instead expire on the date that is twelve (12) months after your termination date.  In such a case, during the period following your death up to the date that is twelve (12) months after your termination date, your estate or heirs may exercise the vested portion of this Option.
Disability	If your Service terminates due to your Disability, then this Option will expire at the close of business at Company headquarters on the date that is twelve (12) months after your termination date.  During such twelve (12) month period, you (or your guardian or legal representative, as applicable) may exercise the vested portion of this Option.
Leaves of Absence	For purposes of this Option, your Service does not terminate when you go on a bona fide employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued service crediting, or when continued service crediting is required by applicable law.  However, in all other cases, your Service will be treated as terminating ninety (90) days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract.  Your Service terminates in any event when the approved leave ends, unless you immediately return to active employee work. The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan.
Notice of Exercise	When you wish to exercise this Option, you must notify the Company in writing by filing a notice of exercise in the form designated by the Company at the address given on the form.  Your notice must specify how many shares you wish to purchase.  Your notice must also specify how your shares of Stock should be registered (in your name only or in your and your spouse’s names as joint tenants with right of survivorship).  The notice will be effective when it is received by the Company.   If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.
Form of Payment	When you submit your notice of exercise, you must include payment of the Exercise Price indicated on the Schedule for the shares you are purchasing.  Payment may be made in one (or a combination) of the following forms: ● Cash, your personal check, a cashier’s check, a money order, or another cash equivalent acceptable to the Company. ● If approved in advance by the Board or the Committee, shares of Stock which are owned by you and which are surrendered to the Company and which are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements.  The Fair Market Value of the shares of Stock as of the effective date of the Option exercise will be applied to the Exercise Price. ● If approved in advance by the Board or the Committee, by delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of

	Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price and any withholding taxes. ● If approved in advance by the Board or the Committee, by the Company withholding a number of shares of Stock that would otherwise be issuable to you upon your exercise of this Option.  The Fair Market Value of the shares as of the effective date of the Option exercise will be applied to the Exercise Price.
Evidence of Issuance	The issuance of the shares of Stock upon exercise of this Option shall be evidenced in such a manner as the Company, in its discretion, will deem appropriate, including, without limitation, book-entry, direct registration, or issuance of one or more Stock certificates.
Withholding Taxes	You agree as a condition of this Agreement that you will make acceptable arrangements to pay any withholding or other taxes that may be due relating to the exercise of this Option, the sale of shares of Stock acquired under this Option, or as otherwise arising under this Option.  In the event that the Company or any subsidiary of the Company determines that any federal, state, local, or foreign tax or withholding payment is required relating to the exercise of this Option, the sale of shares of Stock acquired under this Option, or as otherwise arising under this Option, the Company or any subsidiary of the Company shall have the right to (i) require you to tender a cash payment, or (ii) deduct from payments of any kind otherwise due to you.  If the Board or the Committee so permits, you may elect to satisfy any such tax withholding obligation by having vested shares of Stock otherwise deliverable under this Agreement withheld up to an amount that does not exceed your minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities. You agree that the Company or any subsidiary of the Company shall be entitled to use whatever method it may deem appropriate to recover such taxes.  You further agree that the Company may, as it reasonably considers necessary, amend or vary this Agreement to facilitate such recovery of taxes.
Transfer of Option	This Option is not transferable by you other than to a designated beneficiary upon your death or by will or the laws of descent and distribution, and is exercisable during your lifetime only by you.  No assignment or transfer of this Option, or the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary upon death by will or the laws of descent or distribution) will vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer this Option will terminate and become of no further effect.
Retention Rights	Neither this Option nor this Agreement gives you the right to be retained or employed by the Company (or any subsidiary of the Company) in any capacity.  Unless otherwise specified in any written employment or other agreement between the Company and you, the Company reserves the right to terminate your Service at any time and for any reason.

Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of the Company until the shares of Stock have been issued upon exercise of this Option and either a certificate evidencing your shares of Stock has been issued or an appropriate entry has been made on the Company’s books.  No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made).
Forfeiture; Clawback	Notwithstanding anything in this Agreement to the contrary, if the Board or the Committee determines that you have engaged in conduct that constitutes Cause at any time while you are employed by, or providing services to, the Company or any of its subsidiaries, or after your termination of employment or service, this Option, to the extent outstanding, shall immediately terminate, and you shall automatically forfeit all shares underlying any exercised portion of this Option for which the Company has not yet delivered the share certificates, upon refund by the Company of the Exercise Price paid by you for such shares.  Upon any exercise of this Option, the Company may withhold delivery of share certificates pending resolution of an inquiry that could lead to a finding resulting in a forfeiture. This Option is subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to (i) any “clawback” or recoupment policy that is adopted by the Company or a subsidiary of the Company to comply with the requirements of any applicable laws, or (ii) any applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws.
Adjustments	The number of shares subject to issuance upon exercise of this Option and the Exercise Price of this Option are subject to adjustment in accordance with Section 3(d) of the Plan.  This Option shall be subject to the terms of any applicable agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.
Applicable Law	This Agreement will be interpreted and enforced under the laws of Delaware other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
The Plan	The text of the Plan is incorporated into this Agreement by reference.   This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option.  Any prior agreements, commitments or negotiations concerning this grant are superseded; except that any written employment, consulting, confidentiality, non-solicitation, non-competition, and/or severance agreement between you and the Company or any subsidiary of the Company shall supersede this Agreement with respect to its subject matter.
Data Privacy	In order to administer the Plan, the Company may process personal data about you.  Such data includes, but is not limited to the information provided in this Agreement and any changes thereto, other appropriate

	personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan. By accepting this Option, you give explicit consent to the Company to process any such personal data.  You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect to non-U.S. resident grantees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the Plan.
Consent to Electronic Delivery	By accepting this Option, you consent to receive documents related to the Option by electronic delivery (including e-mail or reference to a website or other URL) and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.
Qualification as an Incentive Stock Option; Certain Dispositions	It is understood that this Option is intended to qualify as an Incentive Stock Option to the extent permitted under applicable law. Accordingly, you understand that in order to obtain the benefits of an Incentive Stock Option, no sale or other disposition may be made of shares for which Incentive Stock Option treatment is desired within one (1) year following the date of exercise of the Option or within two (2) years from the Grant Date.  You understand and agree that the Company shall not be liable or responsible for any additional tax liability you incur in the event that the Internal Revenue Service for any reason determines that this Option does not qualify as an Incentive Stock Option within the meaning of the Code. If you sell or otherwise dispose of shares of Stock acquired pursuant to the exercise of this Option prior to the later of (i) the second (2nd) anniversary of the Grant Date or (ii) the first (1st) anniversary of the date of exercise of the Option, then you agree to notify the Company in writing of the date of sale or disposition, the number of shares of Stock sold or disposed of and the sale price per share within thirty (30) days of such sale or disposition.
Code Section 409A	This Option is intended to be exempt from, or to comply with, Code Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Code Section 409A. Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, any subsidiaries of the Company, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on you under Code Section 409A, and neither the Company, any subsidiaries of the Company, the Board, nor the Committee will have any liability to you for such tax or penalty.

Successors and Assigns	This Agreement shall inure to the successors and assigns of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by you, except to the extent expressly permitted herein.
Severability	If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

You must accept this Agreement electronically pursuant to the online acceptance procedure established by the Company.  By accepting this Agreement, you agree to all of the terms and conditions described in this Agreement and in the Plan, a copy of which has been provided or made available to you.  You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent with the Plan.  

Schedule to Incentive Stock Option Agreement

(See Attachment)

Recipient ID[●]

Recipient Name[●]

Recipient Address[●]

Type of AwardIncentive Stock Option

Number of Shares[●]

Exercise Price[●]

Grant Date[●]

Vesting Start Date[●]

Expiration Date[●]

Vesting Schedule:

[Initial Employment Option Grant Vesting: This Option shall vest and become exercisable as follows: twenty-five percent (25%) of the shares of Stock subject to this Option shall vest on the first (1^st) anniversary of the Vesting Start Date and the remaining seventy-five percent (75%) of the shares of Stock subject to this Option shall vest and become exercisable in thirty-six (36) consecutive monthly installments of [●] shares of Stock each, starting on the thirteen (13) month anniversary of the Vesting Start Date and continuing on each monthly anniversary thereafter such that one-hundred percent (100%) of the shares of Stock subject to this Option shall vest on the fourth (4^th) anniversary of the Vesting Start Date, subject to your continued  service as an Employee through each of the applicable vesting dates.][Annual Option Grant Vesting: This Option shall vest and become exercisable in thirty-six (36) consecutive monthly installments of [●] shares of Stock each, starting on the one month anniversary of the Vesting Start Date and continuing on each monthly anniversary thereafter such that one-hundred percent (100%) of the shares of Stock subject to this Option shall vest on the third (3^rd) anniversary of the Vesting Start Date, subject to your continued service as an Employee through each of the applicable vesting dates.]  

EX-10.3

Exhibit 10.3

MARINUS PHARMACEUTICALS, INC.

2014 EQUITY INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

Marinus Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby grants an option (the “Option”) to purchase shares of its common stock, par value $0.001 (the “Stock”), to the recipient (the “Grantee”) set forth on the Schedule to Nonqualified Stock Option Agreement attached hereto (the “Schedule”), subject to the vesting and other conditions set forth below and in the Schedule.  The terms and conditions of the Option are set forth in this Nonqualified Stock Option Agreement and the Schedule (collectively, the “Agreement”), as well as in the Company’s 2014 Equity Incentive Plan (as it may be amended from time to time, the “Plan”).  All capitalized terms that are used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

Nonqualified Stock Option	This Agreement evidences an award of an Option exercisable for that number of shares of Stock set forth on the Schedule and subject to the vesting and other conditions set forth in this Agreement and in the Plan.  This Option is not intended to be an incentive stock option under Section 422 of the Code and will be interpreted accordingly.
Vesting & Exercisability	This Option is only exercisable before it expires and then only with respect to the vested portion of the Option.  This Option shall vest in accordance with the vesting schedule set forth on the Schedule; provided, however, that for purposes of vesting, fractional numbers of shares of Stock shall be rounded to the nearest whole number, and the number of shares of Stock that shall vest on the final vesting date shall be rounded up or down as necessary such that the total number of shares of Stock that vest pursuant to the vesting schedule shall be equal to the number of shares of Stock covered by this Option as set forth on the Schedule.   Notwithstanding the vesting schedule set forth on the Schedule, this Option shall become one-hundred percent (100%) vested upon the termination of your service as an Employee (“Service”) due to your death or Disability. Unless the termination of your Service triggers accelerated vesting or other treatment of this Option pursuant to the terms of this Agreement, the Plan or your employment agreement with the Company (the “Employment Agreement”), if any, you shall immediately and automatically forfeit the unvested portion of the Option to the Company in the event your Service terminates for any reason.  No portion of this Option that is not exercisable at the time of the termination of your Service shall thereafter become exercisable.
Change of Control	In the event of a Change of Control, this Option will be treated in the manner provided in Section 13 of the Plan.  Notwithstanding the foregoing, if, within twelve (12) months following the consummation of a Change of Control, your Service is terminated (i) by the Company or any of its subsidiaries (or by the acquiring or successor entity in the Change of Control transaction) without Cause (as defined below) or, (ii) if you have an Employment Agreement that has a definition of “good reason,” by you

	for good reason (as defined in your Employment Agreement), this Option will become fully vested and exercisable as of the date of your termination of employment.   For purposes of this Agreement, the term “Cause” shall have the meaning set forth in the Plan, or, if you have an Employment Agreement which has a definition of “Cause,” then it shall have the meaning set forth in your Employment Agreement.
Term	Notwithstanding anything in this Agreement to the contrary, this Option shall expire and you shall immediately and automatically forfeit the Option to the Company in any event at the close of business at Company headquarters on the Expiration Date, as shown on the Schedule.  This Option will expire earlier (but never later) if your Service terminates, as described below.
Regular Termination	If your Service terminates for any reason, other than due to your Retirement, death or Disability or for Cause, then this Option will expire at the close of business at Company headquarters on the ninetieth (90th) day after your termination date.
Termination for Cause	If your Service is terminated for Cause, then you shall immediately forfeit all rights to this Option (including to any vested portion of the Option) and the Option shall immediately expire.
Retirement	If your Service terminates due to your Retirement, then this Option will expire at the close of business at Company headquarters on the date that is twelve (12) months after the date of your Retirement.  During such twelve (12) month period, you may exercise the vested portion of this Option.
Death	If your Service terminates due to your death, then this Option will expire at the close of business at Company headquarters on the date that is twelve (12) months after the date of your death.  During such twelve (12) month period, your estate or heirs may exercise the vested portion of this Option. In addition, if you die during the ninety (90) day period described in connection with a regular termination (i.e., a termination of your Service other than due to death or Disability or for Cause), and a vested portion of this Option has not yet been exercised, then such vested portion of this Option will instead expire on the date that is twelve (12) months after your termination date.  In such a case, during the period following your death up to the date that is twelve (12) months after your termination date, your estate or heirs may exercise the vested portion of this Option.
Disability	If your Service terminates due to your Disability, then this Option will expire at the close of business at Company headquarters on the date that is twelve (12) months after your termination date.  During such twelve (12) month period, you (or your guardian or legal representative, as applicable) may exercise the vested portion of this Option.
Leaves of Absence	For purposes of this Option, your Service does not terminate when you go on a bona fide employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued service

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	crediting, or when continued service crediting is required by applicable law.  However, in all other cases, your Service will be treated as terminating ninety (90) days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract.  Your Service terminates in any event when the approved leave ends, unless you immediately return to active employee work. The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan.
Notice of Exercise	When you wish to exercise this Option, you must notify the Company in writing by filing a notice of exercise in the form designated by the Company at the address given on the form.  Your notice must specify how many shares you wish to purchase.  Your notice must also specify how your shares of Stock should be registered (in your name only or in your and your spouse’s names as joint tenants with right of survivorship).  The notice will be effective when it is received by the Company.   If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.
Form of Payment	When you submit your notice of exercise, you must include payment of the Exercise Price indicated on the Schedule for the shares you are purchasing.  Payment may be made in one (or a combination) of the following forms: ● Cash, your personal check, a cashier’s check, a money order, or another cash equivalent acceptable to the Company. ● If approved in advance by the Board or the Committee, shares of Stock which are owned by you and which are surrendered to the Company and which are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements.  The Fair Market Value of the shares of Stock as of the effective date of the Option exercise will be applied to the Exercise Price. ● If approved in advance by the Board or the Committee, by delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price and any withholding taxes. ● If approved in advance by the Board or the Committee, by the Company withholding a number of shares of Stock that would otherwise be issuable to you upon your exercise of this Option.  The Fair Market Value of the shares as of the effective date of the Option exercise will be applied to the Exercise Price.
Evidence of Issuance	The issuance of the shares of Stock upon exercise of this Option shall be evidenced in such a manner as the Company, in its discretion, will deem appropriate, including, without limitation, book-entry, direct registration, or issuance of one or more Stock certificates.

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Withholding Taxes	You agree as a condition of this Agreement that you will make acceptable arrangements to pay any withholding or other taxes that may be due relating to the exercise of this Option, the sale of shares of Stock acquired under this Option, or as otherwise arising under this Option.  In the event that the Company or any subsidiary of the Company determines that any federal, state, local, or foreign tax or withholding payment is required relating to the exercise of this Option, the sale of shares of Stock acquired under this Option, or as otherwise arising under this Option, the Company or any subsidiary of the Company shall have the right to (i) require you to tender a cash payment, or (ii) deduct from payments of any kind otherwise due to you.  If the Board or the Committee so permits, you may elect to satisfy any such tax withholding obligation by having vested shares of Stock otherwise deliverable under this Agreement withheld up to an amount that does not exceed your minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities. You agree that the Company or any subsidiary of the Company shall be entitled to use whatever method it may deem appropriate to recover such taxes.  You further agree that the Company may, as it reasonably considers necessary, amend or vary this Agreement to facilitate such recovery of taxes.
Transfer of Option	This Option is not transferable by you other than to a designated beneficiary upon your death or by will or the laws of descent and distribution, and is exercisable during your lifetime only by you.  No assignment or transfer of this Option, or the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary upon death by will or the laws of descent or distribution) will vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer this Option will terminate and become of no further effect.  Notwithstanding the foregoing, with the prior written approval of the Board or the Committee, you may transfer this Option to your family members, or one or more trusts or other entities for the benefit of or owned by your family members, consistent with applicable securities laws, according to such terms as the Board or the Committee may determine; provided, that, you receive no consideration for the transfer of this Option and the transferred Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.
Retention Rights	Neither this Option nor this Agreement gives you the right to be retained or employed by the Company (or any subsidiary of the Company) in any capacity.  Unless otherwise specified in any written employment or other agreement between the Company and you, the Company reserves the right to terminate your Service at any time and for any reason.
Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of the Company until the shares of Stock have been issued upon exercise of this Option and either a certificate evidencing your shares of Stock has been issued or an appropriate entry has been made on the Company’s books.  No adjustments are made for dividends or other rights if the applicable record date occurs

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	before your stock certificate is issued (or an appropriate book entry has been made).
Forfeiture; Clawback	Notwithstanding anything in this Agreement to the contrary, if the Board or the Committee determines that you have engaged in conduct that constitutes Cause at any time while you are employed by, or providing services to, the Company or any of its subsidiaries, or after your termination of employment or service, this Option, to the extent outstanding, shall immediately terminate, and you shall automatically forfeit all shares underlying any exercised portion of this Option for which the Company has not yet delivered the share certificates, upon refund by the Company of the Exercise Price paid by you for such shares.  Upon any exercise of this Option, the Company may withhold delivery of share certificates pending resolution of an inquiry that could lead to a finding resulting in a forfeiture. This Option is subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to (i) any “clawback” or recoupment policy that is adopted by the Company or a subsidiary of the Company to comply with the requirements of any applicable laws, or (ii) any applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws.
Adjustments	The number of shares subject to issuance upon exercise of this Option and the Exercise Price of this Option are subject to adjustment in accordance with Section 3(d) of the Plan.  This Option shall be subject to the terms of any applicable agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.
Applicable Law	This Agreement will be interpreted and enforced under the laws of Delaware other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
The Plan	The text of the Plan is incorporated into this Agreement by reference.   This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option.  Any prior agreements, commitments or negotiations concerning this grant are superseded; except that any written employment, consulting, confidentiality, non-solicitation, non-competition, and/or severance agreement between you and the Company or any subsidiary of the Company shall supersede this Agreement with respect to its subject matter.
Data Privacy	In order to administer the Plan, the Company may process personal data about you.  Such data includes, but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan.

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	By accepting this Option, you give explicit consent to the Company to process any such personal data.  You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect to non-U.S. resident grantees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the Plan.
Consent to Electronic Delivery	By accepting this Option, you consent to receive documents related to the Option by electronic delivery (including e-mail or reference to a website or other URL) and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.
Code Section 409A	This Option is intended to be exempt from, or to comply with, Code Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Code Section 409A. Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, any subsidiaries of the Company, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on you under Code Section 409A, and neither the Company, any subsidiaries of the Company, the Board, nor the Committee will have any liability to you for such tax or penalty.
Successors and Assigns	This Agreement shall inure to the successors and assigns of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by you, except to the extent expressly permitted herein.
Severability	If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

You must accept this Agreement electronically pursuant to the online acceptance procedure established by the Company. By accepting this Agreement, you agree to all of the terms and conditions described in this Agreement and in the Plan, a copy of which has been provided or made available to you. You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent with the Plan.

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Schedule to Nonqualified Stock Option Agreement

(See Attachment)

Recipient ID[●]

Recipient Name[●]

Recipient Address[●]

Type of AwardNonqualified Stock Option

Number of Shares[●]

Exercise Price[●]

Grant Date[●]

Vesting Start Date[●]

Expiration Date[●]

Vesting Schedule:

[Initial Employment Option Grant Vesting: This Option shall vest and become exercisable as follows: twenty-five percent (25%) of the shares of Stock subject to this Option shall vest on the first (1^st) anniversary of the Vesting Start Date and the remaining seventy-five percent (75%) of the shares of Stock subject to this Option shall vest and become exercisable in thirty-six (36) consecutive monthly installments of [●] shares of Stock each, starting on the thirteen (13) month anniversary of the Vesting Start Date and continuing on each monthly anniversary thereafter such that one-hundred percent (100%) of the shares of Stock subject to this Option shall vest on the fourth (4^th) anniversary of the Vesting Start Date, subject to your continued service as an Employee through each of the applicable vesting dates.][Annual Option Grant Vesting: This Option shall vest and become exercisable in thirty-six (36) consecutive monthly installments of [●] shares of Stock each, starting on the one month anniversary of the Vesting Start Date and continuing on each monthly anniversary thereafter such that one-hundred percent (100%) of the shares of Stock subject to this Option shall vest on the third (3^rd) anniversary of the Vesting Start Date, subject to your continued service as an Employee through each of the applicable vesting dates.]

EX-10.4

Exhibit 10.4

MARINUS PHARMACEUTICALS, INC.

2014 EQUITY INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT FOR NON-EMPLOYEE DIRECTORS

Marinus Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby grants an option (the “Option”) to purchase shares of its common stock, par value $0.001 (the “Stock”), to the recipient (the “Grantee”) set forth on the Schedule to Nonqualified Stock Option Agreement for Non-Employee Directors attached hereto (the “Schedule”), subject to the vesting and other conditions set forth below and in the Schedule.  The terms and conditions of the Option are set forth in this Nonqualified Stock Option Agreement for Non-Employee Directors and the Schedule (collectively, the “Agreement”), as well as in the Company’s 2014 Equity Incentive Plan (as it may be amended from time to time, the “Plan”).  All capitalized terms that are used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

Nonqualified Stock Option	This Agreement evidences an award of an Option exercisable for that number of shares of Stock set forth on the Schedule and subject to the vesting and other conditions set forth in this Agreement and in the Plan.  This Option is not intended to be an incentive stock option under Section 422 of the Code and will be interpreted accordingly.
Vesting & Exercisability	This Option is only exercisable before it expires and then only with respect to the vested portion of the Option.  This Option shall vest in accordance with the vesting schedule set forth on the Schedule; provided, however, that for purposes of vesting, fractional numbers of shares of Stock shall be rounded to the nearest whole number, and the number of shares of Stock that shall vest on the final vesting date shall be rounded up or down as necessary such that the total number of shares of Stock that vest pursuant to the vesting schedule shall be equal to the number of shares of Stock covered by this Option as set forth on the Schedule.   Notwithstanding the vesting schedule set forth on the Schedule, this Option shall become one-hundred percent (100%) vested upon the termination of your service as a Non-Employee Director (“Service”) due to your death or Disability. Unless the termination of your Service triggers accelerated vesting or other treatment of this Option pursuant to the terms of this Agreement or the Plan, you shall immediately and automatically forfeit the unvested portion of the Option to the Company in the event your Service terminates for any reason.  No portion of this Option that is not exercisable at the time of the termination of your Service shall thereafter become exercisable.
Change of Control	In the event of a Change of Control, this Option will be treated in the manner provided in Section 13 of the Plan.  Notwithstanding the foregoing, if, within twelve (12) months following the consummation of a Change of Control, your Service is terminated by the Company (or by the acquiring or successor entity in the Change of Control transaction) without Cause,

	this Option will become fully vested and exercisable as of the date of your termination of Service.
Term	Notwithstanding anything in this Agreement to the contrary, this Option shall expire and you shall immediately and automatically forfeit the Option to the Company in any event at the close of business at Company headquarters on the Expiration Date, as shown on the Schedule.  This Option will expire earlier (but never later) if your Service terminates, as described below.
Regular Termination	If your Service terminates for any reason, other than due to your death or Disability or for Cause, then this Option will expire at the close of business at Company headquarters on the ninetieth (90th) day after your termination date.
Termination for Cause	If your Service is terminated for Cause, then you shall immediately forfeit all rights to this Option (including to any vested portion of the Option) and the Option shall immediately expire.
Death	If your Service terminates due to your death, then this Option will expire at the close of business at Company headquarters on the date that is twelve (12) months after the date of your death.  During such twelve (12) month period, your estate or heirs may exercise the vested portion of this Option. In addition, if you die during the ninety (90) day period described in connection with a regular termination (i.e., a termination of your Service other than due to death or Disability or for Cause), and a vested portion of this Option has not yet been exercised, then such vested portion of this Option will instead expire on the date that is twelve (12) months after your termination date.  In such a case, during the period following your death up to the date that is twelve (12) months after your termination date, your estate or heirs may exercise the vested portion of this Option.
Disability	If your Service terminates due to your Disability, then this Option will expire at the close of business at Company headquarters on the date that is twelve (12) months after your termination date.  During such twelve (12) month period, you (or your guardian or legal representative, as applicable) may exercise the vested portion of this Option.
Notice of Exercise	When you wish to exercise this Option, you must notify the Company in writing by filing a notice of exercise in the form designated by the Company at the address given on the form.  Your notice must specify how many shares you wish to purchase.  Your notice must also specify how your shares of Stock should be registered (in your name only or in your and your spouse’s names as joint tenants with right of survivorship).  The notice will be effective when it is received by the Company.   If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

2

Form of Payment	When you submit your notice of exercise, you must include payment of the Exercise Price indicated on the Schedule for the shares you are purchasing.  Payment may be made in one (or a combination) of the following forms: ● Cash, your personal check, a cashier’s check, a money order, or another cash equivalent acceptable to the Company. ● If approved in advance by the Board or the Committee, shares of Stock which are owned by you and which are surrendered to the Company and which are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements.  The Fair Market Value of the shares of Stock as of the effective date of the Option exercise will be applied to the Exercise Price. ● If approved in advance by the Board or the Committee, by delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price and any withholding taxes. ● If approved in advance by the Board or the Committee, by the Company withholding a number of shares of Stock that would otherwise be issuable to you upon your exercise of this Option.  The Fair Market Value of the shares as of the effective date of the Option exercise will be applied to the Exercise Price.
Evidence of Issuance	The issuance of the shares of Stock upon exercise of this Option shall be evidenced in such a manner as the Company, in its discretion, will deem appropriate, including, without limitation, book-entry, direct registration, or issuance of one or more Stock certificates.
Withholding Taxes	You agree as a condition of this Agreement that you will make acceptable arrangements to pay any withholding or other taxes that may be due relating to the exercise of this Option, the sale of shares of Stock acquired under this Option, or as otherwise arising under this Option.  In the event that the Company or any subsidiary of the Company determines that any federal, state, local, or foreign tax or withholding payment is required relating to the exercise of this Option, the sale of shares of Stock acquired under this Option, or as otherwise arising under this Option, the Company or any subsidiary of the Company shall have the right to (i) require you to tender a cash payment, or (ii) deduct from payments of any kind otherwise due to you.  If the Board or the Committee so permits, you may elect to satisfy any such tax withholding obligation by having vested shares of Stock otherwise deliverable under this Agreement withheld up to an amount that does not exceed your minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities. You agree that the Company or any subsidiary of the Company shall be entitled to use whatever method it may deem appropriate to recover such taxes.  You further agree that the Company may, as it reasonably considers

3

	necessary, amend or vary this Agreement to facilitate such recovery of taxes.
Transfer of Option	This Option is not transferable by you other than to a designated beneficiary upon your death or by will or the laws of descent and distribution, and is exercisable during your lifetime only by you.  No assignment or transfer of this Option, or the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary upon death by will or the laws of descent or distribution) will vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer this Option will terminate and become of no further effect.  Notwithstanding the foregoing, with the prior written approval of the Board or the Committee, you may transfer this Option to your family members, or one or more trusts or other entities for the benefit of or owned by your family members, consistent with applicable securities laws, according to such terms as the Board or the Committee may determine; provided, that, you receive no consideration for the transfer of this Option and the transferred Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.
Retention Rights	Neither this Option nor this Agreement gives you the right to be retained by the Company (or any subsidiary of the Company) in any capacity.
Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of the Company until the shares of Stock have been issued upon exercise of this Option and either a certificate evidencing your shares of Stock has been issued or an appropriate entry has been made on the Company’s books.  No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made).
Forfeiture; Clawback	Notwithstanding anything in this Agreement to the contrary, if the Board or the Committee determines that you have engaged in conduct that constitutes Cause at any time while you are providing services to the Company, or after your termination of service, this Option, to the extent outstanding, shall immediately terminate, and you shall automatically forfeit all shares underlying any exercised portion of this Option for which the Company has not yet delivered the share certificates, upon refund by the Company of the Exercise Price paid by you for such shares.  Upon any exercise of this Option, the Company may withhold delivery of share certificates pending resolution of an inquiry that could lead to a finding resulting in a forfeiture. This Option is subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to (i) any “clawback” or recoupment policy that is adopted by the Company or a subsidiary of the Company to comply with the requirements of any applicable laws, or (ii) any applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws.

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Adjustments	The number of shares subject to issuance upon exercise of this Option and the Exercise Price of this Option are subject to adjustment in accordance with Section 3(d) of the Plan.  This Option shall be subject to the terms of any applicable agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.
Applicable Law	This Agreement will be interpreted and enforced under the laws of Delaware other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
The Plan	The text of the Plan is incorporated into this Agreement by reference.   This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option.  Any prior agreements, commitments or negotiations concerning this grant are superseded; except that any written employment, consulting, confidentiality, non-solicitation, non-competition, and/or severance agreement between you and the Company or any subsidiary of the Company shall supersede this Agreement with respect to its subject matter.
Data Privacy	In order to administer the Plan, the Company may process personal data about you.  Such data includes, but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan. By accepting this Option, you give explicit consent to the Company to process any such personal data.  You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect to non-U.S. resident grantees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the Plan.
Consent to Electronic Delivery	By accepting this Option, you consent to receive documents related to the Option by electronic delivery (including e-mail or reference to a website or other URL) and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.
Code Section 409A	This Option is intended to be exempt from, or to comply with, Code Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Code Section 409A. Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, any subsidiaries of the Company, the Board, nor the Committee will have any obligation to take any action to prevent the

5

	assessment of any excise tax or penalty on you under Code Section 409A, and neither the Company, any subsidiaries of the Company, the Board, nor the Committee will have any liability to you for such tax or penalty.
Successors and Assigns	This Agreement shall inure to the successors and assigns of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by you, except to the extent expressly permitted herein.
Severability	If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

You must accept this Agreement electronically pursuant to the online acceptance procedure established by the Company.  By accepting this Agreement, you agree to all of the terms and conditions described in this Agreement and in the Plan, a copy of which has been provided or made available to you.  You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent with the Plan.

6

Schedule to Nonqualified Stock Option Agreement for Non-Employee Directors

(See Attachment)

Recipient ID[●]

Recipient Name[●]

Recipient Address[●]

Type of AwardNonqualified Stock Option

Number of Shares[●]

Exercise Price[●]

Grant Date[●]

Vesting Start Date[●]

Expiration Date[●]

Vesting Schedule:

[Initial Appointment to the Board Option Grant Vesting: This Option shall vest and become exercisable in thirty-six (36) consecutive monthly installments of [●] shares of Stock each, starting on the one month anniversary of the Vesting Start Date and continuing on each monthly anniversary thereafter such that one-hundred percent (100%) of the shares of Stock subject to this Option shall vest on the third (3^rd) anniversary of the Vesting Start Date, subject to your continued service as a Director through each of the applicable vesting dates.]   [Annual Option Grant Vesting: This Option shall vest and become exercisable in twelve (12) consecutive monthly installments of [●] shares of Stock each, starting on the one month anniversary of the Vesting Start Date and continuing on each monthly anniversary thereafter such that one-hundred percent (100%) of the shares of Stock subject to this Option shall vest on the first anniversary of the Vesting Start Date, subject to your continued service as a Director through each of the applicable vesting dates.]  

EX-10.5

Exhibit 10.5

MARINUS PHARMACEUTICALS, INC.

INDUCEMENT AWARD

NONQUALIFIED STOCK OPTION AGREEMENT

Marinus Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby grants an option (the “Option”) to purchase shares of its common stock, par value $0.001 (the “Stock”), to the recipient (the “Grantee”) set forth on the Schedule to Nonqualified Stock Option Agreement attached hereto (the “Schedule”), subject to the vesting and other conditions set forth below and in the Schedule.  The Option is granted to the Grantee in connection with the Grantee’s entering into employment with the Company and is regarded by the parties as an inducement material to the Grantee’s entering into employment within the meaning of Nasdaq Listing Rule 5635(c)(4).  The Option is made and granted as a stand-alone award, separate and apart from, and outside of, the Company’s 2014 Equity Incentive Plan (as it may be amended from time to time, the “Plan”), and shall not constitute an award granted under or pursuant to the Plan.  Notwithstanding the foregoing, the terms, conditions and definitions set forth in the Plan shall apply to the Option, and the Option shall be subject to such terms, conditions and definitions, which are hereby incorporated into this Nonqualified Stock Option Agreement and the Schedule (collectively, the “Agreement”) by reference.  For the avoidance of doubt, the Option shall not reduce the number of shares of Stock available for issuance under awards issued pursuant to the Plan.  The terms and conditions of the Option are set forth in this Agreement and in the Plan.  All capitalized terms that are used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

Nonqualified Stock Option

This Agreement evidences an award of an Option exercisable for that number of shares of Stock set forth on the Schedule and subject to the vesting and other conditions set forth in this Agreement and in the Plan.  This Option is not intended to be an incentive stock option under Section 422 of the Code and will be interpreted accordingly.

Vesting & Exercisability

This Option is only exercisable before it expires and then only with respect to the vested portion of the Option.  This Option shall vest in accordance with the vesting schedule set forth on the Schedule; provided, however, that for purposes of vesting, fractional numbers of shares of Stock shall be rounded to the nearest whole number, and the number of shares of Stock that shall vest on the final vesting date shall be rounded up or down as necessary such that the total number of shares of Stock that vest pursuant to the vesting schedule shall be equal to the number of shares of Stock covered by this Option as set forth on the Schedule.   Notwithstanding the vesting schedule set forth on the Schedule, this Option shall become one-hundred percent (100%) vested upon the termination of your service as an Employee (“Service”) due to your death or Disability. Unless the termination of your Service triggers accelerated vesting or other treatment of this Option pursuant to the terms of this Agreement, the Plan or your employment agreement with the Company (the “Employment Agreement”), if any, you shall immediately and automatically forfeit the unvested portion of the Option to the Company in the event your Service terminates for any reason.  No portion of this Option that is not exercisable

	at the time of the termination of your Service shall thereafter become exercisable.
Change of Control	In the event of a Change of Control, this Option will be treated in the manner provided in Section 13 of the Plan.  Notwithstanding the foregoing, if, within twelve (12) months following the consummation of a Change of Control, your Service is terminated (i) by the Company or any of its subsidiaries (or by the acquiring or successor entity in the Change of Control transaction) without Cause (as defined below) or, (ii) if you have an Employment Agreement that has a definition of “good reason,” by you for good reason (as defined in your Employment Agreement), this Option will become fully vested and exercisable as of the date of your termination of employment.   For purposes of this Agreement, the term “Cause” shall have the meaning set forth in the Plan, or, if you have an Employment Agreement which has a definition of “Cause,” then it shall have the meaning set forth in your Employment Agreement.
Term	Notwithstanding anything in this Agreement to the contrary, this Option shall expire and you shall immediately and automatically forfeit the Option to the Company in any event at the close of business at Company headquarters on the Expiration Date, as shown on the Schedule.  This Option will expire earlier (but never later) if your Service terminates, as described below.
Regular Termination	If your Service terminates for any reason, other than due to your Retirement, death or Disability or for Cause, then this Option will expire at the close of business at Company headquarters on the ninetieth (90th) day after your termination date.
Termination for Cause	If your Service is terminated for Cause, then you shall immediately forfeit all rights to this Option (including to any vested portion of the Option) and the Option shall immediately expire.
Retirement	If your Service terminates due to your Retirement, then this Option will expire at the close of business at Company headquarters on the date that is twelve (12) months after the date of your Retirement.  During such twelve (12) month period, you may exercise the vested portion of this Option.
Death	If your Service terminates due to your death, then this Option will expire at the close of business at Company headquarters on the date that is twelve (12) months after the date of your death.  During such twelve (12) month period, your estate or heirs may exercise the vested portion of this Option. In addition, if you die during the ninety (90) day period described in connection with a regular termination (i.e., a termination of your Service other than due to death or Disability or for Cause), and a vested portion of this Option has not yet been exercised, then such vested portion of this Option will instead expire on the date that is twelve (12) months after your termination date.  In such a case, during the period following your death up

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	to the date that is twelve (12) months after your termination date, your estate or heirs may exercise the vested portion of this Option.
Disability	If your Service terminates due to your Disability, then this Option will expire at the close of business at Company headquarters on the date that is twelve (12) months after your termination date.  During such twelve (12) month period, you (or your guardian or legal representative, as applicable) may exercise the vested portion of this Option.
Leaves of Absence	For purposes of this Option, your Service does not terminate when you go on a bona fide employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued service crediting, or when continued service crediting is required by applicable law.  However, in all other cases, your Service will be treated as terminating ninety (90) days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract.  Your Service terminates in any event when the approved leave ends, unless you immediately return to active employee work. The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under this Agreement.
Notice of Exercise	When you wish to exercise this Option, you must notify the Company in writing by filing a notice of exercise in the form designated by the Company at the address given on the form.  Your notice must specify how many shares you wish to purchase.  Your notice must also specify how your shares of Stock should be registered (in your name only or in your and your spouse’s names as joint tenants with right of survivorship).  The notice will be effective when it is received by the Company.   If someone else wants to exercise this Option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.
Form of Payment	When you submit your notice of exercise, you must include payment of the Exercise Price indicated on the Schedule for the shares you are purchasing.  Payment may be made in one (or a combination) of the following forms: ● Cash, your personal check, a cashier’s check, a money order, or another cash equivalent acceptable to the Company. ● If approved in advance by the Board or the Committee, shares of Stock which are owned by you and which are surrendered to the Company and which are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements.  The Fair Market Value of the shares of Stock as of the effective date of the Option exercise will be applied to the Exercise Price. ● If approved in advance by the Board or the Committee, by delivery (on a form prescribed by the Company) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of

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	Stock and to deliver all or part of the sale proceeds to the Company in payment of the aggregate Exercise Price and any withholding taxes. ● If approved in advance by the Board or the Committee, by the Company withholding a number of shares of Stock that would otherwise be issuable to you upon your exercise of this Option.  The Fair Market Value of the shares as of the effective date of the Option exercise will be applied to the Exercise Price.
Evidence of Issuance	The issuance of the shares of Stock upon exercise of this Option shall be evidenced in such a manner as the Company, in its discretion, will deem appropriate, including, without limitation, book-entry, direct registration, or issuance of one or more Stock certificates.
Withholding Taxes	You agree as a condition of this Agreement that you will make acceptable arrangements to pay any withholding or other taxes that may be due relating to the exercise of this Option, the sale of shares of Stock acquired under this Option, or as otherwise arising under this Option.  In the event that the Company or any subsidiary of the Company determines that any federal, state, local, or foreign tax or withholding payment is required relating to the exercise of this Option, the sale of shares of Stock acquired under this Option, or as otherwise arising under this Option, the Company or any subsidiary of the Company shall have the right to (i) require you to tender a cash payment, or (ii) deduct from payments of any kind otherwise due to you.  If the Board or the Committee so permits, you may elect to satisfy any such tax withholding obligation by having vested shares of Stock otherwise deliverable under this Agreement withheld up to an amount that does not exceed your minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities. You agree that the Company or any subsidiary of the Company shall be entitled to use whatever method it may deem appropriate to recover such taxes.  You further agree that the Company may, as it reasonably considers necessary, amend or vary this Agreement to facilitate such recovery of taxes.
Transfer of Option	This Option is not transferable by you other than to a designated beneficiary upon your death or by will or the laws of descent and distribution, and is exercisable during your lifetime only by you.  No assignment or transfer of this Option, or the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary upon death by will or the laws of descent or distribution) will vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer this Option will terminate and become of no further effect.  Notwithstanding the foregoing, with the prior written approval of the Board or the Committee, you may transfer this Option to your family members, or one or more trusts or other entities for the benefit of or owned by your family members, consistent with applicable securities laws, according to such terms as the Board or the Committee may determine; provided, that, you receive no consideration for the transfer of this Option and the transferred

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	Option shall continue to be subject to the same terms and conditions as were applicable to the Option immediately before the transfer.
Retention Rights	Neither this Option nor this Agreement gives you the right to be retained or employed by the Company (or any subsidiary of the Company) in any capacity.  Unless otherwise specified in any written employment or other agreement between the Company and you, the Company reserves the right to terminate your Service at any time and for any reason.
Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of the Company until the shares of Stock have been issued upon exercise of this Option and either a certificate evidencing your shares of Stock has been issued or an appropriate entry has been made on the Company’s books.  No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made).
Forfeiture; Clawback	Notwithstanding anything in this Agreement to the contrary, if the Board or the Committee determines that you have engaged in conduct that constitutes Cause at any time while you are employed by, or providing services to, the Company or any of its subsidiaries, or after your termination of employment or service, this Option, to the extent outstanding, shall immediately terminate, and you shall automatically forfeit all shares underlying any exercised portion of this Option for which the Company has not yet delivered the share certificates, upon refund by the Company of the Exercise Price paid by you for such shares.  Upon any exercise of this Option, the Company may withhold delivery of share certificates pending resolution of an inquiry that could lead to a finding resulting in a forfeiture. This Option is subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to (i) any “clawback” or recoupment policy that is adopted by the Company or a subsidiary of the Company to comply with the requirements of any applicable laws, or (ii) any applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws.
Adjustments	The number of shares subject to issuance upon exercise of this Option and the Exercise Price of this Option are subject to adjustment in accordance with Section 3(d) of the Plan.  This Option shall be subject to the terms of any applicable agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.
Applicable Law	This Agreement will be interpreted and enforced under the laws of Delaware other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
Administration	The Committee shall have the power to interpret this Agreement and to adopt such rules for the administration, interpretation and application of this Agreement as are consistent therewith and to interpret or revoke any such rules.  All actions taken and all interpretations and determinations

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	made by the Committee in good faith shall be final and binding upon you, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination or interpretation made in good faith with respect to this Option.  In its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under this Agreement.
The Plan	The text of the Plan is incorporated into this Agreement by reference.   This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Option.  Any prior agreements, commitments or negotiations concerning this grant are superseded; except that any written employment, consulting, confidentiality, non-solicitation, non-competition, and/or severance agreement between you and the Company or any subsidiary of the Company shall supersede this Agreement with respect to its subject matter.
Data Privacy	In order to administer this Agreement, the Company may process personal data about you.  Such data includes, but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of this Agreement. By accepting this Option, you give explicit consent to the Company to process any such personal data.  You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect to non-U.S. resident grantees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer this Agreement.
Consent to Electronic Delivery	By accepting this Option, you consent to receive documents related to the Option by electronic delivery (including e-mail or reference to a website or other URL) and, if requested, agree to participate in this Agreement through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.
Code Section 409A	This Option is intended to be exempt from, or to comply with, Code Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Code Section 409A. Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, any subsidiaries of the Company, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on you under Code Section 409A, and neither the Company, any subsidiaries of the Company, the Board, nor the Committee will have any liability to you for such tax or penalty.

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Successors and Assigns	This Agreement shall inure to the successors and assigns of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by you, except to the extent expressly permitted herein.
Severability	If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

You must accept this Agreement electronically pursuant to the online acceptance procedure established by the Company.  By accepting this Agreement, you agree to all of the terms and conditions described in this Agreement and in the Plan, a copy of which has been provided or made available to you.  You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent with the Plan.  

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Schedule to Nonqualified Stock Option Agreement

(See Attachment)

Recipient ID[●]

Recipient Name[●]

Recipient Address[●]

Type of AwardNonqualified Stock Option

Number of Shares[●]

Exercise Price[●]

Grant Date[●]

Vesting Start Date[●]

Expiration Date[●]

Vesting Schedule:

[Initial Employment Option Grant Vesting: This Option shall vest and become exercisable as follows: twenty-five percent (25%) of the shares of Stock subject to this Option shall vest on the first (1^st) anniversary of the Vesting Start Date and the remaining seventy-five percent (75%) of the shares of Stock subject to this Option shall vest and become exercisable in thirty-six (36) consecutive monthly installments of [●] shares of Stock each, starting on the thirteen (13) month anniversary of the Vesting Start Date and continuing on each monthly anniversary thereafter such that one-hundred percent (100%) of the shares of Stock subject to this Option shall vest on the fourth (4^th) anniversary of the Vesting Start Date, subject to your continued service as an Employee through each of the applicable vesting dates.

EX-10.6

Exhibit 10.6

MARINUS PHARMACEUTICALS, INC.

2014 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

Marinus Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby grants restricted Stock Units (the “RSUs”) representing the right to receive shares of its common stock, par value $0.001 (the “Stock”), to the recipient (the “Grantee”) set forth on the Schedule to Restricted Stock Unit Agreement attached hereto (the “Schedule”), subject to the vesting and other conditions set forth below and in the Schedule.  The terms and conditions of the RSUs are set forth in this Restricted Stock Unit Agreement and the Schedule (collectively, the “Agreement”), as well as in the Company’s 2014 Equity Incentive Plan (as it may be amended from time to time, the “Plan”).  All capitalized terms that are used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

Restricted Stock Units	This Agreement evidences an award of RSUs in the number set forth on the Schedule.  Each RSU represents the right to receive one share of Stock, subject to the vesting and other conditions set forth in this Agreement and in the Plan.
Vesting	The RSUs shall vest in accordance with the vesting schedule set forth on the Schedule; provided, however, that for purposes of vesting, fractional numbers of shares of Stock shall be rounded to the nearest whole number, and the number of RSUs that shall vest on the final vesting date shall be rounded up or down as necessary such that the total number of RSUs that vest pursuant to the vesting schedule shall be equal to the number of RSUs covered by this grant as set forth on the Schedule.   Unless the termination of your service as an Employee (“Service”) triggers accelerated vesting or other treatment of the RSUs pursuant to the terms of this Agreement or the Plan, you shall immediately and automatically forfeit the unvested RSUs to the Company in the event your Service terminates for any reason.  No RSUs shall vest after your termination of Service.
Change of Control	In the event of a Change of Control, the RSUs will be treated in the manner provided in Section 13 of the Plan.  Notwithstanding the foregoing, if, within twelve (12) months following the consummation of a Change of Control, your Service is terminated (i) by the Company or any of its subsidiaries (or by the acquiring or successor entity in the Change of Control transaction) without Cause (as defined below) or, (ii) if you have an employment agreement with the Company (an “Employment Agreement”) which has a definition of “good reason,” by you for good reason (as defined in your Employment Agreement), the unvested RSUs will become fully vested as of the date of your termination of employment.   For purposes of this Agreement, the term “Cause” shall have the meaning set forth in the Plan, or, if you have an Employment Agreement which has a definition of “Cause,” then it shall have the meaning set forth in your Employment Agreement.

Termination due to death or Disability	If your Service terminates due to your death or Disability, the unvested RSUs shall become immediately vested as of the date of your termination of Service.
Leaves of Absence	For purposes of the RSUs, your Service does not terminate when you go on a bona fide employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued service crediting, or when continued service crediting is required by applicable law.  However, in all other cases, your Service will be treated as terminating ninety (90) days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract.  Your Service terminates in any event when the approved leave ends, unless you immediately return to active employee work. The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan.
Issuance	The issuance of the shares of Stock underlying any RSUs that become vested hereunder shall be made within thirty (30) days after the applicable vesting date.  Any such issuance shall be evidenced in such a manner as the Company, in its discretion, will deem appropriate, including, without limitation, book-entry, direct registration or issuance of one or more Stock certificates.
Withholding Taxes	The Company’s obligation to deliver shares of Stock upon vesting of the RSUs shall be subject to the satisfaction of all applicable income and employment tax withholding requirements.   The Company shall, except to the extent that you request otherwise in writing at least thirty (30) days prior to the applicable vesting date of the RSUs, satisfy any applicable income and employment tax withholding requirements by having vested shares of Stock otherwise deliverable to you under this Agreement in respect of your vested RSUs withheld up to an amount that does not exceed your minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities.  In the event and to the extent that you timely request in writing that the Company not withhold otherwise deliverable shares of Stock, then you may elect to make a cash payment to the Company at the time of the vesting of the RSUs equal to the required withholding taxes.  To the extent that you do not make a cash payment to the Company as set forth in the preceding sentence, then the Company shall withhold from your next immediate payments of salary, wages or fees amounts as necessary to satisfy all applicable withholding tax requirements.
Transfer of RSUs	The RSUs are not transferable by you other than to a designated beneficiary upon your death or by will or the laws of descent and distribution.  No assignment or transfer of the RSUs, or the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary upon death by will or the laws of descent or distribution) will vest in the assignee or transferee any interest or right

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	herein whatsoever, but immediately upon such assignment or transfer the RSUs will terminate and become of no further effect.
Retention Rights	Neither the RSUsnor this Agreement gives you the right to be retained or employed by the Company (or any subsidiary of the Company) in any capacity.  Unless otherwise specified in any written employment or other agreement between the Company and you, the Company reserves the right to terminate your Service at any time and for any reason.
Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of the Company until the shares of Stock have been issued to you upon vesting of the RSUs and either a certificate evidencing your shares of Stock has been issued or an appropriate entry has been made on the Company’s books.  No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made).
Clawback	The RSUs are subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to (i) any “clawback” or recoupment policy that is adopted by the Company or a subsidiary of the Company to comply with the requirements of any applicable laws, or (ii) any applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws.
Adjustments	The number of shares subject to issuance upon vesting of the RSUs is subject to adjustment in accordance with Section 3(d) of the Plan.  The RSUs shall be subject to the terms of any applicable agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.
Applicable Law	This Agreement will be interpreted and enforced under the laws of Delaware other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
The Plan	The text of the Plan is incorporated into this Agreement by reference.   This Agreement and the Plan constitute the entire understanding between you and the Company regarding the RSUs.  Any prior agreements, commitments or negotiations concerning this grant are superseded; except that any written employment, consulting, confidentiality, non-solicitation, non-competition, and/or severance agreement between you and the Company or any subsidiary of the Company shall supersede this Agreement with respect to its subject matter.
Data Privacy	In order to administer the Plan, the Company may process personal data about you.  Such data includes, but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan.

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	By accepting this grant of RSUs, you give explicit consent to the Company to process any such personal data.  You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect to non-U.S. resident grantees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the Plan
Consent to Electronic Delivery	By accepting this grant of RSUs, you consent to receive documents related to the RSUs by electronic delivery (including e-mail or reference to a website or other URL) and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.
Code Section 409A	The RSUs are intended to be exempt from, or to comply with, Code Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Code Section 409A. Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, any subsidiaries of the Company, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or penalty on you under Code Section 409A, and neither the Company, any subsidiaries of the Company, the Board, nor the Committee will have any liability to you for such tax or penalty. For purposes of this Agreement, a termination of Service only occurs upon an event that would be a “separation from service” (within the meaning of Code Section 409A and the regulations thereunder).  Notwithstanding anything in this Agreement to the contrary, if at the time of your separation from service, (i) you are a “specified employee” (within the meaning of Code Section 409A and the regulations thereunder, and using the identification methodology selected by the Company from time to time), and (ii) the Company makes a good faith determination that an amount payable to you on account of such separation from service constitutes deferred compensation (within the meaning of Code Section 409A) the payment of which is required to be delayed pursuant to the six (6)-month delay rule set forth in Code Section 409A in order to avoid taxes or penalties under Section 409A (the “Delay Period”), then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first payroll date after such Delay Period (or upon your death, if earlier), without interest thereupon.
Successors and Assigns	This Agreement shall inure to the successors and assigns of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by you, except to the extent expressly permitted herein.
Severability	If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held

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invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

You must accept this Agreement electronically pursuant to the online acceptance procedure established by the Company.  By accepting this Agreement, you agree to all of the terms and conditions described in this Agreement and in the Plan, a copy of which has been provided or made available to you.  You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent with the Plan.

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Schedule to Restricted Stock Unit Agreement

(See Attachment)

Recipient ID[●]

Recipient Name[●]

Recipient Address[●]

Type of AwardRestricted Stock Units

Number of Shares[●]

Grant Date[●]

Vesting Start Date[●]

Vesting Schedule:

[Insert vesting schedule]

EX-10.7

Exhibit 10.7

MARINUS PHARMACEUTICALS, INC.

2014 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT FOR NON-EMPLOYEE DIRECTORS

Marinus Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby grants restricted Stock Units (the “RSUs”) representing the right to receive shares of its common stock, par value $0.001 (the “Stock”), to the recipient (the “Grantee”) set forth on the Schedule to Restricted Unit Agreement for Non-Employee Directors attached hereto (the “Schedule), subject to the vesting and other conditions set forth below and in the Schedule.  The terms and conditions of the RSUs are set forth in this Restricted Stock Unit Agreement and the Schedule (collectively, the “Agreement”), as well as in the Company’s 2014 Equity Incentive Plan (as it may be amended from time to time, the “Plan”).  All capitalized terms that are used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

Restricted Stock Units	This Agreement evidences an award of RSUs in the number set forth on the Schedule.  Each RSU represents the right to receive one share of Stock, subject to the vesting and other conditions set forth in this Agreement and in the Plan.
Vesting	The RSUs shall vest in accordance with the vesting schedule set forth on the Schedule; provided, however, that for purposes of vesting, fractional numbers of shares of Stock shall be rounded to the nearest whole number, and the number of RSUs that shall vest on the final vesting date shall be rounded up or down as necessary such that the total number of RSUs that vest pursuant to the vesting schedule shall be equal to the number of RSUs covered by this grant as set forth on the Schedule.   Unless the termination of your service as a Non-Employee Director (“Service”) triggers accelerated vesting or other treatment of the RSUs pursuant to the terms of this Agreement or the Plan, you shall immediately and automatically forfeit the unvested RSUs to the Company in the event your Service terminates for any reason.  No RSUs shall vest after your termination of Service.
Change of Control	In the event of a Change of Control, the RSUs will be treated in the manner provided in Section 13 of the Plan.  Notwithstanding the foregoing, if, within twelve (12) months following the consummation of a Change of Control, your Service is terminated by the Company (or by the acquiring or successor entity in the Change of Control transaction) without Cause, the unvested RSUs will become fully vested as of the date of your termination of Service.
Termination due to death or Disability	If your Service terminates due to your death or Disability, the unvested RSUs shall become immediately vested as of the date of your termination of Service.
Issuance	The issuance of the shares of Stock underlying any RSUs that become vested hereunder shall be made within thirty (30) days after the applicable vesting date.  Any such issuance shall be evidenced in such a manner as

	the Company, in its discretion, will deem appropriate, including, without limitation, book-entry, direct registration or issuance of one or more Stock certificates.
Withholding Taxes	The Company’s obligation to deliver shares of Stock upon vesting of the RSUs shall be subject to the satisfaction of all applicable income and employment tax withholding requirements.   The Company shall, except to the extent that you request otherwise in writing at least thirty (30) days prior to the applicable vesting date of the RSUs, satisfy any applicable income and employment tax withholding requirements by having vested shares of Stock otherwise deliverable to you under this Agreement in respect of your vested RSUs withheld up to an amount that does not exceed your minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities.  In the event and to the extent that you timely request in writing that the Company not withhold otherwise deliverable shares of Stock, then you may elect to make a cash payment to the Company at the time of the vesting of the RSUs equal to the required withholding taxes.  To the extent that you do not make a cash payment to the Company as set forth in the preceding sentence, then the Company shall withhold from your next immediate payments of fees amounts as necessary to satisfy all applicable withholding tax requirements.
Transfer of RSUs	The RSUs are not transferable by you other than to a designated beneficiary upon your death or by will or the laws of descent and distribution.  No assignment or transfer of the RSUs, or the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary upon death by will or the laws of descent or distribution) will vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the RSUs will terminate and become of no further effect.
Retention Rights	Neither the RSUsnor this Agreement gives you the right to be retained by the Company (or any subsidiary of the Company) in any capacity.
Stockholder Rights	You, or your estate or heirs, have no rights as a stockholder of the Company until the shares of Stock have been issued to you upon vesting of the RSUs and either a certificate evidencing your shares of Stock has been issued or an appropriate entry has been made on the Company’s books.  No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made).
Clawback	The RSUs are subject to mandatory repayment by you to the Company to the extent you are or in the future become subject to (i) any “clawback” or recoupment policy that is adopted by the Company or a subsidiary of the Company to comply with the requirements of any applicable laws, or (ii) any applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws.

2

Adjustments	The number of shares subject to issuance upon vesting of the RSUs is subject to adjustment in accordance with Section 3(d) of the Plan.  The RSUs shall be subject to the terms of any applicable agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.
Applicable Law	This Agreement will be interpreted and enforced under the laws of Delaware other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
The Plan	The text of the Plan is incorporated into this Agreement by reference.   This Agreement and the Plan constitute the entire understanding between you and the Company regarding the RSUs.  Any prior agreements, commitments or negotiations concerning this grant are superseded; except that any written employment, consulting, confidentiality, non-solicitation, non-competition, and/or severance agreement between you and the Company or any subsidiary of the Company shall supersede this Agreement with respect to its subject matter.
Data Privacy	In order to administer the Plan, the Company may process personal data about you.  Such data includes, but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan. By accepting this grant of RSUs, you give explicit consent to the Company to process any such personal data.  You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect to non-U.S. resident grantees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the Plan.
Consent to Electronic Delivery	By accepting this grant of RSUs, you consent to receive documents related to the RSUs by electronic delivery (including e-mail or reference to a website or other URL) and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company, and your consent shall remain in effect throughout your term of Service and thereafter until you withdraw such consent in writing to the Company.
Code Section 409A	The RSUs are intended to be exempt from, or to comply with, Code Section 409A to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Agreement will be interpreted and administered to be in compliance with Code Section 409A. Notwithstanding anything to the contrary in the Plan or this Agreement, neither the Company, any subsidiaries of the Company, the Board, nor the Committee will have any obligation to take any action to prevent the assessment of any excise tax or

3

	penalty on you under Code Section 409A, and neither the Company, any subsidiaries of the Company, the Board, nor the Committee will have any liability to you for such tax or penalty. For purposes of this Agreement, a termination of Service only occurs upon an event that would be a “separation from service” (within the meaning of Code Section 409A and the regulations thereunder).  Notwithstanding anything in this Agreement to the contrary, if at the time of your separation from service, (i) you are a “specified employee” (within the meaning of Code Section 409A and the regulations thereunder, and using the identification methodology selected by the Company from time to time), and (ii) the Company makes a good faith determination that an amount payable to you on account of such separation from service constitutes deferred compensation (within the meaning of Code Section 409A) the payment of which is required to be delayed pursuant to the six (6)-month delay rule set forth in Code Section 409A in order to avoid taxes or penalties under Section 409A (the “Delay Period”), then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it in a lump sum on the first payroll date after such Delay Period (or upon your death, if earlier), without interest thereupon.
Successors and Assigns	This Agreement shall inure to the successors and assigns of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by you, except to the extent expressly permitted herein.
Severability	If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

You must accept this Agreement electronically pursuant to the online acceptance procedure established by the Company.  By accepting this Agreement, you agree to all of the terms and conditions described in this Agreement and in the Plan, a copy of which has been provided or made available to you.  You acknowledge that you have carefully reviewed the Plan, and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent with the Plan.

4

Schedule to Restricted Stock Unit Agreement for Non-Employee Directors

(See Attachment)

Recipient ID[●]

Recipient Name[●]

Recipient Address[●]

Type of AwardRestricted Stock Units

Number of Shares[●]

Grant Date[●]

Vesting Start Date[●]

Vesting Schedule:

[Insert vesting schedule)

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to

Exchange Act Rules 13a-14(a) or 15d-14(a)

I, Scott Braunstein, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Marinus Pharmaceuticals, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2021	/s/ Scott Braunstein
	Scott Braunstein,
	Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to

Exchange Act Rules 13a-14(a) or 15d-14(a)

I, Steven Pfanstiel, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Marinus Pharmaceuticals, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

4
Date: November 9, 2021	/s/ Steven Pfanstiel
	Steven Pfanstiel,
	Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Section 1350

In connection with the quarterly report of Marinus Pharmaceuticals, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the date indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

4
Date: November 9, 2021	/s/ Scott Braunstein
	Chief Executive Officer
	(Principal executive officer)
Date: November 9, 2021	/s/ Steven Pfanstiel
	Chief Financial Officer and Treasurer
	(Principal financial and accounting officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2021	Oct. 31, 2021
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2021
Entity File Number	001-36576
Entity Registrant Name	MARINUS PHARMACEUTICALS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-0198082
Entity Address, Address Line One	5 Radnor Corporate Center, Suite 500
Entity Address, Address Line Two	100 Matsonford Rd
Entity Address, City or Town	Radnor
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	19087
City Area Code	484
Local Phone Number	801-4670
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	MRNS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		36,766,355
Entity Central Index Key	0001267813
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 145,101	$ 138,509
Short-term investments		1,474
Accounts receivable	2,473	1,646
Contract asset	1,059
Prepaid expenses and other current assets	4,858	4,638
Total current assets	153,491	146,267
Property and equipment, net	2,650	1,945
Other assets	2,732	2,250
Total assets	158,873	150,462
Current liabilities:
Accounts payable	693	2,211
Refund liability	21,828
Accrued expenses	15,155	8,518
Total current liabilities	37,676	10,729
Notes payable, net of deferred financing costs	40,579
Other long-term liabilities	2,124	2,534
Total liabilities	80,379	13,263
Stockholders' equity:
Series A convertible preferred stock, $0.001 par value; 25,000,000 shares authorized, 4,575 shares issued and outstanding at September 30, 2021 and 4,753 issued and outstanding at December 31, 2020	4,302	4,469
Common stock, $0.001 par value; 150,000,000 shares authorized, 36,758,508 issued and 36,751,201 outstanding at September 30, 2021 and 36,585,767 issued and 36,578,460 outstanding at December 31, 2020	37	37
Additional paid-in capital	456,555	444,622
Treasury stock at cost, 7,307 shares at September 30, 2021 and December 31, 2020
Accumulated deficit	(382,400)	(311,929)
Total stockholders' equity	78,494	137,199
Total liabilities and stockholders' equity	$ 158,873	$ 150,462

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	36,758,508	36,585,767
Common stock, shares outstanding	36,751,201	36,578,460
Treasury stock, shares	7,307	7,307
Series A Convertible Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred Stock, Shares Issued	4,575	4,753
Preferred stock, shares outstanding	4,575	4,753

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Federal contract revenue	$ 1,127	$ 171	$ 4,838	$ 171
Collaboration revenue	8,987		8,987
Total revenue	10,114	171	13,825	171
Expenses:
Research and development	18,353	11,306	55,506	38,062
General and administrative	9,452	4,564	26,656	12,543
Cost of collaboration revenue	1,478		1,478
Loss from operations	(19,169)	(15,699)	(69,815)	(50,434)
Interest income	17	79	57	459
Interest expense	(678)		(1,029)
Other income (expense), net	323	(39)	316	(31)
Net loss and comprehensive loss	(19,507)	(15,659)	(70,471)	(50,006)
Deemed dividends on convertible preferred stock				(8,880)
Net loss applicable to common shareholders	$ (19,507)	$ (15,659)	$ (70,471)	$ (58,886)
Per share information:
Net loss per share of common stock-basic	$ (0.53)	$ (0.51)	$ (1.92)	$ (2.29)
Net loss per share of common stock-diluted	$ (0.54)	$ (0.51)	$ (1.93)	$ (2.29)
Basic weighted average shares outstanding	36,744,591	30,552,947	36,667,472	25,737,981
Diluted weighted average shares outstanding	36,744,591	30,552,947	36,667,472	25,737,981
Net loss	$ (19,507)	$ (15,659)	$ (70,471)	$ (50,006)
Other comprehensive (loss) income:
Unrealized (loss) gain on available-for-sale securities		(15)		11
Total comprehensive loss	$ (19,507)	$ (15,674)	$ (70,471)	$ (49,995)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities
Net loss	$ (70,471)	$ (50,006)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	262	243
Amortization of debt issuance costs	319
Stock-based compensation expense	10,867	5,521
Noncash contract asset	(41)
Noncash lease expense	232	194
Noncash lease liability	237	276
Changes in operating assets and liabilities:
Refund Liability	21,828
Contract asset	(1,018)
Prepaid expenses and other current assets, non-current assets, and accounts receivable	(453)	(1,496)
Accounts payable, accrued expenses and other long term-liabilities	4,511	754
Net cash used in operating activities	(33,727)	(44,514)
Cash flows from investing activities
Maturities of short-term investments	1,474	5,711
Purchases of short-term investments		(8,931)
Deposit on property and equipment	(1,329)
Purchases of property and equipment	(839)
Net cash used in investing activities	(694)	(3,220)
Cash flows from financing activities
Proceeds from exercise of stock options	902	616
Proceeds from notes payable, net of issuance costs	40,259
Financing costs, paid	(148)
Proceeds from equity offerings, net of offering costs		43,512
Net cash provided by financing activities	41,013	44,128
Net increase (decrease) in cash and cash equivalents	6,592	(3,606)
Cash and cash equivalents-beginning of period	138,509	90,943
Cash and cash equivalents-end of period	145,101	87,337
Supplemental disclosure of cash flow information
Contractual exit fee included in notes payable	900
Property and equipment in accrued expenses	$ 107
Conversion of preferred stock to common stock		$ 17

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	Follow-on Public Offering, One Common Stock	Follow-on Public Offering, One Additional Paid-in Capital	Follow-on Public Offering, One	Series A Convertible Preferred Stock Preferred Stock	Common Stock	Additional Paid-in Capital	Treasury Stock	Accumulated Other Comprehensive Income	Accumulated Deficit	Total
Balance at Dec. 31, 2019					$ 22,000	$ 295,121,000			$ (235,574,000)	$ 59,569,000
Balance (in shares) at Dec. 31, 2019					21,625,088		7,307
Increase (Decrease) in Stockholders' Equity (Deficit)
Stock-based compensation expense						1,876,000				1,876,000
Exercise of stock options						312,000				312,000
Exercise of stock options (in shares)					59,978
Issuance of restricted stock (in shares)					5,250
Deemed dividend on beneficial conversion feature - Series A convertible preferred stock						8,880,000			(8,880,000)
Unrealized gain (loss) on investments								$ 27,000		27,000
Net loss									(18,672,000)	(18,672,000)
Balance at Mar. 31, 2020					$ 22,000	306,189,000		27,000	(263,126,000)	43,112,000
Balance (in shares) at Mar. 31, 2020					21,690,316		7,307
Balance at Dec. 31, 2019					$ 22,000	295,121,000			(235,574,000)	59,569,000
Balance (in shares) at Dec. 31, 2019					21,625,088		7,307
Increase (Decrease) in Stockholders' Equity (Deficit)
Net loss										(50,006,000)
Balance at Sep. 30, 2020				$ 8,698,000	$ 31,000	373,143,000		11,000	(294,461,000)	87,423,000
Balance (in shares) at Sep. 30, 2020				9,253	30,582,625		7,307
Balance at Mar. 31, 2020					$ 22,000	306,189,000		27,000	(263,126,000)	43,112,000
Balance (in shares) at Mar. 31, 2020					21,690,316		7,307
Increase (Decrease) in Stockholders' Equity (Deficit)
Stock-based compensation expense						1,796,000				1,796,000
Exercise of stock options						200,000				200,000
Exercise of stock options (in shares)					47,455
Issuance of common stock	$ 5,000	$ 42,905,000	$ 42,910,000
Issuance of common stock (in shares)	4,600,000
Issuance of common stock under equity distribution agreement						602,000				602,000
Issuance of common stock under equity distribution agreement (in shares)					78,807
Transfer of convertible preferred stock into permanent equity				$ 8,745,000						8,745,000
Transfer of convertible preferred stock into permanent equity (in shares)				9,303
Conversion of convertible preferred stock to common stock					$ 4,000	19,451,000				19,455,000
Conversion of convertible preferred stock to common stock (in shares)					4,139,400
Net loss									(15,675,000)	(15,675,000)
Balance at Jun. 30, 2020				$ 8,745,000	$ 31,000	371,143,000		27,000	(278,801,000)	101,145,000
Balance (in shares) at Jun. 30, 2020				9,303	30,555,978		7,307
Increase (Decrease) in Stockholders' Equity (Deficit)
Stock-based compensation expense						1,849,000				1,849,000
Exercise of stock options						104,000				104,000
Exercise of stock options (in shares)					16,647
Conversion of convertible preferred stock to common stock				$ (47,000)		47,000
Conversion of convertible preferred stock to common stock (in shares)				(50)	10,000
Unrealized gain (loss) on investments								(16,000)		(16,000)
Net loss									(15,659,000)	(15,659,000)
Balance at Sep. 30, 2020				$ 8,698,000	$ 31,000	373,143,000		$ 11,000	(294,461,000)	87,423,000
Balance (in shares) at Sep. 30, 2020				9,253	30,582,625		7,307
Balance at Dec. 31, 2020				$ 4,469,000	$ 37,000	444,622,000			(311,929,000)	137,199,000
Balance (in shares) at Dec. 31, 2020				4,753	36,585,767		7,307
Increase (Decrease) in Stockholders' Equity (Deficit)
Stock-based compensation expense						5,035,000				5,035,000
Exercise of stock options						244,000				244,000
Exercise of stock options (in shares)					55,030
Financing costs						(3,000)				(3,000)
Net loss									(27,141,000)	(27,141,000)
Balance at Mar. 31, 2021				$ 4,469,000	$ 37,000	449,898,000			(339,070,000)	115,334,000
Balance (in shares) at Mar. 31, 2021				4,753	36,640,797		7,307
Balance at Dec. 31, 2020				$ 4,469,000	$ 37,000	444,622,000			(311,929,000)	137,199,000
Balance (in shares) at Dec. 31, 2020				4,753	36,585,767		7,307
Increase (Decrease) in Stockholders' Equity (Deficit)
Net loss										(70,471,000)
Balance at Sep. 30, 2021				$ 4,302,000	$ 37,000	456,555,000			(382,400,000)	78,494,000
Balance (in shares) at Sep. 30, 2021				4,575	36,758,508		7,307
Balance at Mar. 31, 2021				$ 4,469,000	$ 37,000	449,898,000			(339,070,000)	115,334,000
Balance (in shares) at Mar. 31, 2021				4,753	36,640,797		7,307
Increase (Decrease) in Stockholders' Equity (Deficit)
Stock-based compensation expense						2,991,000				2,991,000
Exercise of stock options						557,000				557,000
Exercise of stock options (in shares)					63,312
Conversion of convertible preferred stock to common stock				$ (167,000)		167,000
Conversion of convertible preferred stock to common stock (in shares)				(178)	35,600
Net loss									(23,823,000)	(23,823,000)
Balance at Jun. 30, 2021				$ 4,302,000	$ 37,000	453,613,000			(362,893,000)	95,059,000
Balance (in shares) at Jun. 30, 2021				4,575	36,739,709		7,307
Increase (Decrease) in Stockholders' Equity (Deficit)
Stock-based compensation expense						2,841,000				2,841,000
Exercise of stock options					$ 18,799	101,000				101,000
Net loss									(19,507,000)	(19,507,000)
Balance at Sep. 30, 2021				$ 4,302,000	$ 37,000	$ 456,555,000			$ (382,400,000)	$ 78,494,000
Balance (in shares) at Sep. 30, 2021				4,575	36,758,508		7,307

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands	3 Months Ended
	Jun. 30, 2020 USD ($) $ / shares
Follow-on Public Offering, One
Share Price (in dollars per share) | $ / shares	$ 2.50
Stock issuance costs	$ 3,090
2017 Equity Distribution Agreement
Stock issuance costs	$ 68

XML

Description of the Business and Liquidity

9 Months Ended

Sep. 30, 2021

Description of the Business and Liquidity

Description of the Business and Liquidity

1. Description of the Business and Liquidity

We are a clinical stage pharmaceutical company focused on developing and commercializing innovative therapeutics to treat patients suffering from seizure disorders. Our clinical stage product candidate, ganaxolone, is a positive allosteric modulator of GABA_A receptors that is being developed in formulations for two different routes of administration: intravenous (IV) and oral. Ganaxolone is a synthetic analog of allopregnanolone, an endogenous neurosteroid. The different formulations are intended to maximize potential therapeutic applications of ganaxolone for adult and pediatric patient populations, in both acute and chronic care, and for both in-patient and self-administered settings. Ganaxolone acts at both synaptic and extrasynaptic GABA_A receptors, a target known for its anti-seizure, antidepressant and anxiolytic potential.

In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) was identified in Wuhan, China. This virus was declared a pandemic by the World Health Organization in March 2020 and has spread to nearly every country in the world, including the United States (U.S.). Efforts to contain the spread of COVID-19 have intensified and many countries, including the U.S., have implemented travel restrictions, business shutdowns and social distancing measures that have impacted clinical development through supply chain shortages and clinical trial enrollment difficulties as hospitals reduce and redeploy staff, divert resources to patients suffering from COVID-19 and limit hospital access for non-patients. The pandemic poses the risk that we, our employees, contractors, suppliers, or other partners may be prevented from conducting normal business activities for an indefinite period of time, including those due to restrictions that may be requested or mandated by governmental authorities.

The continued global spread of COVID-19 has not materially adversely impacted our operating results, financial condition or cash flows as of and for the nine months ended September 30, 2021. However, COVID-19 has impacted our clinical operations and timelines. In response to COVID-19, for our ongoing clinical trials, we have implemented multiple measures consistent with the U.S. Food and Drug Administration’s guidance on the conduct of clinical trials of medical products during the COVID-19 pandemic, including implementing remote site monitoring and remote visits using telemedicine where needed. However, COVID-19 may still adversely impact our clinical trials. For example, our Phase 3 clinical trial in refractory status epilepticus (RSE) is conducted in hospitals, including academic medical centers, which have experienced high rates of COVID-19 admissions. Due to COVID-19, priorities in several academic medical centers participating in the RAISE Trial, including staff turnover and the need for clinical sites to devote significant resources to patients with COVID-19, the trial has experienced site initiation and enrollment delays. Given these challenges, we previously updated our expectation of top-line data readout for the RAISE Trial to be available in the second half of 2022. In addition, our ganaxolone clinical trials in the outpatient setting may be negatively impacted if patients and their caregivers do not want to participate while COVID-19 outbreaks continue. We are unable to predict the impact that COVID-19 will have in the future on our business, operating results, financial condition and cash flows. The duration and severity of the pandemic and its long-term impact on our business are uncertain at this time, and our ability to raise sufficient additional financing depends on many factors beyond our control, including the current volatility in the capital markets as a result of the COVID-19 pandemic.

Liquidity

We have not generated any product revenues and have incurred operating losses since inception, including losses of $70.5 million for the nine months ended September 30, 2021. There is no assurance that profitable operations will ever be achieved, and if achieved, could be sustained on a continuing basis. In addition, development activities, clinical and preclinical testing, if approved, and commercialization of our product candidates will require significant additional financing. Our accumulated deficit as of September 30, 2021 was $382.4 million and we expect to incur substantial losses in future periods. We plan to finance our future operations with a combination of proceeds from the issuance of equity securities, the issuance of debt, government funding, collaborations, licensing transactions, other transactions, including the sale of priority review vouchers if awarded, and revenues from future product sales, if any. We have not generated positive cash flows from operations, and there are no assurances that we will be successful in

obtaining an adequate level of financing for the development and, if approved, commercialization of our product candidates.

On July 30, 2021, we entered into a collaboration agreement (the Collaboration Agreement) with Orion Corporation (Orion), whereby Orion received exclusive rights to commercialize the oral and IV dose formulations of ganaxolone in the European Economic Area, United Kingdom and Switzerland in multiple seizure disorders, including CDD, tuberous sclerosis complex (TSC) and RSE. Under the agreement, we received a €25 million ($29.6 million) upfront fee and are eligible to receive up to an additional €97 million in R&D reimbursement and cash milestone payments based on specific clinical and commercial achievements, as well as tiered royalty payments based on net sales ranging from the low double digits to the high teens for the oral programs and the low double-digits to the low twenties for the IV programs. In connection with the upfront fee, we agreed to provide Orion with the results of an ongoing genotoxicity study on the M2 metabolite of ganaxolone, a “Combined Micronucleus & Comet study in vivo.” In the event that the results of such study are positive, based on the criteria set forth in the study’s protocol, Orion will have the right to terminate the Collaboration Agreement within ninety (90) days after its receipt of the final report of such study, in which case we must refund Orion seventy-five percent (75%) of the upfront fee. In the event of such termination and refund, Orion shall have no further rights pursuant to the oral and IV dose formulations of ganaxolone and the Collaboration Agreement shall terminate and be of no further force or effect.

On May 11, 2021 (the Closing Date), we entered into a Credit Agreement and Guaranty (as amended by that certain letter agreement on May 17, 2021, the Credit Agreement) with Oaktree Fund Administration, LLC, as administrative agent and the lenders party thereto that provides for a five-year senior secured term loan facility in an aggregate original principal amount of up to $125.0 million available to us in five tranches (collectively, the Term Loans). Refer to Note 9. Notes Payable for additional information.

In September 2020, we entered into a contract (BARDA Contract) with the Biomedical Advanced Research and Development Authority (BARDA), a division of the U.S. Department of Health and Human Services’ Office of the Assistant Secretary for Preparedness and Response. Under the BARDA Contract, we received an award of up to an estimated $51 million for development of IV-administered ganaxolone for the treatment of RSE. The BARDA Contract provides for funding to support, on a cost-sharing basis, the completion of a Phase 3 clinical trial of IV-administered ganaxolone in patients with RSE, which covers the RAISE Trial, funding of pre-clinical studies to evaluate IV-administered ganaxolone as an effective treatment for RSE due to chemical nerve gas agent exposure, and funding of certain ganaxolone manufacturing scale-up and regulatory activities.

The BARDA Contract consists of an approximately two-year base period during which BARDA will provide up to approximately $21 million of funding for the RAISE Trial on a cost share basis and funding of additional preclinical studies of ganaxolone in nerve agent exposure models. Following successful completion of the RAISE Trial and preclinical studies in the base period, the BARDA Contract provides for approximately $30 million of additional BARDA funding for three options in support of manufacturing, supply chain, clinical, regulatory and toxicology activities. Under the BARDA Contract, we will be responsible for cost sharing in the amount of approximately $33 million and BARDA will be responsible for approximately $51 million, if all development options are completed. The contract period-of-performance (base period plus option exercises) is up to approximately five years.

In connection with the closing of an equity financing in December 2020, we issued a total of 5,000,000 shares of common stock in an underwritten public offering resulting in aggregate net proceeds, after underwriting discounts and commissions in the public offering and other estimated offering expenses, of $64.9 million.

In connection with the closing of an equity financing in June 2020, we issued a total of 4,600,000 shares of common stock in an underwritten public offering resulting in aggregate net proceeds, after underwriting discounts and commissions in the public offering and other estimated offering expenses, of $42.9 million.

We believe that our cash and cash equivalents balance as of September 30, 2021 will be sufficient to maintain the minimum cash balance required under our debt facility and to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of this filing.

Reverse stock split

On September 23, 2020, we effected a 1-for-4 reverse split of shares of our common stock (Reverse Split), as approved by our board of directors and stockholders. The par value per share of our common stock was not adjusted as a result of the Reverse Split, and our authorized shares of common stock was reduced to 150,000,000. All of the share and per share amounts included in the accompanying financial statements and these notes have been adjusted to reflect the Reverse Split.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of Marinus Pharmaceuticals, Inc. (a Delaware corporation) as well as the accounts of Marinus Pharmaceuticals Emerald Limited (an Ireland company incorporated in February 2021), a wholly owned subsidiary requiring consolidation. Marinus Pharmaceuticals Emerald Limited serves as a corporate presence in the European Union for regulatory purposes. The unaudited interim consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all information and disclosures necessary for a presentation of our financial position, results of operations and cash flows in conformity with generally accepted accounting principles in the U.S. (GAAP) for annual financial statements. In the opinion of management, these unaudited interim consolidated financial statements reflect all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of our financial position and results of operations and cash flows for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for the full year. These unaudited interim consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2020 and accompanying notes thereto included in our annual report on Form 10-K filed with the SEC on March 9, 2021.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from such estimates.

Federal Contract Revenue

We recognize federal contract revenue from the BARDA Contract in the period in which the allowable research and development expenses are incurred, and receivables associated with this revenue are recorded as federal contract revenue receivable on our interim consolidated balance sheets. This revenue is not within the scope of Accounting Standards Codification (ASC) 606 – Revenue from contracts with customers.

Debt Issuance Costs

Debt issuance costs incurred in connection with Note payable (Note 9) are amortized to interest expense over the term of the respective financing arrangement using the effective-interest method. Debt issuance costs, net of related amortization are deducted from the carrying value of the related debt.

Contract Liability

When consideration is received, or such consideration is unconditionally due, from a customer prior to completing our performance obligation to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities expected to be recognized as revenue or a reduction of expense within the 12 months following the balance sheet date are classified as current liabilities. Contract liabilities not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as long-term liabilities. In accordance with ASC 210-20, our contract liability is offset by a contract asset as further discussed in Note 10.

Collaboration and Licensing Revenue

We may enter into collaboration and licensing arrangements for research and development, manufacturing, and commercialization activities with counterparties for the development and commercialization of our product candidates. These arrangements may contain multiple components, such as (i) licenses, (ii) research and development activities, and (iii) the manufacturing of certain material. Payments pursuant to these arrangements may include non-refundable and refundable payments, payments upon the achievement of significant regulatory, development and commercial milestones, sales of product at certain agreed-upon amounts, and royalties on product sales. The amount of variable consideration is constrained until it is probable that the revenue is not at a significant risk of reversal in a future period.

In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under a collaboration agreement, the Company performs 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 capable of being distinct; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue as we satisfy each performance obligation.

We must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation, which determines how the transaction price is allocated among the performance obligations. The estimation of the stand-alone selling price may include such estimates as forecasted revenues and costs, development timelines, discount rates and probabilities of regulatory and commercial success. We also apply significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, assessing the recognition and future reversal of variable consideration and determining and applying appropriate methods of measuring progress for performance obligations satisfied over time.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2021

Fair Value Measurements

Fair Value Measurements

3. Fair Value Measurements

FASB accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (the exit price) in an orderly transaction between market participants at the measurement date. The accounting guidance outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value, we use quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources.

The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

● Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

● Level 2 — Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities.

● Level 3 — Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement.

If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument.

The following fair value hierarchy table presents information about each major category of our financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	Level 1		Level 2		Level 3		Total
September 30, 2021
Assets
Money market funds (cash equivalents)	$	113,340	$	—	$	—	$	113,340
Total assets	$	113,340	$	—	$	—	$	113,340
December 31, 2020
Assets
Money market funds (cash equivalents)	$	138,509	$	—	$	—	$	138,509
Certificates of deposit		1,474		—		—		1,474
Total assets	$	139,983	$	—	$	—	$	139,983

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Accrued Expenses

9 Months Ended

Sep. 30, 2021

Accrued Expenses

Accrued Expenses

4. Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	September 30,		December 31,
	2021		2020
Payroll and related costs	$	4,755	$	4,097
Clinical trials and drug development		8,388		2,452
Professional fees		1,178		927
Short-term lease liabilities		540		510
Other		294		532
Total accrued expenses	$	15,155	$	8,518

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Investments

9 Months Ended

Sep. 30, 2021

Investments

Investments

5. Investments

We did not have any investments as of September 30, 2021. As of December 31, 2020, our investments consisted of certificates of deposit with various financial institutions with original maturities of six to nine months.  Investments are classified as short- or long-term investments on our balance sheets based on original maturity. Certificates of deposits were classified as held-to-maturity and were recorded at amortized cost, which approximated fair value.  We have never experienced a credit loss on the principal or interest receivable of our cash equivalents or short-term investments.  Our certificates of deposit are each individually and fully insured by the Federal Deposit Insurance Company (FDIC). Accordingly, we did not record any allowance for potential credit losses as of December 31, 2020.

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Loss Per Share of Common Stock

9 Months Ended

Sep. 30, 2021

Loss Per Share of Common Stock

Loss Per Share of Common Stock

6. Loss Per Share of Common Stock

Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock, convertible notes payable, warrants, stock options, and unvested restricted stock, which would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation. These potentially dilutive securities are more fully described in Note 7, and summarized in the table below:

	September 30,
	2021	2020
Convertible preferred stock	915,000	1,850,600
Restricted stock	37,000	5,250
Stock options	4,625,768	3,344,885
	5,577,768	5,200,735

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Stockholders' Equity

9 Months Ended

Sep. 30, 2021

Stockholders' Equity

Stockholders' Equity

7. Stockholders’ Equity

In 2005, we adopted the 2005 Stock Option and Incentive Plan (2005 Plan) that authorizes us to grant stock options, restricted stock and other equity-based awards. As of September 30, 2021, 6,565 options to purchase shares of common stock were outstanding pursuant to grants in connection with the 2005 Plan. No additional shares are available for issuance under the 2005 Plan.

In August 2014, we adopted our 2014 Equity Incentive Plan, most recently amended in May 2020 (2014 Plan), that authorizes us to grant stock options, restricted stock, and other equity-based awards, subject to adjustment in accordance with the 2014 Plan. The amount, terms of grants, and exercisability provisions are determined and set by our board of directors. As of September 30, 2021, 3,291,558 options to purchase shares of common stock were outstanding pursuant to grants in connection with the 2014 Plan, and 1,017,372 shares of common stock were available for future issuance. The amount, terms of grants, and exercisability provisions are determined and set by our board of directors.

Stock Options

There were 4,625,768 stock options outstanding as of September 30, 2021 at a weighted-average exercise price of $12.20 per share, including 1,327,645 stock options outstanding outside of the 2014 Plan, granted as inducements to new employees. During the nine months ended September 30, 2021, 1,701,258 options were granted to employees and directors at a weighted-average exercise price of $13.64 per share. Of the options granted, 1,082,324 options were granted pursuant to the 2014 Plan and 618,934 were granted outside of the 2014 Plan as inducements for new employees.

Total compensation cost recognized for all stock option awards in the statements of operations is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Research and development	$	1,060	$	701	$	3,333	$	2,108
General and administrative		1,700		1,145		7,317		3,405
Total	$	2,760	$	1,846	$	10,650	$	5,513

Restricted Stock

All issued and outstanding restricted shares of common stock are time-based, and become vested between one and three years after the grant date. Compensation expense is recorded ratably over the requisite service period. Compensation expense related to restricted stock is measured based on the fair value using the closing market price of our common stock on the date of the grant.

We issued 15,000 and 5,250 restricted shares of common stock during the nine months ended September 30, 2021 and 2020, respectively. As of September 30, 2021 there were 37,000 restricted shares of common stock outstanding.

Total compensation cost recognized for all restricted stock awards in the statements of operations is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
General and administrative		81		3		217		8
Total	$	81	$	3	$	217	$	8

Preferred Stock

As of September 30, 2021, 4,575 shares of our Series A Convertible Preferred Stock (Preferred Stock) remained outstanding, convertible into 915,000 shares of our common stock. In the second quarter of 2021, 178 shares of our Preferred Stock were converted into 35,600 shares of common stock. In May 2020, a registration statement covering the resale of shares of our common stock underlying our Preferred Stock was declared effective by the SEC. In accordance with the securities purchase agreements underlying the Preferred Stock, the liquidation preference was terminated, and we reclassified the Preferred Stock into permanent equity.

Deemed Dividends

On March 31, 2020, our stockholders approved an amendment to our company charter, which was filed with the Secretary of State of the State of Delaware to increase the number of authorized shares of common stock, which resulted in the recognition of a beneficial conversion feature on our Preferred Stock. Accordingly, we recorded $8.9 million in deemed dividends in the three months ended March 31, 2020, which was calculated as the difference between the conversion price and the fair value of our common stock on the commitment date (transaction date) in connection with the closing of concurrent equity financings during the fourth quarter of 2019.

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Leases

9 Months Ended

Sep. 30, 2021

Leases

Leases

8. Leases

We have entered into operating leases for real estate. These leases have terms which range from 36 to 78 months, and include renewal terms which can extend the lease terms by 24 to 60 months, which are included in the lease term when it is reasonably certain that we will exercise the option.  As of September 30, 2021, our operating leases had a weighted average remaining lease term of 48 months.  These right-of-use (ROU) assets are included in "Other assets" on our interim consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively, and represent our right to use the underlying asset for the lease term. Our obligations to make lease payments are included in "Accrued expenses" and "Other long-term liabilities" on our interim consolidated balance sheets as of September 30, 2021 and December 31, 2020, respectively.  The ROU assets were initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred, less any lease incentives received.  The ROU assets are subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received.  

As of September 30, 2021 and December 31, 2020, ROU assets were $1.7 million and $2.0 million, respectively, and operating lease liabilities were $2.7 million and $3.0 million, respectively. We have entered into various short-term operating leases, primarily for clinical trial equipment, with an initial term of twelve months or less. These leases are not recorded on our balance sheets. All operating lease expense is recognized on a straight-line basis over the lease term. During each of the three months ended September 30, 2021 and 2020, we recognized $0.2 million in total lease costs. During each of the nine months ended September 30, 2021 and 2020, we recognized $0.5 million in total lease costs. In all periods, we recognized less than $0.1 million in short-term lease costs related to short-term operating leases.

Because the rate implicit in each lease is not readily determinable, we use our incremental borrowing rate to determine the present value of the lease payments. The weighted average incremental borrowing rate used to determine the initial value of ROU assets and lease liabilities was 11.0%, derived from a corporate yield curve based on a synthetic credit rating model using a market signal analysis. We have certain contracts for real estate which may contain lease and non-lease components which we have elected to treat as a single lease component.

ROU assets for operating leases are periodically reduced by impairment losses. We use the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant, and Equipment – Overall, to determine whether an ROU asset is impaired, and if so, the amount of the impairment loss to recognize.  As of September 30, 2021 and December 31, 2020, we have not recognized any impairment losses for our ROU assets.

We monitor for events or changes in circumstances that require a reassessment of one of our leases. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding ROU asset unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset balance is recorded in our interim consolidated statements of operations and comprehensive loss.

Maturities of operating lease liabilities as of September 30, 2021 were as follows (in thousands):

Remaining three months of 2021		202
2022		807
2023		823
2024		840
Thereafter		642
		3,314
Less: imputed interest		(650)
Total lease liabilities	$	2,664
Current operating lease liabilities	$	540
Non-current operating lease liabilities		2,124
Total lease liabilities	$	2,664

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Notes Payable

9 Months Ended

Sep. 30, 2021

Notes Payable

Notes Payable

9. Notes Payable

On May 11, 2021 (the Closing Date) and as amended on May 17, 2021, the Company entered into the Credit Agreement with Oaktree Fund Administration, LLC as administrative agent (Oaktree) and the lenders party thereto (collectively, the Lenders) that provides for a five-year senior secured term loan facility in an aggregate original principal amount of up to $125.0 million, available to the Company in five tranches (collectively, the Term Loans).

Upon entering into the Credit Agreement in May 2021, the Company borrowed $15.0 million in term loans from the Lenders (the Tranche A-1 Term Loan) and upon receipt of written acceptance by the FDA of our NDA filing relating to the use of ganaxolone in CDD in September 2021, the Company borrowed $30.0 million of tranche A-2 term loans from the Lenders (the Tranche A-2 Term Loan). Under the terms of the Credit Agreement, the Company may, at its sole discretion, borrow from the Lenders up to an additional $80.0 million in term loans subject to certain milestone events, as follows:

● Through December 31, 2022, $30.0 million of tranche B term loans will be available for draw if the Company receives written approval from the FDA of an NDA permitting the marketing of ganaxolone in the U.S. to treat CDD (FDA Approval).

● Through June 30, 2023, $25.0 million of tranche C term loans will be available for draw if the Company receives FDA Approval and completes one or more financings (including through the issuance of common stock, convertible debt, subordinated debt, a synthetic royalty, or a sublicense) resulting in gross proceeds to the Company of at least $40.0 million and net proceeds to the Company of at least $36.0 million. In addition, the availability of this tranche is subject to certain clinical outcomes.

● Through December 31, 2023, $25.0 million of tranche D term loans will be available for draw if the Company receives FDA Approval and earns an aggregate of at least $50 million in net product revenue in the U.S. for a trailing six consecutive months.

In addition, the Credit Agreement contains a minimum liquidity covenant that requires the Company to maintain cash and cash equivalents of at least $20.0 million from the funding of the tranche A- 2 term loans until the funding of the tranche B term loans, and at least $15.0 million from the funding date of the tranche B term loans until the maturity of the Term Loans.

The Term Loans will be guaranteed by certain of the Company’s future subsidiaries (Guarantors). The Company’s obligations under the Credit Agreement are secured by a pledge of substantially all of the Company’s assets and will be secured by a pledge of substantially all of the assets of the Guarantors.

The Term Loans mature on May 11, 2026 (Maturity Date). The Term Loans bear interest at a fixed per annum rate (subject to increase during an event of default) of 11.50%, and the Company is required to make quarterly interest payments until the Maturity Date. The Company is also required to make quarterly principal payments beginning on June 30, 2024 in an amount equal to 5.0% of the aggregate amount of the Term Loans outstanding on June 30, 2024, and continuing until the Maturity Date. On the Maturity Date, the Company is required to pay in full all outstanding Term Loans and other amounts owed under the Credit Agreement.

At the time of borrowing any tranche of the Term Loans, the Company is required to pay an upfront fee of 2.0% of the aggregate principal amount borrowed at that time. In addition, a commitment fee of 75 basis points per annum will accrue on each of the tranche B, C, and D commitments for the period beginning 120 days after the funding date of the tranche A-2 term loans until the applicable tranche is either funded or terminated.

The Company may prepay all or any portion of the Term Loans, and is required to make mandatory prepayments of the Term Loans from the proceeds of asset sales, casualty and condemnation events, and prohibited debt issuances, subject to certain exceptions. All mandatory and voluntary prepayments of the Term Loans are subject to prepayment premiums equal to (i) 4% of the principal prepaid plus a “make-whole” amount equal to the interest that would have accrued through May 11, 2023 if prepayment occurs on or before May 11, 2023, (ii) 4% of the principal prepaid if prepayment occurs after May 11, 2023 but on or before May 11, 2024, or (iii) 2% of the principal prepaid if prepayment occurs after May 11, 2024 but on or before May 11, 2025. If prepayment occurs after May 11, 2025, no prepayment premium is due.

The Company is also required to make mandatory prepayments of the Term Loans upon an event of default under the Credit Agreement resulting from the occurrence of a change of control. These mandatory prepayments are subject to a prepayment premium equal to (i) 12.5% of the principal prepaid if such prepayment occurs on or before May 11, 2022 or (ii) 10.0% of the principal prepaid if the prepayment occurs after May 11, 2022 but on or before May 11, 2023.

In addition, the Company is required to pay an exit fee in an amount equal to 2.0% of all principal repaid, whether as a mandatory prepayment, voluntary prepayment, or a scheduled repayment.

In addition to the minimum liquidity covenant, the Company is subject to a number of affirmative and restrictive covenants under the Credit Agreement, including limitations on its ability and its subsidiaries’ abilities, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, and enter into affiliate transactions, subject to certain exceptions. As of September 30, 2021 the Company was in compliance with all covenants.

Upon the occurrence of certain events, including but not limited to the Company’s failure to satisfy its payment obligations under the Credit Agreement, the breach of certain of its other covenants under the Credit Agreement, the occurrence of cross defaults to other indebtedness, or defaults related to enforcement action by the FDA or other Regulatory Authority or recall of ganaxolone, Oaktree and the Lenders will have the right, among other remedies, to accelerate all amounts outstanding under the Term Loans and declare all principal, interest, and outstanding fees immediately due and payable.

In September 2021, the Company borrowed $30.0 million upon receipt of written acceptance by the FDA of our NDA filing relating to the use of ganaxolone in the treatment of CDD and incurred debt issuance costs of $1.2 million,

including the exit fee of $0.6 million, that are classified as contra-liability on our consolidated balance sheets and are being recognized as interest expense over the term of the loan using the effective-interest method.

In May 2021, the Company borrowed $15.0 million upon entering into the Credit Agreement and incurred debt issuance costs of $4.4 million, including the exit fee of $0.3 million, that are classified as a contra-liability on the consolidated balance sheet and are being recognized as interest expense over the term of the loan using the effective-interest method.

For the nine months ended September 30, 2021, the Company recognized interest expense of $1.0 million, of which $0.7 million was interest on the Term Loans and $0.3 million was non-cash interest expense related to the amortization of debt issuance costs.

The following table summarizes the composition of Notes payable as reflected on the consolidated balance sheet as of September 30, 2021 (in thousands):

Gross proceeds	$	45,000
Contractual exit fee		900
Unamortized debt discount and issuance costs		(5,321)
Total	$	40,579

The aggregate maturities of Notes payable as of September 30, 2021 are as follows (in thousands):

Remainder of 2021	$	—
2022		—
2023		—
2024		6,825
2025 and thereafter		38,175
Total	$	45,000

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License and Collaboration Revenue

9 Months Ended

Sep. 30, 2021

License and Collaboration Revenue

License and Collaboration Revenue

10. License and Collaboration Revenue

In July 2021, the Company entered into a collaboration agreement (Orion Collaboration Agreement”) with Orion Corporation (Orion). The Orion Collaboration Agreement falls under the scope of ASC Topic 808, Collaborative Arrangements (ASC 808) as both parties are active participants in the arrangement that are exposed to significant risks and rewards. While this arrangement is in the scope of ASC 808, the Company analogizes to ASC 606 for some aspects of this arrangement, including for the delivery of a good or service (i.e., a unit of account). Revenue recognized by analogizing to ASC 606 is recorded as collaboration revenue on the condensed statements of operations.

Under the terms of the Orion Collaboration Agreement, the Company granted Orion an exclusive, royalty-bearing, sublicensable license to certain of the Company’s intellectual property rights with respect to commercializing biopharmaceutical products incorporating the Company’s product candidate ganaxolone (Licensed Products) in the European Economic Area, the United Kingdom and Switzerland (collectively, the Territory) for the diagnosis, prevention and treatment of certain human diseases, disorders or conditions (the Field), initially in the indications of CDKL5 deficiency disorder (CDD), tuberous sclerosis complex (TSC) and refractory status epilepticus (“RSE”). The Company will be responsible for the continued development of Licensed Products and regulatory interactions related thereto, including conducting and sponsoring all clinical trials, provided that Orion may conduct certain post-approval studies in the Territory. Orion will be responsible, at Orion’s sole cost and expense, for the commercialization of any Licensed Product in the Field in the Territory.

Under the terms of the Orion Collaboration Agreement, the Company received a €25.0 million ($29.6 million) upfront payment from Orion in July 2021. In connection with the upfront fee, the Company agreed to provide Orion with the results of a planned genotoxicity study on the M2 metabolite of ganaxolone, a “Combined Micronucleus & Comet study in vivo.” In the event that the results of such study are positive, based on the criteria set forth in the study’s protocol, Orion will have the right to terminate the Collaboration Agreement within ninety (90) days after its receipt of the final report of such study, in which case we must refund Orion seventy-five percent (75%) of the upfront fee. In the event of such termination and refund, Orion shall have no further rights pursuant to the oral and IV dose formulations of ganaxolone and the Collaboration Agreement shall terminate and be of no further force or effect.

The Company will also be reimbursed for up to €7.0 million for research and development costs incurred. The Company is eligible to receive up to €90.0 million upon the achievement of specific clinical and commercial achievements, as well as tiered royalty payments based on net sales ranging from the low double-digits to high teens for the oral programs and the low double-digits to low 20s for the IV program. Also, as part of the overall arrangement, the Company has agreed to supply the Licensed Products to Orion at an agreed upon price.

The Orion Collaboration Agreement shall remain effective until the date of expiration of the last to expire Royalty Term, which is defined as the period beginning on the date of the first commercial sale Licensed Product in such country and ending on the latest to occur of (a) the tenth (10th) anniversary of the first commercial sale of Licensed Product in such country, (b) the expiration of the last-to-expire licensed patent covering the manufacture, use or sale of such Licensed Product in such country, and (c) the expiration of regulatory exclusivity period, if any, for such Licensed Product in such country. The Orion Collaboration Agreement has a term of at least ten (10) years since a commercial sale has yet to occur. The Orion Collaboration Agreement allows for termination in certain specific events, such as material breach, in the event Orion challenges the validity, enforceability or scope of the licensed patent rights, termination for forecast failure, insolvency and force majeure, none of which are probable at contract inception.

In accordance with the guidance, the Company identified the following commitments under the arrangement: (i) exclusive rights to develop, use, sell, have sold, offer for sale and import any product comprised of Licensed Product (the License) (ii) development and regulatory activities (Development and Regulatory Activities), and (iii) requirement to supply Orion with the Licensed Product at an agreed upon price (the Supply of Licensed Product). The Company determined that these three commitments represent distinct performance obligations for purposes of recognizing revenue or reducing expense, which it will recognize such revenue or expense, as applicable, as it fulfills these performance obligations.

The Company determined that the non-refundable portion of the upfront payment plus the research and development reimbursement constitutes the transaction price as of the outset of the Orion Collaboration Agreement. The refundable portion of the upfront payment and the future potential regulatory and development milestone payments were fully constrained at contract inception as the risk of significant revenue reversal related to these amounts has not yet been resolved. The achievement of the future potential milestones is not within the Company’s control and is subject to certain research and development success and therefore carry significant uncertainty. The Company will reevaluate the likelihood of achieving these milestones at the end of each reporting period and adjust the transaction price in the period the risk is resolved. In addition, the Company will recognize any consideration related to sales-based milestones and royalties when the subsequent sales occur since those payments relate primarily to the License, which was delivered by the Company to Orion upon entering into the Orion Collaboration Agreement. The €18.8 million ($21.8 million) refundable portion of the upfront payment is recorded as a Refund liability as of September 30, 2021.

The transaction price was allocated to the three performance obligations based on the estimated stand-alone selling prices at contract inception. The stand-alone selling price of the License was based on a discounted cash flow approach and considered several factors including, but not limited to, discount rate, development timeline, regulatory risks, estimated market demand and future revenue potential using an adjusted market approach. The stand-alone selling price of the Development and Regulatory Activities and the Supply of Licensed Product was estimated using the

expected cost-plus margin approach. The Company allocated the transaction price to the performance obligations as of September 30, 2021 as follows (in thousands):

			Cumulative
	Transaction		Collaboration		Contract
	Price		Recognized		Liability
License	$	8,987	$	8,987	$	-
Development and Regulatory Services		2,787		41		2,746
Supply of License Product		3,943		-		3,943
	$	15,717	$	9,028		6,689
Less current portion of contract liability						(910)
Total long-term contract liability					$	5,779

In accordance with ASC 210-20, the above contract liability of $6.7 million is offset by a contract asset of $7.8 million related to the reimbursement of research and development costs, resulting in a net Contract asset of $1.1 million.

License is recognized as revenue. Development and regulatory services are recognized as a reduction of research and development costs.

The Company incurred $2.0 million of incremental costs in obtaining the Orion Collaboration Agreement. These contract acquisition costs were allocated consistent with the transaction price, resulting in $1.1 million of expense recorded to General and administrative expense commensurate with the recognition of the License performance obligation and $0.9 million recorded as capitalized contract costs, included in Other current assets and Other assets, which will be amortized as Development and Regulatory Services and Supply of License Product obligations are met. Cost of collaboration revenue of $1.5 million represents a one-time fee paid to Purdue Neuroscience Company related to our license agreement and was paid in conjunction with the €25.0 million upfront fees received from Orion.

The Company reevaluates the transaction price and the total estimated costs expected to be incurred to satisfy the performance obligations and adjusts the deferred revenue at the end of each reporting period. Such changes will result in a change to the amount of collaboration revenue recognized and deferred revenue.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2021

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include the accounts of Marinus Pharmaceuticals, Inc. (a Delaware corporation) as well as the accounts of Marinus Pharmaceuticals Emerald Limited (an Ireland company incorporated in February 2021), a wholly owned subsidiary requiring consolidation. Marinus Pharmaceuticals Emerald Limited serves as a corporate presence in the European Union for regulatory purposes. The unaudited interim consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all information and disclosures necessary for a presentation of our financial position, results of operations and cash flows in conformity with generally accepted accounting principles in the U.S. (GAAP) for annual financial statements. In the opinion of management, these unaudited interim consolidated financial statements reflect all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation of our financial position and results of operations and cash flows for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for the full year. These unaudited interim consolidated financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2020 and accompanying notes thereto included in our annual report on Form 10-K filed with the SEC on March 9, 2021.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from such estimates.

Federal Contract Revenue

Federal Contract Revenue

We recognize federal contract revenue from the BARDA Contract in the period in which the allowable research and development expenses are incurred, and receivables associated with this revenue are recorded as federal contract revenue receivable on our interim consolidated balance sheets. This revenue is not within the scope of Accounting Standards Codification (ASC) 606 – Revenue from contracts with customers.

Debt Issuance Costs

Debt Issuance Costs

Debt issuance costs incurred in connection with Note payable (Note 9) are amortized to interest expense over the term of the respective financing arrangement using the effective-interest method. Debt issuance costs, net of related amortization are deducted from the carrying value of the related debt.

Contract Liability

Contract Liability

When consideration is received, or such consideration is unconditionally due, from a customer prior to completing our performance obligation to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities expected to be recognized as revenue or a reduction of expense within the 12 months following the balance sheet date are classified as current liabilities. Contract liabilities not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as long-term liabilities. In accordance with ASC 210-20, our contract liability is offset by a contract asset as further discussed in Note 10.

Collaboration and Licensing Revenue

Collaboration and Licensing Revenue

We may enter into collaboration and licensing arrangements for research and development, manufacturing, and commercialization activities with counterparties for the development and commercialization of our product candidates. These arrangements may contain multiple components, such as (i) licenses, (ii) research and development activities, and (iii) the manufacturing of certain material. Payments pursuant to these arrangements may include non-refundable and refundable payments, payments upon the achievement of significant regulatory, development and commercial milestones, sales of product at certain agreed-upon amounts, and royalties on product sales. The amount of variable consideration is constrained until it is probable that the revenue is not at a significant risk of reversal in a future period.

In determining the appropriate amount of revenue to be recognized as we fulfill our obligations under a collaboration agreement, the Company performs 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 capable of being distinct; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue as we satisfy each performance obligation.

We must develop estimates and assumptions that require judgment to determine the underlying stand-alone selling price for each performance obligation, which determines how the transaction price is allocated among the performance obligations. The estimation of the stand-alone selling price may include such estimates as forecasted revenues and costs, development timelines, discount rates and probabilities of regulatory and commercial success. We also apply significant judgment when evaluating whether contractual obligations represent distinct performance obligations, allocating transaction price to performance obligations within a contract, determining when performance obligations have been met, assessing the recognition and future reversal of variable consideration and determining and applying appropriate methods of measuring progress for performance obligations satisfied over time.

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2021

Fair Value Measurements

Summary of major categories of financial assets and liabilities measured at fair value on a recurring basis

The following fair value hierarchy table presents information about each major category of our financial assets and liabilities measured at fair value on a recurring basis (in thousands):

	Level 1		Level 2		Level 3		Total
September 30, 2021
Assets
Money market funds (cash equivalents)	$	113,340	$	—	$	—	$	113,340
Total assets	$	113,340	$	—	$	—	$	113,340
December 31, 2020
Assets
Money market funds (cash equivalents)	$	138,509	$	—	$	—	$	138,509
Certificates of deposit		1,474		—		—		1,474
Total assets	$	139,983	$	—	$	—	$	139,983

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Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2021

Accrued Expenses

Schedule of accrued expenses

Accrued expenses consisted of the following (in thousands):

	September 30,		December 31,
	2021		2020
Payroll and related costs	$	4,755	$	4,097
Clinical trials and drug development		8,388		2,452
Professional fees		1,178		927
Short-term lease liabilities		540		510
Other		294		532
Total accrued expenses	$	15,155	$	8,518

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Loss Per Share of Common Stock (Tables)

9 Months Ended

Sep. 30, 2021

Loss Per Share of Common Stock

Schedule of antidilutive securities excluded from the computation of diluted weighted average shares outstanding

	September 30,
	2021	2020
Convertible preferred stock	915,000	1,850,600
Restricted stock	37,000	5,250
Stock options	4,625,768	3,344,885
	5,577,768	5,200,735

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2021

Stock options

Schedule of total compensation cost recognized in the statement of operations

Total compensation cost recognized for all stock option awards in the statements of operations is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Research and development	$	1,060	$	701	$	3,333	$	2,108
General and administrative		1,700		1,145		7,317		3,405
Total	$	2,760	$	1,846	$	10,650	$	5,513

Restricted stock

Schedule of total compensation cost recognized in the statement of operations

Total compensation cost recognized for all restricted stock awards in the statements of operations is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
General and administrative		81		3		217		8
Total	$	81	$	3	$	217	$	8

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Leases (Tables)

9 Months Ended

Sep. 30, 2021

Leases

Schedule of maturities of operating lease liabilities

Maturities of operating lease liabilities as of September 30, 2021 were as follows (in thousands):

Remaining three months of 2021		202
2022		807
2023		823
2024		840
Thereafter		642
		3,314
Less: imputed interest		(650)
Total lease liabilities	$	2,664
Current operating lease liabilities	$	540
Non-current operating lease liabilities		2,124
Total lease liabilities	$	2,664

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Notes Payable (Tables)

9 Months Ended

Sep. 30, 2021

Notes Payable

Summary of composition of Notes payable

The following table summarizes the composition of Notes payable as reflected on the consolidated balance sheet as of September 30, 2021 (in thousands):

Gross proceeds	$	45,000
Contractual exit fee		900
Unamortized debt discount and issuance costs		(5,321)
Total	$	40,579

Schedule of maturities of Notes payable over the next five years

Gross proceeds	$	45,000
Contractual exit fee		900
Unamortized debt discount and issuance costs		(5,321)
Total	$	40,579

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License and Collaboration Revenue (Tables)

9 Months Ended

Sep. 30, 2021

License and Collaboration Revenue

Schedule of allocation of the transaction price to the performance obligations

The Company allocated the transaction price to the performance obligations as of September 30, 2021 as follows (in thousands):

			Cumulative
	Transaction		Collaboration		Contract
	Price		Recognized		Liability
License	$	8,987	$	8,987	$	-
Development and Regulatory Services		2,787		41		2,746
Supply of License Product		3,943		-		3,943
	$	15,717	$	9,028		6,689
Less current portion of contract liability						(910)
Total long-term contract liability					$	5,779

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Description of the Business and Liquidity (Details) $ in Thousands, € in Millions					1 Months Ended			3 Months Ended						9 Months Ended
	Jul. 30, 2021 USD ($)	Jul. 30, 2021 EUR (€)	May 11, 2021 USD ($) tranche	Sep. 23, 2020 shares	Dec. 31, 2020 USD ($) shares	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($) shares	Sep. 30, 2021 USD ($) shares	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2021 USD ($) shares	Sep. 30, 2021 EUR (€)	Sep. 30, 2020 USD ($)
Liquidity
Net loss								$ 19,507	$ 23,823	$ 27,141	$ 15,659	$ 15,675	$ 18,672	$ 70,471		$ 50,006
Accumulated deficit					$ 311,929			382,400						382,400
Net product revenue								$ 8,987						$ 8,987
Reverse stock split ratio				0.25
Common stock, shares authorized | shares				150,000,000	150,000,000			150,000,000						150,000,000
Oaktree Capital Management LP Credit Agreement
Liquidity
Term of loan facility			5 years
Maximum borrowing capacity available under the credit agreement			$ 125,000
Number of tranches | tranche			5
BARDA Contract
Liquidity
Maximum amount to be awarded under the contract						$ 51,000					51,000					51,000
Contract base period						2 years
Amount of funding to be provided during contract base period						$ 21,000					21,000					21,000
Amount of additional funding to be provided following successful completion of clinical trial and preclinical studies in base period						30,000					30,000					30,000
Cost sharing, amount						33,000					33,000					33,000
Cost sharing, BARDA amount						$ 51,000					$ 51,000					$ 51,000
Contract period-of-performance						5 years
Collaboration Agreement with Orion
Liquidity
Upfront fee received	$ 29,600	€ 25.0													€ 25.0
R&D reimbursement and cash milestone payments to be received | €		€ 97.0
Number of days from receipt of the final report, in which the collaboration agreement may be terminated	90 days	90 days
Percentage of upfront fee which must be refunded in the event of termination		75.00%
Common Stock | Public Offering
Liquidity
Issuance of common stock (in shares) | shares					5,000,000		4,600,000
Proceeds from equity offerings, net of offering costs					$ 64,900		$ 42,900

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Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Assets
Total assets	$ 113,340	$ 139,983
Money market funds
Assets
Cash and cash equivalents, fair value	113,340	138,509
Certificates of deposit
Assets
Investments		1,474
Level 1
Assets
Total assets	113,340	139,983
Level 1 | Money market funds
Assets
Cash and cash equivalents, fair value	$ 113,340	138,509
Level 1 | Certificates of deposit
Assets
Investments		$ 1,474

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Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Accrued Expenses
Payroll and related costs	$ 4,755	$ 4,097
Clinical trials and drug development	8,388	2,452
Professional fees	1,178	927
Short-term lease liabilities	540	510
Other	294	532
Total accrued expenses	$ 15,155	$ 8,518

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Loss Per Share of Common Stock (Details) - shares	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Loss per share of common stock
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	5,577,768	5,200,735
Convertible preferred stock
Loss per share of common stock
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	915,000	1,850,600
Restricted stock
Loss per share of common stock
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	37,000	5,250
Stock options.
Loss per share of common stock
Antidilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	4,625,768	3,344,885

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Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Shares
Conversion of Series A convertible preferred stock (in shares)		178
Number of common shares issued for each convertible Series A preferred stock	915,000				915,000
Deemed Dividends
Deemed dividends on Series A convertible preferred stock				$ 8,900
Series A Convertible Preferred Stock
Shares
Preferred stock, shares outstanding	4,575				4,575		4,753
Common Stock
Shares
Conversion of Series A convertible preferred stock (in shares)		35,600
Stock options
Stock option and incentive plans
Total compensation cost	$ 2,760		$ 1,846		$ 10,650	$ 5,513
Stock Options
Outstanding (in shares)	4,625,768				4,625,768
Outstanding, weighted-average exercise price (in dollars per share)	$ 12.20				$ 12.20
Granted (in shares)					1,701,258
Granted (in dollars per share)					$ 13.64
Stock options | Research and development
Stock option and incentive plans
Total compensation cost	$ 1,060		701		$ 3,333	2,108
Stock options | General and administrative
Stock option and incentive plans
Total compensation cost	1,700		1,145		7,317	3,405
Restricted stock
Stock option and incentive plans
Total compensation cost	$ 81		3		$ 217	$ 8
Shares
Issued (in shares)					15,000	5,250
Outstanding (in shares)	37,000				37,000
Restricted stock | Minimum
Stock option and incentive plans
Vesting period					1 year
Restricted stock | Maximum
Stock option and incentive plans
Vesting period					3 years
Restricted stock | General and administrative
Stock option and incentive plans
Total compensation cost	$ 81		$ 3		$ 217	$ 8
2005 Plan
Stock option and incentive plans
Common stock reserved for issuance (in shares)	0				0
2005 Plan | Stock options
Stock Options
Outstanding (in shares)	6,565				6,565
2014 Plan
Stock option and incentive plans
Common stock reserved for issuance (in shares)	1,017,372				1,017,372
2014 Plan | Stock options
Stock Options
Outstanding (in shares)	3,291,558				3,291,558
Granted (in shares)					1,082,324
Equity Incentive Plan, Employee Inducements | Stock options
Stock Options
Outstanding (in shares)	1,327,645				1,327,645
Granted (in shares)					618,934

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Leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Leases
Weighted average remaining lease term	48 months		48 months
Right-of-use assets	$ 1,700		$ 1,700		$ 2,000
Operating lease liabilities	$ 2,664		$ 2,664
Operating Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:OtherAccruedLiabilitiesNoncurrent us-gaap:AccruedLiabilitiesCurrent		us-gaap:OtherAccruedLiabilitiesNoncurrent us-gaap:AccruedLiabilitiesCurrent		us-gaap:OtherAccruedLiabilitiesNoncurrent us-gaap:AccruedLiabilitiesCurrent
Total lease costs	$ 200
Weighted-average incremental borrowing rate used to determine right-of-use assets and lease liabilities	11.00%		11.00%
Maturities of operating lease liabilities
Remaining three months of 2021	$ 202		$ 202
2022	807		807
2023	823		823
2024	840		840
Thereafter	642		642
Total lease payments	3,314		3,314
Less: imputed interest	(650)		(650)
Total lease liabilities	2,664		2,664
Current operating lease liabilities	540		540
Non-current operating lease liabilities	$ 2,124		$ 2,124
Minimum
Leases
Operating lease agreement term	36 months		36 months
Operating lease renewal term	24 months		24 months
Maximum
Leases
Operating lease agreement term	78 months		78 months
Operating lease renewal term	60 months		60 months
Short-term operating lease costs	$ 100	$ 100	$ 100	$ 100

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Notes Payable - Narratives (Details) $ in Thousands			1 Months Ended	3 Months Ended	9 Months Ended
	May 11, 2021 USD ($) tranche	May 11, 2011 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)
Debt Instrument [Line Items]
Contractual exit fee			$ 900	$ 900	$ 900
Interest Expense				678	1,029
Amortization of debt issuance costs					319
Oaktree Capital Management LP Credit Agreement
Debt Instrument [Line Items]
Term of loan facility	5 years
Maximum borrowing capacity available under the credit agreement	$ 125,000
Number of tranches | tranche	5
Additional borrowing capacity available, subject to certain milestone events	$ 80,000
Proceeds from line of credit	$ 15,000		30,000
Accrued interest rate (as a percent)	11.50%
Percentage of periodic principal payment	5.00%
Upfront fee (as a percent)	2.00%
Commitment fees	0.75%
Commitment fee accrual period	120 days
Percentage of term loan exit fees	2.00%
Debt issuance costs	$ 4,400		1,200	1,200	1,200
Contractual exit fee	300		$ 600	$ 600	600
Interest Expense					1,000
Interest on term loan					700
Amortization of debt issuance costs					$ 300
Oaktree Capital Management LP Credit Agreement | Funding of the tranche A- 2 term loans until the funding of the tranche B term loans
Debt Instrument [Line Items]
Minimum liquidity to be maintained	20,000
Oaktree Capital Management LP Credit Agreement | Funding date of the tranche B term loans until the maturity of the Term Loans
Debt Instrument [Line Items]
Minimum liquidity to be maintained	$ 15,000
Oaktree Capital Management LP Credit Agreement | Scenario Of Prepayment On Or Before May 11, 2023
Debt Instrument [Line Items]
Prepayment premium (as a percent)	4.00%
Oaktree Capital Management LP Credit Agreement | Scenario Of Prepayment Occurs Between May 11, 2023 To May 11, 2024
Debt Instrument [Line Items]
Prepayment premium (as a percent)	4.00%
Oaktree Capital Management LP Credit Agreement | Scenario Of Prepayment Between May 11, 2024 To May 11, 2025
Debt Instrument [Line Items]
Prepayment premium (as a percent)	2.00%
Oaktree Capital Management LP Credit Agreement | Scenario Of Prepayment After May 11, 2025
Debt Instrument [Line Items]
Prepayment premium (as a percent)	0.00%
Oaktree Capital Management LP Credit Agreement | Prepayment occurs on or before May 11, 2022
Debt Instrument [Line Items]
Prepayment premium (as a percent)	12.50%
Oaktree Capital Management LP Credit Agreement | Prepayment occurs after May 11, 2022 but on or before May 11, 2023
Debt Instrument [Line Items]
Prepayment premium (as a percent)	10.00%
Oaktree Capital Management LP Credit Agreement | Term Loans Tranche A-1
Debt Instrument [Line Items]
Proceeds from line of credit		$ 15,000
Oaktree Capital Management LP Credit Agreement | Term Loans Tranche A-2
Debt Instrument [Line Items]
Proceeds from line of credit	$ 30,000
Oaktree Capital Management LP Credit Agreement | Term Loan Tranche B
Debt Instrument [Line Items]
Additional borrowing capacity available, subject to certain milestone events	30,000
Oaktree Capital Management LP Credit Agreement | Term Loan Tranche C
Debt Instrument [Line Items]
Additional borrowing capacity available, subject to certain milestone events	25,000
Gross proceeds from sublicense, minimum	40,000
Net proceeds from sublicense, minimum	36,000
Oaktree Capital Management LP Credit Agreement | Term Loan Tranche D
Debt Instrument [Line Items]
Additional borrowing capacity available, subject to certain milestone events	25,000
Net product revenue, minimum	$ 50,000
Net product revenue, consecutive earning period	6 months

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Notes Payable - Composition of debt (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Notes Payable
Gross proceeds	$ 45,000
Contractual exit fee	900
Unamortized debt discount and issuance costs	(5,321)
Total	$ 40,579

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Notes Payable - Debt maturities (Details) $ in Thousands	Sep. 30, 2021 USD ($)
Notes Payable
2024	$ 6,825
2025 and thereafter	38,175
Total	$ 45,000

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License and Collaboration Revenue - Narrative (Details) $ in Thousands, € in Millions			9 Months Ended
	Jul. 30, 2021 USD ($)	Jul. 30, 2021 EUR (€)	Sep. 30, 2021 EUR (€)	Sep. 30, 2021 USD ($)	Sep. 30, 2021 EUR (€)
License and Collaboration Revenue
Refundable portion of upfront payment | $				$ 21,828
Collaboration Agreement with Orion
License and Collaboration Revenue
Upfront fee received	$ 29,600	€ 25.0	€ 25.0
Number of days from receipt of the final report, in which the collaboration agreement may be terminated	90 days	90 days
Percentage of upfront fee which must be refunded in the event of termination		75.00%
Amount of reimbursement of research and development cost receivable		€ 7.0
Amount of payment receivable upon achievement of specific clinical and commercial achievements		€ 90.0
Term of collaboration agreement	10 years	10 years
Refundable portion of upfront payment				$ 21,800	€ 18.8

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License and Collaboration Revenue - Allocation of the transaction price to the performance obligations (Details) $ in Thousands, € in Millions			3 Months Ended	9 Months Ended
	Jul. 30, 2021 USD ($) item	Jul. 30, 2021 EUR (€) item	Sep. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2021 EUR (€)
License and Collaboration Revenue
Net contract asset			$ 1,059	$ 1,059
Cost of collaboration revenue			1,478	1,478
Collaboration Agreement with Orion
License and Collaboration Revenue
Number of performance obligations | item	3	3
Transaction Price			15,717	15,717
Cumulative Collaboration Recognized				9,028
Contract Liability			6,689	6,689
Less current portion of contract liability			(910)	(910)
Total long-term contract liability			5,779	5,779
Contract asset			7,800	7,800
Net contract asset			1,100	1,100
Incremental costs incurred in obtaining the agreement			2,000	2,000
Contract acquisition costs included in general and administrative expense				1,100
Capitalized contract costs			900	900
Cost of collaboration revenue				1,500
Upfront fee received	$ 29,600	€ 25.0			€ 25.0
Collaboration Agreement with Orion | License Revenue
License and Collaboration Revenue
Transaction Price			8,987	8,987
Cumulative Collaboration Recognized				8,987
Collaboration Agreement with Orion | Development and Regulatory Services
License and Collaboration Revenue
Transaction Price			2,787	2,787
Cumulative Collaboration Recognized				41
Contract Liability			2,746	2,746
Collaboration Agreement with Orion | Supply of License Product
License and Collaboration Revenue
Transaction Price			3,943	3,943
Contract Liability			$ 3,943	$ 3,943