ALUMIS INC. 10-Q

Alumis Inc._June 30, 2025 Table of Contents ​ ​ ​ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-42143 Alumis Inc. (Exact name of registrant as specified in its charter) ​ ​ ​ Delaware 86-1771129 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) ​ 280 East Grand Avenue South San Francisco , CA 94080 (Address of Principal Executive Offices) ( 650 ) 231-6625 (Registrant’s telephone number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ​ ​ ​ ​ ​ ​ ​ Large accelerated filer ☐ Accelerated filer ☐ ​ ​ ​ ​ ​ ​ ​ ​ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ ​ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ Securities registered pursuant to Section 12(b) of the Act: ​ ​ ​ ​ Title of Each Class Trading symbol Name of Exchange on which registered Common Stock, par value $0.0001 per share ALMS The Nasdaq Global Select Market ​ As of August 7, 2025, the registrant had 96,879,394 shares of voting common stock, $0.0001 par value per share, and 7,184,908 shares of non-voting common stock, $0.0001 par value per share, outstanding. ​ ​ ​ ​ Table of Contents TABLE OF CONTENTS ​ ​ ​ Page ​ ​ ​ Part I Financial Information ​ ​ ​ ​ Item 1. Financial Statements (Unaudited) 5 ​ ​ ​ ​ Condensed Consolidated Balance Sheets 5 ​ ​ ​ ​ Condensed Consolidated Statements of Operations and Comprehensive Income (Loss ) 6 ​ ​ ​ ​ Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit ) 7 ​ ​ ​ ​ Condensed Consolidated Statements of Cash Flows 8 ​ ​ ​ ​ Notes to Condensed Consolidated Financial Statements 9 ​ ​ ​ Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 40 ​ ​ ​ Item 3. Quantitative and Qualitative Disclosures about Market Risk 58 ​ ​ ​ Item 4. Controls and Procedures 58 ​ ​ ​ Part II Other Information ​ ​ ​ ​ Item 1. Legal Proceedings 60 ​ ​ ​ Item 1A. Risk Factors 60 ​ ​ ​ Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 125 ​ ​ ​ Item 3. Defaults Upon Senior Securities 126 ​ ​ ​ Item 4. Mine Safety Disclosures 126 ​ ​ ​ Item 5. Other Information 126 ​ ​ ​ Item 6. Exhibits 126 ​ ​ ​ Signatures ​ 128 ​ In this Quarterly Report on Form 10-Q, unless otherwise stated or as the context otherwise requires, references to “Alumis,” “the Company,” “we,” “us,” “our” and similar references refer to Alumis Inc . This Quarterly Report on Form 10-Q also contains registered marks, trademarks and trade names of other companies. All other trademarks, registered marks and trade names appearing in this report are the property of their respective holders. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies. ​ ​ ​ ​ ​ Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. All statements, other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future financial condition, business strategy and plans, and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These forward-looking statements involve risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report on Form 10-Q, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about: ● our expectations regarding the potential benefits of our strategy, including the integration of operations, technologies and personnel associated with the ACELYRIN Merger (as defined below); ● our plans relating to the research and development of our product candidates; ● developments related to our competitors and our industry, including the success of competing product candidates and therapies that are, or may become, available; ● details regarding our strategic vision and planned product candidate pipeline; ● our beliefs regarding the success, cost and timing of our product candidate development activities and current and future clinical trials and studies, including study design; ● the timing or likelihood of regulatory filings or other actions and related regulatory authority responses; ● the ability and willingness of various third parties to engage in research and development activities involving our product candidates, and our ability to leverage those activities; ● our expectations regarding the potential benefits from any existing or future license or collaboration agreements, including the receipt of potential co-development, milestone and royalty payments ● our expectations regarding the ease of administration associated with our product candidates; ● our expectations regarding the patient compatibility associated with our product candidates; ● our beliefs regarding the potential markets for our product candidates and our ability to serve those markets; ● our beliefs regarding the potential of our product candidates to demonstrate differentiation from other approved therapies or therapies in development; ● the ability to obtain and, if approved, maintain regulatory approval of any of our product candidates, and any related restrictions, limitations and/or warnings in the label of any approved product candidate; ● our ability to commercialize any approved products; 3 Table of Contents ● the rate and degree of market acceptance of any approved products; ● our ability to attract and retain key personnel; ● the accuracy of our estimates regarding our future revenue, as well as our future operating expenses, capital requirements and needs for additional financing; ● our ability to obtain funding for our operations, including funding necessary to complete further development and any commercialization of our product candidates; ● our ability to obtain, maintain, protect and enforce intellectual property protection for our product candidates and technology and not infringe, misappropriate or otherwise violate the intellectual property of others; ● regulatory developments in the United States and foreign countries; ● our expectations regarding the period during which we qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and a “smaller reporting company,” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and ● statements of belief and any statement of assumptions underlying any of the foregoing. You should refer to the section titled “Risk Factors” in Part II, Item 1A. of this Quarterly Report on Form 10-Q for a discussion of other important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and although we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. ​ 4 Table of Contents PART I—FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) ALUMIS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, (in thousands, except share and per share amounts) ​ 2025 ​ 2024 Assets ​ ​ Current assets: ​ ​ Cash and cash equivalents ​ $ 151,753 ​ $ 169,526 Restricted cash ​ 367 ​ — Marketable securities ​ 334,568 ​ 118,737 Research and development prepaid expenses ​ 7,009 ​ 13,424 Other prepaid expenses and current assets ​ 23,861 ​ 4,501 Total current assets ​ 517,558 ​ 306,188 Restricted cash, non-current ​ 1,382 ​ 1,106 Property and equipment, net ​ 20,328 ​ 20,968 Intangible assets ​ ​ 50,959 ​ ​ — Operating lease right-of-use assets, net ​ 18,223 ​ 12,723 Other assets, non-current ​ 2,475 ​ 7 Total assets ​ $ 610,925 ​ $ 340,992 Liabilities and Stockholders’ Equity ​ ​ Current liabilities: ​ ​ Accounts payable ​ $ 14,981 ​ $ 9,624 Research and development accrued expenses ​ 43,731 ​ 29,149 Other accrued expenses and current liabilities ​ 22,805 ​ 10,580 Operating lease liabilities, current ​ 4,058 ​ 1,557 Total current liabilities ​ 85,575 ​ 50,910 Operating lease liabilities, non-current ​ 34,718 ​ 29,165 Deferred revenue, non-current ​ ​ 2,611 ​ ​ — Deferred income tax liability ​ ​ 2,140 ​ ​ — Share repurchase liability ​ ​ 386 ​ ​ 813 Other liabilities, non-current ​ 168 ​ — Total liabilities ​ 125,598 ​ 80,888 Commitments and contingencies (Note 9) ​ ​ Stockholders’ equity: ​ ​ ​ Preferred stock, $ 0.0001 par value; 50,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2025 and December 31, 2024 ​ ​ — ​ ​ — Common stock, voting, $ 0.0001 par value; 492,815,092 voting shares authorized as of June 30, 2025 and December 31, 2024; 96,857,569 and 47,222,419 voting shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively ​ 9 ​ 4 Common stock, non-voting, $ 0.0001 par value; 7,184,908 non-voting shares authorized as of June 30, 2025 and December 31, 2024; 7,184,908 non-voting shares issued and outstanding as of June 30, 2025 and December 31, 2024 ​ ​ 1 ​ ​ 1 Additional paid-in capital ​ 1,183,488 ​ 918,610 Accumulated other comprehensive income (loss) ​ 22 ​ 40 Accumulated deficit ​ ( 698,193 ) ​ ( 658,551 ) Total stockholders’ equity ​ 485,327 ​ 260,104 Total liabilities and stockholders’ equity ​ $ 610,925 ​ $ 340,992 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ 5 Table of Contents ALUMIS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Six Months Ended June 30, ​ (in thousands, except share and per share amounts) 2025 2024 2025 2024 Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ License revenue ​ $ — ​ $ — ​ $ 17,389 ​ $ — ​ Collaboration revenue ​ ​ 2,666 ​ ​ — ​ ​ 2,666 ​ ​ — ​ Total revenue ​ ​ 2,666 ​ ​ — ​ ​ 20,055 ​ ​ — ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development expenses, including related party expenses of $ 259 , $ 213 , $ 521 and $ 571 for the three and six months ended June 30, 2025 and 2024, respectively ​ ​ 108,755 ​ ​ 48,565 ​ ​ 205,377 ​ ​ 90,526 ​ General and administrative expenses ​ ​ 34,450 ​ ​ 7,575 ​ ​ 56,745 ​ ​ 13,207 ​ Total operating expenses ​ 143,205 ​ 56,140 ​ 262,122 ​ 103,733 ​ Loss from operations ​ ( 140,539 ) ​ ( 56,140 ) ​ ( 242,067 ) ​ ( 103,733 ) ​ Other income (expense): ​ ​ ​ ​ ​ Gain on bargain purchase ​ 187,907 ​ — ​ 187,907 ​ — ​ Interest income ​ 3,430 ​ 1,977 ​ 6,039 ​ 2,831 ​ Change in fair value of derivative liability ​ — ​ ( 2,311 ) ​ — ​ ( 5,406 ) ​ Other income (expenses), net ​ ( 38 ) ​ ( 34 ) ​ ( 82 ) ​ ( 49 ) ​ Total other income (expense), net ​ 191,299 ​ ( 368 ) ​ 193,864 ​ ( 2,624 ) ​ Net income (loss) before income taxes ​ ​ 50,760 ​ ​ ( 56,508 ) ​ ​ ( 48,203 ) ​ ​ ( 106,357 ) ​ Income tax benefit ​ ​ 8,561 ​ ​ — ​ ​ 8,561 ​ ​ — ​ Net income (loss) ​ $ 59,321 ​ $ ( 56,508 ) ​ $ ( 39,642 ) ​ $ ( 106,357 ) ​ Other comprehensive income (loss): ​ ​ ​ ​ ​ Unrealized gain (loss) on marketable securities, net ​ 30 ​ — ​ ( 18 ) ​ ( 3 ) ​ Net income (loss) and other comprehensive income (loss) ​ $ 59,351 ​ $ ( 56,508 ) ​ $ ( 39,660 ) ​ $ ( 106,360 ) ​ Net income (loss) per share attributable to common stockholders, basic ​ $ 0.78 ​ $ ( 23.10 ) ​ $ ( 0.61 ) ​ $ ( 44.17 ) ​ Net income (loss) per share attributable to common stockholders, diluted ​ $ 0.77 ​ $ ( 23.10 ) ​ $ ( 0.61 ) ​ $ ( 44.17 ) ​ Weighted-average shares of common stock outstanding, basic ​ 76,477,144 ​ 2,446,022 ​ 65,440,021 ​ 2,408,037 ​ Weighted-average shares of common stock outstanding, diluted ​ 76,635,895 ​ 2,446,022 ​ 65,440,021 ​ 2,408,037 ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ 6 Table of Contents ALUMIS INC. CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT ) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ Convertible ​ ​ ​ ​ ​ ​ Additional Other ​ ​ Total ​ ​ Preferred Stock ​ ​ Common Stock Paid-In Comprehensive Accumulated Stockholders’ (in thousands, except share amounts) Shares Amount ​ Shares Amount Capital Income (Loss) Deficit Equity Balance at December 31, 2024 — ​ $ — ​ ​ 54,407,327 ​ $ 5 ​ $ 918,610 ​ $ 40 ​ $ ( 658,551 ) ​ $ 260,104 Vesting of early exercised stock options — ​ — ​ ​ — ​ — ​ 224 ​ — ​ — ​ 224 Vesting of restricted shares of common stock — ​ — ​ ​ — ​ — ​ 2 ​ — ​ — ​ 2 Stock-based compensation expense — ​ — ​ ​ — ​ — ​ 6,995 ​ — ​ — ​ 6,995 Other comprehensive income (loss), net — ​ — ​ ​ — ​ — ​ — ​ ( 48 ) ​ — ​ ( 48 ) Net income (loss) — ​ — ​ ​ — ​ — ​ — ​ — ​ ( 98,963 ) ​ ( 98,963 ) Balance at March 31, 2025 — ​ $ — ​ ​ 54,407,327 ​ $ 5 ​ $ 925,831 ​ $ ( 8 ) ​ $ ( 757,514 ) ​ $ 168,314 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of common stock and equity awards in connection with the ACELYRIN Merger — ​ — ​ ​ 48,653,549 ​ 5 ​ 238,072 ​ — ​ — ​ 238,077 Issuance of common stock upon vesting of RSUs ​ — ​ ​ — ​ ​ 798,751 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Issuance of common stock under the 2024 ESPP ​ — ​ ​ — ​ ​ 184,633 ​ ​ — ​ ​ 766 ​ ​ — ​ ​ — ​ ​ 766 Vesting of early exercised stock options — ​ — ​ ​ — ​ — ​ 184 ​ — ​ — ​ 184 Repurchase of unvested early exercised stock options — ​ — ​ ​ ( 1,783 ) ​ — ​ — ​ — ​ — ​ — Stock-based compensation expense — ​ — ​ ​ — ​ — ​ 18,635 ​ — ​ — ​ 18,635 Other comprehensive income (loss), net ​ — ​ — ​ ​ — ​ — ​ — ​ 30 ​ — ​ 30 Net income (loss) — ​ — ​ ​ — ​ — ​ — ​ — ​ 59,321 ​ 59,321 Balance at June 30, 2025 — ​ $ — ​ ​ 104,042,477 ​ $ 10 ​ $ 1,183,488 ​ $ 22 ​ $ ( 698,193 ) ​ $ 485,327 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ Convertible ​ ​ ​ ​ ​ ​ Additional Other ​ ​ Total ​ ​ Preferred Stock ​ ​ Common Stock Paid-In Comprehensive Accumulated Stockholders’ (in thousands, except share amounts) Shares Amount ​ Shares Amount Capital Income (Loss) Deficit Deficit Balance at December 31, 2023 85,960,088 ​ $ 375,370 ​ ​ 2,675,979 ​ $ 1 ​ $ 25,055 ​ $ 2 ​ $ ( 364,318 ) ​ $ ( 339,260 ) Issuance of Series C redeemable convertible preferred stock in March 2024 for cash, net of derivative liability of $ 8,913 and offering costs of $ 382 ​ 41,264,891 ​ ​ 120,205 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Issuance of common stock upon exercise of stock options and early exercised stock options — ​ — ​ ​ 3,186 ​ — ​ 29 ​ — ​ — ​ 29 Vesting of early exercised stock options — ​ — ​ ​ — ​ — ​ 494 ​ — ​ — ​ 494 Vesting of restricted shares of common stock — ​ — ​ ​ — ​ — ​ 6 ​ — ​ — ​ 6 Stock-based compensation expense ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,657 ​ ​ — ​ ​ — ​ ​ 2,657 Other comprehensive income (loss), net — ​ — ​ ​ — ​ — ​ — ​ ( 3 ) ​ — ​ ( 3 ) Net loss — ​ — ​ ​ — ​ — ​ — ​ — ​ ( 49,849 ) ​ ( 49,849 ) Balance at March 31, 2024 127,224,979 ​ $ 495,575 ​ ​ 2,679,165 ​ $ 1 ​ $ 28,241 ​ $ ( 1 ) ​ $ ( 414,167 ) ​ $ ( 385,926 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of Series C redeemable convertible preferred stock for cash and settlement of the derivative liability of $ 14,319 , net of issuance costs of $ 157 ​ 41,264,892 ​ ​ 143,662 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Issuance of common stock upon exercise of stock options and early exercise of stock options ​ — ​ ​ — ​ ​ 62,333 ​ ​ — ​ ​ 287 ​ ​ — ​ ​ — ​ ​ 287 Vesting of early exercised stock options — ​ — ​ ​ — ​ — ​ 253 ​ — ​ — ​ 253 Vesting of restricted shares of common stock — ​ — ​ ​ — ​ — ​ 6 ​ — ​ — ​ 6 Stock-based compensation expense ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 3,133 ​ ​ — ​ ​ — ​ ​ 3,133 Net loss — ​ — ​ ​ — ​ — ​ — ​ — ​ ( 56,508 ) ​ ( 56,508 ) Balance at June 30, 2024 168,489,871 ​ $ 639,237 ​ ​ 2,741,498 ​ $ 1 ​ $ 31,920 ​ $ ( 1 ) ​ $ ( 470,675 ) ​ $ ( 438,755 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ 7 Table of Contents ALUMIS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, (in thousands) ​ 2025 2024 Cash flows from operating activities ​ ​ Net loss ​ $ ( 39,642 ) ​ $ ( 106,357 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ Stock-based compensation ​ 25,630 ​ 5,790 Net accretion of discounts on marketable securities ​ ( 2,152 ) ​ ( 507 ) Depreciation and amortization ​ 1,713 ​ 1,518 Non-cash lease expense ​ 624 ​ 12 Loss on disposal of fixed assets ​ — ​ 5 Change in fair value of derivative liability ​ — ​ 5,406 Gain on bargain purchase in connection with the ACELYRIN Merger ​ ​ ( 187,907 ) ​ ​ — Changes in operating assets and liabilities: ​ ​ ​ ​ Research and development prepaid expenses ​ 7,373 ​ ( 10,540 ) Other prepaid expenses and other assets ​ 96 ​ ( 382 ) Other assets, non-current ​ ​ ( 1,723 ) ​ ​ — Accounts payable ​ ( 1,162 ) ​ 7,788 Deferred revenue ​ ​ 2,611 ​ ​ — Research and development accrued expenses ​ 11,037 ​ 3,638 Other accrued expenses and current liabilities ​ 6,537 ​ ( 1,912 ) Operating lease liabilities ​ ​ ( 1,349 ) ​ ​ ( 1,007 ) Other liabilities, non-current ​ ​ 168 ​ ​ — Deferred income tax liability ​ ( 8,561 ) ​ — Net cash used in operating activities ​ ( 186,707 ) ​ ( 96,548 ) Cash flows from investing activities ​ ​ Maturities of marketable securities ​ 144,274 ​ 8,000 Purchases of marketable securities ​ ( 24,535 ) ​ ( 58,964 ) Purchases of property and equipment ​ ​ ( 653 ) ​ ​ ( 587 ) Cash, cash equivalents and restricted cash acquired in connection with the ACELYRIN Merger ​ 49,742 ​ — Net cash provided by (used in) investing activities ​ 168,828 ​ ( 51,551 ) Cash flows from financing activities ​ ​ Proceeds from issuance of redeemable convertible preferred stock and derivative liability, net of issuance costs ​ — ​ 258,461 Proceeds from issuance of common stock upon exercise of stock options ​ — ​ 537 Repurchase of common stock shares issued upon early exercised restricted common stock ​ ​ ( 17 ) ​ ​ — Proceeds from issuance of common stock under the 2024 ESPP ​ ​ 766 ​ ​ — Payments of deferred offering costs ​ — ​ ( 1,787 ) Net cash provided by financing activities ​ 749 ​ 257,211 Net (decrease) increase in cash, cash equivalents and restricted cash ​ ( 17,130 ) ​ 109,112 Cash, cash equivalents and restricted cash at beginning of period ​ 170,632 ​ 47,133 Cash, cash equivalents and restricted cash at end of period ​ $ 153,502 ​ $ 156,245 Supplemental disclosures: ​ ​ Equity consideration transferred in connection with the ACELYRIN Merger ​ $ 238,077 ​ $ — Vesting of early exercised stock options and unvested restricted shares of common stock ​ $ 410 ​ $ 759 Purchases of property and equipment in other accrued expenses and current liabilities ​ $ — ​ $ 716 Right-of-use assets obtained in exchange for operating lease liabilities ​ $ 1,776 ​ $ — Recognition of derivative liability upon issuance of redeemable convertible preferred stock ​ $ — ​ $ 8,913 Settlement of derivative liability upon issuance of redeemable convertible preferred stock ​ $ — ​ $ ( 14,319 ) Deferred offering costs in accounts payable and other accrued expenses and current liabilities ​ $ — ​ $ 2,559 Reconciliation of cash, cash equivalents and restricted cash: ​ ​ ​ Cash and cash equivalents ​ $ 151,753 ​ $ 155,108 Restricted cash ​ 367 ​ 113 Restricted cash, non-current ​ 1,382 ​ 1,024 Total cash, cash equivalents and restricted cash ​ $ 153,502 ​ $ 156,245 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ ​ 8 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Organization and Nature of the Business Organization and Business Alumis Inc. (the “Company”) is a clinical stage biopharmaceutical company focused on identifying, acquiring, and accelerating the development and commercialization of transformative medicines for autoimmune disorders. The Company leverages its proprietary precision data analytics platform, biological insights, and a team of experts with deep experience in precision medicine drug discovery, development, and immunology, to create medicines that significantly improve the lives of patients by replacing broad immunosuppression with targeted therapies. The Company was founded on January 29, 2021, as a Delaware corporation under the name FL2021-001, Inc. FL2021-001, Inc.’s name was changed to Esker Therapeutics, Inc. on March 8, 2021, and to Alumis Inc. on January 6, 2022. The Company is headquartered in South San Francisco, California. As of June 30, 2025, the Company had one wholly owned subsidiary, ACELYRIN, Inc. (“ACELYRIN”), a Delaware corporation incorporated on July 27, 2020 and its wholly owned subsidiary, WH2, LLC. Arrow Merger Sub, Inc. (“Merger Sub”), the Company’s wholly owned subsidiary incorporated in January 2025, was merged with and into ACELYRIN in May 2025. Reverse Stock Split On June 19, 2024, the board of directors approved, and on June 20, 2024, the Company effected, a reverse stock split of the shares of the Company’s outstanding common stock at a ratio of 1 -for-4.675 (the “Reverse Stock Split”). The number of authorized shares and par value per share were not adjusted as a result of the Reverse Stock Split. All references to shares, options to purchase common stock, share amounts, per share amounts, and related information contained in the unaudited condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented. The shares of common stock underlying outstanding stock options and other equity instruments were proportionately reduced and the respective exercise prices, if applicable, were proportionately increased in accordance with the terms of the agreements governing such securities. In addition, the conversion ratios for each series of the Company’s redeemable convertible preferred stock, which were automatically convertible into shares of common stock upon the closing of the Company’s initial public offering (the “IPO”) of common stock, were proportionally adjusted. IPO and Concurrent Private Placement On July 1, 2024, the Company completed its IPO, pursuant to which it issued and sold 13,125,000 shares of its common stock at $ 16.00 price per share to the public. Net proceeds from the IPO were $ 193.3 million, after deducting underwriting discounts and commissions and other offering costs totaling $ 16.7 million. On July 17, 2024, an existing investor and a holder of more than 5 % of the Company’s capital stock, purchased an additional 2,500,000 shares of the Company’s common stock at the IPO price per share for total gross and net proceeds of $ 40.0 million in a private placement transaction (the “Concurrent Private Placement”). Immediately prior to the closing of the IPO on July 1, 2024, all of the shares of the Company’s redeemable convertible preferred stock then outstanding converted into 28,855,656 shares of Class A common stock and 7,184,908 shares of Class B common stock at a 1 -for-4.675 conversion ratio (the “Preferred Stock Conversion”). All outstanding Class A common stock shares and all outstanding Class B common stock shares were redesignated immediately thereafter into the same number of shares of voting common stock and non-voting common stock, respectively. Unless the context otherwise requires a different meaning, all references to “common stock” in these notes refers to the Company’s voting common stock and non-voting common stock combined. 9 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ACELYRIN Merger On February 6, 2025, the Company entered into an Agreement and Plan of Merger, and, on April 20, 2025, the Company entered into an Amendment to Agreement and Plan of Merger (collectively the “Merger Agreement”) with ACELYRIN and Merger Sub, a Delaware corporation and a direct wholly owned subsidiary of the Company. Under the terms of the Merger Agreement, Merger Sub merged with and into ACELYRIN, with ACELYRIN continuing as a direct wholly owned subsidiary of the Company (the “ACELYRIN Merger”). The Merger Agreement was approved by the disinterested directors on the Company’s board of directors and the board of directors of ACELYRIN and was approved by the stockholders of each company on May 13, 2025. On May 21, 2025, the Company completed the ACELYRIN Merger with ACELYRIN in a common stock transaction valued at approximately $ 238.1 million settled through the issuance of 48,653,549 shares of the Company’s common stock to acquire net assets with a fair value of $ 426.0 million. See Note 3 for additional information. Liquidity The Company has incurred negative operating cash flows and significant losses from operations since its inception. For the three and six months ended June 30, 2025 and 2024, the Company incurred net income (loss) of $ 59.3 million, $( 56.5 ) million, $( 39.6 ) million and $( 106.4 ) million, respectively. Cash used in operating activities was $ 186.7 million and $ 96.5 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had an accumulated deficit of $ 698.2 million. The Company has historically funded its operations primarily through issuance of common stock, including in its IPO and Concurrent Private Placement, the issuance of redeemable convertible preferred stock and convertible promissory notes in private placements and, most recently, the acquisition of cash, cash equivalents and marketable securities in connection with the ACELYRIN Merger and payments received under its collaboration and license agreement. The Company expects to continue to incur substantial losses for the foreseeable future, and its ability to achieve and sustain profitability will depend on the successful development, approval, and commercialization of any product candidates it may develop, and on the achievement of sufficient revenue to support its cost structure. The Company may never achieve profitability and, unless and until it does, it will need to continue to raise additional capital. The Company believes that, based on its current operating plan, its existing cash, cash equivalents and marketable securities of $ 486.3 million as of June 30, 2025, will be sufficient to meet its operating and capital requirements for at least 12 months from the date of issuance of these unaudited condensed consolidated financial statements. The Company will need to raise significant additional capital to fund ongoing research and development activities and maintain future operations. The Company’s management plans to monitor expenses and may raise additional capital through a combination of public and private equity, debt financings, strategic alliances and licensing arrangements. The Company’s ability to access capital when needed is not assured and, if capital is not available to the Company when, and in the amounts, needed, on the terms which are favorable, the Company could be required to delay, scale back, or abandon some or all of its planned development programs and other operations, which could materially harm the Company’s business, financial condition and results of operations. 2. Summary of Significant Accounting Policies and Basis of Presentation The significant accounting policies and estimates used in the preparation of the accompanying unaudited condensed consolidated financial statements are described in the Company’s audited consolidated financial statements for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 19, 2025. There have been no material changes in the Company’s significant accounting policies during the six months ended June 30, 2025, except business combinations, acquired in-process research and development (“IPR&D”) intangible assets, 10 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) collaboration arrangements, revenue recognition, stock-based compensation expense, and provision for income tax expense as discussed below. Basis of Presentation The condensed consolidated financial statements and accompanying notes are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting and do not contain all information that is included in the annual financial statements and notes thereto of the Company. The Company’s unaudited condensed consolidated financial statements include the accounts of its subsidiaries, and all intercompany transactions were eliminated. The Company’s condensed consolidated financial statements include the accounts of ACELYRIN and its wholly owned subsidiary WH2, LLC after the closing of the ACELYRIN Merger, and the accounts of Merger Sub from its incorporation in January 2025 until the ACELYRIN Merger. WH2, LLC has not had any operations or any balances from its inception. FronThera U.S. Holdings, Inc. and FronThera U.S. Pharmaceuticals LLC, two wholly owned subsidiaries, were dissolved on April 8, 2024 and March 14, 2024, respectively. The unaudited condensed consolidated interim financial statements have been prepared on the same basis as the audited annual financial statements 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 June 30, 2025, its results of operations for the three and six months ended June 30, 2025 and 2024 and its cash flows for the six months ended June 30, 2025 and 2024. The condensed balance sheet as of December 31, 2024, included in this filing, was derived from audited annual consolidated financial statements but does not include all disclosures required by U.S. GAAP. The results of operations for the three and six months ended June 30, 2025 and 2024 are not necessarily indicative of the results of operations to be expected for the full year or for any other subsequent interim period. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). Use of Estimates The preparation of financial statements in conformity with U.S. 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 period. On an ongoing basis, the Company evaluates estimates and assumptions, including but not limited to those related to revenue recognition, accruals for research and development expenses, stock-based compensation expense, impairment of the IPR&D intangible assets, and the provision for income tax expense. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from those estimates. Segment and Geographical Information The Company operates and manages its business as one reportable and operating segment, which is the business of researching and developing medicines for autoimmune disorders. The chief executive officer, who is the chief operating decision maker (“CODM”), reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance (see Note 15). All of the Company’s long-lived assets are located in the United States. 11 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Concentration of Credit Risk Financial instruments which potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents, investments in marketable securities, accounts receivable and restricted cash. The Company maintains bank deposits in federally insured financial institutions and certain of these deposits exceed federally insured limits. To date, the Company has not experienced any losses on its deposits of cash and periodically evaluates the creditworthiness of the financial institutions at which its bank deposits are maintained. The Company also invests in money market funds, U.S. treasuries, commercial paper, corporate bonds, supranational debt securities and agency bonds, which can be subject to certain credit risks. The Company mitigates the risks by investing in high-grade instruments, limiting its exposure to any one issuer and monitoring the ongoing creditworthiness of the financial institutions and issuers. The Company has not experienced any loss of principal on its financial instruments. Risks and Uncertainties The Company is subject to certain risks and uncertainties, including, but not limited to, changes in any of the following areas that the Company believes could have a material adverse effect on the future financial position or results of operations: the Company’s ability to advance the development of its proprietary precision data analytics platform, timing and ability to advance its product candidates through preclinical and clinical development; costs and timelines associated with the manufacturing of clinical supplies; regulatory approval, market acceptance of, and reimbursement for, any product candidates the Company may develop; performance of third-party vendors; competition from pharmaceutical or other biotechnology companies with greater financial resources or expertise; protection of intellectual property; litigation or claims against the Company based on intellectual property or other factors; and its ability to attract and retain employees necessary to support its growth. The Company’s business and results of operations may be affected by worldwide economic conditions, which may continue to be impacted by global macroeconomic challenges and uncertainty in the markets, including international trade policies and tariffs, severely diminished liquidity and credit availability, rising inflation and monetary supply shifts, rising interest rates, labor shortages, declines in consumer confidence, declines in economic growth, increases in unemployment rates, recession risks and uncertainty about economic and geopolitical stability (for example, related to the ongoing conflicts in Ukraine and Israel and the surrounding areas). These worldwide economic conditions have continued into 2025 and may negatively impact the Company’s business, financial position and results of operations. Business Acquisitions, Including Intangible Assets, Goodwill and Contingent Consideration The Company accounts for business combinations, as defined in ASC Topic 805, Business Combinations , using the acquisition method of accounting, which generally requires that assets acquired, including IPR&D intangible assets, and liabilities assumed, be recorded at fair value on the consolidated balance sheets as of the acquisition date. The excess of the fair value of the purchase consideration over the fair value of net assets acquired, if any, is recorded as goodwill on the consolidated balance sheet. The excess of the fair value of net assets acquired over the fair value of the purchase consideration, if any, represents negative goodwill, or a gain on bargain purchase, which is recognized in the consolidated statement of operations as of the date of the acquisition. Calculating the fair value of assets acquired and liabilities assumed requires the Company to make significant estimates and assumptions. As a result, the Company may record adjustments to the fair values within the measurement period, which may be up to one year from the acquisition date, with the corresponding offset to goodwill or a gain on bargain purchase. Transaction costs associated with business combinations are expensed as they are incurred. 12 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Intangible assets related to IPR&D projects acquired are considered to be indefinite-lived until abandonment or completion of the associated R&D efforts, which generally occurs when regulatory approval is obtained. Goodwill and indefinite-lived intangible assets are not amortized and, instead, are tested for impairment annually, in the fourth quarter, or more frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired. Development costs incurred after an acquisition are expensed as incurred Intangible assets with finite useful lives, which include completed IPR&D projects, are amortized over their estimated useful lives, primarily on a straight-line basis, and are also periodically reviewed for changes in facts or circumstances that may result in an impairment or in a reduction to the estimated useful life of the asset. In determining the initial fair value of an intangible asset, or when quantitative analysis is required to determine any impairment, the Company usually uses an income approach that discounts expected future cash flows to present value using a discount rate that is based on the estimated weighted-average cost of capital for comparable companies and represents the rate that market participants would use to value the intangible asset. These cash flow models require the use of Level 3 fair value measurements and inputs, including estimated revenues, costs and probabilities of technical and regulatory milestones, among other factors. If the Company is required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events, then the estimated fair value of contingent consideration liabilities is recognized in the consolidated balance sheet as of the date of the acquisition. Each reporting period thereafter, the Company revalues these obligations and records increases or decreases in their fair value on the consolidated statements of operations until such time that the payment is made or obligations expire. Collaboration Arrangements and Revenue Recognition The Company earns revenue from collaboration agreements that allow collaborators to develop, manufacture and commercialize product candidates. Arrangements with collaborators may include intellectual property licenses, research and development services, manufacturing services for clinical and commercial supply and participation in joint steering committees. At the inception of an agreement, the Company evaluates if an agreement is a collaborative arrangement within the scope of ASC 808, Collaborative Arrangements (“ASC 808”). For collaborative arrangements that fall within the scope of ASC 808, the Company first determines which elements of the collaboration are deemed to be a performance obligation with a customer within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). For elements of collaboration arrangements that are accounted for pursuant to ASC 808 and are not subject to the guidance in ASC 606, the Company applies the revenue recognition model under ASC 606 or other guidance, as deemed appropriate. Under ASC 606, the Company recognizes revenue in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services when its collaborator, or customer, obtains control of promised goods or services. The Company follows a five-step approach: (i) identify the contract 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 and (v) recognize revenue when (or as) the customer obtains control of the product or service. The Company assesses the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. Performance obligations are promises in a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together with other readily available resources and (ii) are separately identifiable from other promises in the contract. Goods or services that are not individually distinct performance obligations are combined with other promised goods or services until such combined group of promises meet the requirements of a performance obligation. 13 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The Company determines the transaction price based on the amount of consideration the Company is entitled to receive in exchange for the transfer of control of a product or a service to the customer. Consideration may be fixed, variable, or a combination of both. Payments to the Company under these arrangements typically include one or more of the following: non-refundable upfront payments, reimbursement for research services, payments for clinical supplies, research, development or regulatory milestone payments, profit-sharing arrangements, and royalty and commercial sales milestone payments. Variable consideration, such as performance-based milestones, are included in the total consideration if the Company expects to receive such consideration and if it is probable that the inclusion of the variable consideration will not result in a significant reversal in the cumulative amount of revenue recognized under the arrangement. The Company includes cost reimbursements included the transaction price using the expected value method. The Company excludes sales-based royalty and milestone payments from the total consideration it expects to receive until the underlying sales occur because the license to its intellectual property is deemed to be the predominant item to which the royalties or milestones relate as it is the primary driver of value in the collaboration arrangements. The Company then allocates the transaction price to each distinct performance obligation based on the relative standalone selling price. Key assumptions to determine the standalone selling price may include forecasted revenues, development timelines, probabilities of technical and regulatory success, and the expected level of effort for research and development services. The Company recognizes revenue associated with each performance obligation as the control over the promised goods or services transfer to its collaborators which occurs either at a point in time or over time. If control transfers over time, revenue is recognized by using a method of measuring progress that best depicts the transfer of goods or services. The Company evaluates the measure of progress and related inputs each reporting period and any resulting adjustments to revenue are recorded on a cumulative catch-up basis. Consideration allocated to options that include material rights is deferred until the options are exercised or expire. The Company records amounts as accounts receivable when the right to consideration is deemed unconditional. Consideration received that does not meet the requirements to satisfy ASC 606 revenue recognition criteria is recorded as deferred revenue in the consolidated balance sheets, classified as either current (less than 12 months) or non-current (more than 12 months) deferred revenue based on the Company’s best estimate of when such revenue will be recognized. See Note 7 for additional information. Stock-Based Compensation Expense The Company grants stock-based awards to employees, directors and non-employee consultants in the form of stock options to purchase shares of its common stock. The Company measures stock options granted with service-based vesting based on the fair value of the award on the grant date using the Black-Scholes option-pricing model. The model requires management to make a number of assumptions, including common stock fair value, expected volatility, expected term, risk-free interest rate and expected dividend yield. The Company expenses the fair value of its stock-based compensation awards on a straight-line basis over the requisite service period, which is the period in which the related services are received. The Company has also granted stock options with graded vesting based on market, service and performance conditions. At the grant date, the fair value of these stock options was estimated using a Monte Carlo simulation model, which uses a distribution of potential outcomes over the vesting period. The assumptions utilized in the calculation included the Company’s expected common stock price, expected volatility, risk-free rate and expected term. Stock-based compensation expense for these awards is recognized on a straight-line basis over the requisite service period, which is the longer of the explicit service period of the service condition and the derived service period of the market condition, as determined for each separately vesting portion of the awards as if each award was, in substance, multiple awards. Stock-based compensation expense related to stock purchase rights under the Company’s 2024 Employee Stock Purchase Plan (the “2024 ESPP”) is measured based on grant date at fair value using the Black-Scholes option-pricing model. The 14 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) model requires management to make a number of assumptions, including common stock fair value, expected volatility, expected term, risk-free interest rate and expected dividend yield. Stock-based compensation expense is recognized on a straight-line basis over the offering period. The Company accounts for award forfeitures as they occur and classifies stock-based compensation expense in its consolidated statements of operations and comprehensive income (loss) in the same manner in which the award recipient’s salary or services costs are classified. Provision for Income Tax Expense Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and their respective tax bases. Deferred taxes and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period of enactment. The Company records a valuation allowance to reduce deferred tax assets to an amount for which realization is more likely than not. Due to the Company’s historical operating performance and the recorded cumulative net losses in prior fiscal periods, the net deferred tax assets have been fully offset by a valuation allowance. The Company recognizes the tax benefit from an uncertain tax position if it is more than likely than not that the tax position will be sustained upon examination by the tax authorities, based on the merits of the position. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties incurred in relation to unrecognized tax benefits. The Company recognized a benefit from income taxes of $ 8.6 million for the three and six months ended June 30, 2025, and zero for the three and six months ended June 30, 2024. The income tax benefit is primarily related to the realization of deferred tax assets and valuation allowance release as a result of the ACELYRIN Merger. Recoverable Value-Added Tax The Company conducts clinical trials in several European and Asian countries which can result in VAT assessments based on the transfer of products across borders including production, packaging and distribution of clinical materials. VAT is a national tax that is levied at each stage of production and can vary by jurisdiction. When a company is not VAT-registered in a country, VAT is due when goods enter a country and is not considered reclaimable. When the Company becomes VAT-registered and establishes a pattern of VAT recoverability from taxing authorities in a certain country, the Company will record aggregate balances recoverable in other prepaid expenses and current assets in the consolidated balance sheets. The Company reviews these balances on a regular basis and records valuation allowances on the amounts that are not expected to be recovered. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. The Company qualifies as an “emerging growth company” as defined in the JOBS Act, and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and private companies, the Company will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies. 15 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Recently Issued and Not Yet Adopted Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires the disclosure of specific categories in the rate reconciliation and greater disaggregation for income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 for public entities and for fiscal years beginning after December 15, 2025 for all other entities, with early application permitted. ASU 2023-09 should be adopted prospectively with the option to be adopted retrospectively. The Company is currently evaluating the impact of this standard on its disclosure in its consolidated financial statements for the year ending December 31, 2025. In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Topic 220) (“ASU 2024-03”), requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments of ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual periods beginning after December 15, 2027. The requirements of ASU 2024-03 may be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements and disclosures. ​ 3. Acquisitions ACELYRIN Merger The Company completed the ACELYRIN Merger on May 21, 2025 (the “Closing Date”). ACELYRIN was a late-stage biopharma company focused on identifying, acquiring, and accelerating the development and commercialization of transformative medicines. ACELYRIN’s portfolio consisted of lonigutamab, a subcutaneously delivered, monoclonal antibody targeting IGF-1R for the potential treatment of Thyroid Eye Disease (“TED”). The ACELYRIN Merger strengthened the Company’s balance sheet and its cash position and added the lonigutamab product candidate to the Company’s development portfolio as of the Closing Date. Immediately following the ACELYRIN Merger, the Company’s pre-merger stockholders collectively owned approximately 52 % of the combined company’s common stock and the pre-merger stockholders of ACELYRIN owned approximately 48 % of the combined company’s common stock, in each case, calculated on a fully diluted basis as of January 31, 2025. At the Closing Date, the Company (i) issued 48,653,549 shares of its common stock in exchange for ACELYRIN issued and outstanding common stock shares and paid cash for fractional shares, (ii) assumed ACELYRIN’s stock options with an exercise price of $ 18.00 or less outstanding and unexercised immediately prior to the Closing Date, which are exercisable into 4,712,186 shares of the Company’s common stock, (iii) assumed ACELYRIN’s restricted stock units (“RSUs”) outstanding and unvested immediately prior to the Closing Date, which were converted into 1,323,905 of the Company’s RSUs, and (iv) assumed ACELYRIN’s performance RSUs outstanding and unvested immediately prior to the Closing Date, which were converted into 146,963 of the Company’s RSUs subject only to a service vesting condition. Outstanding shares, stock options, RSUs and performance RSUs were exchanged at the exchange ratio of 0.4814 shares of the Company’s common stock for each share of ACELYRIN common stock (the “Exchange Ratio”). ACELYRIN’s outstanding and unexercised options with exercise prices more than $ 18.00 were cancelled. Exercise prices for the assumed options were determined as the product of the original exercise prices multiplied by the reciprocal of the Exchange Ratio. Converted ACELYRIN stock options and RSUs continue to vest in accordance with their original terms. Performance RSUs were deemed to have 100 % satisfied their performance conditions and will vest in two equal installments on May 15 of calendar years 2026 and 2027, subject to the holder of the converted performance RSUs remaining in service with the Company or any of its subsidiaries on such date. 16 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The preliminary purchase price consideration consists of the Company’s shares of common stock issued at the Closing Date and the additional stock-based compensation related to the fair value of replacement awards attributable to pre-combination services, and is calculated as follows (in thousands, except share and per share data): ​ ​ ​ ​ Implied shares of common stock issued to holders of ACELYRIN common stock ​ ​ 48,653,549 Closing price per share of common stock as of Closing Date ​ $ 4.78 Consideration transferred for share exchange ​ $ 232,564 Fair value of replacement awards attributable to pre-combination services ​ $ 5,513 Total preliminary purchase price consideration ​ $ 238,077 ​ The ACELYRIN Merger was accounted for as a business combination with the Company being treated as the accounting acquirer. Net assets acquired were recognized at their fair value at the Closing Date of the ACELYRIN Merger. The Company recognized ACELYRIN Merger transaction costs of $ 7.1 million and $ 14.8 million as incurred in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2025, respectively. The following table presents the preliminary purchase price allocation of the fair value of the net assets acquired and liabilities assumed at the Closing Date (in thousands): ​ ​ ​ ​ Assets Acquired ​ Cash and cash equivalents ​ $ 49,155 Restricted cash ​ 367 Marketable securities ​ 333,436 Research and development prepaid expenses ​ 958 Prepaid credit voucher for clinical manufacturing ​ ​ 11,376 Other prepaid expenses and current assets ​ 8,081 Restricted cash, non-current ​ 220 Property and equipment, net ​ 420 Intangible assets ​ ​ 50,959 Operating lease right-of-use assets, net ​ 4,349 Other assets, non-current ​ 744 Total assets ​ $ 460,065 Liabilities Assumed ​ Accounts payable ​ $ ( 6,518 ) Research and development accrued expenses ​ ( 3,546 ) Other accrued expenses and current liabilities ​ ( 5,688 ) Operating lease liabilities, current ​ ( 1,390 ) Operating lease liabilities, non-current ​ ( 6,238 ) Deferred income tax liability ​ ( 10,701 ) Total liabilities ​ ( 34,081 ) Fair value of net assets ​ $ 425,984 Purchase consideration ​ ​ 238,077 Gain on bargain purchase ​ $ 187,907 ​ Valuing certain components of the ACELYRIN Merger, primarily the acquired IPR&D intangible asset and a deferred income tax liability required the Company to make significant estimates that may be adjusted in the future; consequently, the purchase price allocation is considered preliminary. The preliminary fair value estimates of the net assets acquired are 17 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) based upon preliminary calculations and valuations and are subject to change as the Company obtains additional information during the measurement period (up to one year from the Closing Date). Intangible assets represent the IPR&D intangible asset related to the acquired lonigutamab product candidate in development at the Closing Date. The preliminary fair value of the acquired IPR&D intangible asset was estimated as $ 51.0 million using the multi-period excess earnings method which is equal to the present value of the incremental after-tax cash flows attributable to that intangible asset, using a discount rate of 23.0 % based on the best estimate of a market participant's after-tax weighted average cost of capital. Projected future cash flows were based on significant estimates, including estimated revenues, costs and probabilities of technical and regulatory milestones, among other factors. The acquired IPR&D intangible asset is an indefinite-life asset and will be tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable as ASC 350 also requires testing more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. The Company acquired a prepaid credit voucher for clinical manufacturing issued by one of ACELYRIN’s contract manufacturers that will be applied towards payments of clinical product manufacturing invoices issued by the vendor. The remaining balance of $ 11.4 million will be used within one year and it was not adjusted from its carrying amount as its fair value approximates its carrying value. The Company acquired two operating leases and a sublease. Refer to Note 9 for additional details. The Company estimated the fair value of lease liabilities as the present value of the remaining lease payments, as if the acquired leases were new leases of the acquirer at the Closing Date. The Company measured the right-of-use asset at the same amount as the lease liability as adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms. As ACELYRIN entered into a sublease in February 2025, these sublease terms were considered at market terms. The fair value of operating lease liabilities, current, increased by $ 0.2 million and the fair value of operating lease liabilities, non-current, increased by $ 0.5 million. The fair value of operating lease right-of-use assets, net, decreased by $ 0.1 million. Because the fair value of the identifiable assets acquired and liabilities assumed exceeded the fair value of the purchase consideration transferred, the Company recorded a gain on bargain purchase of $ 187.9 million at the Closing Date. Consequently, the Company reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed in accordance with ASC 805-30-25-4 and concluded that all acquired assets and assumed liabilities were recognized and that the valuation procedures and resulting measures were appropriate. Gain on bargain purchase primarily relates to the market value of ACELYRIN’s common stock trading below the carrying value of net assets and the Exchange Ratio being fixed at the time when the Merger Agreement was signed and not adjusted for subsequent changes in the market price of the Company’s common stock. Gain on bargain purchase is recognized as other income in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The Company recognized a deferred tax liability of $ 10.7 million related to the acquired IPR&D intangible asset at the Closing Date. The Company also has additional severance related obligations under the Merger Agreement that are separate from the assets and liabilities acquired. In accordance with the ACELYRIN severance plan, ACELYRIN employees terminated within 12 months of the Closing Date are entitled to receive severance benefits, including acceleration of their outstanding equity awards and extension of their outstanding options exercise periods of up to 12 months post-termination. The Company estimated total cash severance obligations, including related taxes, of $ 12.5 million, which it expects to pay within 12 months from the Closing Date based on agreed termination dates with employees. Severance obligation is recorded to expense over the remaining employment period for notified employees. The Company recognized $ 5.2 million as general and administrative expenses and $ 3.7 million as research and development expenses related to severance expenses for the three and six months ended June 30, 2025. As of June 30, 2025, the severance liability of $ 3.0 million is classified as other accrued expenses and current liabilities in the condensed consolidated balance sheet. The Company estimated stock-based compensation expense of $ 13.1 million related to the accelerated vesting and exercise term 18 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) modification, which it expects to recognize during the year ending December 31, 2025. The Company recognized stock-based compensation expense of $ 7.8 million as general and administrative expenses and $ 3.0 million as research and development expenses for the three and six months ended June 30, 2025. Following the Closing Date, the operating results of ACELYRIN have been included in the condensed consolidated financial statements. For the period from May 22, 2025 through June 30, 2025, there was no revenue attributable to ACELYRIN and operating losses attributable to ACELYRIN for such period were $ 8.9 million. ​ The ACELYRIN Merger is intended to be a reorganization under Internal Revenue Code (“IRC”) Section 368(a). The Merger Agreement outlines the “plan of reorganization” within the meaning of the regulations issued under IRC Section 368(a) and the ACELYRIN Merger is intended to qualify as a tax-free reorganization for U.S. federal and state income tax purposes. Unaudited Pro Forma Summary of Operations The following table shows the unaudited pro forma summary of operations for the three and six months ended June 30, 2025, and 2024, as if the ACELYRIN Merger had closed on January 1, 2024. The pro forma financial information is provided for comparative purposes only and is not necessarily indicative of what actual results would have been had the acquisition occurred as of January 1, 2024, nor does it give effect to synergies or any cost savings, and it is not indicative of what such results would be for any future period: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ 2025 ​ 2024 ​ 2025 2024 Total revenue ​ $ 2,666 ​ $ — ​ $ 20,055 ​ $ — Net income (loss) ​ ​ ( 130,001 ) ​ ​ ( 143,206 ) ​ ​ ( 276,520 ) ​ ​ ( 79,508 ) ​ The summary pro forma financial information includes the following adjustments: ● actual acquisition-related transaction costs of $ 7.1 million and $ 14.8 million were excluded from the three and six months ended June 30, 2025 pro forma results, respectively, and $ 14.8 million were included in the six months ended June 30, 2024 pro forma results as if these costs were incurred during the 2024 period; ● incremental stock-based compensation expense related to the accelerated vesting and exercise term modification of $ 10.8 million were excluded from the three and six months ended June 30, 2025 pro forma results and $ 0.3 million and $ 13.1 million were included in the three and six months ended June 30, 2024 pro forma results, respectively, as if these costs were incurred during the 2024 period; ● severance cash obligations for terminated ACELYRIN employees of $ 8.9 million were excluded from the three and six months ended June 30, 2025 pro forma results and $ 0.7 million and $ 12.5 million were included in the three and 19 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) six months ended June 30, 2024 pro forma results, respectively, as if these costs were incurred during the 2024 period; and ● Gain on bargain purchase of $ 187.9 million was excluded from the three and six months ended June 30, 2025 pro forma results and included in the six months ended June 30, 2024 pro forma results as if such gain was recognized during the 2024 period. 4. Fair Value Measurements The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The guidance establishes three levels of the fair value hierarchy as follows: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company recognizes transfers into and out of levels within the fair value hierarchy in the period in which the actual event or change in circumstances that caused the transfer occurs. The Company’s financial instruments consist of Level 1, Level 2 and Level 3 financial instruments. Changes in the ability to observe valuation inputs may result in a reclassification of levels of certain securities within the fair value hierarchy. Level 1 financial instruments are comprised of money market funds and U.S. treasuries. Level 2 financial instruments are comprised of U.S. treasuries, corporate debt obligations and Federal agency obligations. Usually, short term marketable securities are considered Level 2 when their fair values are determined using inputs that are observable in the market or can be derived principally from or corroborated by observable market data such as pricing for similar securities, recently executed transactions, cash flow models with yield curves, and benchmark securities. In addition, Level 2 financial instruments are valued using comparisons to like-kind financial instruments and models that use readily observable market data as their basis. Level 3 financial instruments include derivative liabilities issued in March 2024 and settled in May 2024 in connection with the closing of the second tranche of the Series C redeemable convertible preferred stock financing. 20 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The following tables present the Company’s fair value hierarchy for financial assets measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2025 ​ Level 1 Level 2 Level 3 Total Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds ​ $ 148,040 ​ $ — ​ $ — ​ $ 148,040 Marketable securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. treasuries ​ ​ 146,158 ​ ​ 135,083 ​ ​ — ​ ​ 281,241 Corporate debt obligations ​ ​ — ​ ​ 46,373 ​ ​ — ​ ​ 46,373 Federal agency obligations ​ ​ — ​ ​ 4,851 ​ ​ — ​ ​ 4,851 Supranational bonds ​ — ​ 2,103 ​ — ​ 2,103 Total assets ​ $ 294,198 ​ $ 188,410 ​ $ — ​ $ 482,608 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ Level 1 Level 2 Level 3 Total Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market funds ​ $ 168,847 ​ $ — ​ $ — ​ $ 168,847 Marketable securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. treasuries ​ 47,137 ​ 71,600 ​ — ​ 118,737 Total assets ​ $ 215,984 ​ $ 71,600 ​ $ — ​ $ 287,584 ​ In connection with the Series C redeemable convertible preferred stock financing in March 2024, the Company issued to investors two freestanding financial instruments: the Series C second tranche option liability and the put right option liability. The Company estimated their fair value using a Black-Scholes option pricing model weighted by the probability of occurring. The Company used the intrinsic value calculation to estimate the fair value of the Series C second tranche option liability and the put right option liability upon settlement. Significant estimates and assumptions impacting the derivative liability fair value included the probability of each option exercise, redeemable convertible preferred stock fair value, estimated stock volatility and the expected term. 21 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The following table provides a range of assumptions used in the valuation of the derivative liabilities for the six months ended June 30, 2024: ​ ​ ​ ​ ​ Six Months Ended June 30, ​ 2024 Expected term (in years) ​ 0.2 – 0.4 Volatility ​ 55.1 % – 59.9 % Risk-free interest rate ​ 5.4 % – 5.5 % Dividend yield ​ 0.00 % Probability of option exercise ​ 0.0 % – 100.0 % ​ The following table provides a roll-forward of the fair value of the Company’s Level 3 financial instrument, the derivative liabilities, for the six months ended June 30, 2024 (in thousands): ​ ​ ​ ​ Six Months Ended June 30, ​ 2024 Fair value at beginning of period $ — Fair value upon issuance ​ 8,913 Changes in fair value ​ 5,406 Fair value upon settlement ​ ( 14,319 ) Fair value at end of period $ — ​ The Company did not have Level 3 financial instruments for the three and six months ended June 30, 2025. There were no transfers between Level 1, Level 2 or Level 3 categories for the three and six months ended June 30, 2025 and 2024. 5. Marketable Securities Marketable securities, which are classified as available-for-sale marketable securities, consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2025 ​ ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ ​ Amortized Cost ​ Unrealized ​ Unrealized ​ Fair ​ ​ Basis ​ Gains ​ Losses ​ Value Short-term marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. treasuries ​ $ 281,305 ​ $ — ​ $ ( 64 ) ​ $ 281,241 Corporate debt obligations ​ ​ 46,394 ​ ​ — ​ ​ ( 21 ) ​ ​ 46,373 Federal agency obligations ​ ​ 4,850 ​ ​ 1 ​ ​ — ​ ​ 4,851 Supranational bonds ​ ​ 2,103 ​ ​ — ​ ​ — ​ ​ 2,103 Total short-term marketable securities ​ $ 334,652 ​ $ 1 ​ $ ( 85 ) ​ $ 334,568 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Gross ​ Gross ​ ​ ​ ​ Amortized Cost ​ Unrealized ​ Unrealized ​ Fair ​ ​ Basis ​ Gains ​ Losses ​ Value Short-term marketable securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. treasuries ​ $ 118,697 ​ $ 45 ​ $ ( 5 ) $ 118,737 Total short-term marketable securities ​ $ 118,697 ​ $ 45 ​ $ ( 5 ) $ 118,737 ​ 22 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) All marketable securities held as of June 30, 2025 and December 31, 2024 had contractual maturities of less than one year. As of June 30, 2025 and December 31, 2024, no significant facts or circumstances were present to indicate a deterioration in the creditworthiness of the issuers of the marketable securities, and the Company has no requirement or intention to sell these securities before maturity or recovery of their amortized cost basis. The Company considered the current and expected future economic and market conditions and determined that its marketable securities were not significantly impacted. For all marketable securities with a fair value less than its amortized cost basis, the Company determined the decline in fair value below amortized cost basis to be immaterial and non-credit related, and therefore no allowance for expected credit losses was recorded for the three and six months ended June 30, 2025 and 2024. 6. Balance Sheet Components Restricted Cash Restricted cash includes cash held at financial institutions that is pledged as collateral for stand-by letters of credit, of $ 1.4 million and $ 1.1 million related to lease commitments as of June 30, 2025 and December 31, 2024, respectively, and cash held at a financial institution that is pledged under a collateral support contract of $ 0.4 million and zero related to the Company’s corporate credit program as of June 30, 2025 and December 31, 2024, respectively. The cash will be restricted until the termination or modification of the related lease agreements and corporate credit card program, respectively. Restricted cash is classified as restricted cash, non-current in the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024. Other Prepaid Expenses and Current Assets Other prepaid expenses and current assets consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ ​ 2025 ​ 2024 Prepaid credit voucher for clinical manufacturing ​ $ 10,754 ​ $ — Service and other revenue receivable ​ ​ 2,666 ​ ​ — Interest receivable ​ ​ 2,267 ​ ​ 698 Prepaid subscriptions ​ ​ 1,855 ​ ​ 1,232 Tax receivable ​ ​ 2,924 ​ ​ 1,114 Prepaid insurance ​ ​ 330 ​ ​ 695 Other ​ 3,065 ​ 762 Total other prepaid expenses and current assets ​ $ 23,861 ​ $ 4,501 ​ The prepaid credit voucher for clinical manufacturing was received by ACELYRIN in the third quarter of 2024 as part of an agreement to cancel certain services with a vendor under a manufacturing agreement related to the suspension of development of certain ACELYRIN programs. The prepaid credit voucher for clinical manufacturing may be used to settle invoices for services and raw materials from this vendor related to the lonigutamab product candidate in development by ACELYRIN. ​ 23 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Property and Equipment, Net Property and equipment, net consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated Useful Life June 30, December 31, ​ ​ (in years) ​ 2025 ​ 2024 Leasehold improvements Shorter of useful life or lease term ​ $ 17,799 ​ $ 17,618 Laboratory equipment 5 ​ ​ 5,843 ​ ​ 5,227 Furniture and fixtures 5 ​ 2,094 ​ 1,709 Computer equipment 5 ​ 1,161 ​ 896 Capitalized software 3 ​ 75 ​ 75 Total property and equipment, gross ​ ​ ​ 26,972 ​ 25,525 Less: Accumulated depreciation and amortization ​ ​ ​ ( 6,644 ) ​ ( 4,557 ) Total property and equipment, net ​ ​ ​ $ 20,328 ​ $ 20,968 ​ Depreciation and amortization expense was $ 0.9 million and $ 0.8 million for the three months ended June 30, 2025 and 2024, respectively, and $ 1.7 million and $ 1.5 million for the six months ended June 30, 2025 and 2024, respectively. Other Accrued Expenses and Current Liabilities Other accrued expenses and current liabilities consisted of the following as of June 30, 2025 and December 31, 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ ​ 2025 ​ 2024 Accrued personnel and related expenses ​ $ 9,845 ​ $ 7,765 Accrued professional services ​ 9,609 ​ 2,657 Severance liability ​ ​ 3,003 ​ ​ — Accrued other expenses ​ 348 ​ 158 Total other accrued expenses and current liabilities ​ $ 22,805 ​ $ 10,580 ​ 7. Revenue Kaken Collaboration Agreement On March 25, 2025, (the “Effective Date”) the Company entered into a collaboration and license agreement (the “Collaboration Agreement”) with Kaken Pharmaceutical Co., Ltd. (“Kaken”). Under the terms of the Collaboration Agreement, the Company granted to Kaken an exclusive right to develop, manufacture and commercialize envudeucitinib (or “envu”), formerly known as ESK-001, for dermatology indications in Japan, with options to expand the license, subject to opt-in payments and certain cost-sharing obligations on the part of Kaken, to include rheumatological and gastrointestinal diseases. Pursuant to the terms of the Collaboration Agreement, the Company is responsible for the global development of envu in the dermatology field, and Kaken is responsible for the clinical development, regulatory approvals and commercialization of envu in Japan in dermatology and other indications for which Kaken has exercised its option. Kaken is required to use commercially reasonable efforts to conduct all subsequent development, manufacture, and commercialization activities. The Collaboration Agreement further provides that the Company will retain rights to envu in all other indications and geographies. 24 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) In March 2025, Kaken made an upfront, non-refundable payment of $ 20.0 million to the Company. In addition, Kaken will pay the Company an aggregate of $ 20.0 million towards global development costs for envu in the dermatology field through the end of 2026 and thereafter will pay a specified share of development costs applicable to the dermatology field, and for any field for which Kaken exercises its option, subject to Kaken's right to opt out of cost-sharing in certain indications in specified circumstances. In addition, Kaken would pay the Company up to an aggregate of $ 36.0 million upon the achievement of regulatory milestones and upon Kaken’s exercise of its field expansion options for the rheumatology and gastrointestinal fields. In addition, the Company is entitled to receive aggregate payments of up to ¥ 15.5 billion upon the achievement of commercial milestones, plus tiered royalties at percentages ranging from the low double digits into the twenties on aggregate net sales of envu in Japan. The Company evaluated the Collaboration Agreement and concluded it was within the scope of ASC 606. As of the Effective Date, the Company identified four performance obligations: (1) license to develop, manufacture and commercialize envu (the “License Obligation”), (2) development services that support the global development of envu (the “Development Services Obligation”), (3) the manufacture of the clinical supply in Japan (the “Manufacturing Services Obligation”) and (4) a material right related to the option for rheumatology disease (the “Material Right Obligation”). The License Obligation was considered functional intellectual property and distinct from other promises under the contract, as Kaken can benefit from the license on its own or together with other readily available resources. The Development Services Obligation and Manufacturing Services Obligation were considered distinct as Kaken could benefit from both of these separately with the license transferred by the Company at the inception of the agreement. The option in the rheumatology field contained a material right because its exercise does not require payment of a fee that is commensurate with the value of the additional license. No material right was assigned to the gastrointestinal field since its estimated fair value did not exceed the exercise price of the option. The transaction price includes the upfront license fee of $ 20.0 million, the global development cost reimbursement of $ 20.0 million in the dermatology field through the end of 2026, the estimated global development cost reimbursement in the dermatology field after 2026 of $ 1.5 million and an immaterial amount of variable consideration related to the Manufacturing Services Obligation. The Company determined that any variable consideration related to development and regulatory milestones was deemed to be fully constrained at inception and therefore excluded from the initial transaction price due to the high degree of uncertainty and risk associated with these potential payments, and the Company could not assert that it was probable that a significant reversal in the amount of cumulative revenue recognized would not occur. The Company developed the estimated standalone selling prices for the License Obligation and Material Right Obligation primarily based on the probability-weighted value of expected future revenues associated with each underlying license. In developing such estimates, the Company applied judgment in determining the forecasted revenue, taking into consideration the applicable market conditions, the probability of success, and the time needed to develop each indication for which the license relates. The Company developed the estimated standalone selling price for the development services and clinical supply primarily based on the resources to be committed to perform the service. At inception of the contract, the Company allocated $ 17.4 million to the License Obligation, $ 20.8 million to the Development Services Obligation, $ 3.3 million to the Material Right Obligation and an immaterial amount to the Manufacturing Services Obligation. The License Obligation was satisfied in March 2025 upon transfer of the license to Kaken. For the Development Services Obligation, the Company recognizes revenue over time as Kaken consumes the benefit of such services as they are being performed. The Company measures proportional performance over time for the Development Services Obligation by using an input method based on cost incurred relative to the total estimated cost of the obligation on a quarterly basis. The Company re-evaluates the transaction price as uncertain events are resolved or other changes in circumstances occur as of the end of each reporting period. The Company recognized revenue of zero and $ 17.4 million for the three and six months ended June 30, 2025, respectively, related to the License Obligation and $ 2.7 million for the three and six months ended June 30, 2025 related 25 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) to the Development Services Obligation. As of June 30, 2025, deferred revenue, non-current was $ 2.6 million and related to the Material Right Obligation, and accounts receivable balance was $ 2.7 million and related to the Development Services Obligation. The aggregate estimated amount of transaction price that was unsatisfied as of June 30, 2025 was $ 21.5 million, of which, $ 18.2 million related to the Development Services Obligation that is expected to be recognized through 2028 as the Company performs its services towards the global development of envu in the dermatology field. The remaining $ 3.3 million estimated amount of transaction price that was unsatisfied as of June 30, 2025 related to the Material Right Obligation and is deferred until the option is exercised or expires. Tenet Medicines Purchase Agreement In January 2024, ACELYRIN entered into an asset purchase agreement (“Purchase Agreement”) with Tenet Medicines, Inc. (“Tenet”). ACELYRIN recorded $ 7.0 million cash received as other income, net in the condensed consolidated statement of operations and comprehensive loss for the six months ended June 30, 2024. In consideration for the assets and other rights Tenet received under the Purchase Agreement, ACELYRIN is entitled to receive development, regulatory and commercial milestone payments of up to $ 157.5 million in the aggregate, royalties on worldwide net sales and payments on sublicense income. 8. Related Party Transactions Foresite Labs Services Agreement Foresite Labs, LLC (“Foresite Labs”) is an affiliate of Foresite Capital Management, a stockholder of the Company. In January 2021, the Company entered into a services agreement with Foresite Labs, which was amended and restated in August 2021 and in December 2023, and expires in December 2026, unless terminated earlier by the parties. Thereafter, on each anniversary of the effective date, the agreement will automatically renew for an additional one-year term, unless terminated earlier by the parties. Foresite Labs provides services to assist the Company in exploring specified immunology genetic targets. For the three months ended June 30, 2025 and 2024, the Company recognized $ 0.3 million and $ 0.2 million as research and development expenses under the service agreement, respectively. For the six months ended June 30, 2025 and 2024, the Company recognized $ 0.5 million and $ 0.6 million as research and development expenses under the services agreement, respectively. Accrued expenses under the service agreement were zero as of June 30, 2025 and December 31, 2024. 9. Commitments and Contingent Liabilities Operating Leases In August 2022, the Company entered into a lease agreement for 55,000 square feet of office and laboratory space in South San Francisco, California, which commenced in January 2023 and has a contractual termination date in August 2033. The Company constructed leasehold improvements in the space, which were concluded to be lessee assets. The lessor provided the Company a tenant improvement allowance of $ 17.2 million, of which $ 0.5 million was received in the year ended December 31, 2022, and $ 16.7 million was received in the year ended December 31, 2023, and was accounted for as a reduction to lease payments. At the commencement date, future lease payments totaled $ 37.9 million, including $ 54.6 million in gross fixed payments less $ 16.7 million in lease incentives expected to be received during the first year of the lease. The lease liability at lease commencement was calculated to be $ 14.1 million, which is equal to the present value of the future lease payments, discounted at an incremental borrowing rate of 11.4 %. Following the commencement date, the Company measured its lease liability and right-of-use asset in accordance with ASC 842-20-35-3. In accordance with this guidance, future lease payments increased as the $ 16.7 million incentive was received and future gross fixed payments were no longer offset by these incentives. Leasehold improvements were reflected in property and equipment, net in the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024. The lease agreement also includes a 26 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) renewal option allowing the Company to extend this lease for an additional three years at the prevailing rental rate, which the Company was not reasonably certain to exercise. In December 2024, the Company entered into a lease agreement for approximately 22,000 square feet of additional office space in South San Francisco, California. The lease has a contractual termination date of December 2026, with the right to extend the lease for an additional two years subject to certain conditions. The Company determined that, for accounting purposes, the commencement date of the lease is in January 2025 and the lease term ends in December 2026, as it not reasonably certain that the lease will be extended. As of the commencement date, future lease payments totaled $ 1.9 million and the lease liability was calculated to be $ 1.8 million, which is equal to the present value of the future lease payments, discounted at an incremental borrowing rate of 7.9 %. Upon the closing of the ACELYRIN Merger, the Company became the successor to ACELYRIN’s rights under ACELYRIN’s lease and sublease agreements. In January 2023, ACELYRIN entered into a lease agreement to rent approximately 10,012 square feet of office space in Southern California. The term of the lease is 65 months with an option to extend it for an additional three years . Monthly rent payments are approximately $ 30,500 , subject to an annual 3.0 % increase. In addition to the base rent, the Company is obligated to pay variable costs related to its share of operating expenses and taxes. In July 2023, ACELYRIN entered into a lease agreement to rent approximately 22,365 square feet of office space in South San Francisco, California. The term of the lease is 60 months with an option to extend it for an additional five years . Monthly base rent payments are approximately $ 150,000 , subject to an annual 3.5 % increase. In addition to the base rent, the Company is obligated to pay variable costs related to its share of operating expenses and taxes. In February 2025, ACELYRIN entered into an agreement to sublease the entirety of its South San Francisco leased space through October 2029, the remainder of the lease term. The sublease included the operating lease right-of-use asset and certain property, plant and equipment. Sublease income was immaterial for the three and six months ended June 30, 2025. The components of lease costs were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Six Months Ended June 30, ​ 2025 2024 2025 2024 Operating lease costs ​ $ 1,190 ​ $ 835 ​ $ 2,305 ​ $ 1,711 Variable lease costs ​ 306 ​ 326 ​ 657 ​ 656 Total lease costs ​ $ 1,496 ​ $ 1,161 ​ $ 2,962 ​ $ 2,367 ​ Supplemental cash flow information related to the operating leases was as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ 2025 ​ 2024 Cash payments included in the measurement of operating lease liabilities ​ $ 3,118 ​ $ 2,745 ​ Weighted-average remaining lease term and incremental borrowing rate for the operating leases were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ December 31, ​ ​ 2025 2024 ​ Weighted-average remaining lease term (years) 7.2 ​ 8.7 ​ Weighted-average incremental borrowing rate 11.6 % 11.4 % ​ 27 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Future minimum lease payments under non-cancelable leases as of June 30, 2025, were as detailed below (in thousands): ​ ​ ​ ​ 2025 (remainder of the year) ​ $ 4,271 2026 ​ ​ 8,175 2027 ​ 7,648 2028 ​ 7,765 2029 ​ 7,205 Thereafter ​ 21,857 Total undiscounted lease payments ​ 56,921 Less: Imputed interest ​ ( 18,145 ) Total operating lease liabilities ​ $ 38,776 ​ FronThera Contingent Consideration In March 2021, the Company entered into a stock purchase agreement to acquire FronThera U.S. Holdings, Inc. and its wholly owned subsidiary, FronThera U.S. Pharmaceuticals LLC. (the “FronThera Acquisition”), and the transaction was accounted for as an asset acquisition. Under the stock purchase agreement, the Company is obligated to pay contingent consideration of up to an aggregate of $ 120.0 million based on the achievement of specified clinical and approval milestones, of up to an aggregate of $ 70.0 million payable for clinical milestones, and of up to an aggregate of $ 50.0 million payable for approval milestones, all related to technology acquired under the agreement. In the year ended December 31, 2022, the Company incurred and made a $ 37.0 million milestone payment for the first administration of envu to a patient enrolled in a Phase 2 clinical trial of envu, which was recorded in research and development expenses in the consolidated statement of operations and comprehensive income (loss). In July 2024, the Company met a milestone in connection with the first administration of envu to a patient enrolled in a Phase 3 clinical trial of envu and made a $ 23.0 million milestone payment in August 2024, which was recorded in research and development expenses in the consolidated statement of operations and comprehensive income (loss) for year ended December 31, 2024. No other milestones were achieved or were probable of being achieved as of June 30, 2025. License and Commercialization Agreement with Pierre Fabre Upon the closing of the ACELYRIN Merger, the Company became the successor to ACELYRIN’s rights under the March 25, 2021 license and commercialization agreement with Pierre Fabre Medicament SAS (“Pierre Fabre”), as amended (the “Pierre Fabre Agreement”), through which ACELYRIN received certain exclusive worldwide licenses with the right to sublicense certain patents, know-how and other intellectual property to develop, manufacture, use and commercialize lonigutamab for non-oncology therapeutic indications. The license from Pierre Fabre extends to any product containing lonigutamab (excluding any fragments or derivatives) as its sole active ingredient (each, a “PF Licensed Product”). The Pierre Fabre Agreement prohibits the Company from using the licensed intellectual property in any antibody drug conjugate, multi-specific antibodies or any other derivatives of lonigutamab. The Company is obligated to (i) make payments of up to $ 100.5 million upon the achievement of various development and regulatory milestones, (ii) make milestone payments of up to $ 390.0 million upon the achievement of certain commercial milestones, and (iii) pay tiered royalties in the high single-digit to low-teen percentages to Pierre Fabre on worldwide net sales in a given calendar year. Royalties will be payable for each PF Licensed Product in a given country during a period commencing upon the first commercial sale of such PF Licensed Product in such country and continuing until the latest of (a) 10 years after such first commercial sale, (b) expiration of last-to-expire valid claim in a licensed patent in such country and (c) expiration of regulatory exclusivity for such PF Licensed Product in such country. In the event the Company enters into a sublicense with a third party, the Company must also share with Pierre Fabre a percentage of any revenues from option fees, upfront payments, license maintenance fees, milestone payments or the like generated 28 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) from the sublicense. Such percentage may be between the high single-digits to the low thirties based on which stage of development of a PF Licensed Product the sublicense relates to. Unless earlier terminated, the Pierre Fabre Agreement will continue on a PF Licensed Product-by-PF Licensed Product and country-by-country basis until there are no more royalty payments owed to Pierre Fabre on any PF Licensed Product thereunder. Either party may terminate the Pierre Fabre Agreement upon an uncured material breach, or upon the bankruptcy or insolvency of the other party. Pierre Fabre may also terminate the agreement if the Company or any of its affiliates institutes a patent challenge against the licensed patents from Pierre Fabre. The Company may also terminate the Pierre Fabre Agreement with or without cause upon nine months ’ prior written notice, so long as there is no ongoing clinical trial for any PF Licensed Product. As of June 30, 2025, no milestones were probable and accrued in the unaudited condensed consolidated balance sheets. Research and Development Agreements The Company enters into various agreements in the ordinary course of business, such as those with suppliers, clinical research organizations (“CROs”) , contract manufacturing organizations (“CMOs”) and clinical trial sites. Upon the closing of the ACELYRIN Merger, the Company became the successor to contracts with non-cancellable obligations under ACELYRIN contracts. As of June 30, 2025, and December 31, 2024, the total value of non-cancellable obligations under contracts was $ 7.1 million and zero , respectively. This presentation of non-cancellable purchase obligations does not include any estimates of potential reduction of such liabilities related to mitigation obligations of the counterparties in the event of cancellation under the terms of its engagements. Legal Contingencies From time to time, the Company has and may become involved in legal proceedings arising in the ordinary course of business, any or all of which could have a material adverse impact on the Company, including its financial position. The outcomes of legal proceedings are not within the Company’s complete control and may not be known for prolonged periods of time. The Company records a liability for such matters when it is probable that future losses will be incurred and that such losses can be reasonably estimated. Significant judgment by the Company is required to determine both probability and the estimated amount. On November 15, 2023, a purported federal securities class action lawsuit was commenced in the United States District Court for the Central District of California. On February 15, 2024, the Court appointed joint lead plaintiffs and lead counsel. An amended complaint was filed on March 26, 2024 (Boukadoum v. Acelyrin, Inc. et al., No. 2:23-cv-09672-FMO-MAA), naming ACELYRIN and then-current and former executive officers and directors as defendants. The complaint alleges that the defendants violated the Exchange Act and Securities Act by misleading investors about the Phase 2b trial of izokibep in hidradenitis suppurativa. The original complaint was filed following ACELYRIN’s announcement of the week 16 results from the Part B portion of such Phase 2b trial. The amended complaint seeks damages and an award of reasonable costs and expenses, including attorneys’ fees, expert fees and other costs, as well as such other and further relief as the court may deem just and proper. On May 3, 2024, defendants filed their motion to dismiss the amended complaint, which remains pending. It is possible that additional suits will be filed, or allegations made by stockholders, with respect to these same or other matters and also naming the Company and/or its officers and directors as defendants. This lawsuit and any other potential lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. The outcome of this lawsuit is necessarily uncertain. The Company could be forced to expend significant resources in the defense against this and any other related lawsuits and the Company may not prevail. The Company currently is not able to estimate the possible loss to the Company from this lawsuit, as this lawsuit is currently at an early stage, and such 29 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) amounts could be material to the Company’s financial statements even if the Company prevails in the defense against this lawsuit. The Company cannot be certain how long it may take to resolve this lawsuit or the possible amount of any damages that the Company may be required to pay. The Company does not consider any payment to be probable or reasonably estimable and has not accrued for any potential liability relating to this lawsuit. Guarantees and Indemnifications In the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification. Its exposure under these agreements is unknown because it involves claims that may be made against the Company in the future. To the extent permitted under Delaware law, the Company has agreed to indemnify its directors and officers for certain events or occurrences while the director or officer is, or was serving, at a request in such capacity. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. As of June 30, 2025 and December 31, 2024, the Company did not have any material indemnification claims that were probable or reasonably possible and consequently has not recorded related liabilities. 10. Redeemable Convertible Preferred Stock In March 2024, the Company issued and sold an aggregate of 41,264,891 shares of Series C redeemable convertible preferred stock for gross proceeds of $ 129.5 million and incurred $ 0.4 million of offering costs. The purchase price for Series C redeemable convertible preferred stock was $ 3.13826 per share. Under the Series C stock purchase agreement, any time prior to the earliest of (i) December 31, 2024, (ii) the execution of a letter of intent for the sale of the Company, or (iii) the closing date of the Company’s IPO, at the discretion of the Company’s board of directors, the Company was obligated to sell and each Series C purchaser was obligated to purchase additional shares of Series C redeemable convertible preferred stock with the amount equal to the purchaser’s aggregate purchase price in the first tranche Series C closing less any previous payments by the purchaser as part of the Put Right (as defined below) exercise. If the purchaser did not purchase its full share in the second tranche closing (the “Second Tranche Series C Closing”), all of its existing shares of Series C redeemable convertible stock and Series C-1 redeemable convertible preferred stock were convertible into voting common stock at a 10 -to-1 basis. Additionally, a purchaser had a right to purchase shares of Series C-1 redeemable convertible preferred stock at a purchase price of $ 4.00 per share beginning from the earlier of (a) September 4, 2024 or (b) the date of a significant partnering or collaboration agreement and expiring upon the earlier of (a) December 31, 2024, (b) the public filing of a registration statement on Form S-1 for the IPO, (c) the Second Tranche Series C Closing and (d) the execution of a letter of intent for the sale of the Company (the “Put Right”). The Put Right could only be exercised once. The Company determined that the Second Tranche Series C Closing and the Put Right were two freestanding financial instruments and recognized the derivative liabilities at their estimated fair value of $ 8.9 million at the issuance date. In May 2024, the Company closed the Second Tranche Series C Closing and issued an additional 41,264,892 shares of Series C redeemable convertible preferred stock at a price of $ 3.13826 per share. The Company received gross proceeds of $ 129.5 million and incurred $ 0.2 million of offering costs. Accordingly, the derivative liabilities were settled, and the Company reclassified the derivative liabilities, remeasured at fair value of $ 14.3 million, into redeemable convertible preferred stock. Immediately prior to the closing of the Company’s IPO on July 1, 2024, all outstanding shares of the Company’s redeemable convertible preferred stock were converted and then redesignated into voting and non-voting common stock and are no longer outstanding. 30 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 11. Stockholders’ Equity As of June 30, 2025, the Company was authorized to issue 50,000,000 shares of preferred stock, 492,815,092 shares of voting common stock and 7,184,908 shares of non-voting common stock, all with par values of $ 0.0001 per share. As of June 30, 2025, there were no shares of preferred stock issued or outstanding, 96,857,569 shares of voting common stock issued and outstanding and 7,184,908 shares non-voting common stock issued outstanding. The holders of voting and non-voting common stock have the same rights except that non-voting common stock does not have voting rights, except as may be required by law. Each holder of non-voting common stock has a right to convert each share of non-voting common stock to one share of voting common stock subject to the following limitations. At any time following the Company’s registration of any class of equity securities under the Exchange Act, the holders of shares of non-voting common stock may not convert a number of shares of non-voting common stock into shares of voting common stock in excess of that number of shares of non-voting common stock which would cause the holder thereof to beneficially own (for purposes of Section 13(d) of the Exchange Act), in excess of 4.99 % of the total number of issued and outstanding shares of voting common stock. Such maximum percentage may be increased or decreased to such other percentage as any holder of outstanding shares of non-voting common stock may designate in writing (in the case of an increase upon 61 days ’ prior written notice). Common stock reserved for issuance, on an as-converted basis, consisted of the following as of June 30, 2025 and December 31, 2024: ​ ​ ​ ​ ​ ​ ​ June 30, December 31, ​ ​ 2025 ​ 2024 Stock options issued and outstanding 18,190,124 9,458,788 RSUs issued and outstanding ​ 672,117 ​ — Shares available for grant under the 2024 Equity Incentive Plan ​ 5,430,350 ​ 6,893,517 Shares available for grant under the 2024 Employee Stock Purchase Plan ​ 1,009,440 ​ 650,000 Shares available for grant under the ACELYRIN, Inc. 2023 Equity Incentive Plan ​ 6,321,733 ​ — Shares available for grant under the 2024 Performance Option Plan ​ 98,681 ​ 92,800 Total 31,722,445 17,095,105 ​ Common Stock Issued to Executives In February 2021, the Company issued 100,532 shares of restricted common stock to two executives at a purchase price of $ 0.94 per share. The shares vested over a four-year period with a one-year cliff. While the shares were unvested, the holders had voting and dividends rights and the Company had the right to repurchase unvested shares of common stock at the price paid by the holder in the event of termination of the holder’s continuous status as a service provider. The Company estimated the fair value of the restricted stock awards based on the fair value of common stock at the grant dates. The expense was recognized ratably over the vesting terms. The Company recognized less than $ 0.1 million of stock-based compensation expense for the three and six months ended June 30, 2025 and 2024. 31 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The following table summarizes the activity for the Company’s restricted common stock for the six months ended June 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ Number of ​ Grant Date ​ ​ Shares ​ Fair Value Unvested as of December 31, 2024 2,583 ​ $ 2.90 Vested ( 2,583 ) ​ $ 2.90 Unvested as of June 30, 2025 — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12. Stock-Based Compensation 2021 Stock Plan In February 2021, the Company adopted its 2021 Stock Plan (the “2021 Plan”), which provided for stock awards to eligible employees, directors and consultants of the Company. Awards issuable under the 2021 Plan included incentive stock options (“ISOs”), non-statutory stock options (“NSOs”), restricted stock units (“RSUs”) and stock grants. Subsequent to the adoption of the 2024 Equity Incentive Plan (the “2024 EIP”) in June 2024, described below, no additional shares were available for issuance under the 2021 Plan, and any stock options granted under the 2021 Plan that were subsequently forfeited would be made available for issuance under the 2024 EIP. The terms of the 2021 Plan permit option holders to exercise options before their options are vested. The shares of common stock granted upon early exercise that have not yet vested are subject to repurchase by the Company in the event of termination of the holder’s continuous status as a service provider, at the price paid by the holder. Stock Option Repricing In March 2024, the Company’s board of directors approved the repricing of all outstanding options as of March 29, 2024, which have an exercise price exceeding $ 8.84 per share. The exercise price of outstanding options with a weighted average exercise price of $ 10.23 for 4,603,443 common stock shares was reduced to the estimated common stock fair value of $ 8.84 per share at the date of the repricing. The vesting terms and expiration dates remain unchanged from the original grant dates. The stock option repricing was treated as an option modification for accounting purposes and resulted in total incremental expense of $ 0.7 million, of which $ 0.1 million incremental expense associated with the vested options was recognized on the modification date. The remaining $ 0.6 million incremental expense associated with the unvested options as of the modification date is being recognized over the remainder of the original requisite service period. 2024 Performance Option Plan In May 2024, the Company’s board of directors adopted, and its stockholders approved, the 2024 Performance Option Plan (the “2024 POP”). The Company reserved 1,880,680 shares of common stock issuable under the 2024 POP. The 2024 POP permits grants of ISOs, NSOs and restricted stock awards to the Company’s employees, directors and consultants. In May 2024, the Company granted NSOs to employees to purchase 1,880,680 shares of common stock at an exercise price of $ 10.19 under the 2024 POP. Options generally vest on the date when the Company meets certain common stock public market price specified targets after the end of the lock-up period, subject to continuous service through each respective vest date. The price targets are calculated based on the volume weighted average price per share over 30 32 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) consecutive trading dates, in accordance with the grant terms. The unvested awards will expire if it is determined that the vesting conditions have not been met during the applicable six-year performance period. The service condition includes monthly vesting over 36 months from the vesting commencement date and the employee’s continuous service with the Company through each such monthly vesting date. The terms of the 2024 POP permit option holders to exercise options before their options are vested if the market condition has been met. 2024 Equity Incentive Plan In June 2024, the Company’s board of directors adopted, and its stockholders approved, the 2024 EIP, which became effective on June 27, 2024, upon execution of the underwriting agreement related to the Company’s IPO. The Company reserved 7,800,000 new shares of common stock for issuance under the 2024 EIP. In addition, up to 6,829,339 shares subject to awards under the 2021 Plan that terminate, expire, or lapse for any reason without the delivery of shares, or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price, were authorized to be added to the 2024 EIP. The 2024 EIP is a successor to the 2021 Plan and no further grants will be made under the 2021 Plan. The 2024 EIP also provides that the number of shares initially reserved and available for issuance will automatically increase each January 1, beginning on January 1, 2025 through January 1, 2034, by an amount equal to 5 % of the outstanding number of shares of the Company’s common stock as of the last day of the immediately preceding fiscal year, or such lesser number of shares as determined by the board of directors prior to the applicable January 1. Pursuant to this evergreen provision, the Company increased the number of shares reserved under the 2024 EIP by 2,720,366 on January 1, 2025. No more than 43,888,017 shares of common stock may be issued upon the exercise of incentive stock options under the 2024 EIP. The 2024 EIP allows the Company to make equity-based awards to its officers, employees, directors and consultants. The 2024 EIP provides for the grant of ISOs, NSOs, restricted stock awards, RSUs, stock appreciation rights, performance awards and other stock-based awards. Options under the 2024 EIP may be granted for periods of up to 10 years at exercise prices no less than the fair market value of common stock on the date of grant; provided, however, that the exercise price of an incentive stock option granted to a 10% stockholder may not be less than 110 % of the fair market value of the shares on the date of grant and such option may not be exercisable after the expiration of five years from the date of grant. Stock option grants under the 2024 EIP generally vest over four years . The grant date fair market value of all awards made under the 2024 EIP and all cash compensation paid by the Company to any non-employee director for services as a director in any fiscal year may not exceed $ 750,000 , increased to $ 1,000,000 in the fiscal year of their initial service as a non-employee director. The terms of the 2024 EIP do not permit option holders to exercise options before their options are vested. ACELYRIN Plans Pursuant to the Merger Agreement, the Company assumed certain stock options, RSUs and performance RSUs outstanding under the ACELYRIN, Inc. 2020 Stock Option and Grant Plan, as amended (the “ACELYRIN 2020 Plan”), the ValenzaBio, Inc. Stock Plan (the “ValenzaBio Plan”) and the ACELYRIN, Inc. 2023 Equity Incentive Plan (the “ACELYRIN 2023 Plan” and, together with the ACELYRIN 2020 Plan and the ValenzaBio Plan, the “ACELYRIN Plans”). In connection with the closing of the ACELYRIN Merger, the Company also assumed the ACELYRIN 2023 Plan, which, as modified in connection with such assumption, permits equity awards to be issued to the extent permissible under applicable law and Nasdaq listing rules. Stock options that were outstanding under the ACELYRIN Plans immediately prior to the Closing Date were assumed by the Company and converted into options to purchase the Company’s common stock. RSUs that were outstanding and unvested immediately prior to the Closing Date were assumed by the Company and converted into the Company’s RSU awards. Performance RSUs outstanding and unvested immediately prior to the Closing Date were converted into the Company’s RSU awards subject only to a service vesting condition. 33 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Stock Option Activity The following table summarizes the Company’s stock option activity, excluding under the 2024 POP, for the six months ended June 30, 2025. The table includes early exercised shares as part of options exercised. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ Aggregate ​ ​ Exercise Contractual Intrinsic ​ ​ ​ ​ Price Per ​ Term ​ Value ​ ​ Options ​ Share ​ (in years) ​ (in thousands) Outstanding as of December 31, 2024 7,670,908 ​ $ 9.59 8.2 ​ $ 1,777 Stock options assumed in connection with the ACELYRIN Merger ​ 4,712,186 ​ $ 12.99 ​ ​ ​ ​ ​ Granted 4,268,940 ​ $ 4.99 ​ ​ ​ ​ ​ Exercised — ​ $ — ​ ​ ​ $ — Forfeited or expired ( 243,909 ) ​ $ 12.53 ​ ​ ​ ​ ​ Outstanding, vested and expected to vest as of June 30, 2025 16,408,125 ​ $ 9.33 ​ 7.0 ​ $ 6,092 Exercisable as of June 30, 2025 ​ 10,120,188 ​ $ 10.55 ​ 5.8 ​ $ 1,121 ​ Total exercisable shares of 10,120,188 as of June 30, 2025 included 2,818,430 unvested shares that were early exercisable under the 2021 Plan. The total fair value of stock options vested during the six months ended June 30, 2025 and 2024 was $ 15.6 million and $ 5.5 million, respectively. The following table summarizes the Company’s stock option activity under the 2024 POP for the six months ended June 30, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ Weighted- ​ Average ​ ​ ​ ​ ​ ​ ​ Average ​ Remaining ​ Aggregate ​ ​ ​ ​ Exercise ​ Contractual ​ Intrinsic ​ ​ ​ ​ Price Per ​ Term ​ Value ​ ​ Options ​ Share ​ (in years) ​ (in thousands) Outstanding as of December 31, 2024 1,787,880 ​ $ 10.19 ​ 9.3 ​ $ — Granted — ​ $ — ​ ​ ​ Forfeited or expired ( 5,881 ) ​ $ 10.19 ​ ​ ​ ​ Outstanding, vested and expected to vest as of June 30, 2025 1,781,999 ​ $ 10.19 ​ 8.5 ​ $ — Exercisable as of June 30, 2025 — ​ $ — ​ — ​ $ — ​ Valuation of Stock Options Granted under Non-Performance Plans The weighted-average grant date fair value of stock options granted for the six months ended June 30, 2025 and 2024 was $ 4.02 and $ 10.47 per stock option, respectively. 34 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The fair value of stock options granted for the six months ended June 30, 2025 and 2024 was estimated using the Black-Scholes option pricing model with the following assumptions: ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ 2025 2024 Expected term (in years) ​ 5.23 - 6.08 5.92 - 6.08 Volatility ​ 98.84 % - 102.72 % 103.65 % - 105.69 % Risk-free interest rate ​ 4.00 % - 4.65 % 4.20 % - 4.48 % Dividend yield ​ 0.00 % ​ 0.00 % ​ Expected Term The expected term represents the weighted-average period the stock options are expected to remain outstanding and is based on the options’ vesting terms and contractual terms, as the Company did not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. Expected Volatility The expected stock price volatility assumption was determined by examining the historical volatilities for industry peers, as the Company did not have sufficient trading history of its common stock. The Company will continue to use industry peers in determining historical stock price volatility until sufficient historical data of its common stock becomes available. Risk-Free Interest Rate The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options. Dividends The Company has not paid any cash dividends on common stock since inception and does not anticipate paying any dividends in the foreseeable future. Consequently, an expected dividend yield of zero was used. Valuation of Stock Options Granted under the 2024 POP Stock options granted under the 2024 POP vest based on service, market and performance conditions (the occurrence of the IPO or a change of control) and are classified as equity financial instruments. At the grant date, the fair value of stock options granted under the 2024 POP was estimated using a Monte Carlo simulation model, which uses a distribution of potential outcomes on a monthly basis over the vesting period prioritizing the most reliable information available. The assumptions utilized in the calculation were based on the achievement of certain stock price thresholds, including the Company’s expected common stock price, expected volatility, risk-free rate and expected term. The Company used the following assumptions to estimate the fair value at the grant date in May 2024: common stock fair value of $ 12.06 , vesting term of 6.0 years, volatility of 122.00 %, and risk-free rate of 4.38 %. The estimates of fair value are uncertain and changes in any of the estimated inputs could have resulted in significant adjustments to the fair value. The Company’s estimated fair value of stock options issued under the 2024 POP of $ 18.0 million is recognized using graded vesting from July 1, 2024, the closing of the IPO, when the performance condition was met, over the longer of (i) the explicit service period of the service condition of 36 months or (ii) the derived service period between 1.4 years to 2.1 years), as determined for each graded vesting tranche. 35 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Early Exercise of Employee Stock Options Proceeds from the early exercise of stock options are recorded as share repurchase liability, and as shares vest are recognized to additional paid-in capital in the condensed consolidated balance sheets. As of June 30, 2025 and December 31, 2024, there was $ 0.4 million and $ 0.8 million share repurchase liability related to the unvested shares, respectively, included in share repurchase liability in the condensed consolidated balance sheets. The following table summarizes the activity for the Company’s early exercised shares for the six months ended June 30, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ Number of ​ Exercise Price ​ Shares Per Share Unvested as of December 31, 2024 146,683 ​ $ 5.53 Vested ( 85,040 ) ​ $ 4.99 Unvested as of June 30, 2025 61,643 ​ $ 6.27 ​ 2024 Employee Stock Purchase Plan In June 2024, the Company’s board of directors adopted, and its stockholders approved, the 2024 ESPP, which became effective on June 28, 2024, upon execution of the underwriting agreement related to the Company’s IPO. The Company initially reserved 650,000 shares of common stock for issuance under the 2024 ESPP. The number of shares of common stock reserved for issuance under the 2024 ESPP will be automatically increased each year for ten calendar years beginning on January 1, 2025 through January 1, 2034, by the lesser of (i) 1 % of the total number of shares of our common stock outstanding on the last day of the calendar month before the date of the automatic increase, and (ii) 1,950,000 shares; provided that before the date of any such increase, the board of directors may determine that such increase will be less than the amount in (i) and (ii) above. Pursuant to this evergreen provision, the Company increased the number of shares reserved under the 2024 ESPP by 544,073 on January 1, 2025. The 2024 ESPP allows an eligible employee to purchase shares of common stock at an amount equal to 85 % of the lower of the fair market value of the Company’s common stock at the beginning of the offering period or at each applicable purchase date during an offering period as established by the board of directors. The first purchase period commenced on January 24, 2025 and ended on May 20, 2025. During the six months ended June 30, 2025, 184,633 shares of common stock were purchased under the ESPP. The following table summarizes the Black-Scholes option pricing model used in estimating the fair value of the stock purchase rights under the ESPP during the six months ended June 30, 2025. ​ ​ ​ ​ ​ ​ Six Months Ended ​ June 30, 2025 Expected term (in years) ​ 0.32 - 0.50 Volatility ​ 79.42 % - 133.00 % Risk-free interest rate ​ 4.25 % - 4.33 % Dividend yield ​ 0.00 % ​ 36 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Restricted Stock Units A summary of unvested RSU activity is presented in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ ​ ​ Grant Date ​ ​ Number of ​ Fair Value ​ Shares Per Share RSUs assumed in connection with the ACELYRIN Merger 1,470,868 ​ $ 13.46 RSUs granted — ​ $ — RSUs released ​ ( 798,751 ) ​ $ 14.69 RSUs forfeited — ​ $ — Unvested as of June 30, 2025 672,117 ​ $ 11.99 ​ Stock-Based Compensation Expense The following table summarizes the stock-based compensation expense recognized in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2025 and 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ 2025 2024 2025 2024 Research and development ​ $ 7,225 ​ $ 1,641 ​ $ 10,944 ​ $ 3,085 General and administrative ​ 11,410 ​ ​ 1,492 ​ ​ 14,686 ​ ​ 2,705 Total stock-based compensation expense ​ $ 18,635 ​ $ 3,133 ​ $ 25,630 ​ $ 5,790 ​ Stock-based compensation expense included $ 7.8 million as general and administrative expenses and $ 3.0 million as research and development expenses for the three and six months ended June 30, 2025, related to accelerated vesting and exercise term modification in connection with the ACELYRIN Merger. ​ The following table summarizes the stock-based compensation expense recognized in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss) by award type for the three and six months ended June 30, 2025 and 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ 2025 2024 2025 2024 Stock options ​ $ 13,989 ​ $ 3,115 ​ $ 20,792 ​ $ 5,754 RSUs ​ ​ 4,397 ​ ​ — ​ ​ 4,397 ​ ​ — ESPP ​ ​ 249 ​ ​ — ​ ​ 435 ​ ​ — Restricted stock awards ​ — ​ ​ 18 ​ ​ 6 ​ ​ 36 Total stock-based compensation expense ​ $ 18,635 ​ $ 3,133 ​ $ 25,630 ​ $ 5,790 ​ Stock-based compensation expense related to non-employee awards was $ 0.1 million and less than $ 0.1 million for the three months ended June 30, 2025 and 2024, respectively and $ 0.3 million and $ 0.1 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, there was an unrecognized stock-based compensation expense of $ 62.0 million related to stock options granted which the Company expects to recognize over a weighted-average period of 2.5 years. 37 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 13. Employee Benefit Plans The Company sponsors a qualified 401(k) defined contribution plan covering eligible employees. Participants may contribute a portion of their annual compensation limited to a maximum annual amount set by the Internal Revenue Service. There were no employer contributions under this plan for the three and six months ended June 30, 2025 and 2024. ​ 14. Net Income (Loss) Per Share Attributable to Common Stockholders The following table presents the computation of the basic and diluted net income (loss) per share attributable to common stockholders for the three and six months ended June 30, 2025 and 2024 (in thousands, except share and per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ 2025 2024 2025 2024 Numerator: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ 59,321 ​ $ ( 56,508 ) ​ $ ( 39,642 ) ​ $ ( 106,357 ) Denominator: ​ ​ ​ ​ ​ Weighted-average shares of common stock outstanding ​ 76,559,569 ​ 2,700,082 ​ 65,544,642 ​ 2,689,624 Less: Weighted-average shares of common stock subject to repurchase ​ ( 82,425 ) ​ ( 254,060 ) ​ ( 104,621 ) ​ ( 281,587 ) Weighted-average shares of common stock outstanding, basic ​ ​ 76,477,144 ​ ​ 2,446,022 ​ ​ 65,440,021 ​ ​ 2,408,037 Dilutive effect of issuable shares of common stock ​ ​ 158,751 ​ ​ — ​ ​ — ​ ​ — Weighted-average shares of common stock outstanding, diluted ​ ​ 76,635,895 ​ ​ 2,446,022 ​ ​ 65,440,021 ​ ​ 2,408,037 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) per share attributable to common stockholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.78 ​ $ ( 23.10 ) ​ $ ( 0.61 ) ​ $ ( 44.17 ) Diluted ​ ​ 0.77 ​ ​ ( 23.10 ) ​ ​ ( 0.61 ) ​ ​ ( 44.17 ) ​ The following outstanding potentially dilutive securities were excluded from the computation of diluted net income (loss) per share attributable to common stockholders for the periods presented, because including them would have been antidilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ 2025 2024 2025 2024 Stock options issued and outstanding 17,746,130 8,725,148 18,190,124 8,725,148 RSUs issued and outstanding ​ 212,118 ​ — ​ 672,117 ​ — Common stock issuable under the 2024 ESPP ​ 135,993 ​ — ​ 264,207 ​ — Early exercised stock options and unvested restricted common stock 61,643 246,516 61,643 246,516 Redeemable convertible preferred stock issued and outstanding, as converted ​ — ​ 36,040,564 ​ — ​ 36,040,564 Total 18,155,884 45,012,228 19,188,091 45,012,228 ​ ​ 38 Table of Contents ALUMIS INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 15. Segment Reporting For purposes of evaluating performance and allocating resources, the Company’s CODM, its Chief Executive Officer, regularly reviews consolidated net income (loss) as reported in the Company’s consolidated statements of operations and comprehensive income (loss) as compared to budget. The measure of segment assets is reported in the condensed consolidated balance sheets as total consolidated assets. In addition to the significant expense categories included within net income (loss) presented in the Company’s consolidated statements of operations and comprehensive income (loss), see below for disaggregated amounts that comprise research and development expenses for the three and six months ended June 30, 2025 and 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Six Months Ended June 30, ​ ​ 2025 2024 2025 2024 Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ License revenue ​ $ — ​ $ — ​ $ 17,389 ​ $ — ​ Collaboration revenue ​ ​ 2,666 ​ ​ — ​ ​ 2,666 ​ ​ — ​ Total revenue ​ ​ 2,666 ​ ​ — ​ ​ 20,055 ​ ​ — ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and development expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ External costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ CROs, CMOs and clinical trials ​ ​ 66,089 ​ ​ 26,849 ​ ​ 131,162 ​ ​ 51,113 ​ Professional consulting services ​ ​ 7,417 ​ ​ 4,765 ​ ​ 13,821 ​ ​ 8,290 ​ Other research and development costs ​ ​ 2,995 ​ ​ 3,597 ​ ​ 5,291 ​ ​ 5,594 ​ Internal costs ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel-related costs ​ ​ 26,821 ​ ​ 10,134 ​ ​ 44,479 ​ ​ 19,229 ​ Facilities and overhead costs ​ ​ 5,433 ​ ​ 3,220 ​ ​ 10,624 ​ ​ 6,300 ​ Total research and development expense ​ ​ 108,755 ​ ​ 48,565 ​ ​ 205,377 ​ ​ 90,526 ​ General and administrative expenses ​ ​ 34,450 ​ ​ 7,575 ​ ​ 56,745 ​ ​ 13,207 ​ Total operating expenses ​ 143,205 ​ 56,140 ​ 262,122 ​ 103,733 ​ Loss from operations ​ ( 140,539 ) ​ ( 56,140 ) ​ ( 242,067 ) ​ ( 103,733 ) ​ Total other income (expense), net ​ ​ 191,299 ​ ​ ( 368 ) ​ 193,864 ​ ( 2,624 ) ​ Net income (loss) before income taxes ​ ​ 50,760 ​ ​ ( 56,508 ) ​ ​ ( 48,203 ) ​ ​ ( 106,357 ) ​ Income tax benefit ​ ​ 8,561 ​ ​ — ​ ​ 8,561 ​ ​ — ​ Net income (loss) ​ $ 59,321 ​ $ ( 56,508 ) ​ $ ( 39,642 ) ​ $ ( 106,357 ) ​ ​ ​ 16. Subsequent Events One Big Beautiful Bill Act On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, including, but not limited to, modifications of capitalization of research and development expenses and accelerated fixed asset depreciation. The Company is currently assessing the impact of the OBBBA on its consolidated financial statements and disclosures. ​ ​ ​ ​ 39 Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations and the unaudited interim condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q should be read in conjunction with the financial statements and related notes thereto as of and for the year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in the Annual Report on Form 10-K filed with the SEC on March 19, 2025. This discussion and analysis and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements based upon current beliefs, plans and expectations related to future events and our future financial performance that involve risks, uncertainties and assumptions, such as statements regarding our intentions, plans, objectives and expectations for our business. Our actual results and the timing of selected events could differ materially from those described in or implied by these forward-looking statements as a result of several factors, including those set forth under “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. See also the section titled “Special Note Regarding Forward-Looking Statements.” Overview Our mission is to significantly improve the lives of patients by replacing broad immunosuppression with targeted therapies. Our name, Alumis, captures our mission to enlighten immunology, and is inspired by the words “allumer”—French for illuminate—and “immunis”—Latin for the immune system. We are a clinical stage biopharmaceutical company with an initial focus on developing our two Tyrosine Kinase 2 (“TYK2”) inhibitors: envudeucitinib (or “envu”), formerly known as ESK-001, a second-generation inhibitor that we are developing to maximize target inhibition and optimize tolerability, and A-005, a central nervous system (“CNS”) penetrant molecule. Envu has demonstrated significant therapeutic effect in our Phase 2 program in patients with moderate-to-severe plaque psoriasis (“PsO”), and is currently being evaluated in an additional Phase 2 clinical trial in patients with systemic lupus erythematosus (“SLE”), for which we expect to report topline results in the third quarter of 2026. With the favorable results in our Phase 2 clinical trial in PsO, we have initiated our Phase 3 ONWARD clinical program, which consists of two parallel Phase 3 clinical trials of envu in this indication and for which we expect to report topline results early in the first quarter of 2026. These parallel Phase 3 clinical trials also include one long-term extension (“LTE”) study, ONWARD3. In addition, the open-label extension (“OLE”) of our Phase 2 clinical trial in PsO remains ongoing. TYK2 genetic mutations are associated with a strong protective effect in multiple sclerosis, motivating us to develop our second product candidate, A-005, as a CNS-penetrant, allosteric TYK2 inhibitor for neuroinflammatory and neurodegenerative diseases. In April 2024, we initiated our Phase 1 program of A-005 in healthy volunteers and reported initial results in December 2024. In addition, in connection with the ACELYRIN Merger, we acquired lonigutamab, a subcutaneously delivered, monoclonal antibody targeting IGF-1R for the potential treatment of TED. We are continuing to evaluate the development program for lonigutamab and its potential differentiation in a capital efficient manner. Since our inception, we have devoted substantially all of our efforts to organizing our company, hiring personnel, business planning, acquiring and developing our product candidates, performing research and development, conducting preclinical studies and clinical trials, establishing and protecting our intellectual property portfolio, raising capital and providing general and administrative support for these activities. We do not have any products approved for sale and have not generated any revenue from product sales. We expect to continue to incur significant and increasing expenses and increasing substantial losses for the foreseeable future as we continue our development of and seek regulatory approvals for our product candidates and commercialize any approved products, seek to expand our product pipeline and invest in our expanded organization following the ACELYRIN Merger. Our ability to achieve and sustain profitability will depend on our ability to successfully develop, obtain regulatory approval for and commercialize our product candidates. There can be no assurance that we will ever achieve profitability, or if achieved, that the revenue or profitability will be sustained on a continuing basis. To date, we have primarily funded our operations primarily through issuance of common stock, including in our IPO and Concurrent Private Placement, the issuance of redeemable convertible preferred stock and convertible promissory notes in private placements and, most recently, the acquisition of cash, cash equivalents and marketable securities in connection with the ACELYRIN Merger and payments received under our Collaboration Agreement with Kaken. 40 Table of Contents We have incurred significant operating losses and negative cash flows since our inception. Our net income (loss) for the three and six months ended June 30, 2025 and 2024 was $59.3 million, $(56.5) million, $(39.6) million and $(106.4) million, respectively. As of June 30, 2025, we had an accumulated deficit of $698.2 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development efforts, including acquisitions of in-process research and development assets, and, to a lesser extent, from general and administrative costs associated with our operations. Our net losses and operating losses may fluctuate from quarter to quarter and year to year depending primarily on the timing of acquisition of any new product candidates, the timing of our preclinical studies and clinical trials, our other research and development expenses, and the timing and amount of any milestone or royalty payments due under our existing or future license agreements. In addition, we have incurred and will continue to incur substantial expenses associated with the ACELYRIN Merger and the integration and development activities related to the acquired ACELYRIN business. We have incurred and will continue to incur additional costs associated with operating as a public company, including significant legal, audit, accounting, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer liability insurance costs, investor and public relations costs, and other expenses that we did not incur as a private company. We anticipate that our expenses will increase significantly in connection with our ongoing activities, particularly if and as we: ● continue to progress the development of our product candidates in multiple clinical trials in parallel; ● continue committing substantial capital resources to the integration and development activities related to the acquired ACELYRIN business; ● explore additional indications for our existing product candidates; ● hire additional clinical and scientific personnel; ● obtain, maintain, expand and protect our intellectual property rights; ● make royalty, milestone or other payments under our FronThera Acquisition agreement, Pierre Fabre Agreement and any future license or collaboration agreements; ● seek to identify, acquire or in-license new technologies or product candidates; ● seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical trials, if any; ● procure manufacturing and supply chain capacity for our product candidates, including commercial manufacturing readiness and scale-up; ● experience any delays, challenges or other issues associated with the clinical development and regulatory approvals of our product candidates; ● add operational, legal, financial and management information systems and personnel to support our product development, clinical execution and planned future commercialization efforts, as well as to support our operating as a public company; ● establish a sales, marketing and distribution infrastructure to commercialize any product candidates for which we obtain marketing approval; and ● operate as a public company. 41 Table of Contents We do not have any products approved for sale and have not generated any revenue from product sales since our inception. We do not expect to generate revenue from any product candidates that we develop until we obtain regulatory approval for one or more of such product candidates and commercialize our products or enter into collaboration agreements with third parties. Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we may never achieve or sustain profitability and, unless and until we are able to develop and commercialize our product candidates, we will need to continue to raise additional capital. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through public or private equity or debt financings, or potentially other capital sources, such as collaboration or licensing arrangements with third parties or other strategic transactions. There are no assurances that we will be successful in obtaining an adequate level of financing to support our business plans when needed on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through collaboration or licensing arrangements with third parties or other strategic transactions, we may have to relinquish rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise capital as and when needed, or on attractive terms, we may have to significantly delay, reduce, or discontinue the development and commercialization of our product candidates or scale back or terminate our pursuit of new in-licenses and acquisitions. We do not currently own or operate any manufacturing facility. We rely on CMOs to produce our product candidates in accordance with the U.S. Food and Drug Administration’s (the “FDA”) current Good Manufacturing Practices (“cGMP”) regulations for use in our clinical studies. We have entered into development and manufacturing agreements with various CMOs relating to process development, manufacturing of drug substance and drug product, and quality testing of our product candidates. We expect to rely on our CMOs in the future for the manufacturing of our product candidates in order to expedite readiness for future clinical trials. Most of these CMOs have demonstrated capability in preparation of materials for commercialization. Additionally, we may decide to build our own manufacturing facility in the future to provide us greater flexibility and control over our clinical or commercial manufacturing needs. Given our stage of development, we do not yet have a marketing or sales organization or commercial infrastructure; however, we intend to build the necessary sales, marketing and commercialization capabilities and infrastructure over time as our product candidates advance through clinical development. We expect to spend a significant amount in commercial development and marketing costs prior to obtaining regulatory and marketing approval of one or more of our product candidates. IPO and Concurrent Private Placement On July 1, 2024, we completed our IPO, pursuant to which we issued and sold 13,125,000 shares of our common stock at $16.00 price per share to the public. Net proceeds from the IPO were $193.3 million, after deducting underwriting discounts and commissions and other offering costs totaling $16.7 million. In connection with the IPO, an existing investor and a holder of more than 5% of our capital stock, purchased an additional 2,500,000 shares of our common stock at the IPO price per share for total gross and net proceeds of $40.0 million in a private placement transaction. The closing of the Concurrent Private Placement was contingent on the closing of the IPO. The sale of such shares is not registered under the Securities Act, and as such, the shares may not be offered or sold absent registration or an applicable exemption from registration. The shares sold in connection with the Concurrent Private Placement are subject to existing resale registration rights. The Concurrent Private Placement closed on July 17, 2024. Immediately prior to the closing of the IPO on July 1, 2024, all of the shares of our redeemable convertible preferred stock then outstanding converted into 28,855,656 shares of Class A common stock and 7,184,908 shares of Class B common stock at a 1-for-4.675 conversion ratio. All outstanding Class A common stock shares and all outstanding Class B common stock shares were redesignated immediately thereafter into the same number of shares of common stock and non-voting common stock, respectively. 42 Table of Contents ACELYRIN Merger On February 6, 2025, we entered into a Merger Agreement with ACELYRIN and Merger Sub, a Delaware corporation and a direct wholly owned subsidiary. The Merger Agreement was approved by the disinterested directors on our board of directors and the board of directors of ACELYRIN and was approved by the stockholders of each company on May 13, 2025. On May 21, 2025, we completed the ACELYRIN Merger in a common stock transaction valued at approximately $238.1 million settled through the issuance of 48,653,549 shares of our common stock to acquire net assets with a fair value of $426.0 million. See Note 3 to our unaudited condensed consolidated financial statements included in Part I, Item 1. of this Quarterly Report on Form 10-Q for additional information. Our results of operations include the accounts of ACELYRIN and its wholly owned subsidiary WH2, LLC after the closing of the Merger, and the accounts of Merger Sub from its incorporation in January 2025 until the ACELYRIN Merger. Accordingly, the results discussed below were impacted by the timing of the ACELYRIN Merger. WH2, LLC has not had any operations or any balances from its inception. See Note 2 to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. Macroeconomic Trends Our business and results of operations may be affected by worldwide economic conditions, which may continue to be impacted by global macroeconomic challenges and uncertainty in the markets, including severely diminished liquidity and credit availability, rising inflation and monetary supply shifts, rising interest rates, labor shortages, declines in consumer confidence, declines in economic growth, increases in unemployment rates, recession risks and uncertainty about economic and geopolitical stability (for example, related to the ongoing conflicts in Ukraine and Israel and the surrounding areas). Further, the United States and other countries have imposed and may continue to impose new trade restrictions and export regulations, have levied tariffs and taxes on certain goods, and could significantly increase tariffs on a broad array of goods. For example, the current Trump administration has proposed or enacted tariffs and substantial changes to trade policies, which could adversely affect our business, including imposing tariffs on certain foreign products, most recently from China, that have and may result in retaliatory tariffs on U.S. goods and services. The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods. Moreover, negative macroeconomic conditions could adversely impact our ability to obtain financing in the future on terms acceptable to us, or at all. To date, the macroeconomic trends discussed above have not had a material adverse impact on our business, financial condition or results of operations. If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. Components of Results of Operations Revenue On March 25, 2025, we entered into the Collaboration Agreement with Kaken. Under the terms of the Collaboration Agreement, we granted to Kaken an exclusive right to develop, manufacture and commercialize envu for dermatology indications in Japan, with options to expand the license, subject to opt-in payments and certain cost-sharing obligations on the part of Kaken, to include rheumatological and gastrointestinal diseases. Pursuant to the terms of the Collaboration Agreement, we are responsible for the global development of envu in the dermatology field, and Kaken is responsible for the clinical development, regulatory approvals and commercialization of envu in Japan in dermatology and other indications for which Kaken has exercised its option. Kaken is required to use commercially reasonable efforts to conduct all subsequent development, manufacture, and commercialization activities. The Collaboration Agreement further provides that we will retain rights to envu in all other indications and geographies. In March 2025, Kaken made an upfront, non-refundable payment of $20.0 million to us. In addition, Kaken will pay us an aggregate of $20.0 million towards global development costs of envu in the dermatology field through the end of 2026 and thereafter will pay a specified share of development costs applicable to the dermatology field, and for any field for which Kaken exercises its option, subject to Kaken's right to opt out of cost-sharing in certain indications in specified circumstances. In addition, Kaken would pay us up to an aggregate of $36.0 million upon the achievement of regulatory 43 Table of Contents milestones and upon Kaken’s exercise of its field expansion options for the rheumatology and gastrointestinal fields. In addition, we are entitled to receive aggregate payments of up to ¥15.5 billion upon the achievement of commercial milestones, plus tiered royalties at percentages ranging from the low double digits into the twenties on aggregate net sales of envu in Japan. Operating Expenses Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses, and include ACELYRIN’s operations subsequent to the Closing Date. Research and Development Expenses Research and development expenses consist of external and internal costs primarily related to acquiring and developing our research pipeline and technologies and clinical development of our product candidates. External costs include: ● costs associated with acquiring technology and intellectual property licenses that have no alternative future uses and costs incurred under in-license or assignment agreements, including milestone payments; ● expenses incurred in connection with the discovery and preclinical development of our pipeline programs; ● costs incurred in connection with the clinical development of our product candidates, including under agreements with CROs, CMOs and other third parties that conduct clinical trials and manufacture clinical supplies, product candidates and components on our behalf; and ● costs for third-party professional research and development consulting services. Internal costs include: ● research and development personnel-related costs, including salaries, annual bonuses, benefits, travel and meals expenses and stock-based compensation expense; and ● allocated facilities and other overhead costs, including software licenses, computer supplies and accessories and other miscellaneous expenses. We have acquired and may continue to acquire the rights to develop and commercialize new product candidates. Upfront and milestone payments are accrued for and expensed as in process research and development assets expense when the achievement of the milestone is probable up to the point of regulatory approval and, absent obtaining such approval, have no alternative future use. Milestone payments made after a product’s regulatory approval will be capitalized and amortized over the remaining useful life of the related product. We expense research and development costs as incurred. Costs of certain activities are recognized based on an evaluation of the progress to completion of specific tasks. However, payments made prior to the receipt of goods or services that will be used or rendered for future research and development activities are deferred and capitalized as research and development prepaid expenses in our consolidated balance sheets. The capitalized amounts are recognized as expense as the goods are delivered or services are performed. Since our inception and through June 30, 2025, our external research and development expenses were primarily related to the discovery and advancement of programs under our TYK2 platform, including our two most advanced product candidates, envu and A-005. We use internal resources primarily for managing our research, process development, manufacturing and clinical development activities. In particular, with respect to internal costs, we deploy our personnel across all of our research and development activities as our employees work across multiple programs, and therefore the costs cannot be allocated to a particular product candidate or research program. 44 Table of Contents We expect our research and development expenses to increase substantially for the foreseeable future as we advance our product candidates into and through clinical trials, pursue regulatory approval of our product candidates, build our operational and commercial capabilities for marketing our products, if approved, and expand our pipeline of product candidates. The process of conducting the necessary clinical research to obtain regulatory approval is time-consuming, expensive and uncertain. The actual probability of success for our product candidates may be affected by a variety of factors, including the safety and efficacy of our product candidates, clinical data, investment in our clinical programs, competition, manufacturability and commercial viability. It is possible that we may never receive regulatory approval for any of our product candidates. As a result of the uncertainties discussed above, we are unable to determine the duration and completion of costs of our research and development projects or if, when and to what extent we will generate revenue from the commercialization and sale of our product candidates, if approved by the FDA and other comparable foreign regulatory authorities. Our future research and development costs may vary significantly based on factors such as: ● the timing and progress of our preclinical and clinical development activities; ● the number and scope of preclinical and clinical programs we decide to pursue; ● the costs and timing of manufacturing of our product candidates; ● the amount and timing of any milestone payment due under our FronThera Acquisition agreement, Pierre Fabre Agreement, and any future license or collaboration agreements; ● the number of patients that participate in our clinical trials, and per participant clinical trial costs; ● the number and duration of clinical trials required for approval of our product candidates; ● the number of sites included in our clinical trials, and the locations of those sites; ● delays or difficulties in adding trial sites and enrolling participants; ● patient drop-out or discontinuation rates; ● additional safety monitoring if requested by regulatory authorities; ● the phase of development of our product candidates; ● the timing, receipt and terms of any approvals from applicable regulatory authorities including the FDA and comparable foreign regulatory authorities; ● maintaining a continued acceptable safety profile of our product candidates following approval, if any, of our product candidates; ● changes in the competitive outlook; ● the extent to which we establish additional strategic collaborations or other arrangements; and ● the impact of any business interruptions to our operations or to those of the third parties with whom we work. A change in the outcome of any of these variables with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. 45 Table of Contents General and Administrative Expenses Our general and administrative expenses consist primarily of personnel-related costs, legal and consulting services, including those relating to intellectual property and corporate matters, marketing expenses and allocated facilities and other overhead costs, including software licenses, computer supplies, insurance and other miscellaneous expenses. Personnel-related costs include salaries, annual bonuses, benefits, travel and meal expenses and stock-based compensation expense for our general and administrative personnel. We expect that our general and administrative expenses will increase substantially in the future as a result of expanding our operations, including hiring personnel, preparing for potential commercialization of our product candidates and facility occupancy costs, and integrating ACELYRIN’s operations. We also expect an increase in costs associated with being a public company, including costs related to accounting, audit, legal, consulting fees, regulatory and tax-related services associated with maintaining compliance with applicable Nasdaq and SEC requirements, additional director and officer insurance costs, and investor and public relations costs. Other Income (Expense) Other income (expense) consists primarily of interest income, including amortization of premiums and accretion of discounts on marketable securities, gain on bargain purchase, and the change in fair value of derivative liability. The gain on bargain purchase represents the excess of fair value of net assets acquired in the ACELYRIN Merger over the purchase consideration and was recognized as other income in the unaudited condensed consolidated statements of operations and comprehensive income (loss) as of the Closing Date of the ACELYRIN Merger. In March 2024, in connection with our redeemable convertible preferred stock financings, we issued options to purchase additional shares of redeemable convertible preferred stock at a specified price, which were accounted for as derivative liabilities. Changes in fair value of these derivative liabilities were included in the other income (loss) in the condensed consolidated statement of operations and comprehensive income (loss) for each reporting period until the derivatives were exercised or expired. 46 Table of Contents Results of Operations and Comprehensive Income (Loss) The following tables summarize our results of operations for the three and six months ended June 30, 2025 and 2024 (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Change ​ ​ 2025 ​ 2024 ​ $ ​ % ​ Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ License revenue ​ $ — ​ $ — ​ $ — ​ * ​ Collaboration revenue ​ ​ 2,666 ​ ​ — ​ $ 2,666 ​ * ​ Total revenue ​ ​ 2,666 ​ ​ — ​ ​ 2,666 ​ * ​ Operating expenses: ​ ​ ​ ​ ​ ​ Research and development expenses ​ ​ 108,755 ​ ​ 48,565 ​ ​ 60,190 ​ 124 % General and administrative expenses ​ ​ 34,450 ​ ​ 7,575 ​ ​ 26,875 ​ 355 % Total operating expenses ​ ​ 143,205 ​ ​ 56,140 ​ ​ 87,065 ​ 155 % Loss from operations ​ ​ (140,539) ​ ​ (56,140) ​ ​ (84,399) ​ 150 % Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain on bargain purchase ​ ​ 187,907 ​ ​ — ​ ​ 187,907 ​ * ​ Interest income ​ ​ 3,430 ​ ​ 1,977 ​ ​ 1,453 ​ 73 % Change in fair value of derivative liability ​ ​ — ​ ​ (2,311) ​ ​ 2,311 ​ (100) % Other income (expense), net ​ ​ (38) ​ ​ (34) ​ ​ (4) ​ 12 % Total other income (expense), net ​ ​ 191,299 ​ ​ (368) ​ ​ 191,667 ​ * ​ Net income (loss) before income taxes ​ ​ 50,760 ​ ​ (56,508) ​ ​ 107,268 ​ * ​ Income tax benefit ​ ​ 8,561 ​ ​ — ​ ​ 8,561 ​ * ​ Net income (loss) ​ $ 59,321 ​ $ (56,508) ​ $ 115,829 ​ * ​ * not meaningful ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, Change ​ ​ 2025 ​ 2024 ​ $ ​ % ​ Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ License revenue ​ $ 17,389 ​ $ — ​ $ 17,389 ​ * ​ Collaboration revenue ​ ​ 2,666 ​ ​ — ​ ​ 2,666 ​ * ​ Total revenue ​ ​ 20,055 ​ ​ — ​ ​ 20,055 ​ * ​ Operating expenses: ​ ​ ​ ​ ​ ​ Research and development expenses ​ ​ 205,377 ​ ​ 90,526 ​ ​ 114,851 ​ 127 % General and administrative expenses ​ ​ 56,745 ​ ​ 13,207 ​ ​ 43,538 ​ 330 % Total operating expenses ​ ​ 262,122 ​ ​ 103,733 ​ ​ 158,389 ​ 153 % Loss from operations ​ ​ (242,067) ​ ​ (103,733) ​ ​ (138,334) ​ 133 % Other income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain on bargain purchase ​ ​ 187,907 ​ ​ — ​ ​ 187,907 ​ * ​ Interest income ​ ​ 6,039 ​ ​ 2,831 ​ ​ 3,208 ​ 113 % Change in fair value of derivative liability ​ ​ — ​ ​ (5,406) ​ ​ 5,406 ​ (100) % Other income (expense), net ​ ​ (82) ​ ​ (49) ​ ​ (33) ​ 67 % Total other income (expense), net ​ ​ 193,864 ​ ​ (2,624) ​ ​ 196,488 ​ * ​ Net income (loss) before income taxes ​ ​ (48,203) ​ ​ (106,357) ​ ​ 58,154 ​ (55) % Income tax benefit ​ ​ 8,561 ​ ​ — ​ ​ 8,561 ​ * ​ Net income (loss) ​ $ (39,642) ​ $ (106,357) ​ $ 66,715 ​ (63) % * not meaningful ​ 47 Table of Contents Revenue For the three and six months ended June 30, 2025, we recognized license revenue of zero and $17.4 million, respectively, and service and other revenue of $2.7 million related to the Collaboration Agreement with Kaken. We expect to recognize development services and other revenue through the term of the Collaboration Agreement as the services are performed. Research and Development Expenses The following tables summarize our external and internal research and development expenses for the three and six months ended June 30, 2025 and 2024 (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Change ​ 2025 2024 $ % External costs: ​ ​ ​ ​ ​ CROs, CMOs and clinical trials ​ $ 66,089 ​ $ 26,849 ​ $ 39,240 ​ 146 % Professional consulting services ​ 7,417 ​ 4,765 ​ 2,652 ​ 56 % Other research and development costs ​ 2,995 ​ 3,597 ​ (602) ​ (17) % Internal costs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel-related costs ​ ​ 26,821 ​ 10,134 ​ 16,687 ​ 165 % Facilities and overhead costs ​ 5,433 ​ 3,220 ​ 2,213 ​ 69 % Total research and development expense ​ $ 108,755 ​ $ 48,565 ​ $ 60,190 ​ 124 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ Change ​ 2025 2024 $ % External costs: ​ ​ ​ ​ ​ CROs, CMOs and clinical trials ​ $ 131,162 ​ $ 51,113 ​ ​ 80,049 ​ 157 % Professional consulting services ​ 13,821 ​ 8,290 ​ 5,531 ​ 67 % Other research and development costs ​ 5,291 ​ 5,594 ​ (303) ​ (5) % Internal costs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Personnel-related costs ​ ​ 44,479 ​ 19,229 ​ 25,250 ​ 131 % Facilities and overhead costs ​ 10,624 ​ 6,300 ​ 4,324 ​ 69 % Total research and development expense ​ $ 205,377 ​ $ 90,526 ​ $ 114,851 ​ 127 % Comparison of the Three Months Ended June 30, 2025 and 2024 Research and development expenses increased by $60.2 million, to $108.8 million for the three months ended June 30, 2025, from $48.6 million for the three months ended June 30, 2024. CRO, CMO and clinical trials expenses increased by $39.2 million, to $66.1 million for the three months ended June 30, 2025, from $26.8 million for the three months ended June 30, 2024, primarily due to an increase in clinical trial and CRO expenses related to the progression of our clinical trials for envu and other programs. Professional consulting services expenses increased by $2.7 million, to $7.4 million for the three months ended June 30, 2025, from $4.8 million for the three months ended June 30, 2024, due to services to support our clinical trial for envu and other programs. Other research and development costs decreased by $0.6 million, to $3.0 million for the three months ended June 30, 2025, from $3.6 million for the three months ended June 30, 2024, primarily due to the timing of preclinical studies. Personnel-related costs increased by $16.7 million, to $26.8 million for the three months ended June 30, 2025, from $10.1 million for the three months ended June 30, 2024, primarily due to severance costs related to the ACELYRIN Merger and increased research and development headcount, and included an increase in stock-based compensation expense of $5.6 million resulting from equity awards assumed in the ACELYRIN Merger and additional stock options granted. 48 Table of Contents Facilities and overhead costs increased by $2.2 million, to $5.4 million for the three months ended June 30, 2025, from $3.2 million for the three months ended June 30, 2024, primarily due to an increase in software license costs and information technology, and facilities expenses allocated to research and development activities. Comparison of the Six Months Ended June 30, 2025 and 2024 Research and development expenses increased by $114.9 million, to $205.4 million for the six months ended June 30, 2025, from $90.5 million for the six months ended June 30, 2024. CRO, CMO and clinical trials expenses increased by $80.0 million, to $131.2 million for the six months ended June 30, 2025, from $51.1 million for the six months ended June 30, 2024 primarily due to an increase in clinical trial and CRO expenses related to the progression of our clinical trials for envu and other programs and an increase in CMO expenses associated with manufacturing of clinical supplies to support our trials. Professional consulting services expenses increased by $5.5 million, to $13.8 million for the six months ended June 30, 2025, from $8.3 million for the six months ended June 30, 2024, due to services to support our clinical trial for envu and other programs. Other research and development costs decreased by $0.3 million, to $5.3 million for the six months ended June 30, 2025, from $5.6 million for the six months ended June 30, 2024, primarily due to timing of preclinical studies. Personnel-related costs increased by $25.3 million, to $44.5 million for the six months ended June 30, 2025, from $19.2 million for the six months ended June 30, 2024, primarily due to severance costs related to the ACELYRIN Merger and increased research and development headcount, and included an increase in stock-based compensation expense of $7.9 million resulting from equity awards assumed in the ACELYRIN Merger and additional stock options granted. Facilities and overhead costs increased by $4.3 million, to $10.6 million for the six months ended June 30, 2025, from $6.3 million for the six months ended June 30, 2024, primarily due to an increase in software license costs and information technology, and facilities expenses allocated to research and development activities. External Costs by Program The following table summarizes our external costs by program for the three and six months ended June 30, 2025 and 2024 (dollars in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Six Months Ended June 30, ​ ​ 2025 ​ 2024 ​ 2025 ​ 2024 Envu ​ $ 64,628 ​ $ 27,982 ​ $ 131,120 ​ $ 52,653 A-005 ​ ​ 2,734 ​ ​ 4,342 ​ ​ 6,350 ​ ​ 7,370 Other programs and research and development activities ​ 9,139 ​ 2,887 ​ 12,804 ​ 4,974 Total external research and development expense ​ $ 76,501 ​ $ 35,211 ​ $ 150,274 ​ $ 64,997 ​ General and Administrative Expenses Comparison of the Three Months Ended June 30, 2025 and 2024 General and administrative expenses increased by $26.9 million, to $34.5 million for the three months ended June 30, 2025, from $7.6 million for the three months ended June 30, 2024. Personnel-related expenses increased by $17.7 million, to $21.6 million for the three months ended June 30, 2025, from $3.9 million for the three months ended June 30, 2024, primarily due severance costs related to the ACELYRIN Merger and increased general and administrative headcount, and included an increase in stock-based compensation expense of $9.9 million resulting from equity awards assumed in the ACELYRIN Merger and additional stock options granted. 49 Table of Contents Professional consulting services expenses increased by $9.9 million, to $12.8 million for the three months ended June 30, 2025, from $2.8 million for the three months ended June 30, 2024, primarily due to ACELYRIN Merger transaction costs, and an increase in consulting, legal, accounting, audit and tax services to support our growth, public company requirements and business development. Comparison of the Six Months Ended June 30, 2025 and 2024 General and administrative expenses increased by $43.5 million, to $56.7 million for the six months ended June 30, 2025, from $13.2 million for the six months ended June 30, 2024. Personnel-related expenses increased by $21.6 million, to $28.9 million for the six months ended June 30, 2025, from $7.4 million for the six months ended June 30, 2024, primarily due to severance costs related to the ACELYRIN Merger and increased general and administrative headcount, and included an increase in stock-based compensation expense of $12.0 million resulting from equity awards assumed in the ACELYRIN Merger and additional stock options granted. Professional consulting services expenses increased by $22.4 million, to $27.2 million for the six months ended June 30, 2025, from $4.8 million for the six months ended June 30, 2024, primarily due to ACELYRIN Merger transaction costs, and an increase in consulting, legal, accounting, audit and tax services to support our growth, public company requirements and business development. Other Income (Expense), Net Other income (expense), net increased by $191.7 million, to $191.3 million other income, net for the three months ended June 30, 2025, from $0.4 million other expense, net for the three months ended June 30, 2024. Other income (expense), net increased by $196.5 million, to $193.9 million other income, net for the six months ended June 30, 2025, from $2.6 million other expense, net for the six months ended June 30, 2024. Gain on bargain purchase was $187.9 million for the three and six months ended June 30, 2025 as compared to zero for the three and six months ended June 30, 2024, and represents the excess of fair value of net assets acquired in the ACELYRIN Merger over the purchase consideration on the Closing Date. Interest income increased by $1.5 million, to $3.4 million for the three months ended June 30, 2025, from $2.0 million for the three months ended June 30, 2024, primarily as a result of higher balances of cash equivalents and marketable securities. Interest income increased by $3.2 million, to $6.0 million for the six months ended June 30, 2025, from $2.8 million for the six months ended June 30, 2024, primarily as a result of higher balances of cash equivalents and marketable securities. We recognized a change in fair value of a derivative liability loss of $2.3 million and $5.4 million for the three and six months ended June 30, 2024, respectively related to the derivative liability recognized in connection with our Series C redeemable convertible preferred stock financing entered into in March 2024. The derivative liability was re-measured at fair value and settled in May 2024, when we closed the second tranche of the Series C financing. See Note 4 to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. Income Tax Benefit Income tax benefit was $8.6 million for the three and six months ended June 30, 2025 as compared to zero for the three and six months ended June 30, 2024. The income tax benefit was related to the realization of deferred tax assets and valuation allowance release as a result of the ACELYRIN Merger. 50 Table of Contents Liquidity, Capital Resources and Capital Requirements Sources of Liquidity Since our inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. To date, we have primarily funded our operations through the issuance of common stock, including in our IPO and Concurrent Private Placement, the issuance of redeemable convertible preferred stock and convertible promissory notes in private placements and, most recently, the acquisition of cash, cash equivalents and marketable securities in connection with the ACELYRIN Merger and payments received under our Collaboration Agreement with Kaken. Based on our current operating plan, our existing cash, cash equivalents and marketable securities of $486.3 million as of June 30, 2025, will be sufficient to meet our operating and capital requirements for at least 12 months from the date of issuance of the unaudited condensed consolidated financial statements included in Part I. Item 1. of this Quarterly Report on Form 10-Q. We expect to continue to incur substantial losses for the foreseeable future, and our transition to profitability will depend upon successful development, approval and commercialization of our product candidates and upon achievement of sufficient revenues to support our cost structure. We do not expect to generate any revenue from commercial product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates. We may never achieve profitability, and unless we do and until then, we will need to continue to raise additional capital. We will need to raise significant additional capital to fund ongoing research and development activities and maintain future operations. We plan to monitor expenses and may raise additional capital through a combination of public and private equity, debt financings, strategic alliances, and licensing arrangements. Our ability to access capital when needed is not assured and, if capital is not available to us when, and in the amounts, needed, on the terms which are favorable, we could be required to delay, scale back, or abandon some or all of our planned development programs and other operations, which could materially harm our business, financial condition and results of operations. ​ Future Funding Requirements Our primary uses of cash are to fund our operations, which consist primarily of research and development expenditures related to our programs and, to a lesser extent, general and administrative expenditures. We anticipate that we will continue to incur significant and increasing expenses for the foreseeable future as we continue to advance our product candidates, expand our corporate infrastructure, including the costs associated with being a public company, further our research and development initiatives for our product candidates, and incur costs associated with potential commercialization. In addition, we anticipate committing substantial capital resources to the integration and development activities related to the acquired ACELYRIN business. We are subject to all of the risks typically related to the development of new drug candidates, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. We anticipate that we will need substantial additional funding in connection with our continuing operations. We do not have any products approved for sale and have not generated any revenue from product sales since our inception. We do not expect to generate revenue from any product candidates that we develop until we obtain regulatory approval for one or more of such product candidates and commercialize our products or enter into collaboration agreements with third parties. Because of the numerous risks and uncertainties associated with biopharmaceutical product development, we may never achieve or sustain profitability and, unless and until we are able to develop and commercialize our product candidates, we will need to continue to raise additional capital. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through public or private equity or debt financings, or potentially other capital sources, such as collaboration or licensing arrangements with third parties or other strategic transactions. There are no assurances that we will be successful in obtaining an adequate level of financing to support our business plans when needed on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. 51 Table of Contents If we raise additional funds through collaboration or licensing arrangements with third parties or other strategic transactions, we may have to relinquish rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise capital as and when needed, or on attractive terms, we may have to significantly delay, reduce, or discontinue the development and commercialization of our product candidates or scale back or terminate our pursuit of new in-licenses and acquisitions. Because of the numerous risks and uncertainties associated with research, development and commercialization of our products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including the following: ● the timing, scope, progress and results of our preclinical studies and clinical trials for our current and future product candidates; ● the number, scope and duration of clinical trials required for regulatory approval of our current and future product candidates; ● the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities for our product candidates; ● the cost of manufacturing clinical and commercial supplies as well as scale up of our current and future product candidates; ● the increase in the number of our employees and expansion of our physical facilities to support growth initiatives; ● our ability to establish new, strategic collaborations, licensing or other arrangements; ● the cost of filing and prosecuting our patent applications, and maintaining and enforcing our patents and other intellectual property rights; ● the extent to which we acquire or in-license other product candidates and technologies; ● the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against our product candidates; ● the timing of when we pay our operating expenses; ● the effect of competing technological and market developments; ● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; ● the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval; ● our implementation of various computerized informational systems and efforts to enhance operational systems; ● the costs associated with being a public company; and ● other factors, including economic uncertainty and geopolitical tensions, which may exacerbate the magnitude of the factors discussed above. 52 Table of Contents Cash Flows The following table summarizes our cash flows for the six months ended June 30, 2025 and 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ 2025 2024 Net cash used in operating activities ​ $ (186,707) ​ $ (96,548) Net cash provided by (used in) investing activities ​ ​ 168,828 ​ ​ (51,551) Net cash provided by financing activities 749 257,211 Net (decrease) increase in cash, cash equivalents and restricted cash $ (17,130) $ 109,112 ​ Operating Activities Net cash used in operating activities was $186.7 million and $96.5 million for the six months ended June 30, 2025 and 2024, respectively. Net cash used in operating activities for the six months ended June 30, 2025 was due to our net income (loss) for the period of $(39.6) million and non-cash items totaling $162.1 million partially offset by changes in operating assets and liabilities of $15.0 million. Non-cash items included $187.9 million related to gain on bargain purchase in connection with the ACELYRIN Merger and net accretion of discounts on marketable securities of $2.2 million, partially offset by $25.6 million related to stock-based compensation expense, $1.7 million related to depreciation and amortization and $0.6 million related to non-cash lease expense. The changes in operating assets and liabilities included an increase of $11.0 million in research and development accrued expenses, a decrease of $7.4 million in research and development prepaid expenses, an increase of $6.5 million in other accrued expenses and current liabilities, an increase of $2.6 million in deferred revenue, an increase of $0.2 million in other liabilities, non-current, and a decrease of $0.1 million in other prepaid expenses and other assets, partially offset by a decrease of $8.6 million in deferred income tax liability, an increase of $1.7 million in other assets, non-current, a decrease of $1.3 million in operating lease liabilities and a decrease of $1.2 million in accounts payable. Net cash used in operating activities for the six months ended June 30, 2024 was due to our net income (loss) for the period of $(106.4) million and changes in operating assets and liabilities of $2.4 million, partially offset by non-cash items totaling $12.2 million. Non-cash items included $5.8 million related to stock-based compensation expense, $5.4 million related to the change in fair value of the derivative liability and $1.5 million related to depreciation and amortization, partially offset by net accretion of discounts on marketable securities of $0.5 million. The changes in operating assets and liabilities primarily include an increase of $10.5 million in research and development prepaid expenses, a decrease of $1.9 million in other accrued expenses and current liabilities, and a decrease of $1.0 million in operating lease liabilities, partially offset by an increase of $7.8 million in accounts payable and an increase of $3.6 million in research and development accrued expenses. Investing Activities Net cash provided by investing activities for the six months ended June 30, 2025 of $168.8 million was related to proceeds from maturities of marketable securities of $144.3 million and cash, cash equivalents and restricted cash acquired in connection with the ACELYRIN Merger of $49.7 million, partially offset by purchases of marketable securities of $24.5 million and purchases of property and equipment of $0.7 million. Net cash used in investing activities for the six months ended June 30, 2024 of $51.6 million was related to purchases of marketable securities of $59.0 million and purchases of property and equipment of $0.6 million, partially offset by proceeds from maturities of marketable securities of $8.0 million. Financing Activities Net cash provided by financing activities for the six months ended June 30, 2025 of $0.8 million was primarily related to proceeds from the issuance of common stock under the 2024 ESPP. Net cash provided by financing activities for the six months ended June 30, 2024 of $257.2 million was related to net proceeds of $258.5 million from the issuance of our Series C redeemable convertible preferred stock and related derivative 53 Table of Contents liability, net of issuance costs, and proceeds from issuance of common stock upon exercise of stock options of $0.5 million, partially offset by payments of deferred offering costs of $1.8 million. Contractual Obligations and Commitments Research and Development Agreements We enter into contracts in the normal course of business with suppliers, CROs, CMOs and clinical trial sites. Upon the closing of the ACELYRIN Merger, we became the successor to contracts with non-cancellable obligations under ACELYRIN contracts. As of June 30, 2025 and December 31, 2024, the total value of non-cancellable obligations under contracts was $7.1 million and zero, respectively. This presentation of non-cancellable purchase obligations does not include any estimates of potential reduction of such liabilities related to mitigation obligations of the counterparties in the event of cancellation under the terms of our engagements. FronThera Contingent Consideration On March 5, 2021, we entered into a stock purchase agreement to acquire FronThera U.S. Holdings, Inc. and its wholly owned subsidiary, FronThera U.S. Pharmaceuticals LLC. The transaction was accounted for as an asset acquisition. Under the agreement, we are obligated to pay contingent consideration of up to an aggregate of $120.0 million based on the achievement of specified clinical and approval milestones, for up to an aggregate of $70.0 million payable for clinical milestones, and for up to an aggregate of $50.0 million payable for approval milestones, all related to technology acquired under the agreement. In the year ended December 31, 2022, we incurred and made a $37.0 million milestone payment for the first administration of envu to a patient enrolled in a Phase 2 clinical trial of envu, which was recorded in research and development expenses in the consolidated statement of operations and comprehensive income (loss). In July 2024, we met a milestone in connection with the first administration of envu to a patient enrolled in a Phase 3 clinical trial of envu and made a $23.0 million milestone payment in August 2024, which was recorded in research and development expenses in the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2024. No other milestones were achieved or were probable of being achieved as of June 30, 2025. License and Commercialization Agreement with Pierre Fabre Upon the closing of the Merger Agreement, we became the successor to ACELYRIN’s rights and obligations under the Pierre Fabre Agreement. We received certain exclusive worldwide licenses with the right to sublicense certain patents, know-how and other intellectual property to develop, manufacture, use and commercialize lonigutamab for non-oncology therapeutic indications. The license from Pierre Fabre extends to any product containing lonigutamab (excluding any fragments or derivatives) as its sole active ingredient (each, a “PF Licensed Product”). The Pierre Fabre Agreement prohibits us from using the licensed intellectual property in any antibody drug conjugate, multi-specific antibodies or any other derivatives of lonigutamab. We are obligated to (i) make payments of up to $100.5 million upon the achievement of various development and regulatory milestones, (ii) make milestone payments of up to $390.0 million upon the achievement of certain commercial milestones, and (iii) pay tiered royalties in the high single-digit to low-teen percentages to Pierre Fabre on worldwide net sales in a given calendar year. Royalties will be payable for each PF Licensed Product in a given country during a period commencing upon the first commercial sale of such PF Licensed Product in such country and continuing until the latest of (a) 10 years after such first commercial sale, (b) expiration of last-to-expire valid claim in a licensed patent in such country and (c) expiration of regulatory exclusivity for such PF Licensed Product in such country. In the event we enter into a sublicense with a third party, we must also share with Pierre Fabre a percentage of any revenues from option fees, upfront payments, license maintenance fees, milestone payments or the like generated from the sublicense. Such percentage may be between the high single-digits to the low thirties based on which stage of development of a PF Licensed Product the sublicense relates to. Unless earlier terminated, the Pierre Fabre Agreement will continue on a PF Licensed Product-by-PF Licensed Product and country-by-country basis until there are no more royalty payments owed to Pierre Fabre on any PF Licensed Product thereunder. Either party may terminate the Pierre Fabre Agreement upon an uncured material breach, or upon the bankruptcy or insolvency of the other party. Pierre Fabre may also terminate the agreement if we or any of our affiliates 54 Table of Contents institutes a patent challenge against the licensed patents from Pierre Fabre. We may also terminate the Pierre Fabre Agreement with or without cause upon nine months’ prior written notice, so long as there is no ongoing clinical trial for any PF Licensed Product. As of June 30, 2025 no milestones were probable and accrued in the unaudited condensed consolidated balance sheet. Leases We have operating lease arrangements for office and laboratory space in South San Francisco, California and office space in Southern California. As of June 30, 2025, we had total undiscounted lease payment obligations under non-cancelable leases of $56.9 million, including $4.3 million payable through December 31, 2025. See Note 9 to our unaudited condensed consolidated financial statements included in Part I, Item 1. of this Quarterly Report on Form 10-Q. Off-Balance Sheet Arrangements During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements as defined in the rules and regulations of the SEC. Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our unaudited condensed consolidated financial statements included in Part I, Item 1. of this Quarterly Report on Form 10-Q. Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us 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 expenses during the reporting period. Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Significant Judgments and Estimates” in the Annual Report on Form 10-K filed with the SEC on March 19, 2025. If actual results or events differ materially from the estimates and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected. Significant changes to our critical accounting policies from those described in the Annual Report on Form 10-K are described below. Business Acquisitions, Including Intangible Assets, Goodwill and Contingent Consideration We account for business combinations, as defined in ASC Topic 805, Business Combinations , using the acquisition method of accounting, which generally requires that assets acquired, including IPR&D intangible assets, and liabilities assumed, be recorded at fair value on the consolidated balance sheets as of the acquisition date. The excess of the fair value of the purchase consideration over the fair value of net assets acquired, if any, is recorded as goodwill on the consolidated balance sheet. The excess of the fair value of net assets acquired over the fair value of the purchase consideration, if any, represents negative goodwill, or a gain on bargain purchase, which is recognized in the consolidated statement of operations as of the date of the acquisition. Calculating the fair value of assets acquired and liabilities assumed requires us to make significant estimates and assumptions. As a result, we may record adjustments to the fair values within the measurement period, which may be up to one year from the acquisition date, with the corresponding offset to goodwill or a gain on bargain purchase. Transaction costs associated with business combinations are expensed as they are incurred. Intangible assets related to IPR&D projects acquired are considered to be indefinite-lived until abandonment or completion of the associated R&D efforts, which generally occurs when regulatory approval is obtained. Goodwill and indefinite-lived intangible assets are not amortized and, instead, are tested for impairment annually, in the fourth quarter, or more 55 Table of Contents frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired. Development costs incurred after an acquisition are expensed as incurred Intangible assets with finite useful lives, which include completed IPR&D projects, are amortized over their estimated useful lives, primarily on a straight-line basis, and are also periodically reviewed for changes in facts or circumstances that may result in an impairment or in a reduction to the estimated useful life of the asset. In determining the initial fair value of an intangible asset, or when quantitative analysis is required to determine any impairment, we usually use an income approach that discounts expected future cash flows to present value using a discount rate that is based on the estimated weighted-average cost of capital for comparable companies and represents the rate that market participants would use to value the intangible asset. These cash flow models require the use of Level 3 fair value measurements and inputs, including estimated revenues, costs and probabilities of technical and regulatory milestones, among other factors. If we are required to pay future consideration that is contingent upon the achievement of specified development, regulatory approval or sales-based milestone events, then the estimated fair value of contingent consideration liabilities is recognized in the consolidated balance sheet as of the date of the acquisition. Each reporting period thereafter, we revalue these obligations and records increases or decreases in their fair value on the consolidated statements of operations until such time that the payment is made or obligations expire. Revenue Recognition We earn revenue from collaboration agreements that allow collaborators to develop, manufacture and commercialize product candidates. Collaboration revenue is recognized in accordance with ASC 606. Arrangements with collaborators may include intellectual property licenses, research and development services, manufacturing services for clinical and commercial supply and participation in joint steering committees. We recognize collaboration revenue in an amount that reflects the consideration that we expect to receive in exchange for those goods or services when our collaborator, or customer, obtains control of promised goods or services. We follow a five-step approach: (i) identify the contract 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, and (v) recognize revenue when (or as) the customer obtains control of the product or service. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within the contract to determine whether each promised good or service is a performance obligation. Performance obligations are promises in a contract to transfer a distinct good or service to the customer that (i) the customer can benefit from on its own or together with other readily available resources and (ii) are separately identifiable from other promises in the contract. Goods or services that are not individually distinct performance obligations are combined with other promised goods or services until such combined group of promises meet the requirements of a performance obligation. We determine the transaction price based on the amount of consideration we are entitled to receive in exchange for the transfer of control of a product or a service to the customer. Consideration may be fixed, variable, or a combination of both. Payments to us under these arrangements typically include one or more of the following: non-refundable upfront payments, reimbursement for research services, payments for clinical supplies, research, development or regulatory milestone payments, profit-sharing arrangements, and royalty and commercial sales milestone payments. Variable consideration, such as performance-based milestones, are included in the total consideration if we expect to receive such consideration and if it is probable that the inclusion of the variable consideration will not result in a significant reversal in the cumulative amount of revenue recognized under the arrangement. We include cost reimbursements included the transaction price using the expected value method. We exclude sales-based royalty and milestone payments from the total consideration we expect to receive until the underlying sales occur because the license to our intellectual property is deemed to be the predominant item to which the royalties or milestones relate as it is the primary driver of value in the collaboration arrangements. We then allocate the transaction price to each distinct performance obligation based on the relative standalone selling price. Key assumptions to determine the standalone selling price may include forecasted revenues, development timelines, 56 Table of Contents probabilities of technical and regulatory success, and the expected level of effort for research and development services. We recognize revenue associated with each performance obligation as the control over the promised goods or services transfer to our collaborators which occurs either at a point in time or over time. If control transfers over time, revenue is recognized by using a method of measuring progress that best depicts the transfer of goods or services. We evaluate the measure of progress and related inputs each reporting period and any resulting adjustments to revenue are recorded on a cumulative catch-up basis. Consideration allocated to options that include material rights is deferred until the options are exercised or expire. We record amounts as accounts receivable when the right to consideration is deemed unconditional. Consideration received that does not meet the requirements to satisfy ASC 606 revenue recognition criteria is recorded as deferred revenue in the consolidated balance sheets, classified as either current (less than 12 months) or non-current (more than 12 months) deferred revenue based on our best estimate of when such revenue will be recognized. Stock-Based Compensation Expense We grant stock-based awards to employees, directors and non-employee consultants in the form of stock options to purchase shares of our common stock. We measure stock options granted with service-based vesting based on the fair value of the award on the grant date using the Black-Scholes option-pricing model. The model requires us to make a number of assumptions, including common stock fair value, expected volatility, expected term, risk-free interest rate and expected dividend yield. We expense the fair value of our stock-based compensation awards on a straight-line basis over the requisite service period, which is the period in which the related services are received. We have also granted stock options with graded vesting based on market, service and performance conditions. At the grant date, the fair value of these stock options was estimated using a Monte Carlo simulation model, which uses a distribution of potential outcomes over the vesting period. The assumptions utilized in the calculation included our expected common stock price, expected volatility, risk-free rate and expected term. Stock-based compensation expense for these awards is recognized on a straight-line basis over the requisite service period, which is the longer of the explicit service period of the service condition and the derived service period of the market condition, as determined for each separately vesting portion of the awards as if each award was, in substance, multiple awards. Stock-based compensation expense related to stock purchase rights under the 2024 ESPP is measured based on grant date at fair value using the Black-Scholes option-pricing model. The model requires us to make a number of assumptions, including common stock fair value, expected volatility, expected term, risk-free interest rate and expected dividend yield. Stock-based compensation expense is recognized on a straight-line basis over the offering period. We account for award forfeitures as they occur and classify stock-based compensation expense in our consolidated statements of operations and comprehensive income (loss) in the same manner in which the award recipient’s salary or services costs are classified. Emerging Growth Company and Smaller Reporting Company Status We are an “emerging growth company” as defined in the JOBS Act. Under the JOBS Act, an emerging growth company can take advantage of the extended transition period for complying with new or revised accounting standards and delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from complying with new or revised accounting standards and, therefore, will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. Subject to certain conditions, as an emerging growth company, we may rely on certain of these exemptions, including without limitation exemptions to the requirements for (i) providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an emerging growth company until the earlier 57 Table of Contents to occur of (a) the last day of the fiscal year (A) following the fifth anniversary of the completion of our IPO, (B) in which we have total annual gross revenues of at least $1.235 billion or (C) in which we are deemed to be a “large accelerated filer” under the rules of the SEC, which means the market value of our common stock and non- voting common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, or (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We are also a “smaller reporting company,” meaning that the market value of our common stock and non-voting common stock held by non-affiliates plus the aggregate amount of gross proceeds expected from our IPO was less than $700.0 million as of June 30, 2024, and our annual revenue was less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our common stock and non-voting common stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our common stock and non-voting common stock held by non-affiliates is less than $700.0 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation. ​ Item 3. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk The primary objectives of our investment activities are to ensure liquidity and to preserve capital. We are exposed to market risks related to changes in interest rates of our cash equivalents and marketable securities. However, due to the nature of these cash equivalents and marketable securities, we do not believe that a hypothetical 10% increase or decrease in interest rates during any of the periods presented would have had a material effect on our unaudited condensed consolidated financial statements included in Part I, Item 1. of this Quarterly Report on Form 10-Q. Foreign Currency Exchange Risk All of our employees and our operations are currently located in the United States, and our expenses are generally denominated in U.S. dollars. However, we do utilize certain CRO and CMO vendors outside of the United States for our clinical trials and product development and manufacturing. As such, our expenses are denominated in both U.S. dollars and foreign currencies. Therefore, our operations are and will continue to be subject to fluctuations in foreign currency exchange rates. To date, foreign currency transaction gains and losses have not been material to our consolidated financial statements, and we have not had a formal hedging program with respect to foreign currency. We do not believe that a hypothetical 10% increase or decrease in exchange rates during any of the periods presented would have had a material effect on our unaudited condensed consolidated financial statements included in Part I, Item 1. of this Quarterly Report on Form 10-Q. Effects of Inflation Inflation generally affects us by increasing our cost of labor and research and development costs. We do not believe that inflation had a material effect on our business, results of operations, or financial condition, or on our unaudited condensed consolidated financial statements included in Part I, Item 1. of this Quarterly Report on Form 10-Q. ​ Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures. As of June 30, 2025, management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, have evaluated our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of June 30, 2025, our disclosure controls and procedures were effective to provide reasonable assurance 58 Table of Contents that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Limitations on the Effectiveness of Controls In designing and evaluating the disclosure controls and procedures, management recognizes that because of the inherent limitations in all control systems, any controls and procedures, no matter how well designed and operated, can provide only reasonable not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and the benefits of controls and procedures must be considered relative to their costs. ​ 59 Table of Contents PART II — OTHER INFORMATION Item 1. Legal Proceedings On November 15, 2023, a purported federal securities class action lawsuit was commenced in the United States District Court for the Central District of California. On February 15, 2024, the Court appointed joint lead plaintiffs and lead counsel. An amended complaint was filed on March 26, 2024 (Boukadoum v. Acelyrin, Inc. et al., No. 2:23-cv-09672-FMO-MAA), naming ACELYRIN and then-current and former executive officers and directors as defendants. The complaint alleges that the defendants violated the Exchange Act and Securities Act by misleading investors about the Phase 2b trial of izokibep in hidradenitis suppurativa. The original complaint was filed following ACELYRIN’s announcement of the week 16 results from the Part B portion of such Phase 2b trial. The amended complaint seeks damages and an award of reasonable costs and expenses, including attorneys' fees, expert fees and other costs, as well as such other and further relief as the court may deem just and proper. On May 3, 2024, defendants filed their motion to dismiss the amended complaint, which remains pending. It is possible that additional suits will be filed, or allegations made by stockholders, with respect to these same or other matters and also naming us and/or our officers and directors as defendants. This lawsuit and any other potential lawsuits are subject to inherent uncertainties, and the actual defense and disposition costs will depend upon many unknown factors. We could be forced to expend significant resources in the defense against this and any other related lawsuits and we may not prevail. From time to time, we may become involved in additional legal proceedings arising in the ordinary course of business. Regardless of outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources, negative publicity, reputational harm and other factors, and there can be no assurances that favorable outcomes will be obtained. ​ Item 1A. Risk Factors Risk Factors ​ Investing in our common stock involves a high degree of risk. Before deciding to invest in shares of our common stock, you should carefully consider the risks described below, together with the other information contained in this Quarterly Report on Form 10-Q, including our unaudited condensed consolidated financial statements and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We cannot assure you that any of the events discussed below will not occur. These events could adversely impact our business, financial condition, results of operations and prospects. If that were to happen, the trading price of our common stock could decline, and you could lose all or part of your investment. Summary of Risks Below is a summary of material factors that make an investment in our securities speculative or risky. Importantly, this summary does not address all of the risks that we face. Additional discussion of the risks and uncertainties summarized in this risk factor summary, as well as other risks that we face, follows this summary. This summary is qualified in its entirety by that more complete discussion of such risks and uncertainties. ● We are a clinical stage biopharmaceutical company with a limited operating history and no products approved for commercial sale, and have incurred substantial losses since our inception and anticipate incurring substantial and increasing losses for the foreseeable future. ● Enrollment and retention of participants in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, including difficulties in identifying patients, the availability of competitive products and significant competition for recruiting participants in clinical trials. 60 Table of Contents ● We will require substantial additional financing to achieve our goals, and failure to obtain additional capital when needed, or on acceptable terms to us, could cause us to delay, limit, reduce or terminate our product development or future commercialization efforts. ● Preclinical and clinical development involves a lengthy and expensive process, with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our current product candidates or any future product candidates. ● Our clinical trials may reveal serious adverse events (“SAEs”) and significant adverse events (“AEs”) not seen in our preclinical studies or prior clinical trials and may result in a safety or tolerability profile that could delay or prevent regulatory approval or market acceptance of envudeucitinib (or “envu”), formerly known as ESK-001, A-005 or any future product candidates. ● We face competition from entities that have made substantial investments into the rapid development of competitor treatments for immunological indications, including large and specialty pharmaceutical and biotechnology companies, many of which already have approved therapies and/or candidates under development in our current indications. ● We are subject to various risks related to the acquisition of ACELYRIN. ● Our business is highly dependent on the success of our most advanced product candidate, envu, and we cannot guarantee that envu will successfully complete development, receive regulatory approval or be successfully commercialized. If we are unable to develop, receive regulatory approval for and ultimately successfully commercialize our product candidates, or if we experience significant delays in doing so, our business will be materially harmed. ● The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed. ● We are dependent on the services of our management team and other clinical and scientific personnel, and if we are not able to retain these individuals or recruit additional management or clinical and scientific personnel, our business will suffer. ● If we are unable to obtain and maintain sufficient intellectual property protection for our product candidates and any future product candidates we may develop, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors or other third parties could develop and commercialize products similar or identical to ours, and our ability to successfully develop and commercialize our product candidates may be adversely affected. ● We cannot ensure that patent rights relating to inventions described and claimed in our or any current or future licensors pending patent applications will issue or that patents based on our or any current or future licensors patent applications will not be challenged and rendered invalid and/or unenforceable. ● We may form or seek collaborations or strategic alliances or enter into licensing arrangements in the future, and we may neither enter into, nor realize the benefits of, such alliances or licensing arrangements. ● Even if we receive regulatory approval for our product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense. Additionally, our product candidates, if approved, could be subject to labeling and other restrictions and market withdrawal. We may also be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our product candidates. 61 Table of Contents ● We may have conflicts with any current or future licensors or collaborators that could delay or prevent the development or commercialization of our product candidates. Risks Related to Our Financial Position and Need for Capital We are a clinical stage biopharmaceutical company with a limited operating history and no products approved for commercial sale, and have incurred substantial losses since our inception and anticipate incurring substantial and increasing losses for the foreseeable future. We are a clinical stage biopharmaceutical company with a limited operating history on which to base your investment decision. We have no product candidates approved for commercial sale and have not generated any revenue. Biopharmaceutical product development is a highly speculative undertaking. It entails substantial upfront capital expenditures and significant risk that any product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval or become commercially viable. Our most advanced candidate is envu, an oral, small molecule allosteric inhibitor of TYK2. We are currently conducting two parallel Phase 3 clinical trials of envu in PsO and a Phase 2b clinical trial of envu in SLE. In addition, we are advancing A-005, an investigational CNS penetrant allosteric inhibitor of TYK2 that has a potential application in multiple sclerosis (“MS”) and other neuroinflammatory and neurodegenerative diseases, currently in Phase 1 clinical development. Our ability to achieve profitability in the future is dependent upon obtaining regulatory approval for and successfully commercializing our most advanced candidate, envu, either alone or with third parties. However, our operations may not be profitable even if envu is successfully developed, approved and thereafter commercialized. We have and will continue to incur significant development and other expenses related to our research and clinical development programs and ongoing operations. For the three and six months ended June 30, 2025, our net income (loss) was $59.3 million and $(39.6) million, respectively. As of June 30, 2025, we had an accumulated deficit of $698.2 million. Substantially all of our losses have resulted from expenses incurred in connection with the acquisition and development of our pipeline and from general and administrative costs associated with our operations. We expect to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our development of our product candidates. We have also incurred and will continue to incur substantial integration costs and expenses in connection with the ACELYRIN Merger. While we expected that a certain level of integration costs would be incurred, there are a number of factors beyond our control that could affect the total amount or the timing of our integration costs. Many of the integration costs that will be incurred, by their nature, are difficult to estimate accurately at the present time. Due to these factors, the transaction and integration costs could be greater or could be incurred over a longer period of time than we currently expect. We anticipate that our expenses will increase substantially if, and as, we: ● conduct preclinical studies and clinical trials for envu, A-005 and potential future programs; ​ ● identify additional product candidates and acquire rights from third parties to those product candidates through licenses or other acquisitions, and conduct development activities, including preclinical studies and clinical trials; ● procure the manufacturing of preclinical, clinical and commercial supply of our current and future product candidates; ​ ● seek regulatory approvals for our product candidates or any future product candidates; ● commercialize our current product candidates or any future product candidates, if approved; ● ​ take steps toward our goal of being an integrated biopharma company capable of supporting commercial activities, including establishing sales, marketing and distribution infrastructure; 62 Table of Contents ● ​ attract, hire and retain qualified clinical, scientific, operations and management personnel; ​ ● add and maintain operational, financial and information management systems; ● protect, maintain, enforce and defend our rights in our intellectual property portfolio; ● defend against third-party interference, infringement and other intellectual property claims, if any; ​ ● address any competing therapies and market developments; and ● ​ experience any delays in our preclinical studies or clinical trials and seeking regulatory approval for our product candidates due to public health concerns, macroeconomic conditions or geopolitical conflicts; and ● incur costs associated with operating as a public company. ​ Even if we succeed in commercializing one or more product candidates, we expect to incur substantial development costs and other expenditures to develop and market additional product candidates. We may also encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue or raise additional capital. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity (deficit) and our working capital . We could also encounter delays if a clinical trial is suspended, put on clinical hold or terminated by us, the institutional review boards (“IRBs”) or ethics committees of the institutions in which such trials are being conducted, the FDA or other comparable foreign regulatory authorities, or if a clinical trial is recommended for suspension or termination by the Data Safety Monitoring Board for such trial. A suspension, clinical hold or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, failure by our CROs or clinical trial sites to perform in accordance with good clinical practices (“GCP”) requirements, or applicable regulatory guidelines in other countries, inspection of the clinical trial operations or trial site by the FDA or other comparable foreign regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to establish or achieve clinically meaningful trial endpoints, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. Clinical trials may also be delayed or terminated as a result of ambiguous or negative interim results. For example, we discontinued our proof-of-concept Phase 2a clinical trial of envu in patients with non-infectious uveitis in June 2024 based on the efficacy results of a data analysis prepared for a scheduled monitoring committee meeting, which efficacy results did not meet our clinical threshold for success despite safety results consistent with envu’s safety profile in psoriasis patients. Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. Further, the FDA or other comparable foreign regulatory authorities may disagree with our clinical trial design and our interpretation of data from clinical trials, or may change the requirements for approval even after they have reviewed and commented on the design for our clinical trials. We may also, in the future, conduct preclinical and clinical research in collaboration with other academic, pharmaceutical and biotechnology entities in which we combine our research or development efforts with those of our collaborators. Such collaborations may be subject to additional delays because of the management of the trials, contract negotiations, the need to obtain agreement from multiple parties and may increase our future costs and expenses. Our product development costs will increase if we experience delays in clinical testing or regulatory approvals. We do not know whether any of our clinical trials will begin as planned, will need to be restructured or will be completed on schedule, or at all. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates and may allow our competitors to bring products to market before we do, potentially impairing our ability to successfully commercialize our product candidates. Any delays or 63 Table of Contents increase in costs in our clinical development programs may harm our business, financial condition, results of operations and prospects. Enrollment and retention of participants in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, including difficulties in identifying patients, the availability of competitive products and significant competition for recruiting participants in clinical trials. Participant enrollment, a significant factor in the timing of clinical trials, is affected by many conditions, including the size and nature of the patient population, the number and location of clinical sites we enroll, the proximity of participants to clinical sites, the eligibility and exclusion criteria for the trial, the design of the clinical trial, the inability to obtain and maintain participant consents, the risk that enrolled participants will drop out before completion, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs or biologics that may be approved for the indications being investigated by us. Risks related to patient enrollment are heightened in longer clinical trials, including the 48-week trial period contemplated by our ongoing Phase 2b clinical trial of envu in SLE. In particular, this trial has been and may continue to be challenging to enroll due to the fact that patients must be experiencing active disease at the time of screening to be eligible for enrollment. In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same areas as our product candidates, and this competition will reduce the number and types of participants available to us, because some participants who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors, or to use currently marketed therapies. Additionally, participants, including participants in any control groups, may withdraw from the clinical trial if they are not experiencing improvement in their underlying disease or condition or if they experience other difficulties or issues. Additionally, we could encounter delays if treating clinicians encounter unresolved ethical issues associated with enrolling participants in clinical trials of our product candidates in lieu of prescribing existing treatments that have established safety and efficacy profiles. We have in the past experienced and expect to continue to experience participant withdrawals or discontinuations from our trials. For example, as long-term treatment with envu continues to be evaluated in our STRIDE OLE, ONWARD3 LTE study and LUMUS Part B OLE, we expect to see discontinuation rates rise over time. Withdrawal of participants from our clinical trials may compromise the quality of our data. Even if we are able to enroll a sufficient number of participants in our clinical trials, delays in enrollment or small population size may result in increased costs or may affect the timing or outcome of our clinical trials. Any of these conditions may negatively impact our ability to complete such trials or include results from such trials in regulatory submissions, which could adversely affect our ability to advance the development of our product candidates. We will require substantial additional financing to achieve our goals, and failure to obtain additional capital when needed, or on acceptable terms to us, could cause us to delay, limit, reduce or terminate our product development or future commercialization efforts. Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses and other similar arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of our common stock. Any future debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, selling or licensing our assets, making capital expenditures, declaring dividends or encumbering our assets to secure future indebtedness. Such restrictions could adversely impact our ability to conduct our operations and execute our business plan. We could also be required to seek collaborators for product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves. Based on our current operating plan, we will need to raise additional financing to continue our products’ development for the foreseeable future, and until we become profitable, if ever. Any additional fundraising efforts may divert our management from our day-to-day activities, which may adversely affect our ability to develop and commercialize product 64 Table of Contents candidates. We cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unable to obtain funding when and as needed on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs or the commercialization of any product candidate, or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations. Any of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our common stock to decline. Risks Related to Product Candidate Development and Commercialization Preclinical and clinical development involves a lengthy and expensive process, with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our current product candidates or any future product candidates. Our product candidates are either in clinical or preclinical development, and their risk of failure is high. It is impossible to predict when or if our product candidates will receive regulatory approval. To obtain the requisite regulatory approvals to commercialize any product candidates, we must demonstrate through extensive preclinical studies and lengthy, complex and expensive clinical trials that our product candidates are safe and effective in humans for their intended uses. Before obtaining approval from regulatory authorities for the commercialization of any of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidate in humans. Before we can initiate clinical trials for any product candidates, we must submit the results of preclinical studies to the FDA or comparable foreign regulatory authorities along with other information, including information about product candidate chemistry, manufacturing and controls and our proposed clinical trial protocol, as part of an Investigational New Drug (“IND”) application or similar regulatory submission. The FDA or comparable foreign regulatory authorities may require us to conduct additional preclinical studies for any product candidate before allowing us to initiate clinical trials under any IND or similar regulatory submission, which may lead to delays and increase the costs of our preclinical development programs. Once initiated, clinical testing can take many years to complete, and its outcome is inherently uncertain. The results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials and results in one indication may not be predictive of results to be expected for the same product candidate in another indication. For example, while we plan to continue to evaluate the development program for lonigutamab, which was ACELYRIN’s lead product candidate, and its potential differentiation in a capital efficient manner, lonigutamab’s potential to improve on the safety and side-effect profile of the sole currently-approved therapy in the United States for the treatment of TED is unproven. In particular, if lonigutamab is shown to have similar adverse events or side effects as the existing therapy, or other safety or tolerability concerns, such as hearing impairment, then our opportunity to disrupt the current standard of care in TED will be limited or precluded altogether. In this regard, ACELYRIN observed certain adverse events in its Phase 2 clinical trial of lonigutamab including, without limitation, headache, tinnitus and injection site reactions. If we determine that, whether due to emerging clinical data or otherwise, any of our drug candidates will be unable to improve on the current standard of care in the indications we are pursuing, we may decide to modify, suspend or abandon such development program. Differences in trial design between early-stage clinical trials and later-stage clinical trials make it difficult to extrapolate the results of earlier clinical trials to later clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unfavorable safety profiles, notwithstanding promising results in earlier trials, and we have experienced and may experience setbacks in our programs in the future. For example, we discontinued our proof-of-concept Phase 2a clinical trial of envu in patients with non-infectious uveitis in June 2024 based on the efficacy results of a data analysis prepared for a scheduled monitoring committee meeting, which efficacy results did not meet our clinical threshold for success despite safety results consistent with envu’s safety profile in psoriasis patients. Moreover, clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in clinical trials have nonetheless failed to obtain regulatory approval of such product candidates. Commencing any future clinical trials is subject to finalizing the trial design and submitting an application to the FDA or a comparable foreign regulatory authority. Even after we make our submission, the FDA or comparable foreign regulatory authorities could disagree that we have satisfied their requirements to commence our clinical trials or disagree with our study design, which may require us to complete additional trials or amend our protocols or impose stricter conditions on 65 Table of Contents the commencement of clinical trials. There is typically a high rate of failure of product candidates proceeding through clinical trials, and failure can occur at any time during the clinical trial process. Most product candidates that commence clinical trials are never approved as products and there can be no assurance that any of our current or future clinical trials will ultimately be successful or support the approval of our current or any future product candidates. We expect to continue to rely on our CROs and clinical trial sites to ensure the proper and timely conduct of our clinical trials, including the participant enrollment process, and we have limited influence over their performance. We or any future collaborators may experience delays in initiating or completing clinical trials due to unforeseen events or otherwise, that could delay or prevent our ability to receive regulatory approval or commercialize our current and any future product candidates, including: ● we may be unable to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation or continuation of clinical trials; ● ​ regulators, such as the FDA or comparable foreign regulatory authorities, may disagree with the design or implementation of our clinical trials; ​ ● regulators, such as the FDA or comparable foreign regulatory authorities, IRBs or ethics committees may impose additional requirements before permitting us to initiate a clinical trial, may not allow us or our investigators to commence or conduct a clinical trial at a prospective trial site, may not allow us to amend trial protocols or may require that we modify or amend our clinical trial protocols; ​ ● we may experience delays in reaching, or fail to reach, agreement on acceptable terms with trial sites and CROs, the terms of which can be subject to extensive negotiation and may vary significantly; ​ ● we may be unable to identify, recruit or train suitable clinical investigators; ​ ● clinical trial sites may deviate from trial protocol or drop out of a trial; ● we may be unable to complete our clinical trials due to trial participant withdrawals and discontinuations due to AEs; ● ​ the number of participants required for clinical trials may be larger than we anticipate, enrollment in clinical trials may be slower than we anticipate or participants may drop out or fail to return for post-treatment follow-up at a higher rate than we anticipate; ● ​ the cost of clinical trials may be greater than we anticipate, or we may have insufficient funds to initiate or complete a clinical trial or to pay the substantial user fees required by the FDA upon the submission of a New Drug Application (“NDA”) or comparable marketing authorization application in another jurisdiction; ​ ● the quality or quantity of data relating to our product candidates or other materials necessary to conduct our clinical trials may be inadequate to initiate or complete a given clinical trial; ​ ● reports from clinical testing of other therapies may raise safety, tolerability or efficacy concerns about our product candidates; ​ ● clinical trials of our product candidates may fail to show appropriate safety, tolerability or efficacy, may produce negative or inconclusive results or may otherwise fail to improve on the existing standard of care, and we may decide, or regulators may require us, to conduct additional clinical trials or we may decide to abandon product development programs; ​ 66 Table of Contents ● our CROs or clinical trial sites may fail to perform in accordance with GCP requirements or other applicable regulations, rules or guidelines; ​ ● we may be unable to manufacture our product candidates from our CMOs in accordance with cGMP regulations or other applicable requirements in sufficient quantities for use in our clinical trials; ​ ● serious adverse events may occur in trials of the same class of agents conducted by other companies that could be considered similar to our product candidates; ​ ● we may select clinical endpoints that require prolonged periods of clinical observation or extended analysis of the resulting data; ​ ● we may be required to transfer our manufacturing processes to larger-scale facilities operated by a different CMO, or may experience delays or failure by our CMOs or us to make any necessary changes to such manufacturing process; and ​ ● third parties may be unwilling or unable to satisfy their contractual obligations to us in a timely manner. ​ In addition, we have historically leveraged our extensive analyses of immune-relevant genome-wide association study (“GWAS”) results from both the public domain and the UK Biobank biomedical resource to identify the right therapeutic target on which to focus our preclinical and clinical development efforts. If our access to GWAS results from the public domain or the UK Biobank biomedical resource were to be restricted, including as a result of any potential future legislative policies or regulations that may seek to restrict the sharing of genetic data, our ability to efficiently identify additional therapeutic targets may be limited. In addition, the FDA’s and other regulatory authorities’ policies with respect to clinical trials may change and additional government regulations may be enacted. In the European Union (“EU”), the EU Clinical Trials Regulation (“CTR”) became applicable on January 31, 2022, repealing and replacing the Clinical Trials Directive (“CTD”). The CTR permits trial sponsors to make a single submission to both the competent authority and an ethics committee in each EU member state, leading to a single decision for each EU member state. The assessment procedure for the authorization of clinical trials has been harmonized as well, including a joint assessment of some elements of the application by all EU member states in which the trial is to be conducted, and a separate assessment by each EU member state with respect to specific requirements related to its own territory, including ethics rules. Each EU member state’s decision is communicated to the sponsor through a centralized EU portal, the Clinical Trial Information System. The CTR foresaw a three-year transition period that ended on January 31, 2025. Since this date, all new or ongoing trials are subject to the provisions of the CTR. It is currently unclear to what extent the UK will seek to align its regulations with the EU in the future. The UK regulatory framework in relation to clinical trials is derived from existing legislation (as implemented into UK law, through secondary legislation). On January 17, 2022, the UK Medicines and Healthcare products Regulatory Agency (“MHRA”) launched an eight-week consultation on reframing the UK legislation for clinical trials. The UK government published its response to the consultation outcome on March 21, 2023, confirming that it would bring forward changes to the legislation and such changes were laid in parliament on December 12, 2024. These resulting legislative amendments will, if implemented in their current form, bring the UK into closer alignment with the CTR. Failure of the UK to closely align its regulations with the EU may have an effect on the cost of conducting clinical trials in the UK as opposed to other countries and/or make it harder to seek a marketing authorization for our product candidates on the basis of clinical trials conducted in the UK. Our clinical trials may reveal SAEs and AEs and may result in a safety or tolerability profile that could delay or prevent regulatory approval or market acceptance of envu, A-005 or any future product candidates. Undesirable or clinically unmanageable side effects observed in our clinical trials for our product candidates could occur and cause us or regulatory authorities to interrupt, delay or halt our clinical trials and could result in a more restrictive labeling or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. 67 Table of Contents We have observed SAEs and AEs in our trials of envu, and as more patients become exposed to envu over longer periods of time, we expect to see additional SAEs and AEs emerge. Further, long term treatment with envu continues to be evaluated in an OLE trial, and additional AEs and SAEs will continue to accumulate. Certain conditions occur more frequently in patients with psoriasis compared to the general population. Examples include obesity, cardiovascular disease, psoriatic arthritis and depression. Immune modulating treatments including envu may result in increasing susceptibility to various infections, including serious or life-threatening infections, and there is a theoretical risk with immune-modulating agents that dampening immune responses could increase the risk of malignancies. Other TYK2 inhibitors, such as deucravacitinib (marketed as Sotyktu), which is approved for the treatment of adults with PsO, have shown AEs such as hypersensitivity reactions, infections, tuberculosis, malignancy and rhabdomyolysis. The label for deucravacitinib includes a warning concerning the potential for JAK-related AEs, such as cardiovascular and thrombotic events. We have observed, and expect that additional AEs and SAEs consistent with known side effects of TYK2 inhibition may emerge, in our ongoing and future clinical trials of envu. The most common AEs observed in our Phase 2 STRIDE and OLE PsO trials that were considered related to envu treatment by the principal investigator include headaches, upper respiratory tract infections, nasopharyngitis, rash and nausea. As of June 30, 2025, there were four SAEs from the STRIDE OLE trial that were considered related to envu treatment by the investigator: one serious infection case (peritonsillar abscess), two malignancy cases (non-small cell lung cancer, renal cell carcinoma), and one arthritis case. We continue to evaluate the safety profile of envu in our ongoing Phase 2 OLE and Phase 3 trials. If AEs, SAEs or other side effects are observed in any of our ongoing or future clinical trials that are atypical of, or more severe than, the known side effects of the respective class of agents that each of our product candidates are a part of, we may have difficulty recruiting participants to our clinical trials, participants may drop out of our trials, or we may be required to abandon those trials or our development efforts of one or more product candidates altogether. If such effects are more severe or less reversible than we expect, or not reversible at all, we may decide or be required to perform additional studies or to halt or delay further clinical development of envu, A-005 or any future product candidates, which could result in the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities. If envu fails to demonstrate an acceptable benefit/risk profile, versus current approved therapies or others in clinical development, then our opportunity to disrupt the current standard of care may be limited. AEs and SAEs that emerge during clinical investigation of or treatment with envu, A-005 or any future product candidates have in the past been and may in the future be deemed to be related to our product candidates. This may require longer and more extensive clinical development, or regulatory authorities may increase the amount of data and information required to approve, market, or maintain envu, A-005 or any future product candidates and could result in warnings and precautions in our product labeling or a restrictive risk evaluation and mitigation strategy (“REMS”) or comparable foreign strategies. This may also result in an inability to obtain approval of envu, A-005 or any future product candidates. We, the FDA or other comparable foreign regulatory authorities, or an IRB or ethics committee, may suspend clinical trials of a product candidate at any time for various reasons, including a belief that participants in such trials are being exposed to unacceptable health risks or adverse side effects. Some potential product candidates developed in the biotechnology industry that initially showed promise in early-stage trials have later been found to cause side effects that prevented their further development. Even if the side effects do not preclude the product candidate from obtaining or maintaining regulatory approval, undesirable side effects, like those mentioned above, may limit market acceptance of the approved product due to its tolerability versus other therapies. Any of these developments could materially harm our business, financial condition, results of operations and prospects. Additionally, if any of our product candidates receives regulatory approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result. For example, the FDA could require us to adopt a REMS, to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a communication plan to health care practitioners, patient education, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry. We or our collaborators may also be required to adopt a REMS or comparable foreign strategies or engage in similar actions, such as patient education, certification of health care 68 Table of Contents professionals or specific monitoring, if we or others later identify undesirable side effects caused by any product that we develop alone or with collaborators. Other potentially significant negative consequences associated with AEs include: ● we may be required to suspend marketing of a product, or we may decide to remove such product from the marketplace; ● regulatory authorities may withdraw, suspend or change their approvals of a product; ● regulatory authorities may require additional warnings on the label or limit access of a product to selective specialized centers with additional safety reporting and with requirements that patients be geographically close to these centers for all or part of their treatment; and ● we may be required to create a medication guide outlining the risks of a product for patients, or to conduct post-marketing studies. ​ Any of these events could diminish the usage or otherwise limit the commercial success of our product candidates and prevent us from achieving or maintaining market acceptance of our product candidates, if approved by the FDA or comparable foreign regulatory authorities. Preliminary, “top-line” and interim data from our clinical trials that we announce or publish from time to time may change as more patient data become available or are subject to audit and verification procedures that could result in material changes in the final data. From time to time, we may publicly disclose preliminary or top-line data from our preclinical studies and clinical trials, which are based on preliminary analyses of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular preclinical study or clinical trial. We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the top-line or preliminary results that we report may differ from future results of the same studies or trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Top-line and preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, top-line and preliminary data should be viewed with caution until the final data are available. From time to time, we may also disclose data from interim analyses from our clinical trials. Interim analyses from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as participants enrollment continues and more participant data become available or as participants from our clinical trials continue other treatments for their disease. Adverse differences between interim data, topline data, or preliminary data and final data could significantly harm our business prospects. Further, others, including regulatory authorities, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate and could adversely affect the success of our business. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure. If the interim, top-line or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, financial condition, results of operations and prospects. Further, disclosure of interim, top-line or preliminary data by us or by our competitors could result in volatility in the price of our common stock. 69 Table of Contents We have conducted, are currently conducting, and may in the future conduct, clinical trials for current or future product candidates outside the United States, and the FDA and comparable foreign regulatory authorities may not accept data from such trials. We have conducted, are currently conducting, and may in the future conduct, clinical trials outside the United States, including (without limitation) in the EU, the UK, Japan, Latin America and Asia Pacific countries. We expect to continue to conduct trials internationally in the future. The acceptance of data from clinical trials conducted outside the United States or another jurisdiction by the FDA or comparable foreign regulatory authorities may be subject to certain conditions or may not be accepted at all. In cases where data from foreign clinical trials are intended to serve as the sole basis for regulatory approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice and (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. In addition, even where the foreign study data are not intended to serve as the sole basis for approval, the FDA will not accept the data as support for an application for regulatory approval unless the study is well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an onsite inspection if deemed necessary. Many foreign regulatory authorities have similar requirements for clinical data gathered outside of their respective jurisdictions. In addition, such foreign trials are subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance that the FDA or any comparable foreign regulatory authority will accept data from trials conducted outside of the United States or the applicable jurisdiction. If the FDA or any comparable foreign regulatory authority does not accept such data, it would result in the need for additional trials, which could be costly and time-consuming, and which may result in current or future product candidates that we may develop being delayed or not receiving approval for commercialization in the applicable jurisdiction. Even if we receive regulatory approval for our current or future product candidates in the United States, we may never receive regulatory approval to market outside of the United States. We plan to seek regulatory approval for our current and future product candidates outside of the United States and are currently conducting certain clinical trials internationally, including in the EU and Japan. In order to market any product outside of the United States, however, we must establish and comply with the numerous and varying safety, efficacy and other regulatory requirements of other applicable countries. Approval procedures vary among countries and can involve additional product candidate testing and additional administrative review periods. The time required to obtain approvals in other countries might differ substantially from that required to obtain FDA approval. The regulatory approval processes in other countries generally implicate all of the risks detailed above regarding FDA approval in the United States as well as other risks. In particular, in many countries outside of the United States, products must receive pricing and reimbursement approval before the product can be commercialized. Obtaining this approval can result in substantial delays in bringing products to market in such countries. Regulatory approval in one country does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others and would impair our ability to market our current or future product candidates in such foreign markets. Any such impairment would reduce the size of our potential market, which could adversely affect our business, financial condition, results of operations and prospects. The successful commercialization of our product candidates, if approved, will depend in part on the extent to which governmental authorities and health payors and insurers establish coverage, adequate reimbursement levels and favorable pricing policies. Failure to obtain or maintain coverage and adequate reimbursement for our product candidates could limit our ability to market those products and decrease our ability to generate revenue. The availability of coverage and the adequacy of reimbursement by governmental healthcare programs, such as Medicare and Medicaid, private health insurers and other third-party payors are essential for most patients to be able to afford prescription medications such as our product candidates, if approved. Our ability to achieve coverage and acceptable levels of reimbursement for our products by third-party payors will have an effect on our ability to successfully commercialize those products. Even if we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. We cannot be sure that 70 Table of Contents coverage and reimbursement in the United States, the EU, Japan or elsewhere will be available for any product that we may develop, and any reimbursement that may become available may be decreased or eliminated in the future. Third-party payors increasingly are challenging prices charged for biopharmaceutical products and services, and many third-party payors may refuse to provide coverage and reimbursement for particular drugs when equivalent generic drugs, biosimilars or less expensive therapies are available. It is possible that a third-party payor may consider our product candidates, if approved, as substitutable and only be willing to cover the cost of the alternative product. Even if we show improved efficacy, safety or improved convenience of administration with envu, A-005 or any of our future product candidates, if approved, pricing of competitive products may limit the amount we will be able to charge for our product candidates, if approved. Third-party payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in our product candidates. In some cases, when new competitor generic and biosimilar products enter the market, there are mandatory price reductions for the innovator compound. In other cases, payors employ “therapeutic category” price referencing and seek to lower the reimbursement levels for all treatments in the respective therapeutic category. Additionally, new competitor brand drugs can trigger therapeutic category reviews in the interest of modifying coverage and/or reimbursement levels. The potential of third-party payors to introduce more challenging price negotiation methodologies could have a negative impact on our ability to successfully commercialize our product candidates, if approved. There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products. In the United States, third-party payors, including private and governmental payors, such as the Medicare and Medicaid programs, play an important role in determining the extent to which new drugs will be covered. Some third-party payors may require pre-approval of coverage for new or innovative devices or therapies before they will reimburse healthcare providers who use such therapies. It is difficult to predict at this time what third-party payors will decide with respect to the coverage and reimbursement for our products, if approved. Obtaining and maintaining reimbursement status is time consuming, costly and uncertain. The Medicare and Medicaid programs increasingly are used as models for how private payors and other governmental payors develop their coverage and reimbursement policies for drugs. However, no uniform policy for coverage and reimbursement for products exists among third-party payors in the United States. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. Furthermore, rules and regulations regarding reimbursement change frequently, in some cases on short notice, and we believe that changes in these rules and regulations are likely. Outside the United States, biopharmaceutical products and services are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe and other countries will continue to put pressure on the pricing and usage of our product candidates. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. Some countries provide that products may be marketed only after an agreement on reimbursement price has been reached. Such pricing negotiations with governmental authorities can take considerable time after receipt of marketing approval for a product. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Other countries allow companies to establish their own prices for medical products but monitor and control company profits or control prescription volumes and issue guidance to physicians to limit prescriptions. In addition, some EU member states may require the completion of additional studies that compare the cost-effectiveness of a particular medicinal product candidate to currently available therapies. This Health Technology Assessment (“HTA”), process is the procedure according to which the assessment of the public health impact, therapeutic impact and the economic and societal impact of use of a given medicinal product in the national healthcare systems of the individual country is conducted. The outcome of HTA regarding specific medicinal products will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU member states. 71 Table of Contents Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates, if approved. In December 2021, Regulation No 2021/2282 on Health Technology Assessment (“HTA Regulation”) was adopted. The HTA Regulation intends to boost cooperation among EU member states in assessing health technologies, including new medicinal products, and provide the basis for cooperation at EU level for joint clinical assessments in these areas. The HTA Regulation entered into application on January 12, 2025 and has a phased implementation. Individual EU member states continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technologies, and making decisions on pricing and reimbursement. Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our products. We expect to experience pricing pressures in connection with the sale of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products. There can be no assurance that any country that has reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products, if approved in those countries. In the event Most-Favored-Nation pricing for pharmaceutical products is implemented and applicable to any of product candidates that may receive regulatory approval, our revenue opportunities may be adversely affected, as our U.S. pricing would have to be reduced to the lowest price paid for the applicable product outside of the United States. In such event, we may choose to forgo the ex-U.S. market to preserve more favorable U.S. pricing. We face competition from entities that have made substantial investments into the rapid development of competitor treatments for immunological indications, including large and specialty pharmaceutical and biotechnology companies, many of which already have approved therapies in our current indications. The development and commercialization of therapies is highly competitive. Our product candidates, if approved, will face significant competition, including from well-established, currently marketed therapies, and our failure to demonstrate a meaningful improvement to the existing standard of care may prevent us from achieving significant market penetration. Many of our competitors have significantly greater resources and experience than we do, and we may not be able to successfully compete. We face substantial competition from multiple sources, including large and specialty pharmaceutical and biotechnology companies, academic research institutions and governmental agencies and public and private research institutions. Our competitors compete with us on the level of the technologies employed, or on the level of development of their products as compared to our product candidates. In addition, many small biotechnology companies have formed collaborations with large, established companies to (i) obtain support for their research, development and commercialization of products or (ii) combine several treatment approaches to develop longer lasting or more efficacious treatments that may potentially directly compete with our current or any future product candidates. We anticipate that we will continue to face increasing competition as new therapies and combinations thereof, and related data, emerge. Our current product candidates, initially under development for treatment of patients with immune-mediated diseases, if approved, would face competition from existing approved immunological treatments, many of which have achieved commercial success. For example, we are currently developing envu for the treatment of PsO and SLE. Other emerging and established life sciences companies have been focused on similar therapeutics and indications. If approved, envu would compete with several currently approved or late-stage oral clinical therapeutics in each such indication as well as other drugs used to treat such patients. We are also developing A-005, which has potential applications in MS and other neuroinflammatory and neurodegenerative diseases. There are several therapies available for the treatment of relapsing forms of MS, including interferon beta regulators, monoclonal antibodies, synthetic immunomodulatory drugs and S1P receptor modulators. To compete successfully, we need to disrupt these currently marketed drugs, meaning that we will have to demonstrate that the relative cost, method of administration, safety, tolerability and efficacy of our product candidates provide a better alternative to existing and new therapies. Our commercial opportunity and likelihood of success will be reduced or eliminated if our product candidates are not ultimately demonstrated to be safer, more effective, more conveniently 72 Table of Contents administered, or less expensive than the current standard of care. Furthermore, even if our product candidates are able to achieve these attributes, acceptance of our products may be inhibited by the reluctance of physicians to switch from existing therapies to our products, or if physicians choose to reserve our products for use in limited circumstances. Many of our competitors have significantly greater financial, technical, manufacturing, marketing, sales and supply resources or experience than we have. If we obtain regulatory approval for any product candidate, we will face competition based on many different factors, including the safety and effectiveness of our current or any future product candidates, the ease with which our current or any future product candidates can be administered and the extent to which participants accept relatively new routes of administration, the timing and scope of regulatory approvals for these product candidates, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent position. Competing products could present superior treatment alternatives, including by being more effective, safer, less expensive or marketed and sold more effectively than any products we may develop. Competitive products may make any products we develop obsolete or noncompetitive before we recover the expense of developing and commercializing our current or any future product candidates. Such competitors could also recruit our employees, which could negatively impact our level of expertise and our ability to execute our business plan. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified management and other personnel in establishing clinical trial sites and enrolling patients in clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Risks Related to Our Business and Operations We are subject to various risks related to the acquisition of ACELYRIN. We completed the acquisition of ACELYRIN on May 21, 2025. Risks, contingencies and other uncertainties that could adversely affect our business, financial condition and results of operations following the acquisition, and any anticipated benefits of the acquisition, include: ● the effect of the ACELYRIN Merger on our ability to attract, motivate, retain and hire key personnel and maintain our relationships with suppliers, collaboration partners and others with whom we do business, or on our respective operating results and business generally; ● the diversion of our management’s attention from our ongoing business operations; ● the risk that the anticipated benefits of the ACELYRIN Merger may otherwise not be fully realized; and ● risks that restructuring costs and charges and other liabilities may be greater than anticipated or incurred in different periods than anticipated. Our business is highly dependent on the success of our most advanced product candidate, envu, and we cannot guarantee that envu will successfully complete development, receive regulatory approval or be successfully commercialized. If we are unable to develop, receive regulatory approval for and ultimately successfully commercialize our product candidates, or if we experience significant delays in doing so, our business will be materially harmed. We currently have no products approved for commercial sale or for which regulatory approval to market has been sought. We have invested a significant portion of our efforts and financial resources in the development of our most advanced product candidate, envu, which is still in clinical development, and expect that we will continue to invest heavily in envu, as well as our second product candidate, A-005, and any future product candidates we may develop. Additionally, we are evaluating the development program for lonigutamab, ACELYRIN’s lead product candidate, and its potential differentiation in a capital efficient manner. Our business and our ability to generate revenue, which we do not expect will 73 Table of Contents occur for many years, if ever, are substantially dependent on our ability to develop, obtain regulatory approval for, and then successfully commercialize our product candidates, which may never occur. Our product candidates will require substantial additional preclinical and clinical development time, regulatory approval, commercial manufacturing arrangements, establishment of a commercial organization, significant marketing efforts and further investment before we can generate any revenue from product sales. We currently generate no revenue, and we may never be able to develop or commercialize any products. We cannot assure you that we will meet our timelines for our current or future clinical trials, which may be delayed or not completed for a number of reasons, including the negative impacts of geopolitical instability, public health crises, labor shortages, inflation or other macroeconomic factors impacting our third-party CROs, CMOs, clinical trial sites, investigators or us. Our product candidates are susceptible to the risks of failure inherent at any stage of product development, including the appearance of unexpected AEs or failure to achieve primary endpoints in clinical trials. For example, we discontinued our proof-of-concept Phase 2a clinical trial of envu in patients with non-infectious uveitis in June 2024 based on the efficacy results of a data analysis prepared for a scheduled monitoring committee meeting, which efficacy results did not meet our clinical threshold for success despite safety results consistent with envu’s safety profile in psoriasis patients. Additionally, we may in the future advance envu, A-005 or future product candidates into clinical trials and terminate such trials prior to their completion. Even if our product candidates are successful in clinical trials, we are not permitted to market or promote our product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive sufficient regulatory approval that will allow us to successfully commercialize any product candidates. If we do not receive FDA or comparable foreign regulatory approval with the necessary conditions to allow commercialization, we will not be able to generate revenue from those product candidates in the United States or elsewhere in the foreseeable future, or at all. Any significant delays in obtaining approval for and commercializing our product candidates could adversely affect our business, financial condition, results of operations and prospects. We have not previously submitted an NDA or similar marketing application to the FDA or comparable foreign regulatory authorities for any product candidate, and we cannot be certain that our current or any future product candidates will be successful in clinical trials or receive regulatory approval. The FDA may also consider its approvals of competing products, which may alter the treatment landscape concurrently with their review of any NDA we may submit, and which may lead to changes in the FDA’s review requirements that have been previously communicated to us and our interpretation thereof, including changes to requirements for clinical data or clinical study design. Such changes could delay approval or necessitate withdrawal of any such NDA submission. Similar risks may exist in foreign jurisdictions. If approved for marketing by applicable regulatory authorities, our ability to generate revenue from our product candidates will depend on our ability to: ● price our products competitively such that third-party and government reimbursement permits broad product adoption; ​ ● demonstrate the superiority of our products compared to the standard of care, as well as to other therapies in development; ​ ● create market demand for our product candidates through our own marketing and sales activities, and any other arrangements to promote these product candidates that we may otherwise establish; ​ ● receive regulatory approval for the targeted patient populations and claims that are necessary or desirable for successful marketing; ​ ● effectively commercialize any of our products that receive regulatory approval; ​ ● manufacture product candidates through CMOs in sufficient quantities and at acceptable quality and manufacturing cost to meet commercial demand at launch and thereafter; ​ 74 Table of Contents ● establish and maintain agreements with wholesalers, distributors, pharmacies and group purchasing organizations on commercially reasonable terms; ​ ● obtain, maintain, protect and enforce patent and other intellectual property protection and regulatory exclusivity for our products; ​ ● achieve market acceptance of our products by patients, the medical community and third-party payors; ​ ● maintain a distribution and logistics network capable of product storage within our specifications and regulatory guidelines, and further capable of timely product delivery to commercial clinical sites; and ​ ● assure that our product will be used as directed and that additional unexpected safety risks will not arise. ​ The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed. The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing and distribution of our product candidates are subject to extensive regulation by the FDA in the United States and by comparable foreign regulatory authorities in foreign markets. In the United States, we are not permitted to market our product candidates until we receive regulatory approval of an NDA from the FDA. Similar approvals are required in order to market product candidates in foreign countries. The process of obtaining such regulatory approval is expensive, often takes many years following the commencement of clinical trials and can vary substantially based upon the type, complexity and novelty of the product candidates involved, as well as the target indications and patient population. Approval policies or regulations may change, and the FDA and comparable foreign regulatory authorities have substantial discretion in the approval process, including the ability to delay, limit or deny approval of a product candidate for many reasons. Prior to obtaining approval to commercialize a product candidate in the United States or abroad, we must demonstrate based on adequate and well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses. Clinical testing is expensive, time consuming and subject to uncertainty. We cannot guarantee that any current or future clinical trials will be conducted as planned or completed on schedule, if at all, or that our product candidates will receive regulatory approval. Our Phase 3 pivotal trials of envu in PsO, even if successfully completed, may not be sufficient for approval of envu in that disease. Although we have discussed and intend to further discuss our Phase 3 clinical trial design and overall development plan with the FDA to align on its sufficiency to support an NDA submission, the feedback is typically non-binding and dependent on the strength of the ultimate clinical data and the FDA’s perspective on the benefit-risk profile of the treatment in the intended population. For example, the Committee for Medicinal Products for Human Use in the EU provided comments on the length of our two pivotal 24-week Phase 3 trials, and we plan to address their feedback with our comparator trials. These modifications could delay our development timelines for EU regulatory approval and require substantially more resources. Phase 3 clinical trials typically involve hundreds of patients, have significant costs and take years to complete. In addition to our Phase 3 program in PsO, which we announced in July 2024 had commenced patient dosing, we have initiated a Phase 2b trial of envu in SLE. Even as these trials progress, issues may arise that could require us to suspend or terminate such clinical trials or could cause the results of one cohort to differ from a prior cohort. For example, we may experience slower than anticipated enrollment in our clinical trials, which may consequently delay our development timelines or permit competitors to obtain approvals that may alter our strategy. A failure of one or more clinical trials can occur at any stage of testing, and our future clinical trials may not be successful. In addition, even if such clinical trials are successfully completed, we cannot guarantee that the FDA or comparable foreign regulatory authorities will interpret the results as we do, and more trials could be required before we submit our product candidates for approval. To the extent that the results of the clinical trials are not satisfactory to the FDA or comparable foreign regulatory authorities for support of a marketing application, we may be required to expend significant resources, 75 Table of Contents which may not be available to us, to conduct additional clinical trials in support of potential approval of our product candidates. In addition, if the FDA or comparable foreign regulatory authorities grant approval for our product candidates, then, as a condition for approval, the FDA or comparable foreign regulatory authorities may require us to perform costly post-marketing testing, including Phase 4 clinical trials or surveillance to monitor the effects of the marketed product. Our clinical trial results may also not support approval. In addition, our product candidates could fail to receive regulatory approval for many reasons, including the following: ● the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; ​ ● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective for any of their proposed indications; ​ ● the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval, including due to the heterogeneity of patient populations, or apparent improvement in trial participants receiving placebo; ​ ● we may be unable to demonstrate that our product candidates’ clinical and other benefits outweigh their safety risks; ​ ● the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; ​ ● The data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of an NDA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere; ​ ● such authorities may disagree with us regarding the formulation, labeling and/or the product specifications of our product candidates; ● approval may be granted only for indications that are significantly more limited than those sought by us, and/or may include significant restrictions on distribution and use; ​ ● the FDA or comparable foreign regulatory authorities will review CMOs’ manufacturing process and inspect our CMOs’ commercial manufacturing facilities and may not approve our CMOs’ manufacturing process or facilities with respect to our product candidates; and ​ ● the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval. ​ Even if we eventually complete clinical trials and receive approval of an NDA or comparable foreign marketing application for our product candidates, the FDA or comparable foreign regulatory authority may grant approval contingent on the performance of costly additional clinical trials and/or the implementation of a REMS or comparable foreign strategies, which may be required because the FDA or comparable foreign regulatory authority believes it is necessary to ensure safe use of the product after approval. Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of that product candidate and would materially adversely impact our business and prospects. 76 Table of Contents In addition, FDA and foreign regulatory authorities may change their policies and new regulations may be enacted. For instance, on April 26, 2023, the European Commission adopted a proposal for a new Directive and Regulation to revise the existing pharmaceutical legislation and on April 10, 2024, the parliament adopted its related position. The proposed revisions remain to be agreed and adopted by the European Council. Moreover, on December 1, 2024, a new European Commission took office. The proposal could, therefore, still be subject to revisions. If adopted in the form proposed, the European Commission proposals to revise the existing EU laws governing authorization of medicinal products may result in a number of changes to the regulatory framework governing medicinal products, including a decrease in data and market exclusivity opportunities for our product candidates in the EU and make them open to generic or biosimilar competition earlier than is currently the case with a related reduction in reimbursement status. Disruptions at the FDA and other government agencies or comparable foreign regulatory authorities caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, prevent new or modified products from being developed, review, approved or commercialized in a timely manner or at all, which could negatively impact our business. The ability of the FDA and comparable foreign regulatory authorities to review and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s or comparable foreign regulatory authorities’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s or comparable foreign regulatory authorities’ ability to perform routine functions. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Disruptions at the FDA and other agencies or comparable foreign authorities may also slow the time necessary for new drugs or modifications to approved drugs to be reviewed and/or approved by necessary government agencies or regulatory authorities, which would adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory authorities, such as the FDA, have had to furlough critical FDA employees and stop critical activities. Separately, in response to the global COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points. Even though the FDA has since resumed standard inspection operations, any resurgence of the virus or emergence of new variants may lead to inspectional or administrative delays. If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other comparable foreign regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other comparable foreign regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business. There is substantial uncertainty regarding the new administration’s initiatives and how these might impact the FDA, its implementation of laws, regulations, policies and guidance and its personnel. Similar initiatives may also be directed toward other government agencies. These initiatives could prevent, limit or delay development and regulatory approval of our product candidates, which would adversely affect our business. FDA-regulated industries, such as ours, face substantial uncertainty with regard to the regulatory environment we will face as we proceed with research and development, and possibly in the future commercialization, efforts following the inauguration of President Trump in January 2025. Some of these efforts have manifested to date in the form of personnel measures that could impact the FDA’s ability to hire and retain key personnel, which could result in delays or limitations on our ability to obtain guidance from the FDA on our product candidates in development and obtain the requisite regulatory approvals in the future. Moreover, the new administration has proposed action to freeze or reduce the budget of the National Institute of Health (“NIH”) as related to its funding for medical research, which could decrease the ability of facilities that rely on NIH funding to enroll and conduct clinical trials or increase the costs to us of conducting clinical trials. There remains general uncertainty regarding future activities. The new administration could issue or promulgate executive orders, regulations, policies or guidance that adversely affect us or create a more challenging or costly environment to pursue the development of new therapeutic products. Alternatively, state governments may attempt to address or react to changes at the federal level with changes to their own regulatory frameworks in a manner that is adverse to our operations. If we become negatively impacted by future governmental orders, regulations, policies or guidance as a result of the new administration, there could be a material adverse effect on us and our business. 77 Table of Contents If our product candidates, if approved, do not achieve broad market acceptance, the revenue that we generate from their sales will be limited. We have never commercialized a product candidate for any indication. Even if our product candidates are approved by the appropriate regulatory authorities for marketing and sale, they may not gain acceptance among physicians, patients, third-party payors and others in the medical community. If any product candidate for which we obtain regulatory approval does not gain an adequate level of market acceptance, we may not generate sufficient product revenue or become profitable. The degree of market acceptance of our product candidates, if approved, will depend on a number of factors, some of which are beyond our control, including: ● the safety, efficacy, tolerability and ease of administration of our product candidates; ​ ● the clinical indications for which the products are approved and the approved claims that we may make for the products; ​ ● limitations or warnings contained in the product’s approved labeling, including potential limitations on the use of the product or warnings for such products that may be more restrictive than other competitive products; ​ ● distribution and use restrictions imposed by the FDA or comparable foreign regulatory authorities with respect to such product candidates or to which we agree as part of a mandatory REMS or risk management plan; ​ ● changes in the standard of care for the targeted indications for such product candidates; ​ ● the relative difficulty of administration or compliance with administration instructions of such product candidates; ​ ● cost of treatment as compared to the clinical benefit in relation to alternative treatments or therapies; ​ ● the availability of adequate coverage and reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicare and Medicaid or comparable foreign programs; ​ ● the extent and strength of our marketing and distribution of such product candidates; ​ ● the safety, efficacy and other potential advantages of, and availability of, alternative treatments already used or that may later be approved for any of our intended indications; ​ ● the timing of market introduction of such product candidates, as well as competitive products; ​ ● the reluctance of physicians to switch their patients’ current standard of care; ​ ● the reluctance of patients to switch from their existing therapy regardless of the safety and efficacy of newer products; ​ ● our ability to offer such product candidates for sale at competitive prices; ​ ● the extent and strength of our third-party manufacturer and supplier support; ​ 78 Table of Contents ● adverse publicity about our product or favorable publicity about competitive products; and ​ ● potential product liability claims. ​ Our efforts to educate the medical community and third-party payors as to the benefits of our product candidates may require significant resources and may never be successful. Even if the medical community accepts that our product candidates are safe and effective for their approved indications, physicians and patients may not immediately be receptive to such product candidates and may be slow to adopt them as an accepted treatment of the approved indications. If our current or future product candidates are approved, but do not achieve an adequate level of acceptance among physicians, patients, and third-party payors, we may not generate meaningful revenue from our product candidates and may never become profitable. We may expend our limited resources to pursue a particular product candidate in specific indications and fail to capitalize on product candidates or indications that may be more profitable or for which there is a greater likelihood of success. Because we have limited financial and managerial resources, we focus our development efforts on certain selected product candidates in certain selected indications. For example, we are initially focused on our most advanced product candidate, envu, currently in development for the treatment of PsO and SLE, and our second product candidate A-005, currently in development for the treatment of neuroinflammatory and neurodegenerative diseases. As a result, we may forgo or delay pursuit of opportunities with other product candidates, or other indications for our existing product candidates that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future development programs and product candidates for specific indications may not yield any commercially viable product candidates. For example, we discontinued our proof-of-concept Phase 2a clinical trial of envu in patients with non-infectious uveitis in June 2024 based on the efficacy results of a data analysis prepared for a scheduled monitoring committee meeting, which efficacy results did not meet our clinical threshold for success despite safety results consistent with envu’s safety profile in psoriasis patients. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate. We will need to grow our organization, and we may experience difficulties in managing our growth and expanding our operations, which could adversely affect our business. As of June 30, 2025, we had 250 full-time employees, which includes 25 employees retained on a temporary basis to assist with the integration of ACELYRIN, and 2 part-time employees. As our development and commercialization plans and strategies develop, we expect to expand our employee base for managerial, operational, financial and other resources. In addition, we have limited experience in manufacturing and commercialization. As our product candidates enter and advance through preclinical studies and clinical trials, we expect to continue to expand our development and regulatory capabilities and contract with other organizations to provide manufacturing and other capabilities for us. In the future, we expect to have to manage additional relationships with future collaborators or partners, suppliers and other organizations. Our ability to manage our operations and future growth will require us to continue to improve our operational, financial and management controls, reporting systems and procedures. We may not be able to implement improvements to our management information and control systems in an efficient or timely manner and may discover deficiencies in existing systems and controls. Our inability to successfully manage our growth and expand our operations could adversely affect our business, financial condition, results of operations and prospects. We are dependent on the services of our management team and other clinical and scientific personnel, and if we are not able to retain these individuals or recruit additional management or clinical and scientific personnel, our business will suffer. Our success depends in part on our continued ability to attract, retain and motivate highly qualified management, clinical and scientific personnel. We are highly dependent upon the members of our senior management team. The loss of services of any of these individuals could delay or prevent the successful development of our product pipeline, initiation or 79 Table of Contents completion of our preclinical studies and clinical trials or the commercialization of our product candidates. Although we have executed employment agreements or offer letters with each member of our senior management team, these agreements are terminable at will with or without notice and, therefore, we may not be able to retain their services as expected. We do not currently maintain “key person” life insurance on the lives of our executives or any of our employees. This lack of insurance means that we may not have adequate compensation for the loss of the services of these individuals. We will need to continue to expand and effectively manage our managerial, operational, financial and other resources in order to successfully pursue our clinical development and commercialization efforts. We may not be successful in maintaining our unique company culture and continuing to attract or retain qualified management and scientific and clinical personnel in the future due to the intense competition for qualified personnel among biopharmaceutical, biotechnology and other businesses, particularly in the greater San Francisco Bay Area. If we are not able to attract, integrate, retain and motivate necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy. Our employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. We are exposed to the risk of employee fraud or other illegal activity by our employees, independent contractors, consultants, commercial partners, CROs, CMOs and other parties. Misconduct by these parties could include intentional, reckless and/or negligent conduct that fails to comply with FDA or other regulations, provide true, complete and accurate information to the FDA and other similar foreign regulatory bodies, respect our confidentiality and intellectual property rights, comply with manufacturing standards we may establish, comply with healthcare fraud and abuse laws and regulations, report financial information or data accurately or disclose unauthorized activities to us. If we obtain FDA approval for our product candidates and begin commercializing those products in the United States, our potential exposure under these laws will increase significantly, and our costs associated with compliance with these laws are likely to increase. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Similar requirements apply in foreign countries. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. Additionally, we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a material and adverse effect on our business, financial condition, results of operations and prospects, including the imposition of significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of our operations, loss of eligibility to obtain approvals from the FDA or comparable foreign regulatory authorities, exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid or comparable foreign programs, integrity oversight and reporting obligations, or reputational harm. International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and growth prospects. ​ We conduct business globally and our operations, including third-party suppliers, span numerous countries outside the U.S. There is inherent risk, based on the complex relationships among the U.S. and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. The current international trade and regulatory environment is subject to significant ongoing uncertainty. The U.S. government has recently announced substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue developing new trade policies, including with respect to the pharmaceutical industry. In response, certain foreign governments have announced or implemented retaliatory tariffs and other protectionist measures. These developments 80 Table of Contents have created a dynamic and unpredictable trade landscape, which is adversely impacting, and may continue to adversely impact, our business. The Bureau of Industry and Security, U.S. Department of Commerce, has initiated an investigation to determine whether pharmaceutical ingredients, including finished drug product, manufactured outside the United States pose a national security risk and should be subject to additional tariffs. ​ We do not own or operate, and currently have no plans to establish, any manufacturing facilities. We currently rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for clinical testing, as well as for manufacture of any products that we may commercialize, if approved. Currently, most of our suppliers are located outside of the U.S., and our principal suppliers of critical raw materials are located in India and in Taiwan. We also rely on precursor compounds, other materials, and manufacturing services sourced from multiple countries, including the European Union and South Korea, to advance our research and development and manufacturing efforts. ​ Current or future tariffs will result in increased research and development expenses, including with respect to increased costs associated with APIs, raw materials, laboratory equipment and research materials and components. In addition, such tariffs will increase our supply chain complexity and could also potentially disrupt our existing supply chain. Unlike consumer goods, pharmaceuticals face unique regulatory constraints that make rapid supply chain adjustments particularly difficult and costly. Trade restrictions affecting the import of materials necessary for clinical trials could result in delays to our development timelines. Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce investor confidence, negatively impacting our ability to secure additional financing on favorable terms or at all. In addition, as we advance toward commercialization, tariffs and trade restrictions could hinder our ability to establish cost-effective production capabilities, negatively impacting our growth prospects. ​ The complexity of announced or future tariffs may also increase the risk that we or our customers or suppliers may be subject to civil or criminal enforcement actions in the U.S. or foreign jurisdictions related to compliance with trade regulations. Foreign governments may also adopt non-tariff measures, such as procurement preferences or informal disincentives to engage with, purchase from or invest in U.S. entities, which may limit our ability to compete internationally and attract non-U.S. investment, employees, customers and suppliers. Foreign governments may also take other retaliatory actions against U.S. entities, such as decreased intellectual property protection, increased enforcement actions, or delays in regulatory approvals, which may result in heightened international legal and operational risks. In addition, the U.S. and other governments have imposed and may continue to impose additional sanctions, such as trade restrictions or trade barriers, which could restrict us from doing business directly or indirectly in or with certain countries or parties and have imposed and may continue to impose additional costs and complexity to our business. ​ Trade disputes, tariffs, restrictions and other political tensions between the U.S. and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability, and economic recessions or downturns. The ultimate impact of current or future tariffs and trade restrictions remains uncertain and could materially and adversely affect our business, financial condition, and prospects. While we actively monitor these risks, any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, results of operations and financial condition. In addition, trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in this join proxy statement/prospectus. Our future growth may depend, in part, on our ability to operate in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties. Our future growth may depend, in part, on our ability to develop and commercialize our product candidates in foreign markets, including in the EU, the UK and Japan, for which we may rely on collaboration with third parties. We are not permitted to market or promote our product candidates before we receive regulatory approval from the applicable regulatory authority in that foreign market and may never receive such regulatory approval for our product candidates. To obtain separate regulatory approval in many other countries, we must comply with numerous and varying regulatory requirements of such countries regarding safety and efficacy and governing, among other things, clinical trials and commercial sales, pricing and distribution of our product candidates, and we cannot predict success in these jurisdictions. If we fail to comply with the regulatory requirements in international markets and receive applicable regulatory approvals, 81 Table of Contents our target market will be reduced, our ability to realize the full market potential of our product candidates will be harmed and our business will be adversely affected. We may not obtain foreign regulatory approvals on a timely basis, if at all. Our failure to obtain approval for our product candidates by regulatory authorities in another country may significantly diminish the commercial prospects of that product candidate and our business, financial condition, results of operations and prospects could be adversely affected. Moreover, even if we obtain approval of our product candidates and ultimately commercialize our product candidates in foreign markets, we would be subject to these risks and uncertainties, including the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements and reduced protection of intellectual property rights in some foreign countries. Our business entails a significant risk of product liability and our ability to obtain sufficient insurance coverage could adversely affect our business, financial condition, results of operations and prospects. As we conduct clinical trials of our current or future product candidates, we are exposed to significant product liability risks inherent in the development, testing, manufacturing and marketing of new treatments. Product liability claims could delay or prevent completion of our development programs. If we succeed in marketing products, such claims could result in FDA or other regulatory authority investigation of the safety and effectiveness of our future product candidates, our manufacturing processes and facilities or our marketing programs and potentially a recall of our products or more serious enforcement action, limitations on the approved indications for which they may be used or suspension, variation or withdrawal of approvals. Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our product candidates, termination of clinical trial sites or entire trial programs, withdrawal of clinical trial participants, injury to our reputation and significant negative media attention, significant costs to defend the related litigation, a diversion of management’s time and our resources from our business operations, substantial monetary awards to trial participants or patients, loss of revenue, the inability to commercialize and products that we may develop, and a decline in our stock price. We may need to obtain higher levels of product liability insurance for later stages of clinical development or marketing of our product candidates. Any insurance we may obtain may not provide sufficient coverage against potential liabilities. Furthermore, clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims that could adversely affect our business, financial condition, results of operations and prospects. Our insurance policies are expensive and only protect us from some business risks, which will leave us exposed to significant uninsured liabilities. We do not carry insurance for all categories of risk that our business may encounter. Some of the policies we currently maintain include commercial general liability, general liability, cyber liability, workers’ compensation, clinical trials and directors’ and officers’ liability insurance. We do not know, however, if we will be able to maintain insurance with adequate levels of coverage. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our business, financial condition, results of operations and prospects. We have engaged in, and may in the future engage in, strategic transactions, which could impact our liquidity, increase our expenses, dilute our stockholders and present significant distractions to our management. We have in the past and may continue to enter into strategic transactions, including acquisitions of companies, asset purchases and in-licensing of intellectual property with the potential to acquire and advance new assets or product candidates where we believe we are well qualified to optimize the development of promising therapies. For example, we were founded in January 2021, and subsequently acquired envu via a stock purchase of FronThera U.S. Holdings, Inc. and its wholly owned subsidiary, FronThera U.S. Pharmaceuticals LLC. Additionally, we consummated the ACELYRIN Merger in May 2025 and acquired lonigutamab. Additional potential transactions that we may consider in the future include a variety of business arrangements, including strategic partnerships, in-licensing or out-licensing of product candidates, strategic collaborations, joint ventures, restructurings, divestitures, business combinations and investments. Any such transactions could increase our near and long-term expenditures, result in potentially dilutive issuances of our equity securities, including our common stock, or the incurrence of debt, contingent liabilities, amortization expenses or acquired in-process research and development expenses, any of which could affect our financial condition, liquidity and results of operations. 82 Table of Contents Future acquisitions may also require us to obtain additional financing, which may not be available on favorable terms or at all. These transactions may never be successful and may require significant time and attention of our management. Even if we are able to successfully identify and acquire complementary products, technologies or businesses, we cannot assure you that we will be able to successfully manage the risks associated with integrating acquired products, technologies or businesses or the risks arising from anticipated and unanticipated problems in connection with an acquisition or in-licensing transaction. For example, as a result of the ACELYRIN Merger, we now operate our historical core business along with the ACELYRIN business as one combined organization utilizing common information and communication systems, operating procedures, financial controls and human resources practices. There may be difficulties, costs and delays involved in the integration of our historical core business with the ACELYRIN business, including as a result of challenges relating to the diversion of management’s attention, the possibility of faulty assumptions underlying expectations regarding the integration process, retaining and attracting business and operational relationships, eliminating duplicative operations and inconsistent standards and procedures and increased or unforeseen liabilities or costs relating to the ACELYRIN Merger or the ACELYRIN business. We have also incurred substantial expenses in connection with and as a result of completing the ACELYRIN Merger and, may incur additional expenses as we continue to finalize integration coordinate the businesses, operations, policies and procedures of the combined company. Further, while we seek to mitigate risks and liabilities of potential acquisitions and in-licensing transactions through, among other things, due diligence, there may be risks and liabilities that such due diligence efforts fail to discover, that are not disclosed to us, or that we inadequately assess. Any failure in identifying and managing these risks, liabilities and uncertainties effectively, including in connection with the ACELYRIN Merger, could have a material adverse effect on our business and adversely affect our results of operations and financial condition. Additionally, we may not realize the anticipated benefits of such transactions, including the possibility that expected synergies and accretion will not be realized or will not be realized within the expected time frame. Accordingly, although there can be no assurance that we will undertake or successfully complete any additional transactions of the nature described above, any additional transactions that we do complete could adversely affect our business, financial condition, results of operations and prospects. Our ability to use our net operating loss carryforwards and certain other tax attributes to offset taxable income or taxes may be limited. We have incurred substantial losses during our history and do not expect to become profitable in the near future, and we may never achieve profitability. As of December 31, 2024, we had U.S. federal net operating loss carryforwards of $101.2 million and U.S. states net operating loss carryforwards of $4.7 million. Under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), our U.S. federal net operating losses generated arising in years beginning after December 31, 2017 will not expire and may be carried forward indefinitely, but the deductibility of such U.S. federal net operating losses is limited to no more than 80% of current year taxable income. In addition, under Sections 382 and 383 of the Internal Revenue Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be limited. As of December 31, 2024, we completed a Section 382 analysis which indicates that we have not experienced an ownership change. However, there may be ownership changes in the future, some of which may be outside of our control. If we undergo an ownership change, and our ability to use our pre-change net operating loss carryforwards and other pre-change tax attributes (such as research tax credits) to offset our post-change income or taxes (if any) is limited, such limitation could harm our future results of operations by effectively increasing our future tax obligations. Similar provisions of state tax law may also apply to limit our use of accumulated state tax attributes. In addition, at the state level, there may be periods during which the use of net operating losses is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. As a result, even if we attain profitability, we may be unable to use all or a material portion of our net operating losses and other tax attributes, which could adversely affect our future cash flows. Recent and future changes to tax laws could materially adversely affect our company. The tax regimes we are subject to or operate under, including with respect to income and non-income taxes, are unsettled and may be subject to significant change. Changes in tax laws, regulations or rulings, or changes in interpretations of existing laws and regulations, could materially adversely affect our company. The OBBBA enacted in July 2025, the 83 Table of Contents Inflation Reduction Act (“IRA”) enacted in 2022, the Coronavirus Aid, Relief, and Economic Security Act enacted in 2020, and the Tax Cuts and Jobs Act enacted in 2017 made many significant changes to the U.S. tax laws. For example, the Tax Cuts and Jobs Act required taxpayers to capitalize and amortize U.S.-based and non-U.S.-based research and experimental (“R&E”) expenditures over five and fifteen years, respectively. The OBBBA restores the deductibility of domestic R&E expenditures in the year incurred for tax years beginning after December 31, 2024, but retains the capitalization and amortization requirement for foreign R&E expenditures. In addition, the IRA includes provisions that impact the U.S. federal income taxation of certain corporations, including a 15% minimum tax on the book income of certain large corporations and a 1% excise tax on certain corporate stock repurchases that is imposed on the corporation repurchasing such stock. Future guidance from the Internal Revenue Service and other tax authorities with respect to such legislation may affect us, and certain aspects thereof could be repealed or modified in future legislation, possibly with retroactive effect. Additionally, many countries in Europe, as well as a number of other countries and organizations (including the Organization for Economic Cooperation and Development and the European Commission), have proposed, recommended, or (in the case of countries) enacted or otherwise become subject to changes to existing tax laws or new tax laws that could significantly increase our tax obligations in the countries where we do business or require us to change the manner in which we operate our business. If our information technology systems, or those used by our CROs, CMOs, clinical sites or other third parties with whom we work or our data are or were compromised, become unavailable or suffer security breaches, loss or leakage of data or other disruptions, we could suffer material adverse consequences resulting from such compromise, including but not limited to, operational or service interruption, harm to our reputation, regulatory investigations or actions, litigation, fines, penalties and liability, and other adverse consequences to our business, results of operations and financial condition. In the ordinary course of our business, we, and the third parties with whom we work, process personal information and other sensitive data, including intellectual property, trade secrets, proprietary or confidential business information, preclinical and clinical trial data, personal information related to relevant stakeholders, third-party data, and other sensitive data (collectively, sensitive information) and as a result, we and the third parties with whom we work face a variety of evolving threats which could cause security incidents affecting or interruptions to our information technology systems and sensitive information. Our information technology systems and those of our CROs, CMOs, clinical sites and other third parties with whom we work are vulnerable to attack, damage and interruption from a variety of evolving threats, including but not limited to computer viruses, misconfigurations, software bugs, worms, or other vulnerabilities and malicious codes, malware (including ransomware and as a result of advanced persistent threat intrusions), application security attacks, social engineering (including through phishing attacks and deep fakes, which may be increasingly more difficult to identify as fake), supply chain attacks and vulnerabilities through our third-party service providers, denial or degradation-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, fraud, server malfunctions, software or hardware failures, loss of data or other information technology assets, attacks enhanced or facilitated by AI, adware, telecommunications and electrical failures, terrorism, war, earthquakes, fires, floods, and other similar threats. Such threats are prevalent, are occurring more often, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors. In particular, ransomware attacks, including those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly prevalent and severe and can lead to significant interruptions, delays, or outages in our operations, loss of data (including sensitive information), loss of income, significant extra expenses to restore data or systems, reputational loss, the diversion of funds and other consequences. To alleviate the negative impact of a ransomware attack, it may be preferable to make extortion payments, but we may be unwilling or unable to do so (including, for example, if applicable laws or regulations prohibit such payments). Some actors also now engage and are expected to continue to engage in cyberattacks, including without limitation nation-state actors, for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we, and the third parties with whom we work, may be vulnerable to a heightened risk of these attacks, including retaliatory cyberattacks, that could materially disrupt our systems, operations and supply chain. In addition to experiencing a security incident, third parties may gather, collect or infer sensitive data about us from public 84 Table of Contents sources, data brokers or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position. Additionally, remote work has become more common and has increased risks to our information technology systems and data, as more of our personnel utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations. Furthermore, future or past business transactions (such as the ACELYRIN Merger or other acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Additionally, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate acquired entities into our information technology environment and security program. We have in the past and may in the future expend significant resources and modify our business activities to try to protect against security incidents. While we take steps designed to anticipate, detect and remediate threats and vulnerabilities, because the threats and techniques used to exploit such vulnerabilities and gain unauthorized access to, to sabotage or otherwise compromise systems change frequently, are often sophisticated in nature, and are often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement and maintain adequate preventative measures. Therefore, such vulnerabilities have and could be exploited but may not be detected until after a security incident has occurred. We may also experience security breaches that may remain undetected for an extended period. Even if identified, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities and we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence. There can be no assurance that our information security policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and sensitive information. Our reliance on third-party service providers could introduce additional cybersecurity risks and vulnerabilities, including supply-chain attacks and other threats to our business operations. We rely on third-party service providers and technologies to operate critical business systems and to process sensitive information in a variety of contexts, including, without limitation, cloud-based infrastructure, data hosting, encryption and authentication technology, personnel email, human resource management, training and other functions. We also rely on third-party service providers to assist with our clinical trials or otherwise to operate our business, including to manage and store sensitive patient data from our clinical trials. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. Our third-party service providers have and may in the future experience a security incident or other interruption. While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our information technology systems or the third-party information technology systems that support our operations. We and certain of our service providers have been and are from time to time subject to cyberattacks and security incidents. Any of the previously identified or similar threats have or could cause a security incident or other interruption that resulted or results in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure, or other processing of, or access to our sensitive information or our information technology systems, or those of the third parties with whom we work. A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to conduct clinical trials. Additionally, sensitive information of the company could be leaked, disclosed, or revealed as a result of or in connection with our employees’, personnel’s or vendors’ use of generative AI technologies. The costs related to significant security breaches or disruptions could be material and cause us to incur significant expenses. If the information technology systems of our CROs, CMOs, clinical sites and other third parties become subject to disruptions or security incidents, we may have insufficient recourse against such third parties and we may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent future 85 Table of Contents events of this nature from occurring. Further, our cyber liability insurance coverage may not be sufficient to cover the financial, legal, business reputational or other losses that may result from an interruption or breach. Security incidents have and could result in a disruption of our business and development programs. For example, the loss of clinical trial data from completed or ongoing clinical trials for a product candidate could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data, or may limit our ability to effectively execute a product recall, if required in the future. To the extent that any disruption or security incident were to result in the loss of or damage to our data or applications, or inappropriate disclosure of sensitive information, we could incur liability and the further development of any product candidates could be delayed. Applicable data privacy and security obligations may require us, or we may voluntarily choose, to notify relevant stakeholders, including affected individuals, regulators, and investors, of security incidents, or take other actions, such as providing credit monitoring and identify theft protection services. Such disclosures and related actions can be costly, and the disclosure or the failure to comply with such applicable requirements could lead to adverse consequences. Security incidents (or perceived security incidents), may result in material adverse consequences such as legal claims or proceedings, liability including litigation exposure, penalties and fines under relevant legal obligations, enforcement actions and investigations by regulatory authorities, additional reporting requirements or oversight, restrictions on processing sensitive information (including personal information), indemnification obligations, monetary fund diversions, diversion of management attention, other financial loss, and damage to our reputation and a loss of confidence in us and our ability to conduct clinical trials, which could delay the clinical development of our product candidates, and of which may adversely affect our business, results of operations or financial condition. Our operations are predominantly concentrated in one location, and we or the third parties upon whom we depend may be adversely affected by a wildfire, earthquake or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster. Our current operations are predominantly located in California. Any unplanned event, such as flood, wildfire, explosion, earthquake, extreme weather condition, medical epidemic, power shortage, telecommunication failure or other natural or manmade accidents or incidents that result in us being unable to fully utilize our facilities may have a material and adverse effect on our ability to operate our business, particularly on a daily basis, and have significant negative consequences on our financial and operating conditions. Any similar impacts of natural or manmade disasters on our third-party service providers, such as our CMOs and CROs located globally, could cause delays in our clinical trials and may have a material and adverse effect on our ability to operate our business and have significant negative consequences on our financial and operating conditions. If a natural disaster, power outage or other event occurred that prevented us from using our clinical trial sites, impacted clinical supply or the conduct of our clinical trials, that damaged critical infrastructure, such as the manufacturing facilities of our third-party CMOs, or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time. The disaster recovery and business continuity plans that we and third parties upon whom we rely have or may have in place may prove inadequate in the event of a serious disaster or similar event. As part of our risk management policy, we maintain insurance coverage at levels that we believe are appropriate for our business. However, in the event of an accident or incident at these facilities, we cannot assure you that the amounts of insurance will be sufficient to satisfy any damages and losses. If our facilities, or the manufacturing facilities of our CMOs, are unable to operate because of an accident or incident or for any other reason, even for a short period of time, any or all of our development programs may be harmed. Any business interruption could adversely affect our business, financial condition, results of operations and prospects. Our projections regarding the market opportunities for our product candidates may not be accurate, and the actual market for our products may be smaller than we estimate. The precise incidence and prevalence for all the conditions we aim to address with our product candidates are unknown. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including sales of our competitors, scientific literature, surveys of clinics, patient foundations or market research, and may prove to be incorrect in general, or as to their applicability to our 86 Table of Contents company. Further, new trials may change the estimated incidence or prevalence of these diseases. The total addressable market across all of our product candidates will ultimately depend upon, among other things, the diagnosis criteria included in the final labeling for each of our product candidates approved for sale for these indications, the ability of our product candidates to improve on the safety, convenience, cost and efficacy of competing therapies or therapies in development, acceptance by the medical community and patients, drug pricing and reimbursement. The number of patients in the United States and other major markets and elsewhere may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our product candidates or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our business, financial condition, results of operations and prospects. Further, even if we obtain significant market share for our product candidates, because some of our potential target populations are very small, we may never achieve profitability despite obtaining such significant market share. Our cash and cash equivalents may be exposed to failure of our banking institutions. While we seek to minimize our exposure to third-party losses of our cash and cash equivalents, we hold our balances in a number of large financial institutions. Notwithstanding, those institutions are subject to risk of failure. For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (the “FDIC”) as receiver. Similarly, on March 12, 2023, Signature Bank was also swept into receivership. The U.S. Department of Treasury, the Federal Reserve Board (the “Federal Reserve”), and the FDIC released a statement that indicated that all depositors of SVB would have access to all of their funds, including funds held in uninsured deposit accounts, after only one business day of closure. The U.S. Department of Treasury, the FDIC and the Federal Reserve have announced a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediately liquidity may exceed the capacity of such program. There is no guarantee, however, that the U.S. Department of Treasury, the FDIC and the Federal Reserve will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions, or that they would do so in a timely fashion. Although we expect to assess our banking relationships as we believe necessary or appropriate, our access to cash in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect the financial institutions with which we have banking relationships, and in turn, us. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could also include factors involving financial markets or the financial services industry generally. The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations. These could include, but may not be limited to, delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets; or termination of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements. In addition, widespread investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses, financial obligations or fulfill our other obligations, result in breaches of our financial and/or contractual obligations or result in violations of federal or state wage and hour laws. Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors not described above, could have material adverse impacts on our liquidity and our current and/or projected business operations and financial condition and results of operations. In addition, one or more of our critical vendors, third party manufacturers, or other business partners could be adversely affected by any of the liquidity or other risks that are described above, which in turn, could have a material adverse effect on our current and/or projected business operations and results of operations and financial condition. Any business partner 87 Table of Contents bankruptcy or insolvency, or any breach or default by a business partner, or the loss of any significant supplier relationships, could result in material adverse impacts on our current and/or projected business operations and financial condition. Public opinion and scrutiny of immunology treatments may impact public perception of our company and product candidates, or may adversely affect our ability to conduct our business and our business plans. Public perception may be influenced by claims, such as claims that our product candidates are unsafe, unethical or immoral and, consequently, our approach may not gain the acceptance of the public or the medical community. Adverse public attitudes may also adversely impact our ability to enroll clinical trials. Moreover, our success will depend upon physicians specializing in the treatment of those diseases that our product candidates target prescribing, and their patients being willing to receive, treatments that involve the use of our product candidates in lieu of, or in addition to, existing treatments they are already familiar with and for which greater clinical data may be available. AEs in our clinical trials, even if not ultimately attributable to our product candidates, and the resulting publicity could result in withdrawal of clinical trial participants, increased governmental regulation, unfavorable public perception, potential regulatory delays in the testing or approval of our product candidates, stricter labeling requirements for those product candidates that are approved and a decrease in demand for any such product candidates. In addition, side effects generally associated with TYK2 or JAK inhibitors may negatively impact public perception of us or envu and A-005. More restrictive government regulations or negative public opinion could have an adverse effect on our business, financial condition, results of operations and prospects, and may delay or impair the development and, if approved, commercialization of our product candidates or demand for any products we may develop. The future impairment of IPR&D intangible assets related to the ACELYRIN Merger may negatively affect our results of operations and financial position. As of June 30, 2025, we had recorded $51.0 million of IPR&D intangible assets related to the ACELYRIN Merger. In-process research and development assets are subject to an impairment analysis whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Additionally, indefinite-lived assets are subject to an impairment test at least annually. Events giving rise to impairment are an inherent risk in the pharmaceutical industry and cannot be predicted. Our results of operations and financial position in future periods could be negatively impacted should future impairments of IPR&D intangible assets occur. Our and ACELYRIN’s actual financial positions and results of operations may differ materially from the unaudited pro forma financial information that we filed as Exhibit 99.3 to our Current Report on Form 8-K/A, filed with the SEC on June 30, 2025. The pro forma financial information that we filed as Exhibit 99.3 to our Current Report on Form 8-K/A, filed with the SEC on June 30, 2025 (the “June 8-K”) was presented for illustrative purposes only and may not be an indication of what our financial position or results of operations would have been had the transactions been completed on the dates indicated. The pro forma financial information was derived from our and ACELYRIN’s historical financial statements and certain adjustments and assumptions were made regarding the combined company after giving effect to the indicated transactions. The assets and liabilities of ACELYRIN were measured at fair value based on various preliminary estimates using assumptions that our management believed were reasonable utilizing information available at the time. The process for estimating the fair value of acquired assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates. These estimates may be revised as additional information becomes available and as additional analyses are performed. Differences between preliminary estimates in the pro forma financial information and the final acquisition accounting will occur and could have a material impact on the pro forma financial information and the combined company’s financial position and future results of operations. 88 Table of Contents Risks Related to Intellectual Property If we are unable to obtain and maintain sufficient intellectual property protection for our product candidates and any future product candidates we may develop, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors or other third parties could develop and commercialize products similar or identical to ours, and our ability to successfully develop and commercialize our product candidates may be adversely affected. We rely upon a combination of patents, know-how and confidentiality agreements to protect the intellectual property related to our product candidates and technologies and to prevent third parties from copying and surpassing our achievements, thus eroding our competitive position in our market. Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries for our product candidates and their uses, as well as our ability to operate without infringing, misappropriating or otherwise violating the proprietary rights of others. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our product candidates and novel discoveries that are important to our business. Our pending and future patent applications may not result in patents being issued. We cannot assure you that issued patents will afford sufficient protection of our product candidates or their intended uses against competitors, nor can there be any assurance that the patents issued will not be infringed, designed around, invalidated by third parties, or effectively prevent others from commercializing competitive products or product candidates. Obtaining and enforcing patents is expensive and time-consuming, and we may not be able to file, prosecute, maintain, enforce or license all necessary or desirable patent applications or maintain and/or enforce patents that may issue based on our patent applications, at a reasonable cost or in a timely manner. We may not be able to obtain or maintain patent applications and patents due to the subject matter claimed in such patent applications and patents being in disclosures in the public domain. It is also possible that we will fail to identify patentable aspects of our research and development results before it is too late to obtain patent protection. Although we have in the past and will continue to enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, CROs, CMOs, consultants, advisors and other third parties, any of these parties may breach these agreements and disclose such results before a patent application is filed, thereby jeopardizing our ability to seek patent protection. Consequently, we may not be able to prevent any third parties from using any of our technology that is in the public domain to compete with our product candidates . Composition of matter patents for pharmaceutical product candidates often provide a strong form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use. However, we cannot be certain that the claims in our pending patent applications directed to composition of matter of our product candidates will be considered patentable by the United States Patent and Trademark Office (“USPTO”) or by patent offices in foreign countries, or that the claims in any of our issued patents will be considered valid and enforceable by courts in the United States or foreign countries. Method of use patents protect the use of a product for the specified method. This type of patent does not prevent a competitor from making and marketing a product that is identical to our product candidates for an indication that is outside the scope of the patented method. Moreover, even if competitors do not actively promote their product for our targeted indications, clinicians may prescribe these products “off-label.” Although off-label prescriptions may infringe or contribute to the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute. The patent position of biopharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation, resulting in court decisions, including Supreme Court decisions, which have increased uncertainties as to the ability to enforce patent rights in the future. As a result, the issuance, scope, validity, enforceability and commercial value of any patent rights are highly uncertain. Our pending and future owned or in-licensed patent applications may not result in issued patents that protect our product candidates effectively to prevent others from commercializing our product candidates or otherwise provide any competitive advantage. In fact, patent applications may not issue as patents at all. The coverage claimed in a patent application can also be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States, or vice versa. 89 Table of Contents The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability and our pending patent applications may be challenged in patent offices in the United States and abroad. Even issued patents may later be found invalid or unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. For example, our pending patent applications may be subject to third-party pre-issuance submissions of prior art to the USPTO, or our issued patents may be subject to post-grant review (“PGR”) proceedings, oppositions, derivations, reexaminations, interferences, inter partes review (“IPR”) proceedings or other similar proceedings, in the United States or elsewhere, challenging our patent rights or the patent rights of others. Such submissions may also be made prior to a patent’s issuance, precluding the granting of a patent based on one or more of our owned pending patent applications. An adverse determination in any such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated, or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical product candidates, or limit the duration of the patent protection of our product candidates. Such challenges also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us. Any of the foregoing could adversely affect our business, financial condition, results of operations and prospects. A third party may also claim that our patent rights are invalid or unenforceable in a litigation. An adverse result in any legal proceeding could put one or more of our owned or patents at risk of being invalidated or interpreted narrowly and could allow third parties to commercialize our products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize our technology, products or product candidates without infringing third-party patent rights. In addition, given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such product candidates might expire before or shortly after such candidates are commercialized. The degree of future protection for our proprietary rights is uncertain. Only limited protection may be available and may not adequately protect our rights or permit us to gain or keep any competitive advantage. Any failure to obtain or maintain patent protection with respect to our product candidates or their uses could adversely affect our business, financial condition, results of operations and prospects. We cannot ensure that patent rights relating to inventions described and claimed in our or any current or future licensors pending patent applications will issue or that patents based on our or any current or future licensors patent applications will not be challenged and rendered invalid and/or unenforceable. The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our current or future licensors or collaborators will be successful in protecting our product candidates by obtaining and defending patents. We have several pending United States and foreign patent applications in our portfolio. We cannot predict: ● if and when patents may issue based on our patent applications; ​ ● the scope of protection of any patent issuing based on our patent applications; ● whether the claims of any patent issuing based on our patent applications will provide protection against competitors; ​ ● whether or not third parties will find ways to invalidate or circumvent our patent rights; ​ ● whether or not others will obtain patents claiming aspects similar to those covered by our patents and patent applications; ​ ● whether we will need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; or 90 Table of Contents ● whether the patent applications that we own will result in issued patents with claims that cover our product candidates or uses thereof in the United States or in other foreign countries. ​ We cannot be certain that the claims in our or any current or future licensors’ pending patent applications directed to our product candidates will be considered patentable by the USPTO or by patent offices in foreign countries. There can be no assurance that any such patent applications will issue as granted patents. One aspect of the determination of patentability of our or any current or future licensors’ inventions depends on the scope and content of the “prior art,” information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention. There may be prior art of which we are not aware that may affect the patentability of our or any current or future licensors’ patent claims or, if issued, affect the validity or enforceability of a patent claim. Even if the patents do issue based on our or any current or future licensors’ patent applications, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable. Furthermore, even if they are unchallenged, patents in our or any current or future licensors’ portfolio may not adequately exclude third parties from practicing relevant technology or prevent others from designing around our claims. If the breadth or strength of our intellectual property position with respect to our product candidates is threatened, it could dissuade companies from collaborating with us to develop and threaten our ability to commercialize our product candidates. In the event of litigation or administrative proceedings, we cannot be certain that the claims in any of our issued patents will be considered valid by courts in the United States or foreign countries. We may not be able to protect our intellectual property rights throughout the world. Patents are of national or regional effect, and filing, prosecuting and defending patents on all of our research programs and product candidates in all countries throughout the world would be prohibitively expensive. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States, even in jurisdictions where we do pursue patent protection. Consequently, we may not be able to prevent third parties from practicing our or any current or future licensors’ inventions in all countries outside the United States, even in jurisdictions where we or any current or future licensors do pursue patent protection, or from selling or importing products made using our or any current or future licensors’ inventions in and into the United States or other jurisdictions. Competitors may use our or any current or future licensors’ technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we or any current or future licensors have patent protection, but enforcement is not as strong as that in the United States. These competitor products may compete with our product candidates, and our or any current or future licensors’ patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Various companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of many countries do not favor the enforcement of patents and other intellectual property protection, particularly those relating to pharmaceuticals, which could make it difficult for us to stop the infringement of our or any current or future licensors’ patents or marketing of competing products in violation of our proprietary rights. Certain countries outside the United States have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. As a result, a patent owner may have limited remedies in certain circumstances, which could materially diminish the value of such patent. If we or any current or future licensors are forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license in the future. Further, the standards applied by the USPTO and foreign patent offices in granting patents are not always applied uniformly or predictably. As such, we do not know the degree of future protection that we will have on our product candidates. While we will endeavor to try to protect our product candidates with intellectual property rights, such as patents, as appropriate, the process of obtaining patents is time consuming, expensive and unpredictable. 91 Table of Contents Intellectual property rights do not necessarily address all potential threats to our competitive advantage. The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage. For example: ● others may be able to make product candidates that are similar to ours but that are not covered by the pending patent applications that we own or any patents or patent applications that we currently in-license or may in-license in the future; ​ ● we or any current or future licensors or collaborators might not have been the first to make the inventions covered by the pending patent application that we own or may in-license in the future; ● ​ we or any current or future licensors or collaborators might not have been the first to file patent applications covering certain of our or their inventions; ​ ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing or otherwise violating our owned intellectual property rights or any patent applications that we may license in the future; ​ ● it is possible that noncompliance with the USPTO and foreign governmental patent agencies requirement for a number of procedural, documentary, fee payment and other provisions during the patent process can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction; ​ ● it is possible that our pending owned patent applications or those that we may own or license in the future will not lead to issued patents; ​ ● issued patents, if any arise in the future, that we either own or that we may license in the future may be revoked, modified, or held invalid or unenforceable, as a result of legal challenges by our competitors; ​ ● others may have access to the same intellectual property rights licensed to us in the future on a non-exclusive basis; ​ ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ​ ● we may not develop additional proprietary technologies that are patentable; ​ ● we cannot predict the scope of protection of any patent issuing based on our or any current or future licensors’ patent applications, including whether the patent applications that we own, or, in the future, in-license will result in issued patents with claims directed to our product candidates or uses thereof in the United States or in other foreign countries; ​ ● there may be significant pressure on the United States government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; ​ ● countries other than the United States may have patent laws less favorable to patentees than those upheld by United States courts, allowing foreign competitors a better opportunity to create, develop and market 92 Table of Contents competing product candidates; the claims of any patent issuing based on our patent applications may not provide protection against competitors or any competitive advantages, or may be challenged by third parties; ​ ● if enforced, a court may not hold that our patents, if they issue in the future, are valid, enforceable and infringed; ​ ● we may need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; ​ ● we may choose not to file a patent application in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such intellectual property; ​ ● we may fail to adequately protect and police our trademarks and trade secrets; and ​ ● the patents of others may have an adverse effect on our business, including if others obtain patents claiming subject matter similar to or improving that covered by our patent applications. ​ Should any of these or similar events occur, they could significantly harm our business, financial condition, results of operations and prospects. We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market our product candidates. As the biopharmaceutical industry expands and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of third parties. There can be no assurance that our operations do not, or will not in the future, infringe, misappropriate or otherwise violate existing or future third-party patents or other intellectual property rights. Identification of third-party patent rights that may be relevant to our operations is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases and the difficulty in assessing the meaning of patent claims. We cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction. Numerous United States and foreign patents and pending patent applications exist in our market that are owned by third parties. Our competitors in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our product candidates. We do not always conduct independent reviews of pending patent applications and patents issued to third parties. Patent applications in the United States and elsewhere are typically published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Certain United States applications that will not be filed outside the United States can remain confidential until patents issue. In addition, patent applications in the United States and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived. Furthermore, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our product candidates or the use of our product candidates. As such, there may be applications of others now pending or recently revived patents of which we are unaware. These patent applications may later result in issued patents, or the revival of previously abandoned patents, that may be infringed by the manufacture, use or sale of our product candidates or will prevent, limit or otherwise interfere with our ability to make, use or sell our product candidates. The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history. Our interpretation of the relevance or the scope of a patent or a pending application may be incorrect. For example, we may incorrectly determine that our product candidates are not covered by a third-party patent or may 93 Table of Contents incorrectly predict whether a third-party’s pending application will issue with claims of relevant scope. Our determination of the expiration date of any patent in the United States or abroad that we consider relevant may be incorrect. Our failure to identify and correctly interpret relevant patents may negatively impact our ability to develop and market our product candidates. We cannot provide any assurances that third-party patents and other intellectual property rights do not exist which might be enforced against our current technology, including our research programs, product candidates, their respective methods of use, manufacture and formulations thereof, and could result in either an injunction prohibiting our manufacture or future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant. We may be involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time-consuming and unsuccessful. Competitors or other third parties may infringe our patents, trademarks or other intellectual property. To counter infringement or unauthorized use, we or any current or future licensors may be required to file infringement claims, which can be expensive and time consuming and divert the time and attention of our management and scientific personnel. Our or any current or future licensors’ pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their patents, in addition to counterclaims asserting that our patents or any current or future licensors’ patents are invalid or unenforceable, or both. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement, insufficient written description or failure to claim patent-eligible subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement during prosecution. The outcome following legal assertions of invalidity and unenforceability is unpredictable. In any patent infringement proceeding, there is a risk that a court will decide that a patent of ours or any current or future licensors is invalid or unenforceable, in whole or in part, and that we do not have the right to stop the other party from using the invention at issue. There is also a risk that, even if the validity of such patents is upheld, the court will construe the patent’s claims narrowly or decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our or any current or future licensors’ patent claims do not cover the invention, or decide that the other party’s use of our or any current or future licensors’ patented technology falls under the safe harbor to patent infringement under 35 U.S.C. §271(e)(1). An adverse outcome in a litigation or proceeding involving our or any current or future licensors’ patents could limit our ability to assert our or any current or future licensors’ patents against those parties or other competitors and may curtail or preclude our ability to exclude third parties from making and selling similar or competitive products. Any of these occurrences could adversely affect our competitive position, and our business, financial condition, results of operations and prospects. Similarly, if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable, or that the party against whom we have asserted trademark infringement has superior rights to the marks in question. In this case, we could ultimately be forced to cease use of such trademarks. Even if we establish infringement, the court may decide not to grant an injunction against further infringing activity and instead award only monetary damages, which may or may not be an adequate remedy. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during litigation. There could also be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could adversely affect the price of shares of our common stock. Moreover, we cannot assure you that we will have sufficient financial or other resources to file and pursue such infringement claims, which typically last for years before they are concluded. Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings. 94 Table of Contents We may become involved in third-party claims of intellectual property infringement, which may prevent or delay our product discovery and development efforts. Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. There is a substantial amount of litigation involving the infringement of patents and other intellectual property rights in the biotechnology and pharmaceutical industries. We may be exposed to, or threatened with, future litigation by third parties having patent or other intellectual property rights and who allege that our product candidates, uses and/or other proprietary technologies infringe their intellectual property rights. Numerous United States and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing our product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk that our product candidates may give rise to claims of infringement of the patent rights of others increases. Moreover, it is not always clear to industry participants, including us, which patents exist which may be found to cover various types of drugs, products or their methods of use or manufacture. Thus, because of the large number of patents issued and patent applications currently pending in our fields, there may be a risk that third parties may allege they have patent rights which are infringed by our product candidates, technologies or methods. If a third party alleges that we infringe its intellectual property rights, we may face a number of issues, including, but not limited to: ● infringement and other intellectual property misappropriation which, regardless of merit, may be expensive and time-consuming to litigate and may divert our management’s attention from our core business; ​ ● substantial damages for infringement or misappropriation, which we may have to pay if a court decides that the product candidate or technology at issue