Aclaris Therapeutics, Inc. 10-K

Item 8. Financial Statements and Supplementary Data ​ INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ​ ​ Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 83 ​ ​ Consolidated Balance Sheets as of December 31, 2025 and 2024 85 ​ ​ Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024 86 ​ ​ Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025 and 2024 87 ​ ​ Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 88 ​ ​ Notes to Consolidated Financial Statements 89 ​ ​ ​ 82 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Aclaris Therapeutics, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Aclaris Therapeutics, Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, of stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Fair Value of the Contingent Consideration Liability As described in Notes 2 and 3 to the consolidated financial statements, the Company’s contingent consideration balance was $11.0 million as of December 31, 2025. The Company records a contingent consideration liability related to future potential payments resulting from the acquisition of Confluence based upon significant unobservable inputs including the achievement of regulatory and commercial milestones, as well as estimated future sales levels and the discount rates applied to calculate the present value of the potential payments. Management evaluates fair value estimates of the contingent consideration liability on a quarterly basis using a probability-weighted expected payment model for regulatory milestone payments and a Monte Carlo simulation model for commercial milestone and royalty payments and then applying a risk-adjusted discount rate to calculate the present value of the potential payment. Changes in the fair value of the contingent consideration are recorded as income or expense in the Company’s consolidated statement of operations and comprehensive loss. Significant assumptions used in management’s estimates include the probability of achieving 83 Table of Contents regulatory milestones and commencing commercialization, which are based upon an asset’s current stage of development and review of existing clinical data. ​ The principal considerations for our determination that performing procedures relating to the fair value of the contingent consideration liability is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate, which in turn led to (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the probability of achieving regulatory milestones and commencing commercialization. In addition, the audit effort involved the use of professionals with specialized skill and knowledge. ​ Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, (i) testing management’s process for developing the fair value of the contingent consideration liability, (ii) evaluating the appropriateness of the probability weighted expected payment and Monte Carlo simulation valuation models, (iii) testing the completeness and accuracy of the underlying data used in the models, and (iv) evaluating the reasonableness of the significant assumptions used by management related to the probability of achieving regulatory milestones and commencing commercialization. Evaluating management’s assumptions related to the probability of achieving regulatory milestones and commencing commercialization involved evaluating whether the assumptions were reasonable considering the agreements associated with the transaction as well as the consistency with industry information, the stage of product development and whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s probability-weighted expected payment and Monte Carlo simulation valuation models. ​ ​ /s/ PricewaterhouseCoopers LLP Philadelphia, Pennsylvania February 26, 202 6 We have served as the Company’s auditor since 2015. ​ ​ ​ 84 Table of Contents ACLARIS THERAPEUTICS, INC. CONSOLIDATED BALANCE SHEET S ​ (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 19,960 ​ $ 24,570 Short-term marketable securities ​ 70,791 ​ 89,024 Accounts receivable, prepaid expenses and other current assets ​ 5,565 ​ 12,357 Total current assets ​ 96,316 ​ 125,951 Marketable securities ​ 60,612 ​ 90,302 Property and equipment, net ​ 761 ​ 1,008 Other assets ​ 2,771 ​ 3,066 Total assets ​ $ 160,460 ​ $ 220,327 Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 13,158 ​ $ 4,690 Accrued expenses ​ 8,791 ​ 20,333 Deferred income ​ ​ 3,943 ​ ​ 3,890 Other current liabilities ​ ​ 2,753 ​ ​ 2,683 Total current liabilities ​ 28,645 ​ 31,596 Other liabilities ​ ​ 1,565 ​ 4,439 Deferred income, net of current portion ​ ​ 16,168 ​ ​ 20,038 Contingent consideration ​ ​ 11,000 ​ ​ 8,700 Total liabilities ​ 57,378 ​ 64,773 Stockholders’ Equity: ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.00001 par value; 10,000,000 shares authorized and no shares issued or outstanding at December 31, 2025 and December 31, 2024 ​ ​ — ​ ​ — Common stock, $ 0.00001 par value; 400,000,000 and 200,000,000 shares authorized at December 31, 2025 and December 31, 2024, respectively; 120,499,433 and 107,850,124 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively ​ 1 ​ 1 Additional paid‑in capital ​ 1,070,255 ​ 1,058,317 Accumulated other comprehensive income ​ 610 ​ 97 Accumulated deficit ​ ( 967,784 ) ​ ( 902,861 ) Total stockholders’ equity ​ 103,082 ​ 155,554 Total liabilities and stockholders’ equity ​ $ 160,460 ​ $ 220,327 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ ​ 85 Table of Contents ACLARIS THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS ​ (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Revenues: ​ ​ ​ ​ ​ ​ Contract research ​ $ 1,872 ​ $ 2,541 Licensing ​ ​ 5,954 ​ ​ 16,179 Total revenue ​ ​ 7,826 ​ ​ 18,720 ​ ​ ​ ​ ​ ​ ​ Costs and expenses: ​ ​ ​ ​ ​ ​ Cost of revenue ​ ​ 2,091 ​ ​ 2,792 Research and development 52,645 ​ 33,586 General and administrative 21,972 ​ 22,203 Licensing ​ ​ 5,193 ​ ​ 12,666 Revaluation of contingent consideration ​ ​ 2,300 ​ ​ 2,500 In-process research and development ​ ​ — ​ ​ 86,905 Total costs and expenses 84,201 ​ 160,652 Loss from operations ( 76,375 ) ​ ( 141,932 ) ​ ​ ​ ​ ​ ​ ​ Other income: ​ ​ ​ ​ ​ ​ Interest income 7,637 ​ 7,953 Non-cash royalty income ​ ​ 3,815 ​ ​ 1,914 Total other income ​ ​ 11,452 ​ ​ 9,867 Net loss ​ $ ( 64,923 ) ​ $ ( 132,065 ) ​ ​ ​ ​ ​ ​ ​ Net loss per share, basic and diluted ​ $ ( 0.53 ) ​ $ ( 1.71 ) Weighted average common shares outstanding, basic and diluted ​ ​ 122,564,741 ​ 77,296,665 ​ ​ ​ ​ ​ ​ ​ Other comprehensive income: ​ ​ ​ ​ ​ ​ Unrealized gain on marketable securities, net of tax of $ 0 ​ $ 513 ​ $ 203 Total other comprehensive income ​ 513 ​ 203 Comprehensive loss ​ $ ( 64,410 ) ​ $ ( 131,862 ) ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 86 Table of Contents ACLARIS THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY ​ (In thousands, except share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Additional ​ Other ​ ​ ​ Total ​ ​ ​ Par ​ Paid ‑ in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ ​Shares ​ Value ​ Capital ​ Income (Loss) ​ Deficit ​ Equity Balance at December 31, 2023 70,894,889 ​ $ 1 ​ $ 928,080 ​ $ ( 106 ) ​ $ ( 770,796 ) ​ $ 157,179 Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units 1,399,680 ​ ​ — ​ ​ ( 377 ) ​ ​ — ​ ​ — ​ ( 377 ) Issuance of common stock under securities purchase agreement, net of offering costs of $ 5,087 35,555,555 ​ ​ — ​ ​ 74,913 ​ ​ — ​ ​ — ​ ​ 74,913 Issuance of common stock purchase warrants — ​ ​ — ​ ​ 44,845 ​ ​ — ​ ​ — ​ ​ 44,845 Unrealized gain on marketable securities — ​ ​ — ​ ​ — ​ ​ 203 ​ ​ — ​ 203 Stock-based compensation expense — ​ ​ — ​ ​ 10,856 ​ ​ — ​ ​ — ​ ​ 10,856 Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 132,065 ) ​ ( 132,065 ) Balance at December 31, 2024 107,850,124 ​ $ 1 ​ $ 1,058,317 ​ $ 97 ​ $ ( 902,861 ) ​ $ 155,554 Issuance of common stock in connection with vesting of restricted stock units 1,367,359 ​ ​ — ​ ​ ( 446 ) ​ ​ — ​ ​ — ​ ​ ( 446 ) Exercise of common stock purchase warrants 11,281,950 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Unrealized gain on marketable securities — ​ ​ — ​ ​ — ​ ​ 513 ​ ​ — ​ ​ 513 Stock-based compensation expense — ​ ​ — ​ ​ 12,384 ​ ​ — ​ ​ — ​ ​ 12,384 Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 64,923 ) ​ ​ ( 64,923 ) Balance at December 31, 2025 120,499,433 ​ $ 1 ​ $ 1,070,255 ​ $ 610 ​ $ ( 967,784 ) ​ $ 103,082 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ ​ 87 Table of Contents ACLARIS THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Cash flows from operating activities : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 64,923 ) ​ $ ( 132,065 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 454 ​ 807 Stock-based compensation expense ​ 12,384 ​ 10,856 Revaluation of contingent consideration ​ ​ 2,300 ​ ​ 2,500 In-process research and development expense ​ ​ — ​ ​ 86,905 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Accounts receivable, prepaid expenses and other assets ​ 6,138 ​ ( 4,875 ) Accounts payable ​ 8,447 ​ ( 4,188 ) Accrued expenses and other liabilities ​ ( 8,097 ) ​ ( 3,942 ) Deferred income ​ ​ ( 3,816 ) ​ ​ 23,927 Net cash used in operating activities ​ ( 47,113 ) ​ ( 20,075 ) Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Purchases of property and equipment ​ ( 111 ) ​ ( 121 ) Purchases of marketable securities ​ ( 39,732 ) ​ ( 119,982 ) Proceeds from sales and maturities of marketable securities ​ 89,041 ​ 86,144 Payments of deferred transaction consideration for in-licensed assets ​ ​ ( 833 ) ​ ​ — Acquisition of in-licensed assets, including transaction costs ​ ​ — ​ ​ ( 35,810 ) Net cash provided by (used in) investing activities ​ 48,365 ​ ( 69,769 ) Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Proceeds from issuance of common stock under securities purchase agreement, net of issuance costs ​ ​ — ​ ​ 74,913 Payments of deferred transaction consideration for in-licensed assets ​ ​ ( 5,416 ) ​ ​ — Payments of employee withholding taxes related to restricted stock unit award vesting ​ ​ ( 446 ) ​ ​ ( 409 ) Proceeds from exercise of employee stock options and the issuance of stock ​ ​ — ​ ​ 32 Net cash (used in) provided by financing activities ​ ( 5,862 ) ​ 74,536 Net decrease in cash and cash equivalents ​ ( 4,610 ) ​ ( 15,308 ) Cash and cash equivalents at beginning of period ​ 24,570 ​ 39,878 Cash and cash equivalents at end of period ​ $ 19,960 ​ $ 24,570 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of non-cash investing and financing activities: ​ ​ ​ ​ ​ ​ Additions to property and equipment included in accounts payable ​ $ 21 ​ $ — Fair value of warrants issued in connection with in-license agreement ​ ​ — ​ ​ 44,845 Deferred transaction consideration in connection with in-license agreement ​ ​ — ​ ​ 6,249 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 88 Table of Contents ACLARIS THERAPEUTICS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ​ ​ 1. Organization and Nature of Business ​ Overview ​ Aclaris Therapeutics, Inc. was incorporated under the laws of the State of Delaware in 2012. Aclaris Therapeutics, Inc. and its wholly owned subsidiaries are referred to collectively as the “Company.” ​ The Company is a clinical-stage biopharmaceutical company focused on discovering and developing novel small and large molecule product candidates for immuno-inflammatory diseases. The Company’s proprietary KINect drug discovery platform coupled with its integrated discovery approach to small and large molecules enables the Company to identify and advance product candidates designed to have superior target affinity, specificity and potency. The Company is seeking to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize its novel product candidates. ​ Liquidity ​ The Company’s consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities in the ordinary course of business. As of December 31, 2025, the Company had cash, cash equivalents and marketable securities of $ 151.4 million and an accumulated deficit of $ 967.8 million. Since inception, the Company has incurred net losses and negative cash flows from its operations. There can be no assurance that profitable operations will ever be achieved, and, if achieved, will be sustained on a continuing basis. In addition, development activities, including clinical and preclinical testing of the Company’s product candidates, will require significant additional financing. The future viability of the Company is dependent on its ability to successfully develop its product candidates and to generate revenue from identifying and consummating transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize its development assets or to raise additional capital to finance its operations. The Company will require additional capital to develop its product candidates and to support its discovery efforts. ​ Additional funds may not be available on a timely basis, on commercially acceptable terms, or at all, and such funds, if raised, may not be sufficient to enable the Company to continue to implement its long-term business strategy. The Company's ability to raise additional capital may be adversely impacted by potentially worsening global economic conditions caused by a variety of factors including geopolitical tensions, tariff policies, and inflationary pressures. If the Company is unable to raise sufficient additional capital or generate revenue from transactions with potential third-party partners for the development and/or commercialization of its product candidates, it may need to substantially curtail planned operations. The Company’s failure to raise capital as and when needed could have a negative impact on its financial condition and ability to pursue its business strategies. ​ In accordance with Accounting Standards Codification (“ASC”) Subtopic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that its consolidated financial statements are issued. As of the report date, the Company does not believe that substantial doubt exists about its ability to continue as a going concern. The Company believes its existing cash, cash equivalents and marketable securities are sufficient to fund its operating and capital expenditure requirements for a period greater than 12 months from the date of issuance of these consolidated financial statements. ​ 2. Summary of Significant Accounting Policies ​ Basis of Presentation ​ The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States (“GAAP”). The consolidated financial statements of the Company include the accounts of the operating parent company, Aclaris Therapeutics, Inc., and its wholly owned subsidiaries. All intercompany transactions have been eliminated. Based upon the nature and size of the Company’s revenue, the Company believes that 89 Table of Contents gross profit does not provide a meaningful measure of profitability and, therefore, has not included a line item for gross profit on the consolidated statement of operations and comprehensive loss. ​ Reclassifications ​ Certain prior year amounts have been reclassified to conform to the current year financial statement presentation. ​ 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, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, contingent consideration and the valuation of stock-based awards. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Actual results could differ from the Company’s estimates. ​ Revenue Recognition ​ The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers. Under ASC Topic 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. ​ To determine revenue recognition in accordance with ASC Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) performance obligations are satisfied. At contract inception, the Company assesses the goods or services promised within a contract with a customer to identify the performance obligations, and to determine if they are distinct. The Company recognizes the revenue that is allocated to each distinct performance obligation when (or as) that performance obligation is satisfied. The Company only recognizes revenue when collection of the consideration it is entitled to under a contract with a customer is probable. ​ Licensing Revenue ​ Licenses of Intellectual Property – The Company recognizes revenue received from non-refundable, upfront fees related to the licensing of intellectual property when the intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the license has been transferred to the customer, and the customer is able to use and benefit from the license. ​ Milestone and Royalty Payments – The Company considers any future potential milestones and sales-based royalties to be variable consideration. The Company recognizes revenue from development, regulatory and anniversary milestone payments as they are achieved. The Company recognizes revenue from commercial milestones and royalty payments as the sales occur. ​ Deferred Income Related to the Sale of Future Royalties ​ The Company amortizes its deferred income liability related to the sale of future OLUMIANT® (baricitinib) royalties under the units-of-revenue method by computing a ratio of the proceeds received to the total expected payments over the term of the royalty purchase agreement and then applying that ratio to the period’s estimated cash payment (see Note 12). The amortization is based on the Company’s current estimate of future royalty payments. ​ Cash Equivalents ​ The Company considers all short-term, highly liquid investments with original maturities of three months or less at acquisition date to be cash equivalents. Cash equivalents, which have consisted of money market funds and commercial paper, are stated at fair value. ​ 90 Table of Contents Marketable Securities ​ Marketable securities with original maturities of greater than three months and remaining maturities of less than one year from the balance sheet date are classified as short-term. Marketable securities with remaining maturities of greater than one year from the balance sheet date are classified as long-term. ​ The Company classifies all marketable securities as available-for-sale securities. The Company’s marketable securities are measured and reported at fair value using either quoted prices in active markets for identical securities or quoted prices in markets that are not active for identical or similar securities. Unrealized gains and losses are reported as a separate component of stockholders’ equity. The cost of securities sold is determined on a specific identification basis, and realized gains and losses, if any, are included in other income within the consolidated statement of operations and comprehensive loss. If any adjustment to fair value reflects a decline in the value of the investment, the Company considers available evidence to evaluate the extent to which the decline is “other than temporary” and reduces the investment to fair value through a charge to the statement of operations and comprehensive loss. ​ Discontinued Operations ​ As of December 31, 2025 and 2024, the Company had $ 2.2 million in discontinued operations reported as other current liabilities in the Company’s consolidated balance sheet, related to discontinued commercial products. ​ Leases ​ Leases represent a company’s right to use an underlying asset and a corresponding obligation to make payments to a lessor for the right to use those assets. The Company evaluates leases at their inception to determine if they are an operating lease or a finance lease. A lease is accounted for as a finance lease if it meets one of the following five criteria: the lease has a purchase option that is reasonably certain of being exercised, the present value of the future cash flows are substantially all of the fair market value of the underlying asset, the lease term is for a significant portion of the remaining economic life of the underlying asset, the title to the underlying asset transfers at the end of the lease term, or if the underlying asset is of such a specialized nature that it is expected to have no alternative uses to the lessor at the end of the term. Leases that do not meet the finance lease criteria are accounted for as an operating lease. ​ The Company recognizes assets and liabilities for leases at their inception based upon the present value of all payments due under the lease. The Company uses an incremental borrowing rate to determine the present value of operating leases. The Company determines incremental borrowing rates by referencing collateralized borrowing rates for debt instruments with terms similar to the respective lease. The Company recognizes expense for operating leases on a straight-line basis over the term of each lease. The Company includes estimates for any residual value guarantee obligations under its leases in lease liabilities recorded on its consolidated balance sheet. ​ Right-of-use assets are included in other assets on the Company’s consolidated balance sheet for operating leases. Obligations for lease payments are included in other current liabilities and other liabilities on the Company’s consolidated balance sheet for operating leases. ​ Contingent Consideration ​ The Company records a contingent consideration liability related to future potential payments resulting from the acquisition of Confluence Life Sciences, Inc. (now known as Aclaris Life Sciences, Inc.) (“Confluence”) based upon significant unobservable inputs including the achievement of regulatory and commercial milestones, as well as estimated future sales levels and the discount rates applied to calculate the present value of the potential payments. Significant judgment is involved in determining the appropriateness of these assumptions. These assumptions are considered Level 3 inputs. Revaluation of the contingent consideration liability can result from changes to one or more of these assumptions. The Company evaluates the fair value estimate of the contingent consideration liability on a quarterly basis with changes, if any, recorded as income or expense in the consolidated statement of operations and comprehensive loss. ​ The fair value of contingent consideration is estimated using a probability-weighted expected payment model for regulatory milestone payments and a Monte Carlo simulation model for commercial milestone and royalty payments and then applying a risk-adjusted discount rate to calculate the present value of the potential payments. Significant assumptions used in the Company’s estimates include the probability of achieving regulatory milestones and commencing 91 Table of Contents commercialization (collectively referred to as “probability of success”), which are based on an asset’s current stage of development and a review of existing clinical data. Probability of success assumptions ranged between 21 % and 40 % at December 31, 2025. Additionally, estimated future sales levels and the risk-adjusted discount rate applied to the potential payments are also significant assumptions used in calculating the fair value. As of December 31, 2025, the discount rate ranged between 6.7 % and 8.7 % depending on the year of each potential payment. ​ Research and Development Costs ​ Research and development costs are expensed as incurred. Research and development expenses include salaries, stock-based compensation and benefits of employees, and other operational costs related to the Company’s research and development activities, including depreciation expenses and the cost of research and development contracts which the Company has entered into with outside vendors to conduct both preclinical studies and clinical trials. Significant judgment and estimates are made in determining the amount of research and development costs recognized in each reporting period. The Company analyzes the progress of its preclinical studies and clinical trials, completion of milestone events, invoices received and contracted costs when estimating research and development costs. Actual results could differ from the Company’s estimates. The Company’s historical estimates for research and development costs have not been materially different from the actual costs. ​ Acquisitions ​ In November 2024, the Company entered into an exclusive license agreement with Biosion, Inc. (“Biosion”) (as described in Note 11). This transaction has been accounted for as an asset acquisition in accordance with the Financial Accounting Standards Board (“FASB”) ASC 805-50, rather than a business combination. Cash payments and issuances of equity instruments for in-process research and development (“IPR&D”), as well as future payments, are initially treated as the acquisition of an asset but then immediately expensed as there is no future alternative use under the accounting guidance for the asset. These payments are reflected as IPR&D expense on the Company’s consolidated statements of operations and comprehensive loss. ​ The Company accounted for the transaction as an asset acquisition because substantially all of the fair value of the assets acquired is concentrated in a single asset. ASC 805-10-55-5A, which sets forth a screen test, provides that if substantially all of the fair value of assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the assets acquired are not a business. ​ Stock-Based Compensation ​ The Company measures the compensation expense of stock-based awards granted to employees and directors using the grant date fair value of the award. The Company has issued stock options and restricted stock unit (“RSU”) awards with service-based vesting conditions. For service-based awards, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period, which is typically four years . The impact of forfeitures is recognized in the period in which they occur. ​ The Company measures the compensation expense of stock-based awards granted to consultants using the grant date fair value of the award. The Company recognizes compensation expense over the period during which services are rendered by the consultant. ​ The Company classifies stock-based compensation expense in its statement of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipients’ service payments are classified. ​ The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company estimates expected volatility based on its stock price’s historical volatility, as the Company has determined that it has adequate historical data regarding the volatility of its own publicly-traded stock price. The expected term of the Company’s stock options has been determined using the “simplified” method for awards that qualify as “plain vanilla” options. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The Company uses an expected 92 Table of Contents dividend yield of zero because the Company has never paid cash dividends and does not expect to pay cash dividends in the future. ​ The fair value of each RSU is measured using the closing price of the Company’s common stock on the date of grant. ​ Patent Costs ​ All patent related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses. ​ Income Taxes ​ The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. ​ The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more likely than not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves and unrecognized tax benefits that are considered appropriate, as well as the related net interest and penalties. ​ Comprehensive Loss ​ Comprehensive loss includes net loss as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. Comprehensive loss is primarily composed of net loss and unrealized gains (losses) on marketable securities. ​ Net Loss per Share ​ Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the sum of the weighted average number of common shares outstanding during the period, plus the weighted average number of potential shares of common stock from the assumed exercise of stock options and the assumed vesting of RSUs, if dilutive. Since the Company was in a net loss position, basic and diluted net loss per share were the same for each of the periods presented. ​ Fair Value Measurements ​ Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial 93 Table of Contents assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: ​ ● Level 1 — Quoted prices in active markets for identical assets or liabilities. ​ ● Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. ​ ● Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. ​ The Company’s cash equivalents, marketable securities and contingent consideration are carried at fair value, determined according to the fair value hierarchy described above. The carrying value of the Company’s accounts payable and accrued expenses approximate fair value due to the short-term nature of these liabilities. ​ Concentration of Credit Risk and of Significant Suppliers ​ Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents and marketable securities. The Company holds all cash, cash equivalents and marketable securities balances at three accredited financial institutions, the majority of which are in amounts that exceed or are not subject to federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. ​ The Company is dependent on third-party manufacturers to supply drug product, including all underlying components, for its research and development activities, including preclinical and clinical testing. These activities could be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients or other components. ​ Segment Reporting ​ Operating segments are components of a company for which separate financial information is available and evaluated regularly by the chief operating decision maker (“CODM”) in assessing performance and deciding how to allocate resources. The Company considers its Chief Executive Officer to be its CODM. ​ Historically, the Company had concluded it operated as two reportable segments, therapeutics and contract research. In December 2025, the Company reevaluated its operating segments and concluded it operates and reports as one reportable segment. The Company’s conclusion is based on changes to the discrete financial reporting information regularly provided to the CODM for the purpose of making operating decisions, assessing financial performance, and allocating resources. Certain prior year amounts have been reclassified to conform to the current year presentation. Such reclassifications had no effect on the previously reported results of operations or financial position. ​ The Company’s reportable segment focuses on identifying and developing innovative therapies to address significant unmet needs for immuno-inflammatory diseases. The segment earns revenue through the licensing of its intellectual property and the provision of laboratory services. As of December 31, 2025 and 2024, all of the Company’s assets were held in the United States. ​ Recently Issued Accounting Pronouncements ​ In December 2025, the FASB issued Accounting Standards Update (“ASU”) No. 2025-12, “Interim Reporting (Topic 270): Narrow-Scope Improvements.” This standard clarifies interim disclosure requirements and the applicability of Topic 270. The ASU becomes effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently assessing the impact of this ASU. ​ In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” This standard requires disclosure of additional information about specific expense categories in the notes to financial statements 94 Table of Contents on an annual and interim basis. This ASU becomes effective for annual periods beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently assessing the impact of this ASU. ​ In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This standard enhances disclosures related to income taxes, including the rate reconciliation and information on income taxes paid. The Company adopted ASU No. 2023-09 effective December 31, 2025, on a prospective basis, the impact of which is limited to additional income tax disclosures in the notes to the Company’s consolidated financial statements. ​ 3. Fair Value of Financial Assets and Liabilities ​ The following tables present information about the fair value measurements of the Company’s financial assets and liabilities which are measured at fair value on a recurring and non-recurring basis, and indicate the level of the fair value hierarchy utilized to determine such fair values: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 (In thousands) ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 ​ ​ ​ Total Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents ​ $ 16,302 ​ $ — ​ $ — ​ $ 16,302 Marketable securities ​ — ​ ​ 131,403 ​ ​ — ​ ​ 131,403 Total assets ​ $ 16,302 ​ $ 131,403 ​ $ — ​ $ 147,705 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration ​ $ — ​ $ — ​ $ 11,000 ​ $ 11,000 Total liabilities ​ $ — ​ $ — ​ $ 11,000 ​ $ 11,000 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 (In thousands) ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 ​ ​ ​ Total Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents ​ $ 22,245 ​ $ — ​ $ — ​ $ 22,245 Marketable securities ​ — ​ ​ 179,326 ​ ​ — ​ ​ 179,326 Total assets ​ $ 22,245 ​ $ 179,326 ​ $ — ​ $ 201,571 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration ​ $ — ​ $ — ​ $ 8,700 ​ $ 8,700 Total liabilities ​ $ — ​ $ — ​ $ 8,700 ​ $ 8,700 ​ As of December 31, 2025 and 2024, the Company’s cash equivalents consisted of money market funds, which were valued based upon Level 1 inputs. The Company’s marketable securities as of December 31, 2025 consisted of corporate debt securities and U.S. government debt securities, which were all valued based upon Level 2 inputs. The Company’s marketable securities as of December 31, 2024 consisted of commercial paper, corporate debt securities, foreign government agency debt securities, and U.S. government and government agency debt securities, which were all valued based upon Level 2 inputs. ​ In determining the fair value of its Level 2 investments, the Company relied on quoted prices for identical securities in markets that are not active. These quoted prices were obtained by the Company with the assistance of a third-party pricing service based on available trade, bid and other observable market data for identical securities. During the years ended December 31, 2025 and 2024, there were no transfers into or out of Level 3. ​ The overall $ 2.3 million increase in the fair value of the contingent consideration liability during the year ended December 31, 2025 was primarily due to changes to the probability of success for certain product candidates and the passage of time. ​ 95 Table of Contents As of December 31, 2025 and 2024 the fair value of the Company’s available-for-sale marketable securities by type of security was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Book ​ Unrealized ​ Unrealized ​ Fair (In thousands) ​ Value ​ Gain ​ Loss ​ Value Marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate debt securities (1) ​ $ 85,222 ​ $ 373 ​ $ — ​ $ 85,595 U.S. government debt securities (2) ​ ​ 45,571 ​ ​ 237 ​ ​ — ​ ​ 45,808 Total marketable securities ​ $ 130,793 ​ $ 610 ​ $ — ​ $ 131,403 (1) Included in Corporate debt securities is $ 45.4 million with maturity dates between one and three years . (2) Included in U.S. government debt securities is $ 15.2 million with maturity dates between one and three years . ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Book ​ Unrealized ​ Unrealized ​ Fair (In thousands) ​ Value ​ Gain ​ Loss ​ Value Marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate debt securities (1) ​ $ 105,154 ​ $ 192 ​ $ ( 156 ) ​ $ 105,190 Commercial paper ​ ​ 4,720 ​ ​ — ​ ​ ( 1 ) ​ ​ 4,719 Foreign government agency debt securities ​ ​ 4,911 ​ ​ 16 ​ ​ — ​ ​ 4,927 U.S. government and government agency debt securities (2) ​ ​ 64,454 ​ ​ 47 ​ ​ ( 11 ) ​ ​ 64,490 Total marketable securities ​ $ 179,239 ​ $ 255 ​ $ ( 168 ) ​ $ 179,326 (1) Included in Corporate debt securities is $ 59.8 million with maturity dates between one and three years . (2) Included in U.S. government and government agency debt securities is $ 30.5 million with maturity dates between one and three years . ​ ​ 4. Accrued Expenses ​ Accrued expenses consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (In thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 Employee compensation expenses ​ $ 5,298 ​ $ 4,979 Research and development expenses ​ ​ 1,612 ​ ​ 2,173 Deferred transaction consideration ​ ​ — ​ ​ 3,927 Licensing expenses ​ ​ 1,377 ​ ​ 8,645 Other expenses ​ 504 ​ 609 Total accrued expenses ​ $ 8,791 ​ $ 20,333 ​ ​ 5. Stockholders’ Equity ​ Preferred Stock ​ As of December 31, 2025 and 2024, the Company’s amended and restated certificate of incorporation (as amended, the “Charter”) authorized the Company to issue 10,000,000 shares of undesignated preferred stock. There were no shares of preferred stock outstanding as of December 31, 2025 and 2024. ​ Common Stock ​ On June 5, 2025, at the 2025 Annual Meeting of Stockholders, the Company’s stockholders approved an amendment to the Charter to increase the authorized number of shares of common stock from 200,000,000 shares to 400,000,000 shares. On June 5, 2025, the Company filed a Certificate of Amendment to the Charter with the Secretary of State of the State of Delaware, which became effective upon filing. ​ 96 Table of Contents As of December 31, 2025 and 2024, the Company’s Charter authorized the Company to issue 400,000,000 and 200,000,000 shares of $ 0.00001 par value common stock, respectively. There were 120,499,433 and 107,850,124 shares of common stock issued and outstanding as of December 31, 2025 and 2024, respectively. ​ Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors, if any, subject to any preferential dividend rights of any series of preferred stock that may be outstanding. No dividends have been declared through December 31, 2025. ​ Warrants ​ In November 2024, the Company issued warrants to Biosion and Chia Tai Tianqing Pharmaceutical Group, Co., Ltd. (“CTTQ”) to purchase, in the aggregate, 14,281,985 shares of the Company’s common stock (the “Warrants”). The Warrants have an initial exercise price of $ 0.00001 per share, subject to adjustment as provided in the Warrants. The Warrants are immediately exercisable, subject to any applicable overseas direct investment filing that may be required for the holders. The Warrants will terminate when exercised in full. The Company classified the Warrants within equity because they are indexed to the Company’s own stock. The Company assigned an estimated fair value of $ 44.8 million to the Warrants, which was based on the fair value of the Company’s common stock on the date of issuance less the nominal exercise price of $ 0.00001 per share. ​ In December 2025, Biosion exercised 11,281,985 Warrants. As of December 31, 2025, 3,000,000 Warrants remained unexercised. ​ Private Placement ​ In November 2024, the Company closed a private placement in which it sold approximately 35.6 million shares of its common stock for aggregate gross proceeds of $ 80.0 million. The Company paid placement agent and other fees of $ 5.1 million in connection with the private placement. ​ 6. Stock-Based Awards ​ 2025 Equity Incentive Plan ​ In April 2025, the Company’s board of directors adopted the 2025 Equity Incentive Plan (the “2025 Plan”), and in June 2025, the Company’s stockholders approved the 2025 Plan. Upon the 2025 Plan becoming effective, no further grants can be made under the Company’s 2015 Equity Incentive Plan (the “2015 Plan”). The 2025 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, RSU awards, cash-based awards, and other stock-based awards. The number of shares initially reserved for issuance under the 2025 Plan was 25,532,993 shares of common stock, which includes (i) 9,000,000 new shares of common stock, (ii) 3,957,232 shares of common stock that remained available for future grant under the 2015 Plan upon adoption of the 2025 Plan and (iii) up to 12,575,761 shares of common stock underlying outstanding awards under the 2015 Plan and the former 2012 Equity Compensation Plan, which may become available for issuance under the 2025 Plan if and as such awards expire, are otherwise terminated, settled in cash, or repurchased by the Company. The shares of common stock underlying any awards that expire, or are otherwise terminated, settled in cash or repurchased by the Company under the 2025 Plan will be added back to the shares of common stock available for issuance under the 2025 Plan. As of December 31, 2025, 12,442,759 shares remained available for grant under the 2025 Plan. The Company had 1,007,910 stock options and 320,840 RSUs outstanding as of December 31, 2025 under the 2025 Plan. ​ 97 Table of Contents 2024 Inducement Plan ​ In November 2024, the Company’s board of directors adopted the 2024 Inducement Plan (the “2024 Inducement Plan”). The 2024 Inducement Plan is a non-stockholder approved stock plan adopted pursuant to the “inducement exception” provided under Nasdaq listing rules. The only employees eligible to receive grants of awards under the 2024 Inducement Plan are individuals who satisfy the standards for inducement grants under Nasdaq rules, generally including individuals who were not previously an employee or director of the Company. Under the terms of the 2024 Inducement Plan, the Company may grant up to 2,000,000 shares of common stock pursuant to nonqualified stock options, stock appreciation rights, restricted stock awards, RSU awards, and other stock awards. The shares of common stock underlying any awards that expire, or are otherwise terminated, settled in cash or repurchased by the Company under the 2024 Inducement Plan will be added back to the shares of common stock available for issuance under the 2024 Inducement Plan. As of December 31, 2025, 493,500 shares remained available for grant under the 2024 Inducement Plan. The Company had 1,172,000 stock options and 302,500 RSUs outstanding as of December 31, 2025 under the 2024 Inducement Plan. ​ 2017 Inducement Plan ​ In July 2017, the Company’s board of directors adopted the 2017 Inducement Plan (the “2017 Inducement Plan”). The 2017 Inducement Plan is a non-stockholder approved stock plan adopted pursuant to the “inducement exception” provided under Nasdaq listing rules. The Company had 325,000 stock options outstanding as of December 31, 2025 under the 2017 Inducement Plan. All shares of common stock that were eligible for issuance under the 2017 Inducement Plan after October 1, 2018, including any shares underlying any awards that expire or are otherwise terminated, reacquired to satisfy tax withholding obligations, settled in cash or repurchased by the Company in the future that would have been eligible for re-issuance under the 2017 Inducement Plan, were retired. ​ 2015 Equity Incentive Plan ​ In September 2015, the Company’s board of directors adopted the 2015 Plan, and the Company’s stockholders approved the 2015 Plan. The 2015 Plan became effective in connection with the Company’s initial public offering in October 2015. Upon the 2025 Plan becoming effective, no further grants can be made under the 2015 Plan. The Company had 8,764,489 stock options and 2,179,891 RSUs outstanding as of December 31, 2025 under the 2015 Plan. ​ Stock Option Valuation ​ The weighted average assumptions the Company used to estimate the fair value of stock options granted during the years ended December 31, 2025 and 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2025 ​ ​ 2024 ​ Risk-free interest rate 4.26 % ​ 3.91 % Expected term (in years) 6.2 ​ ​ 6.0 ​ Expected volatility 82.79 % ​ 81.62 % Expected dividend yield 0 % ​ 0 % ​ The Company recognizes compensation expense for awards over their vesting period. Compensation expense for awards includes the impact of forfeitures in the period when they occur. ​ 98 Table of Contents Stock Options ​ The following table summarizes stock option activity for the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ Aggregate ​ ​ Number ​ Exercise ​ Contractual ​ Intrinsic (In thousands, except share and per share data and years) ​ of Shares ​ Price ​ Term ​ Value ​ ​ ​ ​ ​ ​ ​ (in years) ​ ​ ​ Outstanding as of December 31, 2023 ​ 6,419,455 ​ $ 15.94 7.1 ​ $ 14 Granted ​ 2,608,700 ​ 1.86 ​ ​ ​ ​ ​ Exercised ​ ( 162,388 ) ​ 1.31 ​ ​ ​ ​ 285 Forfeited and cancelled ​ ( 2,143,800 ) ​ 15.06 ​ ​ ​ ​ ​ Outstanding as of December 31, 2024 6,721,967 ​ $ 11.12 ​ 6.8 ​ $ 2,968 Granted 5,407,305 ​ ​ 2.18 ​ ​ ​ ​ ​ Forfeited and cancelled ( 859,873 ) ​ ​ 13.32 ​ ​ ​ ​ ​ Outstanding as of December 31, 2025 11,269,399 ​ $ 6.72 ​ 7.7 ​ $ 8,597 Options vested and expected to vest as of December 31, 2025 11,269,399 ​ $ 6.72 ​ 7.7 ​ $ 8,597 Options exercisable as of December 31, 2025 4,174,406 ​ $ 12.72 ​ 5.8 ​ $ 2,503 ​ The weighted average grant date fair value of stock options granted during the years ended December 31, 2025 and 2024 was $ 1.61 and $ 1.34 per share, respectively. ​ Restricted Stock Units ​ The following table summarizes RSU activity for the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ Grant Date ​ Aggregate ​ ​ Number ​ Fair Value ​ Intrinsic (In thousands, except share and per share data) ​ of Shares ​ Per Share ​ Value Outstanding as of December 31, 2023 ​ 1,521,940 ​ $ 15.72 ​ ​ ​ Granted ​ 2,852,573 ​ ​ 1.39 ​ ​ ​ Vested ​ ( 1,473,327 ) ​ ​ 5.51 ​ $ 2,959 Forfeited and cancelled ​ ( 625,035 ) ​ ​ 13.03 ​ ​ ​ Outstanding as of December 31, 2024 ​ 2,276,151 ​ $ 5.12 ​ ​ ​ Granted ​ 2,190,582 ​ ​ 2.26 ​ ​ ​ Vested ​ ( 1,537,652 ) ​ ​ 4.26 ​ $ 4,122 Forfeited and cancelled ​ ( 125,850 ) ​ ​ 4.31 ​ ​ ​ Outstanding as of December 31, 2025 ​ 2,803,231 ​ $ 3.40 ​ ​ ​ ​ Stock-Based Compensation ​ Stock-based compensation expense included in total costs and expenses on the consolidated statement of operations and comprehensive loss included the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (In thousands) 2025 2024 Cost of revenue ​ $ 788 ​ ​ ​ $ 938 Research and development ​ ​ 4,258 ​ ​ 3,135 General and administrative ​ 7,338 ​ 6,783 Total stock-based compensation expense ​ $ 12,384 ​ $ 10,856 ​ As of December 31, 2025, the Company had unrecognized stock-based compensation expense for stock options and RSUs of $ 11.1 million and $ 6.1 million, respectively, which is expected to be recognized over weighted average 99 Table of Contents periods of 2.5 years and 2.3 years, respectively. ​ 7. Net Loss per Share ​ Basic and diluted net loss per share is summarized in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (In thousands, except for share and per share data) ​ ​ ​ 2025 ​ ​ ​ 2024 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 64,923 ) ​ $ ( 132,065 ) Denominator: ​ ​ ​ ​ ​ ​ Weighted average shares of common stock outstanding, basic and diluted ​ 122,564,741 ​ 77,296,665 Net loss per share, basic and diluted ​ $ ( 0.53 ) ​ $ ( 1.71 ) ​ The Company’s potentially dilutive securities, which included stock options and RSUs, have been excluded from the computation of diluted net loss per share since the effect would be to reduce the net loss per share. Therefore, the weighted average number of shares of common stock outstanding used to calculate both basic and diluted net loss per share is the same. For the years ended December 31, 2025 and 2024, the basic and diluted weighted average shares outstanding included the shares of common stock issuable upon exercise of the outstanding Warrants, as there were no outstanding contingencies associated with the vesting or exercisability of the Warrants. ​ The following table presents potential shares of common stock excluded from the calculation of diluted net loss per share for the years ended December 31, 2025 and 2024. All share amounts presented in the table below represent the total number outstanding as of December 31, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2025 ​ 2024 Options to purchase common stock ​ 11,269,399 ​ 6,721,967 Restricted stock units ​ 2,803,231 ​ 2,276,151 Total potential shares of common stock ​ 14,072,630 ​ 8,998,118 ​ ​ 8. Leases ​ The Company has operating leases for office space and laboratory facilities. Rent expense was $ 0.8 million and $ 0.9 million for the years ended December 31, 2025 and 2024, respectively, which was recognized on a straight-line basis over the term of the lease. ​ Operating Leases ​ Agreements for Office and Laboratory Space ​ In May 2023, the Company entered into a lease agreement pursuant to which it leases 11,564 square feet of office space for its headquarters in Wayne, Pennsylvania. The lease commenced in November 2023 and has a term that runs through February 2029. ​ In February 2019, the Company entered into a sublease agreement for 20,433 square feet of office and laboratory space in St. Louis, Missouri. The lease commenced in June 2019 and has a term that runs through May 2029. In January 2023, the Company amended the sublease agreement to add an additional 6,261 square feet of office and laboratory space effective February 2023. The Company exercised its option to terminate the leasing of the additional space effective as of June 30, 2024. ​ 100 Table of Contents Supplemental balance sheet information related to operating leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (In thousands) ​ 2025 ​ 2024 Operating Leases: ​ ​ ​ ​ ​ ​ Gross cost ​ $ 4,530 ​ $ 4,530 Accumulated amortization ​ ​ ( 2,245 ) ​ ​ ( 1,688 ) Other assets ​ $ 2,285 ​ $ 2,842 ​ ​ ​ ​ ​ ​ ​ Current portion of lease liabilities ​ $ 551 ​ $ 481 Other liabilities ​ ​ 1,565 ​ ​ 2,117 Total operating lease liabilities ​ $ 2,116 ​ $ 2,598 ​ Amortization expense related to operating lease right-of-use assets and accretion of operating lease liabilities totaled $ 0.6 million and $ 0.5 million for the years ended December 31, 2025 and 2024, respectively. ​ Supplemental information related to operating leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended (In thousands, except for years and percentages) ​ December 31, Supplemental Cash Flow Lease Information: ​ 2025 ​ 2024 Operating cash flows from operating leases ​ $ 755 ​ $ 736 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average Remaining Lease Term (in years): ​ ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 3.3 ​ ​ 4.3 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average Discount Rate: ​ ​ ​ ​ ​ ​ ​ Operating leases ​ ​ 10.1 % ​ 10.1 % ​ Future minimum lease payments under operating lease agreements are as follows: ​ ​ ​ ​ ​ (In thousands) ​ ​ Operating Year Ending December 31, ​ ​ ​ Leases 2026 ​ ​ 711 2027 ​ ​ 760 2028 ​ ​ 779 2029 ​ ​ 260 Total undiscounted lease payments ​ ​ 2,511 Less: unrecognized interest ​ ​ ( 395 ) Total lease liability ​ $ 2,116 ​ ​ 9. Income Taxes ​ During the years ended December 31, 2025 and 2024, the Company did not record an income tax benefit for net operating losses incurred in each year due to the uncertainty of realizing a benefit from those items. ​ Loss before income taxes is allocated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) ​ 2025 ​ 2024 U.S. operations ​ $ ( 64,923 ) ​ $ ( 132,065 ) Foreign operations ​ ​ — ​ ​ — Loss before income taxes ​ $ ( 64,923 ) ​ $ ( 132,065 ) ​ 101 Table of Contents A reconciliation of the provision for income taxes to the amount computed by applying the 21 % U.S. federal statutory income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows: ​ ​ ​ ​ ​ ​ ​ (In thousands, except percentages) ​ Year Ended December 31, 2025 Federal taxes at U.S. statutory income tax rate ​ ​ ​ $ ( 13,634 ) ( 21.0 ) % Tax credits ​ ​ ​ ​ ​ Research and development tax credits ​ ​ ( 2,531 ) ( 3.9 ) Change in valuation allowance ​ ​ 14,366 22.1 ​ Non-taxable or non-deductible items ​ ​ ​ ​ ​ Non-deductible royalty payments ​ ​ 726 1.1 ​ Other non-deductible items ​ ​ 1,073 1.7 ​ Effective income tax rate ​ $ — 0.0 % ​ A reconciliation of the provision for income taxes to the amount computed by applying the 21 % U.S. federal statutory income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows: ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, 2024 Federal statutory income tax rate ​ ​ ​ ( 21.0 ) % State taxes, net of federal benefit ​ ( 2.1 ) Impact of state rate changes ​ ( 1.1 ) ​ Research and development tax credits ​ ( 1.1 ) Excess equity compensation tax benefit, net of officer limitation ​ 0.8 ​ Revaluation of contingent consideration ​ 0.4 ​ Non-deductible royalty payments ​ 1.8 ​ Change in deferred tax asset valuation allowance ​ 22.1 ​ Other ​ 0.2 ​ Effective income tax rate ​ ( 0.0 ) % ​ Deferred tax liabilities, net consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) ​ 2025 ​ 2024 Deferred tax assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net operating loss carryforwards ​ $ 123,685 ​ $ 120,361 Capitalized start-up costs ​ ​ 2,949 ​ ​ 3,469 Research and development tax credit carryforwards ​ 2,531 ​ 21,954 Section 174 research and development capitalization ​ ​ 21,396 ​ ​ 31,185 Capitalized research and development expense ​ 1,820 ​ 2,145 Stock‑based compensation expense ​ 20,093 ​ 19,101 Accrued compensation ​ ​ 796 ​ ​ 791 Lease liabilities ​ ​ 474 ​ ​ 588 Deferred income ​ ​ 4,536 ​ ​ 5,510 IPR&D ​ ​ 19,534 ​ ​ 20,004 Other ​ 397 ​ 408 Total deferred tax assets ​ 198,211 ​ 225,516 Deferred tax liabilities: ​ ​ ​ ​ ​ ​ Property and equipment ​ ​ ( 31 ) ​ ​ ( 56 ) Right-to-use assets ​ ​ ( 510 ) ​ ​ ( 642 ) Other ​ ( 559 ) ​ ( 458 ) Total deferred tax liabilities ​ ( 1,100 ) ​ ( 1,156 ) Valuation allowance ​ ( 197,111 ) ​ ( 224,360 ) Deferred tax liabilities, net ​ $ — ​ $ — ​ 102 Table of Contents As of December 31, 2025, the Company had federal and state net operating loss (“NOL”) carryforwards of $ 568.2 million and $ 100.7 million, respectively, which will begin to expire in 2032. As of December 31, 2025, the Company also had federal research and development tax credit carryforwards of $ 2.5 million which will begin to expire in 2045. ​ Utilization of the NOLs and research and development tax credit carryforwards in the United States are subject to annual limitations under Section 382 of the Internal Revenue Code of 1986 due to ownership changes that have occurred previously or that could occur in the future. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than 50% over a three-year period. ​ The Company completed an analysis under Section 382 for NOLs generated through December 31, 2024, and concluded that an ownership change occurred as of December 30, 2024. As a result of this ownership change a component of the Company’s research and development credits and state NOL carryforwards will expire prior to utilization. Accordingly, the Company has recorded an adjustment to write down its research and development credit and state NOL deferred tax assets in the amount of $ 21.9 million and $ 19.0 million, respectively. The write down of these deferred tax assets resulted in a corresponding adjustment to the Company’s valuation allowance. ​ The Company may experience ownership changes in the future as a result of subsequent shifts in its stock ownership, some of which may be outside of the Company’s control. These future ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. ​ The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets. The Company considered its history of cumulative net losses incurred since inception, its lack of substantial revenue generated to date, and its forecasted future operating losses and concluded that it is more likely than not that the Company will not realize the benefits of its deferred tax assets. Accordingly, a full valuation allowance has been established against the deferred tax assets as of December 31, 2025 and 2024. The Company evaluates positive and negative evidence of its ability to realize deferred tax assets at each reporting period. ​ Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2025 and 2024, which related primarily to the increases in NOLs, capitalized research and development costs, and research and development tax credit carryforwards, offset by decreases to deferred tax assets associated with research and development tax credits and state NOL carryforwards due to the Section 382 ownership change described above, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) ​ ​ 2025 ​ ​ 2024 Valuation allowance at beginning of year ​ $ ( 224,360 ) ​ ​ ​ $ ( 195,124 ) Decreases recorded as benefit to income tax provision ​ 27,249 ​ — Increases recorded to income tax provision ​ — ​ ( 29,236 ) Valuation allowance as of end of year ​ $ ( 197,111 ) ​ $ ( 224,360 ) ​ The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. There are currently no pending income tax examinations. The Company’s tax years are still open under statute from 2022 to the present. All open years may be examined to the extent that tax credits or NOLs are used in future periods. The Company’s policy is to record interest and penalties related to income taxes as part of its income tax provision. The Company has no t recorded any amounts for unrecognized tax benefits as of December 31, 2025 and 2024. ​ 10. Related Party Transaction ​ In November 2024, Anand Mehra, a member of the Company’s board of directors, purchased 666,666 shares of the Company’s common stock at a price per share of $ 2.25 in connection with a private placement. ​ 11. Agreements Related to Intellectual Property ​ Exclusive License Agreement – Biosion, Inc. ​ In November 2024, the Company entered into an exclusive license agreement (the “Biosion Agreement”) with 103 Table of Contents Biosion, pursuant to which it received the exclusive rights to develop, manufacture and commercialize bosakitug (ATI-045) and ATI-052 worldwide, excluding Mainland China, Macau, Hong Kong and Taiwan (“Greater China”). In connection with the Biosion Agreement, the Company also entered into a collaboration agreement (the “CTTQ Agreement”, and together with the Biosion Agreement, the ‘Biosion Agreements”) with Biosion and CTTQ, a licensee of bosakitug in Greater China. ​ As partial consideration for the rights and licenses under the Biosion Agreements, the Company, in the aggregate, (i) paid $ 30.0 million in upfront cash consideration, plus $ 4.5 million for the reimbursement of certain development costs, (ii) issued the Warrants, and (iii) paid $ 6.2 million for the reimbursement of certain development costs and drug product material. The Company made cash payments of $ 6.2 million and $ 34.5 million as set forth in the Biosion Agreements during the years ended December 31, 2025 and 2024, respectively. ​ In addition, the Company agreed to pay, in the aggregate, (i) up to $ 125 million upon the achievement of specified regulatory milestones commencing with product approval, (ii) up to $ 795 million upon the achievement of specified sales milestones, (iii) a tiered low-to-mid single digit royalty based upon a percentage of annual net sales, subject to specified reductions as set forth in the Biosion Agreement, and (iv) a portion of any sublicense consideration received from the grant of any sublicense or similar rights under any of the rights or licenses granted to the Company under the Biosion Agreement. The Company will expense these payments in the period when either they are determined to be probable of occurring or when the payment is triggered. ​ License Agreement – Sun Pharmaceutical Industries, Inc. ​ In December 2023, the Company entered into an exclusive patent license agreement with Sun Pharmaceutical Industries, Inc. (“Sun Pharma”). Under the license agreement, the Company granted Sun Pharma exclusive rights under certain patents that the Company exclusively licenses from a third party. The patents relate to the use of deuruxolitinib, Sun Pharma’s Janus kinase (“JAK”) inhibitor, or other isotopic forms of ruxolitinib, to treat alopecia areata or androgenetic alopecia. Under the license agreement, Sun Pharma has paid the Company upfront, regulatory and commercial milestone payments, and has agreed to pay the Company other regulatory and commercial milestone payments upon the achievement of specified milestones set forth in the agreement, and a mid single-digit tiered royalty calculated as a percentage of Sun Pharma’s net sales. The Company has separate contractual obligations under which the Company has agreed to pay to third parties a portion of the consideration it may receive under the license agreement. ​ The Company recognized $ 1.2 million and $ 3.0 million of licensing revenue during the years ended December 31, 2025 and 2024, respectively, a portion of which was payable to third parties . ​ License Agreement – Pediatrix Therapeutics, Inc. ​ In November 2022, the Company entered into a license agreement with Pediatrix Therapeutics, Inc. (“Pediatrix”), under which the Company granted Pediatrix the exclusive rights to develop, manufacture and commercialize lepzacitinib in Greater China. Pediatrix has paid the Company an upfront payment, and has agreed to pay the Company development, regulatory and commercial milestone payments upon the achievement of specified milestones set forth in the agreement, and a tiered royalty ranging from a low-to-high single digit percentage of net sales of lepzacitinib by Pediatrix in Greater China. A portion of the consideration received from Pediatrix is payable to the former Confluence equity holders as described below under the caption “—Agreement and Plan of Merger - Confluence.” ​ License Agreement – Eli Lilly and Company ​ In August 2022, the Company entered into a non-exclusive patent license agreement with Eli Lilly and Company (“Lilly”). Under the license agreement, the Company granted Lilly non-exclusive rights under certain patents and patent applications that the Company exclusively licenses from a third party. The patents and patent applications relate to the use of baricitinib, Lilly’s JAK inhibitor, to treat alopecia areata. Under the license agreement, Lilly has paid the Company upfront, anniversary, regulatory and commercial milestone payments. In addition, Lilly has agreed to pay the Company other commercial milestone payments upon the achievement of specified milestones and additional anniversary payments as set forth in the agreement, as well as a low single-digit royalty calculated as a percentage of Lilly’s net sales of baricitinib for the treatment of alopecia areata. The Company has separate contractual obligations under which the Company has agreed to pay to third parties an amount equal to any regulatory and commercial milestone payments it receives under the Lilly license agreement, as well as a portion of the upfront consideration and a portion of the royalties it may receive under 104 Table of Contents the license agreement. In July 2024, the Company entered into a royalty purchase agreement with OCM IP Healthcare Portfolio LP, an investment vehicle for Ontario Municipal Employees Retirement System (“OMERS”), pursuant to which the Company sold to OMERS a portion of the Company’s future royalty payments and the remaining anniversary milestones associated with the license to Lilly (see Note 12). During the year ended December 31, 2025, the Company recognized licensing revenue of $ 4.8 million, all of which was payable to third parties. During the year ended December 31, 2024, the Company recognized licensing revenue of $ 13.2 million, a portion of which was payable to third parties. As of December 31, 2024, a receivable of $ 8.6 million was recognized in other current assets, which represents licensing revenue that was due to third parties. Asset Purchase Agreement – EPI Health, LLC In October 2019, the Company sold RHOFADE (oxymetazoline hydrochloride) cream, 1 % (“RHOFADE”) to EPI Health, LLC (“EPI Health”) pursuant to an asset purchase agreement. In July 2023, EPI Health filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. Through the bankruptcy process, EPI Health and its parent company, Novan, Inc., sold the RHOFADE assets to a third party, which excluded the Company’s asset purchase agreement with EPI Health and the outstanding amounts due. The sale was approved by the bankruptcy court in September 2023. As a result of the bankruptcy proceedings, all amounts that were due and outstanding by EPI Health had been fully reserved. In September 2025, the Company sold all of its right, title and interest in its bankruptcy claims against EPI Health and wrote off the remaining reserved balance as it was deemed uncollectible. Agreement and Plan of Merger – Confluence ​ In August 2017, the Company entered into an Agreement and Plan of Merger, pursuant to which it acquired Confluence (the “Confluence Agreement”). Under the Confluence Agreement, the Company agreed to pay the former Confluence equity holders aggregate remaining contingent consideration of up to $ 75.0 million based upon the achievement of specified regulatory and commercial milestones set forth in the Confluence Agreement. In addition, the Company agreed to pay the former Confluence equity holders future royalty payments calculated as a low single-digit percentage of annual net sales, subject to specified reductions, limitations and other adjustments, until the date that all of the patent rights for that product have expired, as determined on a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first commercial sale of such product. In addition to the payments described above, if the Company sells, licenses or transfers any of the intellectual property acquired from Confluence pursuant to the Confluence Agreement to a third party, the Company will be obligated to pay the former Confluence equity holders a portion of any consideration received from such sale, license or transfer in specified circumstances. ​ As of December 31, 2025 and 2024, the balance of the Company’s contingent consideration liability was $ 11.0 million and $ 8.7 million, respectively (see Note 3). ​ 105 Table of Contents 12. Sale of Future Royalties ​ In July 2024, the Company entered into a royalty purchase agreement with OMERS. Under the royalty purchase agreement, the Company sold to OMERS a portion of the Company’s future royalty payments and the remaining anniversary payments associated with the Company’s existing license to Lilly relating to OLUMIANT® (baricitinib) for the treatment of alopecia areata. ​ Under the terms of the royalty purchase agreement, the Company received an upfront payment of $ 26.5 million. In exchange, OMERS acquired a portion of the royalty payable by Lilly to the Company for worldwide net sales of OLUMIANT for the treatment of alopecia areata from April 1, 2024 through the remainder of the royalty term under the Company’s license agreement with Lilly, and 100 % of the remaining anniversary milestone payments payable by Lilly to the Company under the license agreement. ​ The Company evaluated the arrangement and concluded that the proceeds from the sale of future royalties should be recorded as deferred income on the consolidated balance sheet, as the criteria for debt classification were not met in accordance with ASC Topic 470. In particular, the Company does not have significant continuing involvement in the generation of the cash flows due to OMERS and there are no guaranteed rates of return to OMERS. The Company recognizes non-cash royalty income under the “units-of-revenue” method in the consolidated statements of operations and comprehensive loss. For the years ended December 31, 2025 and 2024, the Company recognized $ 3.8 million and $ 1.9 million of non-cash royalty income, respectively. As of December 31, 2025, the current and non-current portions of the remaining deferred income recognized under the units-of revenue method were $ 3.9 million and $ 16.2 million, respectively. ​ 13. Restructuring Charges ​ In December 2023, the Company’s board of directors approved a reduction of the Company’s workforce by approximately 46 %, which was completed as of December 31, 2024. During the year ended December 31, 2025, the Company made cash severance payments of $ 0.2 million to impacted employees. During the year ended December 31, 2024, the Company recognized severance expense of $ 2.7 million and made cash severance payments of $ 5.6 million to impacted employees. ​ 14. Segment Information ​ The Company operates and reports as one reportable segment, which focuses on identifying and developing innovative therapies to address significant unmet needs for immuno-inflammatory diseases. The segment earns revenue through the licensing of the Company’s intellectual property and the provision of laboratory services. All customers and revenue pertaining to the reportable segment are based in the United States. ​ When evaluating the Company’s financial performance, the CODM regularly reviews consolidated segment loss, total expense, and direct expenses by project. The CODM allocates resources based on the Company’s available cash resources and forecasted expenditures on a consolidated basis. Segment asset information regularly provided to the CODM is consistent with that reported on the consolidated balance sheet with particular emphasis on the Company’s available liquidity, including its cash, cash equivalents and marketable securities balances. ​ 106 Table of Contents ​ The following table presents the significant segment expenses and other segment items regularly reviewed by the CODM for the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ December 31, (In thousands) 2025 ​ 2024 Contract research $ 1,872 ​ $ 2,541 Licensing revenue ​ 5,954 ​ ​ 16,179 Total revenue ​ 7,826 ​ ​ 18,720 Cost of revenue ​ 2,091 ​ ​ 2,792 Research and development: (1) ​ ​ ​ ​ ​ Bosakitug ​ 13,845 ​ ​ 299 ATI-052 ​ 7,074 ​ ​ 1,895 ATI-2138 ​ 4,921 ​ ​ 4,209 ATI-9494 ​ 5,371 ​ ​ 2,360 Discovery ​ 3,872 ​ ​ 3,415 Total research and development project expenses ​ 35,083 ​ ​ 12,178 Personnel ​ 11,816 ​ ​ 11,446 Other research and development (2) ​ 5,746 ​ ​ 9,962 Total research and development ​ 52,645 ​ ​ 33,586 General and administrative (3) ​ 21,972 ​ ​ 22,203 Licensing ​ 5,193 ​ ​ 12,666 Revaluation of contingent consideration ​ 2,300 ​ ​ 2,500 In-process research and development ​ — ​ ​ 86,905 Segment operating loss $ ( 76,375 ) ​ $ ( 141,932 ) Other income ​ 11,452 ​ ​ 9,867 Segment loss before income taxes $ ( 64,923 ) ​ $ ( 132,065 ) (1) Research and development expenses primarily consist of direct costs incurred to specific programs, including costs to conduct clinical trials and to manufacture clinical drug supply. (2) Other research and development expenses primarily consist of indirect costs incurred in support of overall research and development activities and non-specific programs, including activities that benefit multiple programs, as well as stock-based compensation. (3) General and administrative expenses consist principally of salaries and related costs, including stock-based compensation, for personnel in executive, administrative, finance and legal functions, as well as facility-related costs, professional fees, business development costs, insurance costs, and travel expenses. ​ ​ ​ 107 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ​ None. ​