Marinus Pharmaceuticals Inc. Common Stock

Item 1A. Risk Factors 

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Othere have  than as set forth below and previously disclosed in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, there have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, except as follows:

We and certain o:

Risks Related to our Compliance with Nasdaq Listing Requirements

If our offstock pricers have continues to remain been named as defendants in a pendinglow $1.00 or our market value of listed securities class action lawsuit. This lawsuit, and potential similar or related lawsuits,remains below $50 million, or we fail to meet other listing requirements of the Nasdaq Stock Market, our could result in mmon stock may be substantial damages, divert managements time and attention fromject to delisting from the Nasdaq Stock Market, which would materially reduce the liquidity of our business,common stock and have a material an adverse effect on our results of operations. Thmarket price.

Our common stock is lawsuit, and any oisted on ther lawsuits to which we are subjec Nasdaq Global Market, will be costly to defend and is uncertain inand we are therefore subject to its outcome.

On June 5, 2024, a securities class action lawsuit captioned Bishins v. Marinus Pharmaceuticals, Inc., et. al., Case 2:24-cv-02430 was filed against us and certain of ourcontinued listing requirements, including requirements with respect to the market value of publicly-held shares, market value officers in the U.S. Dist listed shares, minimum bid prict Court for the Eastern District of Pennsylvania. The complaint alleges vioe per share, and minimum stockholders equity, among others, and requirements relations of Sections 10(b)ng to board and 20(a) of the Securities and Exchange Act of 1934, as amended (Exchange Act) and Rule 10b-5 promulgated committee independence. If we fail to satisfy one or more of thereunder on the basis of purportedly materially false and mislead requirements, we may be delisted from the Nasdaq Global Market.

Nasdaq Listing statements and omissions concerning our RAISE and RAISE II clinicRule 5450(a)(1) requires companies listed on the Nasdaq Global trials. The complMarket to maint seeks, among other things, unspecified damages, attorneys fees, exain a minimum bid price of at least $1.00 pert fees, and o share. If ther costs. Motions to appoint lead plaintiffs and lead counsel minimum bid price of our common stock remains below $1.00 per share for the action were due on August 5, 2024. One purported stockholder filed a m30 consecutive business days, Nasdaq will send us a notion by the August 5 deadline. That motion is currently pending, and we intend to move to dismiss the complaint oce that we are not in compliance with Nasdaq Listing Rule 5450(a)(1). In accordance a schedule has been set.

We intend to vigorously defend against this action. However, whether or not twith Nasdaq Listing Rule 5810(c)(3)(A), we would then have a period of 180 calendar days to regain compliance with the claim is successful, litigation is often expensive and can divert managements attention and resources from other business concerns, which cminimum bid price requirement. To regain compliance, the closing bid price of our common stock would adversely affechave to meet our business.

We currently r exceed $1.00 per share not able to estimate the possible cost to us from this action, as the pendfor at least ten consecutive business days during lawsuit this currently at an early stage, and180 calendar day period. In the event we canndid not be certregain how long it macompliance by take to resolve thehe end of such pending lawsuit or the possiriod, we could be eligible amount of any damages that we mfor an additional 180 calendar day be requirgrace period, provided to pay. If hat we are ultimately required to pay significant defense costs, damages or settlement amounts, such payments could adversely affect our opersubmit an online transfer application to transfer the listing of our common stock to the Nasdaq Capital Market, submit an applications.

We may be fee, and meet the target of similar litigation in the future. The continued listing requirement for market pricvalue of our common stock has experiencedpublicly held shares and may continue to experience volatility, all other initial listing stand inards for the past, companies that haveNasdaq Capital Market, experienced volatility in cept the marketbid price of their stock have been subjectrequirement. In addition, we will be required to securities litigation. Any future litigation could resultprovide written notice of our in substatential costs and divert our managements attention from oon to cure the deficiency during ther business  seconcerns, which could sd compliance periously harm our business. We maintain liability insurance; however, if any costs or expenses associated with the pending lawsuit or any od by effecting a reverse stock split if necessary. If it appears to Nasdaq that we would not be able to cure the deficiency during ther litigation exceed our insur second compliance coverage, we may be forced to bear some or all costs and expenses directly, which could adversely affect our business, financial condiperiod, or if we determined not to submit a transfer application or make the required representation, results of operations or Nasdaq would provide written notice to us that our common stock price.

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An unfavorable outcome with to delisting. In the pending lawsuievent or any other litigf such notification , we could have a maappeal Nasdaqs deterial adverse effecmination to delist on our business, reputation, financial condition, results of operations and cash flows, which, in turn, may result in securities, but there can be no assurance that Nasdaq would grant our request for may contribute to an inability by us to meet the financial covenant contained in the RIFA.

Our future success is dependentinued listing.

Additionally, Nasdaq Listing Rule 5450(b)(2) requires companies listed on the successful clinicNasdaq Global development, regulatory approMarket to maintain a total market val and continuue of listed commercializationsecurities of ganaxolone, which is being studied in several indications and wat least $50 million. If the total market value of our listed securities remains below $50 mill require significant capital resources and years of additional clinical development effort.

In March 2022, we received FDA approval of ZTALMY for CDD in the U.S., and in July 2023ion for 30 consecutive business days, Nasdaq will send us a notice that we are not in compliance with Nasdaq Listing Rule 5450(b)(2). In accordance with Nasdaq Listing Rule 5810(c)(3)(C), we received EC approvalwould then have a period of ZTALMY for CDD in the EU, and we plan180 calendar days to develop ganaxolone in several other geographic regions and additionregain compliance with the total indications in oral and IV formulations. As a result, our business is dependent on our ability to successfully cmarket value of listed securities requirement. To regain complete clinical development, scale-up manufacturing, obtain regulatory approiance, the total market val, and, if it is approved, commercialize ganaxolone in a timely manner. We cannot commercialize additue of our listed securities would have to meet or exceed $50 millional indicati for at least ten cons or formulations of ganaxolone inecutive business days during the U.S. in any other indication without first obtainingis 180 calendar day period. In the event we did not regulatory approval fromain compliance by the FDA; similarly, we cannot commercialize additional indications or formulations of ganaxolone outside ofend of such period, Nasdaq would provide written notice to us that our common stock would be subject to delisting. In the U.S. without obtaining regulatoryevent of such notification, we could approveal from comparable foreign regulatory authoNasdaqs determination to delist our securities. Befo, but there obtaining regulatory approvals for the commercial sale of ganaxolone for a target indication, we must decan be no assurance that Nasdaq would grant our request for continued listing.

We are actively monstrate with substantial evidenitoring our stock price gathered in preclinical studiesand our market value of listed securities, and clinical trialswill consider any and, with respect to approval in the U.S., all options available to us to the satisfactiomaintain of the FDA, that ganaxolone is safe and effective for use forr, if necessary, regain compliance. There can be no assurance, however, that target indication and that thewe will be able to manufacturing facilities, processes andintain or, if necessary, regain controls armpliance adequate.

Ganaxolone is metabolizednd meet Nasdaqs continued listing requirements. To the 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 plasmat that we are unable to maintain or, if necessary, regain compliance with Nasdaq Listing Rule 5450(a)(1) and Rule 5450(b)(2) or the other requirements of rats Nasdaq for dogs. The chemical structure of M2 hascontinued listing, there is a risk that our common stock may been identified. An activity assay, dose range finding study in rats and an in vivo micronucleus with comet analysis for the dete delisted from Nasdaq. Delisting from Nasdaq may limit the range and attractionveness of genotoxicity have been strategic alternatives that we are able to conducted and the results submittedsider, adversely affect our ability to the FDA. The M17 in vitro drug-drug interaction (DDI) study was submitted in August 2023, andraise additional financing through the public or private sale of equity securities, significantly affect the M17 in vivo PK study with Brain Penetrance was submitted in December 2023. Results from additional preclinical studies are required by the FDA as post-marketingability of investors to trade our securities, or negatively affect the value and liquidity of our common stock. Delisting also could have other negative requirement(s). These sults, include: 2-year carcinogenicity studieing the potential loss of ganaxolone andemployee confidence, the major human unconjugated plasma metabolite, M2, loss of institutional investors or interest in rats; a 26-week carcinogenicity of ganaxolone in transgenic mice; and a juvenile animalbusiness development opportunities.

If we are delisted from Nasdaq and we are not able toxicity study of the major human unconjugated plasma metabolite, M2, in rats. Additional post-marketing requirements included: phase 1 renal and hepatic impairment studies list our common stock on another exchange, our common stock may be eligible to trade on an over-the-counter system, such as the OTCQB market, where and a thorough QTc study; a investor may find extractable/leachable study results on the conit more difficult to sell our common stock or obtainer closure system. The Phase 1 renal impairment study  accurate quotations as to the market value of our commitment was submitted to the FDA in May 2022. The Phase 1 hepatic impairmenton stock. We cannot assure you that our common study and the thorough QTc study were completed and submittock, if delisted from Nasdaq, will be listed to on anothe FDA in December 2022. Ther national securities extractable/leachable study resultschange or quoted on an over-the contain-counter closurequotation system were submitt.

Risks Related to the FDA in July 2023. We plan to complete the required FDA studies withiour Strategic Alternative Review

We are in the required FDA timeframe. However, there is a risk that the studiprocess of evaluating strategic alternatives could take longerfollowing than expectede failure of TrustTSC to complete or the studies may have adverse findings whichmeet its primary endpoint, and we may require addineed to pursue bankruptcy or dissolutional investments and hav if we are not able the poto idential to materially impact the label or our ability to market ZTALMY.

In connection with the EC approval of ZTALMY for CDD, we have several post-fy and implement a meaningful strategic alternative in a timely manner.

On October 24, 2024, we announced that TrustTSC did not meet the primarketing authorization measures. The clinical study report (CSR) for Study 1042-HME-1001 was submitted in September 2023. They endpoint of percent change in 28-day TSC-associated seizure frequency. As a result of this, we discontinued further ganaxolone Steady-State Metabolite Study report, tclinical development, other than activities required by the final Study 1042-CDD-3001 CSR with the open-label triFDA and EMA specific to post-approval completion, the M17 in vitro DDI study, and the M17 in vivo PK study with Brain Penetrance were submitted in December 2023. The remaining post-marketing authorization measures include: participamitments of ZTALMY for CDD. Our existing cash and cash equivalents will not be sufficient to conting in Study LLF001 (CANDID observue our operational study) and providing s as plannual updates; participating in the CDD-IPR-CDD-0 CDKL5 Deficied and, as a result, we have commency Disorder International Patient Regied a process to explore stry and providing six monthly updates; conducting a toxicity studyategic alternatives with a sediment dwelling organism and an updated Environmental Risk Assessment; developing a sodium benzoate-free suspension and assessing the goal of maximizing value for our stockholders, which may include the sale of the compatibility of the oral suspensionny, a strategic partnership with food, drinks, enteral tubone or more parties, shake time and stand time; conducting a 26-Week Oral Gavage Toxicity Studyor the licensing, sale or divestiture of M2; conducting a M2 Embryo-fetal Development study; and conducting a 26-week Oral Gavage Carcinogenicity Study of ganaxolone and M2. The EMA also requested WoEsome or more of our assets, in addition to other alternatives. We have engaged Barclays to assessments to evaluate the need for a 2-year carcinogenicity study in rats with ganaxolone, a 2-year carcinogenicitist in reviewing our strategic alternatives. However, any study in rats with M2, and a juvenile toxicity study with M2. While we expect to be ableegic alternative that may be pursued and complete the remaining required studies within the requested EMA timeframe, td ultimately may not deliver the anticipated benefits or enhance shareholder value. There is a riskcan be no guarantee that the studies could take longer or the studies may have adverse findings which may require additionprocess of evaluating strategic alternatives will result in our company entering into or completing a potential investmentstransaction, and we have the potential to materially impactnot set a timetable for the label or our ability to marker ZTALMY.

In January 2021, completion of this review process.

Should we enrolled the first patibe unable to ident in the RAISE trial, a randomized, double-blind, placebo-controlled trial in patients with RSE, who haify and implement a meaningful strategic alternative failed two or more antiseizure medications. The RAISE trial has

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approxin a timely manner, our Board of Directors is limatkely 70 trial sites, primarily in to consider seeking bankruptcy protection under the U.S. and Canada. It was designed to enroll approximately 124 patients who weBankruptcy Code or engaging in a similar process. In that event we are randomizequired to receive ganaxolone or placebo added to standard of care. We reached alignment with the FDA on a proliquidate under the federal bankruptcy laws, it is highly unlikely that our stocol amendment, including a proposalkholders would receive any value for an interim analysis whentheir shares.

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Our two-thirds ofrestructuring plans and the patients (approximassociately 82) had completed assessment of the primaryd headcount reductions may not result in and key secondary triticipated savings, could result in total endpoints. The enrollment target for the incosts and expenses that are greaterim analysis was comple than expected in the first quarter of 2024. and could disrupt our business.

On April 1530, 2024, we announced implemented a reduction-in-force (RIF) that the trial did not meet the pre-definimpacted approximately 20% of our workforce, and implemented interim aadditionalysis stopping criteria  cost reduction the co-primary endpoints. We decided to complete enrollmentactivities with impact beginning in the RAISE trial at 100 patientssecond quarter of 2024. On June 17November 4, 2024, we announced top-line results of thimplemented a separate RAISE trial, which showIF that impacted that the trial met its first co-primary endpoint, with a statistically significant proporapproximately 45% of our workforce, and implemented additional cost reduction of patients achieving SE cessationactivities within 30 minutes of initiati impact beginning IV ganaxolone compared to placebo: 80% vs. 13%, respectively (p0.0001). However, the trial failed to achieve statistical sin the fourth quarter of 2024, to reduce operating expenses and better alignificance on its second co-primary endpoint, our workforce with the proportion of patients not progressing to IV anesthesianeeds of our business for 36 hours following initiationour discontinuance of IVfurther ganaxolone compared to placebo: 63% vs. 51%, respectively (p=0.162). Tlinical development, other than activities required by the incidence of SAEs was similar between the treaFDA and EMA specific to post-approval commitment and placebo arms (n=19 s of ZTALMY for IV ganaxolone, n=18 for placebo), with hypotensionCDD. Execution of the RIF is expected to being more  substantially commonly seen inpleted by the IV ganaxolone arm. Oend of 2024.

As of ther secondary endpoints filing of this Quarterly Report on Form 10-Q, including escala connection of treatment with either IV ASMs or IV anesthesia within 24 h November 4, 2024 RIF, we estimate that we will incur in the fours and reduction in electroeth quarter of 2024 severancephalogram (EEG) seizure burden, at 36 hours favored ganaxolone and other employee-related costs of approximately $1.5 million. We continue to analyzeare also in the full RAISE trial datasetprocess of assessing and plan to request a meetingy impact associated with the FDA to discuss a potential path forward for IV ganaxolone in RSE.

In August termination of certain contracts and all other activities under the November 4, 2021, we reported data from an open-label, s4 RIF.

We may undertake further restructuringle-arm Phase 2 trial evaluating  actions or workforce reductions in the safety and effectivenessfuture. These types of adjunctive oral ganaxolone treatment in 23 patients with TSC. The primary endpoint showed a median 16.6% reduction in 28-day frrestructuring and cost reduction activities are complex and may result in unintended consequency of TSC-associated seizures relative to tes and costs, such as the four-week baseline period. In additloss of institution, data from the Phase 2 TSC trial suggested that in patients al knowledge and expertise, attrition concomitant Epidiolex, early elevation of ganaxolone blood levels occurred and appeared to be linked to greater somnolence. A formal Phase 1 drug-drug interaction trial was cobeyond the intended number of employees, decreased morale among our remaining empleted, demonstrating a lack of significant interaction between ganaxolone and Epidiolex. Addioyees, and potential impacts on financial reporting. In additionally, the titration schedu, while for all subjects in the TrustTSC trial haspositions have been adjusted to maxelimize tolerability. Undesirable side effects could delay clinical trials and result in the FDA onated, certain functions necessary to our other regulatory authoritieperations requiring us to conduct additional studies or trials for our product candidate either prior or post-approval,main, and we may be unsuccessful in retaining employees to perform such as addifunctional drug-drugs or interaction stud distributing the duties or safety or efficacy studies, or it may object to elements ofand obligations of departed employees among our clremainical development programng employees. There is also a risk that the TrustTSC trial will generate data that is not suse types of activities or losses could also make it difficient to support regulatory approvalult for us to pursue, or prevent us for this indicrom pursuing, new opportunities and initiation.

Even if ganaxolone were to obtain approvves due to insufficient personnel, including any potential from the FDA and comparable foreign regulatory authorities for TSC, RSE, or any ostrategic alternatives. We may not realize, in full or in part, ther indication under development, any app anticipated benefits, savings and improval might contain significant limitations, such as rements in our cost structure from our restrictions as ucturing efforts due to specified age groups, warningunforeseen difficulties, precautiondelays or contraindications, unexpected costs. For mexample, we may be subject to burdensome post-approval trial or risk managementincur unanticipated charges not currently contemplated as a requirementsult of the RIFs. If we are unable to obtain regulatory approval for ganaxolone in realize these addi expected operational indications in one or more jurisdictioncost savings from the restructurings, or any approval contains significant limitatur operating results and financial conditions, we may not be able to obtain sufficient funding or generate sufficient revenue to would be adversely affected.

We may become involved in additional securities litigation that continue uld furthe development of any other indicar divert managements attentions for ganaxolone or any other product c and harm our business, andidate that w insurance coverage may in-license, develop onot be sufficient to cover acquire in the future. Furthermore, even with regulatory approval for ganaxolone, we will still need to develop a commercial organizationll costs and damages.

In addition to the existing securities class action lawsuit filed against us on June 5, 2024 captioned Bishins v. Marinus Pharmaceuticals, Inc., establish commercially viable pricing and obtain adequate reimbursement from third-party and government payers. If we are unable tot. al., Case 2:24-cv-02430, we could become involved in additional securities litigation. In the past, securities litigation has often followed certain significant business transactions, successfully h as the sale of a commercialize ganaxolone, we may not be able to earn sufficient revenue to continue our business.

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Wpany or announcement of any other strategic transaction, or the announcement of negative events, such as negative are conducting results from clinical development activities for ganaxolone across multiple indictrials. We may be exposed to such litigation even if no wrongdoing occurred. Litigations, and such clinical development activitie is usually expensive and diverts may not produce favorablenagements attention and resultources, which could adversely impaaffect our abusiness and cash resources and our ability to achieve regulatory approconsummate a potential strategic transaction or the ultimate val for ganaxolone in ue our stockholders receive in any such indicatransactions.

We are conducting clinical development activities for ganaxolone across multiple ind certain of our officers have been named as defendants in a pendications. Succeng securities class in preclinical studiesaction lawsuit. This lawsuit, and early clinical trials in one indication does not ensure that later clinicpotential similar or related lawsuits, could result in substantial trials in such indicatdamages, divert managements time and attention or other indications will generate adequate data to demonstrfrom our business, and have a mate the efficacy and safety of ganaxolone in one or more indicrial adverse effect on our results of operations. Furthermore, unfavorable clinical trial results in one ganaxolone indication may adversely impact our ability to continue to develop such indicaThis lawsuit, and any other lawsuits to which we are subject, will be costly to defend and is uncertain in its outcome.

On June 5, 2024, a securities class action or other ganaxolone indications. A number of companies in the phlawsuit captioned Bishins v. Marinus Pharmaceutical and biotechnology industries, including those with greater resources, Inc., et. al., Case 2:24-cv-02430 was filed against us and experience, have suffered significant setbackcertain of our officers in clinical trials, even afthe U.S. District Court for the Easter seeing promising results in earlier studies and clinical trials. For example, while ganaxolone showed statistical separan District of Pennsylvania. The complaint alleges violation from placebo in a Phase 2 clinical trial in adjunctive treats of Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, as ament of adults with focal onset seizures, itded (Exchange Act) and Rule 10b-5 promulgated thereunder on the basis of purportedly materially failed to show a similarlse and misleading statistically significant separation in a Phase 3 ements and omissions concerning our RAISE and RAISE II clinical trial for ts. The same indication. As a result, we discontinued complaint seeks, among other things, unspecified damages, attorneys fees, expert fees, and other costs. The cour program in adult focal onset seizurest appointed a lead plaintiff and b

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legan to focus our efforts on advancing ganaxolone in RSE anad counsel for the action on August 16, 2024. The lead pediatric orphlaintiff filed an genetic epilepsy indications. Further, in April amended complaint on October 4, 2024, th. We independent DMC completed its review of the RAISE trialtend to move to dismiss the amended complaint on or before November 22, 2024.

We interim analysis and found to vigorously defend thaagainst the trial did not meet is action. However, whethe pre-defined interr or not the claim analysis stopping criteria uccessful, litigation the co-primary endpoints, and the DMC recommendatis often expensive and can divert managements attention was that and resources from othe trial may r business continue without modification. On June 17, 2024, we announced top-line results of the RAISE trial, which showed thatcerns, which could adversely affect our business.

We currently are not able to estimate the trial met itpossible cost to us first co-primary endpoint, with a statisticallrom this action, as the pending lawsuit is currently at an early signifitage, and we cant proportion of patients achievnot be certain how long it may take to resolve the pending SE cessation within 30 minuteslawsuit or the possible amount of initiating IV ganaxolone compared to placebo: 80% vs. 13%, respectively (p0.0001). However, the trial failany damages that we may be required to pay. If we are ultimately required to achieve statistical sipay significance on its second co-primary endpoint, the proportion of patients not progressing to IV anest defense costs, damages or settlement amounts, such payments could adversely affect our operations.

We may be thesia for 36 hours following initi target of similar litigation of IV ganaxolone compared to placebo: 63% vs. 51%, respectively (p=0.162). Wein the future. The market price of our common stock has experienced and may continue to analyze the full RAISE trial datasetexperience volatility, and plain to request a meeting with the FDA to discuss a potential path forward for IV ganaxolone in RSE.

 We do not know whether the clinical trials we may conduct will demonstrate adequate efficacy and safety tohe past, companies that have experienced volatility in the market price of their stock have been subject to securities litigation. Any future litigation could result in regulatory approval tosubstantial costs and divert our market ganaxolone in any particular jurisdiction or indication. If clinical trials underway or conducnagements attention from other business concerns, which could seriously harm our business. We maintain liability insurance; however, if any costs or expenses associated inwith the future do not produce favorable results, our ability to achieve regulatory approval fpending lawsuit or any other litigation exceed our insurance coverage, we may be forced to bear some or ganaxolone in those indications may be aall costs and expenses directly, which could adversely impacted. Further, even if we believe the dataaffect our business, financial collected from our clinical trials of ganaxolone are promising,ndition, results of operations or stock price.

An unfavorable outcome with these data may not be sufficient to support approval by the FDA or foreign regulatory authorities. Preclinical and clinic pending lawsuit or any other litigation could have a material adverse effect on our business, reputation, financial data can be interpreted in different ways. Accordingly, the FDA or foreign regulatory authoritiescondition, results of operations and cash flows, which, in turn, may result in or may could interpret these data in different ways from us, whichntribute to an inability by us to meet the financial could delay, limit or prevent regulatory approvalvenant contained in the RIFA.