Aclaris Therapeutics, Inc. 10-Q

Item 1. Financial Statements ACLARIS THERAPEUTICS, INC. CONDENSED CONSOLIDATED BALANCE SHEET S (Unaudited) ​ (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ ​ ​ ​ Assets ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 28,660 ​ $ 19,960 Short-term marketable securities ​ 76,756 ​ 70,791 Accounts receivable, prepaid expenses and other current assets ​ 4,814 ​ 5,565 Total current assets ​ 110,230 ​ 96,316 Marketable securities ​ 85,372 ​ 60,612 Property and equipment, net ​ 750 ​ 761 Other assets ​ 2,368 ​ 2,771 Total assets ​ $ 198,720 ​ $ 160,460 Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ Accounts payable ​ $ 14,731 ​ $ 13,158 Accrued expenses ​ 5,896 ​ 8,791 Deferred income ​ ​ 3,972 ​ ​ 3,943 Other current liabilities ​ ​ 2,771 ​ ​ 2,753 Total current liabilities ​ 27,370 ​ 28,645 Other liabilities ​ ​ 1,416 ​ 1,565 Deferred income, net of current portion ​ ​ 15,285 ​ ​ 16,168 Contingent consideration ​ ​ 11,000 ​ ​ 11,000 Total liabilities ​ 55,071 ​ 57,378 Stockholders’ Equity: ​ ​ ​ ​ ​ ​ Preferred stock, $ 0.00001 par value; 10,000,000 shares authorized and no shares issued or outstanding at March 31, 2026 and December 31, 2025 ​ ​ — ​ ​ — Common stock, $ 0.00001 par value; 400,000,000 shares authorized at March 31, 2026 and December 31, 2025; 139,652,849 and 120,499,433 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively ​ 1 ​ 1 Additional paid‑in capital ​ 1,131,234 ​ 1,070,255 Accumulated other comprehensive income ​ 22 ​ 610 Accumulated deficit ​ ( 987,608 ) ​ ( 967,784 ) Total stockholders’ equity ​ 143,649 ​ 103,082 Total liabilities and stockholders’ equity ​ $ 198,720 ​ $ 160,460 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 2 Table of Contents ACLARIS THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) ​ (In thousands, except share and per share data) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Revenues: ​ ​ ​ ​ ​ ​ Contract research ​ $ 537 ​ $ 445 Licensing ​ ​ 1,459 ​ ​ 1,010 Total revenue ​ ​ 1,996 ​ ​ 1,455 ​ ​ ​ ​ ​ ​ ​ Costs and expenses: ​ ​ ​ ​ ​ ​ Cost of revenue ​ ​ 395 ​ ​ 506 Research and development 15,657 ​ 11,584 General and administrative 6,743 ​ 6,139 Licensing ​ ​ 1,393 ​ ​ 1,010 Revaluation of contingent consideration ​ ​ — ​ ​ 300 Total costs and expenses 24,188 ​ 19,539 Loss from operations ( 22,192 ) ​ ( 18,084 ) ​ ​ ​ ​ ​ ​ ​ Other income: ​ ​ ​ ​ ​ ​ Interest income 1,514 ​ 2,166 Non-cash royalty income ​ ​ 854 ​ ​ 833 Total other income ​ ​ 2,368 ​ ​ 2,999 Net loss ​ $ ( 19,824 ) ​ $ ( 15,085 ) Net loss per share, basic and diluted ​ $ ( 0.15 ) ​ $ ( 0.12 ) Weighted average common shares outstanding, basic and diluted ​ ​ 128,810,050 ​ 122,390,303 ​ ​ ​ ​ ​ ​ ​ Other comprehensive (loss) income: ​ ​ ​ ​ ​ ​ Unrealized (loss) gain on marketable securities, net of tax of $ 0 ​ $ ( 588 ) ​ $ 337 Total other comprehensive (loss) income ​ ( 588 ) ​ 337 Comprehensive loss ​ $ ( 20,412 ) ​ $ ( 14,748 ) ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 3 Table of Contents ACLARIS THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) ​ (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, 2025 120,499,433 ​ $ 1 ​ $ 1,070,255 ​ $ 610 ​ $ ( 967,784 ) ​ $ 103,082 Issuance of common stock in connection with exercise of stock options and vesting of restricted stock units 744,453 ​ ​ — ​ ​ ( 99 ) ​ ​ — ​ ​ — ​ ( 99 ) Issuance of common stock under at-the-market sales agreement, net of offering costs of $ 1,884 18,408,963 ​ ​ — ​ ​ 57,880 ​ ​ — ​ ​ — ​ ​ 57,880 Unrealized loss on marketable securities — ​ ​ — ​ ​ — ​ ​ ( 588 ) ​ ​ — ​ ( 588 ) Stock-based compensation expense — ​ ​ — ​ ​ 3,198 ​ ​ — ​ ​ — ​ ​ 3,198 Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 19,824 ) ​ ( 19,824 ) Balance at March 31, 2026 139,652,849 ​ $ 1 ​ $ 1,131,234 ​ $ 22 ​ $ ( 987,608 ) ​ $ 143,649 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Additional ​ Other ​ ​ ​ Total ​ ​ ​ Par ​ Paid ‑ in ​ Comprehensive ​ Accumulated ​ Stockholders’ ​ ​Shares ​ Value ​ Capital ​ Income (Loss) ​ Deficit ​ Equity 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 415,405 ​ ​ — ​ ​ ( 275 ) ​ ​ — ​ ​ — ​ ​ ( 275 ) Unrealized gain on marketable securities — ​ ​ — ​ ​ — ​ ​ 337 ​ ​ — ​ ​ 337 Stock-based compensation expense — ​ ​ — ​ ​ 3,535 ​ ​ — ​ ​ — ​ ​ 3,535 Net loss — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 15,085 ) ​ ​ ( 15,085 ) Balance at March 31, 2025 108,265,529 ​ $ 1 ​ $ 1,061,577 ​ $ 434 ​ $ ( 917,946 ) ​ $ 144,066 ​ The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents ACLARIS THERAPEUTICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) ​ (In thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 Cash flows from operating activities : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 19,824 ) ​ $ ( 15,085 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization ​ 102 ​ 128 Stock-based compensation expense ​ 3,198 ​ 3,535 Revaluation of contingent consideration ​ ​ — ​ ​ 300 Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ Accounts receivable, prepaid expenses and other assets ​ 742 ​ 8,276 Accounts payable ​ 1,513 ​ 1,664 Accrued expenses and other liabilities ​ ( 3,026 ) ​ ( 11,042 ) Deferred income ​ ​ ( 854 ) ​ ​ ( 833 ) Net cash used in operating activities ​ ( 18,149 ) ​ ( 13,057 ) Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Purchases of property and equipment ​ ( 13 ) ​ ( 43 ) Purchases of marketable securities ​ ( 51,669 ) ​ ( 9,996 ) Proceeds from sales and maturities of marketable securities ​ 20,750 ​ 29,991 Payments of deferred transaction consideration for in-licensed assets ​ ​ — ​ ​ ( 833 ) Net cash (used in) provided by investing activities ​ ( 30,932 ) ​ 19,119 Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Proceeds from issuance of common stock under the at-the-market sales agreement, net of issuance costs ​ ​ 57,880 ​ ​ — Payments of employee withholding taxes related to restricted stock unit award vesting ​ ​ ( 250 ) ​ ​ ( 275 ) Proceeds from exercise of employee stock options and the issuance of stock ​ ​ 151 ​ ​ — Net cash provided by (used in) financing activities ​ 57,781 ​ ( 275 ) Net increase in cash and cash equivalents ​ 8,700 ​ 5,787 Cash and cash equivalents at beginning of period ​ 19,960 ​ 24,570 Cash and cash equivalents at end of period ​ $ 28,660 ​ $ 30,357 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosure of non-cash investing activities: ​ ​ ​ ​ ​ ​ Additions to property and equipment included in accounts payable ​ $ 60 ​ $ — ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these condensed consolidated financial statements. ​ 5 Table of Contents ACLARIS THERAPEUTICS, INC. NOTES TO UNAUDITED CONDENSED 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 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 condensed 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 March 31, 2026, the Company had cash, cash equivalents and marketable securities of $ 190.8 million and an accumulated deficit of $ 987.6 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 a variety of factors including changes in investor sentiment, 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 condensed 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 condensed consolidated financial statements. 6 Table of Contents ​ 2. Summary of Significant Accounting Policies ​ Unaudited Interim Financial Information ​ The accompanying condensed consolidated balance sheet as of March 31, 2026, the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026 and 2025, the condensed consolidated statement of stockholders’ equity for the three months ended March 31, 2026 and 2025, and the condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on February 26, 2026 (“Annual Report”) and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2026, the results of its operations and comprehensive loss for the three months ended March 31, 2026 and 2025, its changes in stockholders’ equity for the three months ended March 31, 2026 and 2025 and its cash flows for the three months ended March 31, 2026 and 2025. The condensed consolidated balance sheet data as of December 31, 2025 was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles in the United States (“GAAP”). The financial data and other information disclosed in these notes related to the three months ended March 31, 2026 and 2025 are unaudited. The results for the three months ended March 31, 2026 are not necessarily indicative of results to be expected for the year ending December 31, 2026, any other interim periods, or any future year or period. The unaudited interim financial statements of the Company included herein have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2025 included in the Annual Report. ​ Basis of Presentation ​ The accompanying condensed consolidated financial statements have been prepared in conformity with GAAP. The condensed 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 gross profit does not provide a meaningful measure of profitability and, therefore, has not included a line item for gross profit on the condensed consolidated statement of operations and comprehensive loss. ​ 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. ​ Reclassifications ​ Certain prior year amounts have been reclassified to conform to the current year’s financial statement presentation. ​ 7 Table of Contents Significant Accounting Policies ​ The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2025 included in the Annual Report. There have been no changes to the Company’s existing significant accounting policies from those disclosed in the Annual Report. ​ 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 condensed 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 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 March 31, 2026. 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 March 31, 2026, the discount rate ranged between 7.5 % and 9.3 % depending on the year of each potential payment. ​ 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. 8 Table of Contents 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 10). The amortization is based on the Company’s current estimate of future royalty payments. ​ Discontinued Operations ​ As of March 31, 2026 and December 31, 2025, the Company had $ 2.2 million in discontinued operations reported as other current liabilities in the Company’s condensed consolidated balance sheet, related to discontinued commercial products. ​ Recently Issued Accounting Pronouncements ​ In December 2025, the Financial Accounting Standards Board (“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 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. ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 (In thousands) ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 ​ ​ ​ Total Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents ​ $ 19,058 ​ $ 8,982 ​ $ — ​ $ 28,040 Marketable securities ​ — ​ ​ 162,128 ​ ​ — ​ ​ 162,128 Total assets ​ $ 19,058 ​ $ 171,110 ​ $ — ​ $ 190,168 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Contingent consideration ​ $ — ​ $ — ​ $ 11,000 ​ $ 11,000 Total liabilities ​ $ — ​ $ — ​ $ 11,000 ​ $ 11,000 ​ 9 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ As of March 31, 2026, the Company’s cash equivalents consisted of money market funds, which were valued based upon Level 1 inputs, and treasury bills, which were valued based on Level 2 inputs. As of December 31, 2025, 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 March 31, 2026 consisted of corporate debt securities, commercial paper, treasury bills, and U.S. government debt securities, which were all valued based upon Level 2 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. ​ In determining the fair value of its Level 2 investments, the Company relies on quoted prices for identical securities in markets that are not active. These quoted prices are 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 three months ended March 31, 2026 and 2025, there were no transfers into or out of Level 3. ​ There was no change in the fair value of the contingent consideration liability during the three months ended March 31, 2026 due to offsetting impacts of the passage of time and changes in market rates. ​ As of March 31, 2026 and December 31, 2025, the fair value of the Company’s available-for-sale marketable securities by type of security was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2026 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Book ​ Unrealized ​ Unrealized ​ Fair (In thousands) ​ Value ​ Gain ​ Loss ​ Value Marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate debt securities (1) ​ $ 104,789 ​ $ 126 ​ $ ( 166 ) ​ $ 104,749 Commercial paper ​ ​ 4,896 ​ ​ — ​ ​ ( 4 ) ​ ​ 4,892 Treasury bills ​ ​ 4,951 ​ ​ — ​ ​ — ​ ​ 4,951 U.S. government debt securities (2) ​ ​ 47,470 ​ ​ 94 ​ ​ ( 28 ) ​ ​ 47,536 Total marketable securities ​ $ 162,106 ​ $ 220 ​ $ ( 198 ) ​ $ 162,128 (1) Included in Corporate debt securities is $ 65.2 million with maturity dates between one and three years . (2) Included in U.S. government debt securities is $ 20.1 million with maturity dates between one and three years . ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 . 10 Table of Contents ​ 4. Accrued Expenses ​ Accrued expenses consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, (In thousands) ​ ​ ​ 2026 ​ ​ ​ 2025 Employee compensation expenses ​ $ 2,042 ​ $ 5,298 Research and development expenses ​ ​ 1,828 ​ ​ 1,612 Licensing expenses ​ ​ 1,362 ​ ​ 1,377 Other expenses ​ 664 ​ 504 Total accrued expenses ​ $ 5,896 ​ $ 8,791 ​ ​ 5. Stockholders’ Equity ​ Preferred Stock ​ As of March 31, 2026 and December 31, 2025, the Company’s amended and restated certificate of incorporation (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 March 31, 2026 or December 31, 2025. ​ Common Stock ​ As of March 31, 2026 and December 31, 2025, the Company’s Charter authorized the Company to issue 400,000,000 shares of $ 0.00001 par value common stock. There were 139,652,849 and 120,499,433 shares of common stock issued and outstanding as of March 31, 2026 and December 31, 2025, 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 March 31, 2026. ​ Warrants ​ In November 2024, the Company issued warrants to Biosion, Inc. (“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. ​ As of March 31, 2026, 3,000,000 Warrants were unexercised. ​ Sales of Common Stock Pursuant to At-The-Market Facility ​ In March 2026, the Company sold an aggregate of 18.4 million shares of its common stock for gross proceeds of $ 59.8 million, pursuant to an amended and restated sales agreement with Leerink Partners LLC and Cantor Fitzgerald & Co., as sales agents, dated February 27, 2025. The Company paid selling commissions and other fees of $ 1.8 million in connection with the sales. ​ 11 Table of Contents 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, restricted stock unit (“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 March 31, 2026, 6,674,876 shares remained available for grant under the 2025 Plan. The Company had 5,326,410 stock options and 1,852,140 RSUs outstanding as of March 31, 2026 under the 2025 Plan. ​ 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 March 31, 2026, 493,500 shares remained available for grant under the 2024 Inducement Plan. The Company had 1,172,000 stock options and 287,250 RSUs outstanding as of March 31, 2026 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 323,500 stock options outstanding as of March 31, 2026 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 8,674,464 stock options and 1,458,796 RSUs outstanding as of March 31, 2026 under the 2015 Plan. ​ 12 Table of Contents Stock Option Valuation ​ The weighted average assumptions the Company used to estimate the fair value of stock options granted during the three months ended March 31, 2026 and 2025 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ 2026 ​ ​ 2025 ​ Risk-free interest rate 3.95 % ​ 4.40 % Expected term (in years) 6.3 ​ ​ 6.3 ​ Expected volatility 72.44 % ​ 83.25 % 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. ​ Stock Options ​ The following table summarizes stock option activity for the three months ended March 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ Weighted ​ Remaining ​ Aggregate ​ ​ ​ ​ Average ​ Contractual ​ Intrinsic ​ ​ Number ​ Exercise ​ Term ​ Value ​ ​ of Shares ​ Price ​ (in years) ​ (in thousands) Outstanding as of December 31, 2025 11,269,399 ​ $ 6.72 ​ 7.7 ​ $ 8,597 Granted 4,318,500 ​ ​ 3.61 ​ ​ ​ ​ ​ Exercised ​ ( 90,025 ) ​ ​ 1.67 ​ ​ ​ ​ 184 Forfeited and cancelled ( 1,500 ) ​ ​ 25.03 ​ ​ ​ ​ ​ Outstanding as of March 31, 2026 15,496,374 ​ $ 5.88 ​ 8.1 ​ $ 14,681 Options vested and expected to vest as of March 31, 2026 15,496,374 ​ $ 5.88 ​ 8.1 ​ $ 14,681 Options exercisable as of March 31, 2026 5,746,605 ​ $ 10.55 ​ 6.3 ​ $ 5,660 ​ The weighted average grant date fair value of stock options granted during the three months ended March 31, 2026 was $ 2.45 per share. ​ Restricted Stock Units ​ The following table summarizes RSU activity for the three months ended March 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ ​ Average ​ Aggregate ​ ​ ​ ​ Grant Date ​ Intrinsic ​ ​ Number ​ Fair Value ​ Value ​ ​ of Shares ​ Per Share ​ (in thousands) Outstanding as of December 31, 2025 ​ 2,803,231 ​ $ 3.40 ​ ​ ​ Granted ​ 1,555,411 ​ ​ 3.60 ​ ​ ​ Vested ​ ( 724,606 ) ​ ​ 4.81 ​ $ 2,422 Forfeited and cancelled ​ ( 35,850 ) ​ ​ 4.06 ​ ​ ​ Outstanding as of March 31, 2026 ​ 3,598,186 ​ $ 3.19 ​ ​ ​ 13 Table of Contents ​ Stock-Based Compensation ​ Stock-based compensation expense included in total costs and expenses on the condensed consolidated statement of operations and comprehensive loss included the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, (In thousands) 2026 2025 Cost of revenue ​ $ 28 ​ ​ ​ $ 219 Research and development ​ ​ 1,162 ​ ​ 1,185 General and administrative ​ 2,008 ​ 2,131 Total stock-based compensation expense ​ $ 3,198 ​ $ 3,535 ​ As of March 31, 2026, the Company had unrecognized stock-based compensation expense for stock options and RSUs of $ 19.7 million and $ 10.4 million, respectively, which is each expected to be recognized over a weighted average period of 3.1 years. ​ 7. Net Loss per Share ​ Basic and diluted net loss per share is summarized in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, (In thousands, except for share and per share data) ​ ​ ​ 2026 ​ ​ ​ 2025 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 19,824 ) ​ $ ( 15,085 ) Denominator: ​ ​ ​ ​ ​ ​ Weighted average shares of common stock outstanding, basic and diluted ​ 128,810,050 ​ 122,390,303 Net loss per share, basic and diluted ​ $ ( 0.15 ) ​ $ ( 0.12 ) ​ The Company’s potentially dilutive securities, which included stock options and RSUs, have been excluded from the computation of diluted net loss per share because including them would have an anti-dilutive effect. 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 three months ended March 31, 2026 and 2025, 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 three months ended March 31, 2026 and 2025. All share amounts presented in the table below represent the total number outstanding as of March 31, 2026 and 2025. ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, ​ ​ 2026 ​ 2025 Options to purchase common stock ​ 15,496,374 ​ 10,550,202 Restricted stock units ​ 3,598,186 ​ 3,410,857 Total potential shares of common stock ​ 19,094,560 ​ 13,961,059 ​ ​ 14 Table of Contents 8. Leases ​ 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. ​ Supplemental balance sheet information related to operating leases is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, (In thousands) ​ 2026 ​ 2025 Operating Leases: ​ ​ ​ ​ ​ ​ Gross cost ​ $ 4,530 ​ $ 4,530 Accumulated amortization ​ ​ ( 2,393 ) ​ ​ ( 2,245 ) Other assets ​ $ 2,137 ​ $ 2,285 ​ ​ ​ ​ ​ ​ ​ Current portion of lease liabilities ​ $ 569 ​ $ 551 Other liabilities ​ ​ 1,416 ​ ​ 1,565 Total operating lease liabilities ​ $ 1,985 ​ $ 2,116 ​ Amortization expense related to operating lease right-of-use assets and accretion of operating lease liabilities totaled $ 0.1 million for each of the three months ended March 31, 2026 and 2025. 9. 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 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 (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. 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. ​ 15 Table of Contents 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 $ 0.2 million of licensing revenue during the three months ended March 31, 2026, 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 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 milestone payments associated with the license to Lilly (see Note 10). ​ The Company recognized $ 1.3 million and $ 1.0 million of licensing revenue during the three months ended March 31, 2026 and 2025, respectively, all of which was payable 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 16 Table of Contents 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 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 each of March 31, 2026 and December 31, 2025, the balance of the Company’s contingent consideration liability was $ 11.0 million (see Note 3). 10. 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 milestone 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 condensed 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. For the three months ended March 31, 2026 and 2025, the Company recognized $ 0.9 million and $ 0.8 million of non-cash royalty income, respectively. As of March 31, 2026, the current and non-current portions of the remaining deferred income recognized under the units-of-revenue method were $ 4.0 million and $ 15.3 million, 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. ​ 11. Income Taxes ​ The Company did no t record a federal or state income tax benefit for losses incurred during the three months ended March 31, 2026 and 2025. The Company concluded that it is more likely than not that its deferred tax assets will not be realized which resulted in recording a full valuation allowance during those periods. ​ 17 Table of Contents 12. 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 chief operating decision maker (“CODM”), the Company’s Chief Executive Officer, 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. ​ The following table presents the significant segment expenses and other segment items regularly reviewed by the CODM for the three months ended March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ March 31, (In thousands) ​ 2026 ​ 2025 Contract research ​ $ 537 ​ $ 445 Licensing revenue ​ ​ 1,459 ​ ​ 1,010 Total revenue ​ ​ 1,996 ​ ​ 1,455 Cost of revenue ​ ​ 395 ​ ​ 506 Research and development: ​ ​ ​ ​ ​ ​ Bosakitug ​ ​ 3,141 ​ ​ 3,384 ATI-052 ​ ​ 3,181 ​ ​ 619 ATI-2138 ​ ​ 491 ​ ​ 1,808 ATI-9494 ​ ​ 2,225 ​ ​ 678 Discovery ​ ​ 1,439 ​ ​ 668 Total research and development project expense (1) ​ ​ 10,477 ​ ​ 7,157 Personnel ​ ​ 3,281 ​ ​ 2,927 Other research and development (2) ​ ​ 1,899 ​ ​ 1,500 Total research and development ​ ​ 15,657 ​ ​ 11,584 General and administrative (3) ​ ​ 6,743 ​ ​ 6,139 Licensing ​ ​ 1,393 ​ ​ 1,010 Revaluation of contingent consideration ​ ​ — ​ ​ 300 Segment operating loss ​ $ ( 22,192 ) ​ $ ( 18,084 ) Other income ​ ​ 2,368 ​ ​ 2,999 Segment loss before income taxes ​ $ ( 19,824 ) ​ $ ( 15,085 ) (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. ​ ​ 18 Table of Contents