What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-12 compared with 2026-05-13 · 94 added, 55 removed, 140 unchanged (52% of the section changed)

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This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties.

The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “may,” “will,” “should,” “could,” “target,” “strategy,” “intend,” “project,” “guidance,” “likely,” “usually,” “potential,” or the negative of these words or variations of such words, similar expressions, or comparable terminology are intended to identify such forward-looking statements, although not all forward-looking statements contain these identifying words.

The words “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “may,” “will,” “should,” “could,” “target,” “strategy,” “project,” “guidance,” “likely,” “usually,” “potential,” or the negative of these words or variations of such words, similar expressions, or comparable terminology are intended to identify such forward-looking statements, although not all forward-looking statements contain these identifying words.

There are a number of important risks and uncertainties that could cause our actual results to differ materially from those indicated by forward-looking statements.

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Underwritten Public Offering

On April 24, 2026, we completed an underwritten public offering pursuant to which we raised approximately $211.2 million in net proceeds from the issuance of combination of common stock, common stock warrants and pre-funded warrants.

On April 24, 2026, we completed an underwritten public offering pursuant to which we raised approximately $211.1 million in net proceeds from the issuance of a combination of common stock, common stock warrants and pre-funded warrants.

The common stock and pre-funded warrants were sold in combination with an accompanying common stock warrant to purchase one share of common stock (or pre-funded warrant in lieu thereof) issued for each share of common stock or pre-funded warrant sold.

The gross proceeds could increase by another $225 million if all the warrant holders exercise their common stock warrants.

Subsequent Events for additional information.

Stockholders’ Equity for additional information.

Headquarters Relocation

On June 16, 2026, we announced plans to relocate our corporate headquarters from Gaithersburg, Maryland to Morristown, New Jersey later this year.

The new headquarters is in a region with a strong presence of biopharmaceutical companies, which is expected to support our ability to attract top-tier talent in our hybrid business model, as we continue our growth as a late-stage development company.

Accordingly, we have entered into a lease agreement for office space in Morristown, New Jersey, which will serve as our new headquarters upon facility occupancy and lease commencement.

We will make monthly rental payments aggregating approximately $0.3 million annually for the 5-year lease term.

The relocation of our headquarters is expected to help us achieve cost efficiencies over the long term.

Ongoing Clinical Trials

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We also observed greater adherence to treatment in the pemvidutide arms, as shown by lower discontinuation rates than the placebo group which may be attributable to the favorable safety and tolerability profile of pemvidutide.

With the positive 48-week data from the IMPACT trial, FDA designation and having secured the necessary financing, we are in the start up phase of the execution of our PERFORMA Phase 3 trial in MASH.

With the positive 48-week data from the IMPACT trial, FDA designation and having secured the necessary financing, we began preparing for our PERFORMA Phase 3 trial in MASH.

We have aligned with the FDA following an End of Phase 2 Meeting, and submitted the final study protocol to the FDA.

Further, we received scientific advice from the European Medicines Agency and MHRA and selected a global CRO with deep experience running global MASH pivotal trials.

The global pivotal PERFORMA Phase 3 trial will test two doses of pemvidutide over an estimated duration of approximately 60 months for liver-related events supporting final approval, including an interim analysis after 52 weeks to support with biopsy based-endpoints to support an accelerated approval.

We are planning to initiate the PERFORMA Phase 3 trial in the second half of 2026.

Further, we received scientific advice from the European Medicines Agency and Medicines and Healthcare products Regulatory Agency (UK) and selected a global Contract Research Organization with deep experience running global MASH pivotal trials.

The global pivotal PERFORMA Phase 3 trial will test two doses of pemvidutide over an estimated duration of approximately 60 months for liver-related events supporting final approval, including an interim analysis after 52 weeks with biopsy-based endpoints to support an accelerated approval.

On August 3, 2026, we announced that we have begun enrolling patients in the PERFORMA Phase 3 trial, evaluating the efficacy and safety of pemvidutide in patients with MASH.

The PERFORMA trial is a global, Phase 3, randomized, double-blind, placebo-controlled study evaluating the efficacy, safety and clinical outcomes of pemvidutide in MASH patients with moderate to advanced fibrosis.

PERFORMA is our registrational study for pemvidutide in MASH and will assess the effects of treatment on fibrosis improvement and MASH resolution as well as clinical outcomes.

The 52-week data readout from the PERFORMA trial to support the accelerated approval of pemvidutide is anticipated in 2029.

RECLAIM, a Phase 2 trial evaluating the efficacy and safety of pemvidutide in subjects with AUD, is a randomized, placebo-controlled trial conducted across approximately 15 sites in the United States, targeting enrollment of approximately 100 subjects.

Subjects will be randomized 1:1 to receive either 2.4 mg pemvidutide or placebo weekly for 24 weeks.

The trial’s primary endpoint is a change in alcohol consumption, measured by the change from baseline in the average number of heavy drinking days per week measured at Week 24, with the key secondary endpoints including the proportion of subjects achieving a 2-level reduction in World Health Organization (“WHO”) risk drinking level and the absolute change from baseline in average levels of phosphatidylethanol (“PEth”), a serum biomarker of alcohol intake.

In 2025, the FDA granted Fast Track designation to pemvidutide for the treatment of AUD.

Enrollment was completed in November 2025, several months ahead of schedule, and we are on track to complete the 24-week treatment period and announce topline results in the third quarter 2026.

The trial’s primary endpoint is a change in alcohol consumption, measured by the change from baseline in the average number of heavy drinking days (“HDD”) per week measured at Week 24, with the key secondary endpoints including the proportion of subjects achieving a 2-level reduction in World Health Organization (“WHO”) risk drinking level and the absolute change from baseline in average levels of phosphatidylethanol (“PEth”), a serum biomarker of alcohol intake.

In August 2025, the FDA granted Fast Track designation to pemvidutide for the treatment of AUD.

Enrollment in the RECLAIM Phase 2 trial in AUD was completed in November 2025, several months ahead of schedule.

On July 28, 2026, we announced the positive topline results from the RECLAIM Phase 2 trial evaluating the 2.4 mg dose of pemvidutide, in patients with moderate to severe AUD.

The trial met its primary endpoint with a highly statistically significant reduction in HDD per week versus placebo, with positive results across important secondary endpoints, including a two-level reduction in the WHO risk drinking level and zero HDDs, both of which are FDA registrational endpoints, as well as a reduction in PEth levels.

A generally favorable safety and tolerability profile was observed in the trial.

We plan to request an End-of-Phase 2 meeting with the FDA based on the results of the trial.

RESTORE, a Phase 2 trial evaluating the efficacy and safety of pemvidutide in subjects with ALD, is a randomized, placebo-controlled trial enrolling approximately 100 patients across 34 sites in the United States.

Subjects will be randomized 1:1 to receive either 2.4 mg pemvidutide or placebo weekly for 48 weeks.

The trial’s primary endpoint is the change from baseline in Liver Stiffness Measurement (“LSM”) by vibration-controlled transient elastography (“VCTE”) at Week 24.

Main secondary endpoints include the change from baseline in LSM by VCTE at Week 48, changes in ELF score at Weeks 24 and 48, and changes in alcohol consumption and body weight at the same time points.

We expect to complete enrollment in the RESTORE trial in the third quarter of 2026.

The trial’s primary endpoint is the change from baseline in LSM by vibration-controlled transient elastography and will be assessed in a hierarchical manner at Week 48 and then at Week 24.

Main secondary endpoints include changes in ELF score at Weeks 24 and 48, and changes in alcohol consumption and body weight at the same time points.

In July 2026, we completed enrollment in the RESTORE Phase 2 trial in ALD.

Recent Global Events

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have been causing uncertainties in the global markets.

If the tariffs and counter tariffs continue or escalate, they could have a significant negative effect on the global economy or on

our operations, including continued inflationary pressures on raw materials, supply chain and logistics disruptions, and volatility in the capital markets, foreign exchange rates and interest rates.

If the tariffs and counter-tariffs continue or escalate, they could have a significant negative effect on the global economy or on our operations, including continued inflationary pressures on raw materials, supply chain and logistics disruptions, and volatility in the capital markets, foreign exchange rates and interest rates.

Inflation generally affects us by increasing our employee-related costs and clinical trial expenses, as well as other operating expenses.

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We are closely monitoring the impact of the ongoing military conflict in the Middle East, including the recent conflict involving the U.S., Israel and Iran, on our business as the conflict has caused increased economic uncertainty and operational complexity globally.

While we have no direct exposure to the Middle East, and do not at the moment believe the situation will have a material impact on our operating results, we are monitoring any broader economic impact from the situation.

While we have no direct exposure to the Middle East, and do not currently believe the situation will have a material impact on our operating results, we are monitoring any broader economic impact from the situation.

Should the conflict continue or escalate, it could have a significant negative effect on the global economy or on our operations, including continued inflationary pressures on raw materials, oil and energy prices and clinical trial costs, supply chain and logistics disruptions, volatility in foreign exchange rates and interest rates and heightened cybersecurity threats.

Results of Operations

Comparison of the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

Increase (Decrease)

Comparison of the three months ended June 30, 2026 and 2025

The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025 (in thousands):

Three Months Ended June 30,

Operating expenses:

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Total other income (expense), net

Research and development expenses

Research and development expenses for the three months ended June 30, 2026 and 2025 consisted primarily of expenses related to product candidate development, summarized as follows:

Three Months Ended June 30,

(in thousands)

Other pemvidutide expenses

Total pemvidutide expenses

Non-project costs

Stock compensation

Shared service and infrastructure

Total research and development expenses

The increase in research and development expenses was due primarily to the ongoing ALD trial as well as the startup costs for PERFORMA Phase 3 trial in MASH and the non-project costs to support these activities, partially offset by the decrease in expenses related to completion of the RECLAIM Phase 2 trial in AUD and IMPACT Phase 2b trial in MASH, which were ongoing in the second quarter of 2025.

General and administrative expenses

General and administrative expenses increased by $1.9 million, or 33%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, primarily due to a $0.6 million increase in compensation expenses and a $1.1 million increase in expenses for professional services.

Total other income (expense), net

Total other income (expense), net increased by $2.6 million, or 339%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025.

The net increase was primarily due to a $3.4 million increase in interest income earned on our cash equivalents and investments in marketable securities, partially offset by a $0.8 million increase in interest expense related to our Term Loan.

Comparison of the six months ended June 30, 2026 and 2025

The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025 (in thousands):

Six Months Ended June 30,

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Interest expense

Interest income

Other income (expense), net

Total other income (expense), net

Net loss before income taxes

Income tax expense (benefit)

*Indicates the percentage change period over period is not meaningful due to zero or negligible amount in the prior period.

Research and development expenses

Research and development expenses for the three months ended March 31, 2026 and 2025 consisted primarily of expenses related to product candidate development, summarized as follows:

Three Months Ended March 31,

Research and development expenses for the six months ended June 30, 2026 and 2025 consisted primarily of expenses related to product candidate development, summarized as follows:

Six Months Ended June 30,

(in thousands)

Increase (Decrease)

Other pemvidutide expenses

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Total research and development expenses

*Indicates the percentage change period over period is not meaningful due to zero or negligible amount in the prior period.

The increase in research and development expenses was due primarily to the ongoing ALD and AUD trials as well as the startup costs for PERFORMA Phase 3 trial in MASH, partially offset by the decrease in expenses related to completion of the IMPACT Phase 2b trial in MASH, which was ongoing in the first three months of 2025.

The increase in research and development expenses was due primarily to the ongoing ALD and AUD trials as well as the startup costs for PERFORMA Phase 3 trial in MASH and the non-project costs to support these activities, partially offset by the decrease in expenses related to completion of the IMPACT Phase 2b trial in MASH, which was ongoing in the first six months of 2025.

General and administrative expenses

General and administrative expenses increased by $2.1 million, or 34%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

The increase is due primarily to a $1.3 million increase in compensation expense, including $0.6 million in severance costs for one of our former executive officers and a $0.6 million increase in professional service fees.

General and administrative expenses increased by $3.9 million, or 34%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, primarily due to a $1.4 million increase in compensation expenses and $1.6 million increase in professional services.

Total other income (expense), net

Total other income (expense), net increased by $0.1 million, or 8%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

The net increase is primarily due to a $1.4 million increase in interest income earned on our cash equivalents and short-term investments, partially offset by a $1.1 million increase in interest expense on our Term Loan.

Total other income (expense), net increased by $2.8 million, or 118%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025.

The net increase was primarily due to a $4.8 million increase in interest income earned on our cash equivalents and investments in marketable securities, partially offset by a $1.9 million increase in interest expense related to our Term Loan.

Liquidity and Capital Resources

Our primary sources of cash during the three months ended March 31, 2026, were from equity transactions, interest from our money market funds and short-term investments, and proceeds from maturity of our short-term investments.

Our cash, cash equivalents, restricted cash and short-term investments were $331.6 million as of March 31, 2026.

We believe, based on the operating cash requirements and capital expenditures expected for 2026 and 2027, our cash on hand as of March 31, 2026, together with expected cash receipts from equity transactions finalized after March 31, 2026, are sufficient to fund operations for at least a twelve-month period from the issuance date of our March 31, 2026 consolidated financial statements.

Our primary sources of cash during the six months ended June 30, 2026 were from equity transactions, interest from our money market funds and investments in marketable securities, and proceeds from maturity of our investments.

Our cash, cash equivalents, restricted cash and short-term investments were $326.3 million as of June 30, 2026.

In addition, we had $192.3 million in long-term investments.

We believe, based on the operating cash requirements and capital expenditures expected for 2026 and 2027, our cash on hand as of June 30, 2026 is sufficient to fund operations for at least a twelve-month period from the issuance date of our June 30, 2026 consolidated financial statements.

We have not generated any revenues from the sale of any products to date and there is no assurance of any future revenues from product sales.

We have incurred significant losses since we commenced operations.

As of March 31, 2026,

we had an accumulated deficit of $672.0 million.

As of June 30, 2026, we had an accumulated deficit of $694.9 million.

In addition, we have not generated positive cash flows from operations.

We have had to rely on a variety of financing sources, including the issuance of debt and equity securities.

We have relied on a variety of financing sources, including the issuance of debt and equity securities.

As capital resources are consumed to fund our research and development activities, we may require additional capital beyond our currently anticipated amounts.

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On November 6, 2025, we entered into an Equity Distribution Agreement (the “November 2025 Agreement”) with Leerink Partners LLC serving as sales agent, with respect to an ATM offerings program under which we may offer and sell shares of our common stock having an aggregate offering price of up to $200.0 million through the sales agent from the February 2025 Shelf.

Since inception through March 31, 2026, we raised approximately $34.2 million in net proceeds, with $165.3 million remaining available to be sold under the November 2025 Agreement.

Since inception through June 30, 2026, we raised approximately $34.2 million in net proceeds, with $165.3 million remaining available to be sold under the November 2025 Agreement.

On February 27, 2025, we entered into an Equity Distribution Agreement (the “February 2025 Agreement”) with Leerink Partners LLC, Piper Sandler & Co.

and Stifel, Nicolaus & Company, Incorporated, serving as sales agents, with respect to an ATM offerings program under which we offered and sold shares of our common stock having an aggregate offering price of up to $150.0 million through the sale agents from the February 2025 Shelf.

Since inception, through the termination of the February 2025 Agreement in November 2025, we raised approximately $118.3 million in net proceeds.

On February 28, 2023, we entered an Equity Distribution Agreement (the “2023 Agreement”) with Evercore Group L.L.C., JMP Securities LLC and B.

Riley Securities, Inc., serving as sales agents, with respect to an ATM offerings program under which we offered and sold shares of our common stock having an aggregate offering price of up to $150.0 million through the sale agents from the 2023 Shelf.

On February 28, 2023, we entered into an Equity Distribution Agreement (the “2023 Agreement”) with Evercore Group L.L.C., JMP Securities LLC and B.

Since inception through the termination of the 2023 Agreement in February 2025, we raised approximately $126.8 million in net proceeds.

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On April 22, 2026, we entered into an underwriting agreement with certain underwriters pursuant to which we offered and sold securities consisting of (i) 64,250,000 shares of our common stock and accompanying common stock warrants to purchase an aggregate of 64,250,000 shares of common stock (or pre-funded warrants in lieu thereof) and (ii) in lieu of common stock, to certain investors that so choose, pre-funded warrants to purchase an aggregate of up to 10,750,000 shares of its common stock and accompanying common stock warrants to purchase an aggregate of 10,750,000 shares of common stock (or pre-funded warrants in lieu thereof), at an exercise price of $0.001 per pre-funded warrant.

The common stock and pre-funded warrants were sold in combination with an accompanying common stock warrant to

purchase one share of common stock (or pre-funded warrant in lieu thereof) issued for each share of common stock or pre-funded warrant sold.

The accompanying common stock warrant has an exercise price of $3.00 per share and is immediately exercisable from the date of issuance.

The combined offering price of each share of common stock and accompany common stock warrant is $3.00.

The combined offering price of each share of common stock and accompanying common stock warrant is $3.00.

The combined offering price of each pre-funded warrant and accompanying common stock warrant is $2.999.

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All shares of common stock, pre-funded warrants and common stock warrants offered and sold in the April 2026 Offering were issued pursuant to the February 2025 Shelf, the November 2025 Shelf and a related registration statement that was filed with the SEC on April 22, 2026 pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and became automatically effective upon filing as permitted under Rule 429.

The following table provides information regarding our cash flows for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

The following table provides information regarding our cash flows for the six months ended June 30, 2026 and 2025:

Six Months Ended June 30,

(in thousands)

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Operating Activities

Net cash used in operating activities was $20.9 million for the three months ended March 31, 2026, compared to $16.8 million during the three months ended March 31, 2025.

The primary uses of cash from our operating activities include payments for labor and labor-related costs, professional fees, research and development costs associated with our clinical trials, and other general corporate expenditures.

The increase in cash used in operations of $4.1 million year over year is due to changes in working capital accounts of $2.1 million and an increase in net loss as adjusted for non-cash items of $2.0 million.

Net cash used in operating activities was $45.2 million for the six months ended June 30, 2026 compared to $36.2 million during the six months ended June 30, 2025.

The primary uses of cash from our operating activities included payments for labor and labor-related costs, professional fees, research and development costs associated with our clinical trials, and other general corporate expenditures.

The increase in cash used in operations of $9.0 million year over year was due to changes in working capital accounts of $5.9 million and an increase in net loss as adjusted for non-cash items of $3.1 million.

Investing Activities

Net cash used in investing activities was $3.7 million, for the three months ended March 31, 2026 compared to $5.1 million net cash used in investing activities during the three months ended March 31, 2025.

The cash used in investing activities during the three months ended March 31, 2026 was primarily due to the purchase of $43.3 million of short-term investments, partially offset by $39.6 million in proceeds from sale and maturities of short-term investments.

The cash used in investing activities during the three months ended March 31, 2025, was primarily due to a $43.1 million purchase of short-term investments, partially offset by $38.0 million in proceeds from sale and maturities of short-term investments.

Net cash used in investing activities was $225.1 million for the six months ended June 30, 2026 compared to $96.0 million net cash provided by investing activities during the six months ended June 30, 2025.

The net cash used in investing activities during the six months ended June 30, 2026 was primarily due to a $332.4 million purchase of investments in marketable securities, partially offset by a $107.3 million in proceeds from sales and maturities of these investments.

The net cash provided by investing activities during the six months ended June 30, 2025 was primarily due to a $143.6 million in proceeds from sales and maturities of investments in marketable securities, partially offset by a $47.6 million purchase of investments in marketable securities.

Financing Activities

Net cash provided by financing activities was $78.5 million during the three months ended March 31, 2026, compared to $34.1 million net cash provided by financing activities during the three months ended March 31, 2025.

The net cash provided by financing activities during the three months ended March 31, 2026, was primarily the result of the receipt of $70.3 million in net proceeds from the January 2026 RDO, $8.7 million in proceeds from the issuance of common stock from our ATM offerings program, net of deferred offering costs, $0.2 million in proceeds from proceeds from the sale of shares under the ESPP, partially offset by $0.7 million net payment for tax withholding obligations related to share-based compensation.

The net cash provided by financing activities during the three months ended March 31, 2025, was primarily the result of the receipt of $34.6 million in proceeds from the issuance of common stock from our ATM offerings program and $0.2 million proceeds from the sale of shares under the ESPP, partially offset by $0.7 million payment for tax withholding obligations related to share-based compensation.

Net cash provided by financing activities was $289.5 million during the six months ended June 30, 2026 compared to $86.4 million cash provided by financing activities during the six months ended June 30, 2025.

The net cash provided by financing activities during the six months ended June 30, 2026 was primarily the result of the receipt of $211.1 million in net proceeds from the April 2026 Offering, $70.3 million in net proceeds from the January 2026 RDO, $8.7 million in net proceeds from the issuance of common stock from our ATM offerings program, net of deferred offering costs, $0.2 million in proceeds from the sale of shares under the ESPP, partially offset by $0.7 million net payments for tax withholding obligations related to share-based compensation.

The net cash provided by financing activities during the six months ended June 30, 2025 was primarily the result of the receipt of $72.3 million in net proceeds from the issuance

of common stock from our ATM offerings program, $14.6 million in net proceeds from the term loan, and $0.2 million in proceeds from the sale of shares under the ESPP, partially offset by $0.7 million net payments for tax withholding obligations related to share-based compensation.

Capital Resources

We have financed our operations to date principally through our equity offerings, debt and proceeds from issuances of our preferred stock, common stock and warrants.

As of March 31, 2026, we had $97.6 million of cash, cash equivalents and restricted cash and $233.9 million of short-term investments.

Accordingly, management believes that we have sufficient capital to fund our plan of operations for at least a twelve-month period from the issuance date of our March 31, 2026 consolidated financial statements.

As of June 30, 2026, we had $63.1 million of cash, cash equivalents and restricted cash and $455.5 million of investments in marketable securities, of which $263.3 million is in short-term investments.

Accordingly, management believes that we have sufficient capital to fund our plan of operations for at least a twelve-month period from the issuance date of our June 30, 2026 consolidated financial statements.

In order to address our long-term capital needs, including our planned clinical trials, in April 2026, we raised approximately $211.1 million in net proceeds from the April 2026 Offering.

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Therefore, the expected dividend rate is assumed to be 0%.

Except disclosed above, there have been no changes in our critical accounting policies and significant judgment and estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Except as disclosed above, there have been no changes in our critical accounting policies and significant judgment and estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Quantitative and Qualitative Disclosures about Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis