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Item 5. Market for Registrant’s Common Equity

2025-03-03 compared with 2024-03-05 · 429 added, 9 removed, 16 unchanged (96% of the section changed)

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Market Information

Our common stock trades on the Nasdaq Global Market under the symbol “APGE.” Trading of our common stock commenced on July 14, 2023 in connection with our initial public offering.

Prior to that time, there was no established public trading market for our common stock.

As of February 23, 2024, we had approximately eight holders of record of our common stock.

Our common stock trades on the Nasdaq Global Market under the symbol “APGE”.

As of February 24, 2025, we had approximately 6 holders of record of our common stock.

This number does not include beneficial owners whose shares were held in street name.

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Any determination to pay dividends to holders of our common stock or non-voting common stock will be at the discretion of our Board and will depend on many factors, including our financial condition, results of operations, liquidity, earnings, projected capital and other cash requirements, legal requirements, restrictions in the agreements governing any indebtedness we may enter into, our business prospects and other factors that our Board deems relevant.

Recent Sales of Unregistered Securities

Use of Proceeds from the Initial Public Offering of Common Stock

On July 18, 2023, we completed our IPO in which we issued and sold an aggregate of 20,297,500 shares of our common stock, including the full exercise of the underwriters’ option to purchase up 2,647,500 additional shares of our common stock, at the IPO price of $17.00 per share.

Use of Proceeds from IPO

In July 2023, we completed our IPO pursuant to which we issued and sold an aggregate of 20,297,500 shares of our common stock, including the full exercise of the underwriters’ option to purchase up 2,647,500 additional shares, at the IPO price of $17.00 per share.

The offer and sale of all of the shares of our common stock in the IPO were registered under the Securities Act pursuant to our Registration Statement on Form S‑1, as amended (File Nos.

333-272831 and 333-273236), which was declared effective on July 13, 2023.

333‑272831 and 333‑273236), which were declared effective on July 13, 2023.

Jefferies, TD Cowen, Stifel and Guggenheim Securities acted as joint book-running managers for the IPO.

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None of the underwriting discounts and commissions or other offering expenses were incurred or paid, directly or indirectly, to any of our directors or officers or their associates or to persons owning 10% or more of our common stock or to any of our affiliates.

The net proceeds from the IPO have been used and are expected to be used, primarily to fund our clinical trials, including a potential Phase 2 trial, and manufacturing of our APG777 product candidate, fund our preclinical studies, clinical trials and manufacturing of our APG808 program, fund our preclinical studies, clinical trials and manufacturing of our APG990 program and fund our preclinical studies of our APG222 program.

We intend to use the remainder for our additional research and development activities, as well as for capital expenditures, working capital and general corporate purposes.

There has been no material change in our intended use of proceeds from our IPO as described in the final prospectus for our IPO filed with the Securities and Exchange Commission (“SEC”) pursuant to Rule 424(b) under the on July 17, 2023.

There has been no material change in our intended use of proceeds from our IPO as described in the final prospectus for our IPO filed with the SEC pursuant to Rule 424(b) under the Securities Act on July 17, 2023.

Recent Sales of Unregistered Securities

Issuer Purchases of Equity Securities

Management’s Discussio n and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K (this “ Annual Report ” ).

The following discussion contains forward-looking statements that reflect our current plans, forecasts, estimates and beliefs and involve risks and uncertainties.

Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Our actual results, outcomes and the timing of events could differ materially from those discussed in the forward-looking statements.

Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report, particularly in the section titled “ Special Note Regarding Forward-Looking Statements ” and “Risk Factors.” We urge you to consider these factors carefully in evaluating the forward-looking statements contained in this Annual Report.

Forward-looking statements are not historical facts, reflect our current views with respect to future events, and apply only as of the date made.

We do not intend, and undertake no obligation, to update these forward-looking statements, except as required by law.

Unless the context requires otherwise, references to “we,” “us,” “our,” “Apogee” or “the Company” refer to Apogee Therapeutics, Inc.

and its subsidiaries.

We are a clinical stage biotechnology company advancing novel biologics with the potential for differentiated efficacy and dosing in the largest inflammatory and immunology (“I&I”) markets, including for the treatment of atopic dermatitis (“AD”), asthma, eosinophilic esophagitis (“EoE”), chronic obstructive pulmonary disease (“COPD”), and other I&I indications.

Our antibody programs are designed to overcome limitations of existing therapies by targeting well-established mechanisms of action and incorporating advanced antibody engineering to optimize half-life and other properties.

Our pipeline comprises four antibody programs being developed initially for the treatment of I&I indications as monotherapies and combinations.

Our most advanced programs are APG777, APG990, APG333, and APG808.

With four validated targets in our portfolio, we are seeking to achieve best-in-class efficacy and dosing through monotherapies and combinations of our novel antibodies.

Based on a broad pipeline and depth of expertise, we believe we can deliver value and meaningful benefit to patients underserved by today’s standard of care.

Our programs incorporate advanced antibody engineering to optimize half-life and other properties designed to overcome limitations of existing therapies.

We believe each of our programs has potential for broad application across multiple I&I indications, including in combination.

APG777 – anti-IL13 antibody, same mechanism of action as EBGLYSS (lebrikizumab)

APG777 is a subcutaneous (“SQ”) extended half-life monoclonal antibody (“mAb”) targeting IL-13.

In August 2023, we announced the dosing of our first participant in our first clinical trial for APG777.

In 2024, we announced positive interim safety and PK data from this trial with APG777 demonstrating a potential best-in-class PK profile, including a half-life of 77 days, supporting the potential for every three- to six- month maintenance dosing in AD.

Single doses of APG777 demonstrated a deep and sustained effect on PD markers out to approximately 12 months.

APG777 was well-tolerated across all dose groups.

In May 2024, we commenced dosing in the Phase 2 clinical trial of APG777 in patients with moderate-to-severe AD.

In February 2025, we announced that the last patient in the Part A portion of the trial had been dosed with 16-week topline data from Part A expected in mid-2025.

In February 2025, we also announced that we had commenced dosing of Part B of the Phase 2 trial.

All patients benefiting from treatment will have the opportunity to continue to APG777 maintenance treatment, which will evaluate three- to six-month dosing intervals.

We anticipate maintenance data from Part A in the first half of 2026 and 16-week topline data from Part B in the second half of 2026.

Based on our initial clinical data, we plan to advance the development of APG777 in asthma and EoE by initiating a Phase 1b trial in asthma in the first half of 2025, followed by a Phase 2b trial in asthma in the second half of 2025, and a Phase 2 trial in EoE in 2026.

Based on our clinical data, we expect to further evaluate additional

opportunities to develop APG777 for other I&I indications, including alopecia areata (“AA”), chronic rhinosinusitis with nasal polyps (“CRSwNP”), chronic spontaneous urticaria (“CSU”), and prurigo nodularis (“PN”).

In addition, we plan to evaluate APG777 in combination with other investigational therapies within our pipeline to potentially enable greater efficacy for I&I conditions.

We plan to initiate our first combination study, a Phase 1b trial of APG777 and APG990, a novel, SQ, half-life extended mAb targeting OX40L, in 2025.

This combination study is designed to evaluate the coformulation of APG777 and APG990 (“APG279”) against DUPIXENT in patients with moderate-to-severe AD, with readout expected in the second half of 2026.

APG990 – anti-OX40L antibody, same mechanism of action as amlitelimab;

potential combination therapy with APG777

APG990 is an SQ extended half-life mAb that utilizes advanced antibody engineering to target OX40L.

We plan to develop APG777 and APG990 together as a potential first-in-class coformulation for the treatment of AD by combining deep and sustained inhibition of Type 2 inflammation via APG777’s inhibition of IL-13 with broader inhibition of Type 1-3 inflammation through APG990’s inhibition of OX40L.

APG279 has been shown to retain stability, injectability, and convenience of individual components in preclinical studies.

In preclinical studies, APG279 has also demonstrated broad inhibition of Type 1, Type 2 and Type 3 inflammation, similar to what was seen with Janus kinase (“JAK”) inhibition, but with potential for better tolerability than JAK inhibitors.

We believe these combined mechanisms offer the potential for improved clinical responses over monotherapy while our planned approach of coformulating two extended half-life mAbs holds the potential for best-in-class dosing.

In August 2024, we initiated a Phase 1 clinical trial of APG990 in healthy volunteers to establish safety, tolerability and PK profile, which could enable the combination with APG777.

In March 2025, we announced positive interim safety and PK data from the APG990 Phase 1 clinical trial.

PK data showed a half-life of approximately 60 days across doses tested.

APG990, in single doses up to 1,200mg, was well tolerated and showed a favorable safety profile, consistent with other assets targeting OX40L.

In addition, preclinical toxicology studies of the combination of APG777 and APG990 showed no findings at any dose level, including the highest dose tested of 150 mg/kg per agent.

Based on these results, we plan to submit an Investigational New Drug application or foreign equivalent for APG279.

Following clearance, we plan to initiate in 2025 a Phase 1b trial of APG279 against DUPIXENT in approximately 50 to 75 patients with moderate-to-severe AD with a data readout expected in the second half of 2026.

APG333 – anti-TSLP antibody, same mechanism of action as TEZPIRE (tezepelumab);

potential combination therapy with APG777

APG333 is a fully-human mAb against thymic stromal lymphopoietin (“TSLP”), an epithelial cell-derived cytokine that has emerged as an attractive validated target for the treatment of people living with asthma and COPD.

In preclinical studies, the combination of APG777 and APG333 has been shown to impact both central inflammation and local airway responses.

This has the potential to improve clinical outcomes compared to approved or in-development biologics which only target peripheral or central inflammation, not both, and retains the potential for a significantly less frequent dosing schedule.

In December 2024, we initiated a Phase 1 trial of APG333 in healthy volunteers and we expect interim data from the trial in the second half of 2025.

We plan to evaluate APG777 and APG333 monotherapies in respective Phase 1b trials in patients with asthma in 2025 to support advancement into future combination trials in asthma and COPD.

Subject to positive data, we plan to study APG777 in combination with APG333 to drive potential best-in-class efficacy in respiratory conditions.

APG808 – anti-IL4Rα antibody, same mechanism of action as DUPIXENT

APG808 is an SQ extended half-life mAb targeting IL-4Rα, a target with clinical validation across eight different Type 2 allergic diseases.

In March 2024, we commenced dosing of the first healthy volunteers in the APG808 Phase 1 trial and in September 2024, we commenced dosing of the first asthma patients as a cohort in that Phase 1

In December 2024, we announced positive interim safety, PK and PD data from the Phase 1 trial.

APG808 demonstrated a potential best-in-class PK profile, including a half-life of approximately 55 days at projected, clinically relevant steady state exposures, supporting the potential for every two- to three-month maintenance dosing.

Single doses of APG808 demonstrated a deep and sustained effect on PD markers out to approximately three months (longest follow-up available at time of data cut).

APG808 was well-tolerated across all dose groups.

We are also now evaluating APG808 in a Phase 1b trial in patients with asthma, with data expected in the first half of 2025.

Funding and Capital Resources

Since our inception in February 2022, we have devoted substantially all of our resources to raising capital, organizing and staffing our company, business and scientific planning, conducting discovery and research activities, acquiring product programs, establishing and protecting our intellectual property portfolio, developing and progressing our pipeline, establishing arrangements with third parties for the manufacture of our programs and component materials, and providing general and administrative support for these operations.

We do not have any programs approved for sale and have not generated any revenue from product sales.

To date, we have funded our operations primarily with proceeds from the issuance of preferred units and sale of common stock.

Prior to our IPO, we received gross proceeds of $169.0 million from sales of our preferred units.

On July 13, 2023, our Registration Statement on Form S-1, as amended (File Nos.

333-272831 and 333-273236) (the “IPO Registration Statement”), relating to our IPO was declared effective by the SEC.

Pursuant to the IPO Registration Statement, we issued and sold an aggregate of 20,297,500 shares of common stock (inclusive of 2,647,500 shares pursuant to the exercise in full of the underwriters’ option to purchase additional shares) at a public offering price of $17.00 per share, for aggregate net proceeds of $315.4 million after deducting underwriting discounts and commissions and other offering expenses.

On March 7, 2024, our Registration Statement on Form S-1, as amended (File Nos.

333-277664 and 333-277763) (the “2024 Registration Statement”), relating to our public offering (the “March 2024 Offering”) was declared effective by the SEC.

Pursuant to the 2024 Registration Statement we issued and sold an aggregate of 7,790,321 shares of common stock (inclusive of 1,016,128 shares pursuant to the exercise in full of the underwriters’ option to purchase additional shares) at a public offering price of $62.00 per share, for aggregate net proceeds of $450.0 million after deducting underwriting discounts and commissions and other offering expenses.

We have incurred significant operating losses since inception.

Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of any programs we may develop.

We generated a net loss of $182.1 million for the year ended December 31, 2024.

As of December 31, 2024, we had an accumulated deficit of $305.9 million.

We expect to continue to incur significantly increased expenses for the foreseeable future if and as we:

• advance our programs, APG777, APG990, APG333 and APG808, into and through clinical trials and regulatory approval prior to commercialization;

• continue our research and development and preclinical development of our other programs;

• seek and identify additional research programs and product candidates and initiate preclinical studies for those programs;

• maintain, expand, enforce, defend and protect our intellectual property portfolio and provide reimbursement of third-party expenses related to our patent portfolio;

• hire additional research and development and clinical personnel;

• experience any delays, challenges, or other issues associated with the clinical development of our programs, including with respect to our regulatory strategies;

• seek marketing approvals for any programs for which we successfully complete clinical trials;

• develop, maintain and enhance a sustainable, scalable, reproducible and transferable manufacturing process for our programs;

• ultimately establish a sales, marketing and distribution infrastructure to commercialize any programs for which we may obtain marketing approval;

• add operational, financial and management information systems and personnel, including personnel to support our product development;

• acquire or in-license product candidates or programs, intellectual property and technologies;

• establish and maintain our current and any future collaborations, including making royalty, milestone or other payments thereunder;

• operate as a public company.

We will not generate revenue from product sales unless and until we successfully initiate and complete clinical development and obtain regulatory approval for any product candidates.

If we obtain regulatory approval for any of our programs and do not enter into a commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, manufacturing, marketing, and distribution.

Further, we expect to incur additional costs associated with operating as a public company, including increased costs of accounting, audit, legal, regulatory and tax-related services associated with compliance with exchange listing and SEC requirements, director and officer insurance costs and investor and public relations costs.

As a result, we will need substantial additional funding to support our continued operations and growth strategy.

Until such a time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including collaborations with other companies or other strategic transactions.

We may be unable to raise additional funds or enter into such other agreements on favorable terms, or at all.

If we fail to raise capital or enter into such agreements as, and when, needed, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more of our programs.

Because of the numerous risks associated with product development, we are unable to accurately predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability.

Even if we are able to generate product sales, we may not become profitable.

If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

We expect that our existing cash and cash equivalents of $141.8 million, marketable securities of $378.9 million and long-term marketable securities of $210.4 million as of December 31, 2024, will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2028.

We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

See “Liquidity and Capital Resources” for further information.

Reorganization

Apogee Therapeutics, LLC was formed as a limited liability company under the laws of the State of Delaware in February 2022.

Apogee Therapeutics, Inc.

was incorporated in June 2023 in connection with our IPO to serve as a holding company that would wholly own the assets of Apogee Therapeutics, LLC.

Prior to July 13, 2023, our business was conducted by Apogee Therapeutics, LLC and its subsidiary at the time, Apogee Biologics, Inc.

In July 2023, in connection with our IPO, we completed a series of transactions which are referred to, collectively, as the “Reorganization,” and pursuant to which Apogee Therapeutics, Inc., became the parent and holding company that wholly owns the assets of Apogee Therapeutics, LLC, including stock of its subsidiary at the time, Apogee Biologics, Inc.

In connection with our Reorganization:

• holders of Series A preferred units of Apogee Therapeutics, LLC received 7,678,000 shares of non-voting common stock of Apogee Therapeutics, Inc.;

• holders of Series B preferred units of Apogee Therapeutics, LLC received 11,501,108 shares of common stock and 5,808,642 shares of non-voting common stock of Apogee Therapeutics, Inc.;

• holders of common units of Apogee Therapeutics, LLC received 1,919,500 shares of common stock of Apogee Therapeutics, Inc.;

• holders of vested incentive units of Apogee Therapeutics, LLC received 690,188 shares of common stock of Apogee Therapeutics, Inc.;

• holders of unvested incentive units of Apogee Therapeutics, LLC received 2,779,358 shares of restricted common stock of Apogee Therapeutics, Inc.

Effective December 31, 2024, Apogee Biologics, Inc.

merged with and into Apogee Therapeutics, Inc.

with Apogee Therapeutics, Inc.

surviving the merger.

Collaboration, License and Services Agreements

Paragon Option Agreements

In February 2022, we entered into an antibody discovery and option agreement with Paragon, which was subsequently amended in November 2022 (as amended, the “2022 Option Agreement”).

Under the terms of the 2022 Option Agreement, Paragon identifies, evaluates and develops antibodies directed against certain mutually agreed therapeutic targets of interest to us.

The 2022 Option Agreement initially included two selected targets, IL-13 and IL-4Rα, and was subsequently amended in November 2022 to include an additional selected target, OX40L.

Under the 2022 Option Agreement, we have the exclusive option to, on a research program-by-research program basis, be granted an exclusive, worldwide license to all of Paragon’s right, title and interest in and to the intellectual property resulting from the applicable research program to develop, manufacture and commercialize the antibodies and products directed to the selected targets (each, an “Option”).

From time to time, we can choose to add additional targets to the collaboration by mutual agreement with Paragon.

Pursuant to the terms of the 2022 Option Agreement, the parties initiated certain research programs that generally focused on a particular target (each, a “Research Program”).

Each Research Program is aimed at discovering, generating, identifying and/or characterizing antibodies directed to the respective target.

For each Research Program, the parties established a research plan that sets forth the activities that will be conducted, and the associated research budget (each, a “Research Plan”).

Upon execution of the 2022 Option Agreement, we agreed with Paragon on an initial Research Plan that outlined the services that will be performed commencing at inception of the arrangement related to IL-13 and IL-4Rα.

The Research Plan for OX40L was agreed to prior to December 31, 2022.

Our exclusive option with respect to any future Research Program is exercisable at our sole discretion at any time during the period beginning on the initiation of activities under the associated Research Program and ending a specified number of days following the delivery of the data package from Paragon related to the results of the Research Plan activities (the “Option Period”).

There is no payment due upon exercise of an Option pursuant to the 2022 Option Agreement.

In consideration for the exclusive options granted under the 2022 Option Agreement, we paid an upfront cash amount of $1.3 million and issued 1,250,000 common units to Paragon.

Paragon was also entitled to up to an additional 3,750,000 of common units in exchange for the rights granted under the 2022 Option Agreement, which were issued in connection with the closings of the additional tranches of the Series A Preferred Unit financing.

Under the 2022 Option Agreement, on a Research Program-by-Research Program basis following the finalization of the Research Plan for each respective Research Program, we are required to pay Paragon a nonrefundable fee in cash of $0.5 million.

We are also obligated to compensate Paragon on a quarterly basis for its services performed under each Research Program based on the actual costs incurred.

In November 2023, we entered into an additional antibody discovery and option agreement with Paragon (the “2023 Option Agreement” and together with the 2022 Option Agreement, collectively, the “Option Agreements”).

Under the terms of the 2023 Option Agreement, Paragon identifies, evaluates and develops antibodies directed against certain mutually agreed therapeutic targets of interest to us.

The 2023 Option Agreement initially includes one target, TSLP.

Under the 2023 Option Agreement, we have the exclusive option to, on a research program-by-research program basis, be granted an exclusive, worldwide license to all of Paragon’s right, title and interest in and to the intellectual property resulting from the applicable research program to develop, manufacture and commercialize the antibodies and products directed to the selected targets.

From time to time, we can choose to add additional targets to the collaboration by mutual agreement with Paragon.

Pursuant to the terms of the 2023 Option Agreement, the parties may initiate Research Programs.

Each Research Program will be aimed at discovering, generating, identifying and/or characterizing antibodies directed to the respective target.

For each Research Program, the parties must establish a Research Plan.

In January 2024, we agreed

on an initial Research Plan with Paragon that outlines the services that will be performed commencing at inception of the arrangement related to TSLP.

Our exclusive option with respect to each Research Program is exercisable at our sole discretion at any time during the period beginning on the initiation of activities under the associated Research Program and ending a specified number of days following the delivery of the data package from Paragon related to the results of the Research Plan activities.

There is no payment due upon exercise of an Option pursuant to the 2023 Option Agreement.

Under the 2023 Option Agreement, on a Research Program-by-Research Program basis following the finalization of the Research Plan for each respective Research Program, we are required to pay Paragon a nonrefundable fee in cash of $2.0 million.

We are also obligated to compensate Paragon on a quarterly basis for its services performed under each Research Program based on the actual costs incurred.

We expense the service fees as the associated costs are incurred when the underlying services are rendered.

In January 2024, we finalized the Research Plan with Paragon related to the TSLP target.

As such, we made a one-time non-refundable payment of $2.0 million to Paragon in the first quarter of 2024.

Unless terminated earlier, the Option Agreements shall continue in force on a Research Program-by-Research Program basis until the earlier of:

(i) the end of the Option Period for such Research Program, as applicable, if such Option is not exercised by us;

and (ii) the effective date of the license agreement for such Research Program if we exercise our Option with respect to such Research Program (the “Term”).

Upon the expiration of the Term for all then-existing Research Programs, the applicable Option Agreement will automatically expire in its entirety.

We may terminate either Option Agreement or any Research Program at any time for any or no reason upon 30 days’ prior written notice to Paragon, provided that we must pay certain unpaid fees due to Paragon upon such termination, as well as any non-cancellable obligations reasonably incurred by Paragon in connection with its activities under any terminated Research Program.

Each party has the right to terminate either Option Agreement or any Research Program upon (i) 30 days’ prior written notice of the other party’s material breach that remains uncured for the 30-day period and (ii) the other party’s bankruptcy.

Paragon License Agreements

In November 2022, we exercised our option available under the 2022 Option Agreement with respect to the IL-13 Research Program.

Upon such exercise, the parties entered into an associated license agreement (the “IL-13 License Agreement”).

In April 2023, we exercised our option available under the 2022 Option Agreement with respect to the IL-4Rα Research Program and the OX40L Research Program.

Upon such exercise, the parties entered into associated license agreements (the “IL-4Rα License Agreement” and the “OX40L License Agreement,” respectively).

In August 2024, we exercised our option available under the 2023 Option Agreement with respect to the TSLP Research Program and entered into the associated license agreement (the “TSLP License Agreement,” and collectively with the IL-13 License Agreement, the IL-4Rα License Agreement and the OX40L License Agreement, the “License Agreements”).

Under the terms of the License Agreements, Paragon granted to us an exclusive, worldwide, royalty-bearing, sublicensable right and license with respect to certain information, patent rights and sequence information related to antibodies directed at the respective target to use, make, sell, import, export and otherwise exploit the antibodies directed at the respective target.

Pursuant to the License Agreements, we granted to Paragon a similar license (except that such license we granted to Paragon is non-exclusive) to the respective licenses with respect to multispecific antibodies that are directed at the respective targets and one or more other antibodies.

We were also granted a right of first negotiation with Paragon concerning the development, license and grant of rights to certain multispecific antibodies associated with each respective license.

We are solely responsible for the continued development, manufacture and commercialization of products at our own cost and expense for each licensed target.

Under the IL-13 License Agreement, the IL-4Rα License Agreement and the OX40L License Agreement, we are obligated to pay Paragon up to $3.0 million upon the achievement of specific development and clinical milestones for the first product under each of the License Agreements that achieves such specified milestones, including a payment of $1.0 million upon the nomination of a development candidate and $2.0 million upon the first dosing of a human patient in a Phase 1 trial.

Under the TSLP License Agreement, we are obligated to pay Paragon up to $28.0 million upon the achievement of specific development and clinical milestones for the first product, including a payment of $3.0 million upon the nomination of a development candidate and $5.0 million upon the first dosing of a human patient in a Phase 1 trial.

Upon execution of the IL-13 License Agreement, we paid Paragon a $1.0 million fee for the nomination of a development candidate.

In August 2023, we announced the dosing of our first participants in the Phase 1 trial of

APG777 and made a milestone payment of $2.0 million in the fourth quarter of 2023.

In November 2023, we finalized the nomination of a development candidate under the IL-4Rα License Agreement and made a milestone payment of $1.0 million to Paragon in the fourth quarter of 2023.

In March 2024, we announced the dosing of our first participants in a Phase 1 trial of APG808 and made a milestone payment of $2.0 million to Paragon in the first quarter of 2024.

In May 2024, we finalized the nomination of a development candidate under the OX40L License Agreement and made a milestone payment of $1.0 million to Paragon in the second quarter of 2024.

In August 2024, we announced the dosing of our first participants in the Phase 1 trial of APG990 and made a milestone payment of $2.0 million in the third quarter of 2024.

In October 2024, we finalized the nomination of a development candidate under the TSLP License Agreement and made a milestone payment of $3.0 million to Paragon in the fourth quarter of 2024.

In December 2024, we announced the dosing of our first participant in the Phase 1 trial of APG333 and made a milestone payment of $5.0 million in the fourth quarter of 2024.

We are also obligated to pay royalties to Paragon equal to a low-single digit percentage of net sales of any products under each of the respective License Agreements, and Paragon has a similar obligation to pay royalties to us with respect to each of the multispecific licenses.

Royalties are due on a product-by-product and country-by-country basis beginning upon the first commercial sale of each product and ending on the later of (i) 12 years after the first commercial sale of such product in such country and (ii) expiration of the last valid claim of a patent covering such product in such country.

Biologics Master Services Agreement - WuXi Biologics (Hong Kong) Limited

In June 2022, Paragon and WuXi Biologics (Hong Kong) Limited (“WuXi Biologics”) entered into a biologics master services agreement (the “WuXi Biologics MSA”), which was subsequently novated to us by Paragon in the second quarter of 2023.

The WuXi Biologics MSA governs all development activities and GMP manufacturing and testing for our APG777, APG990, APG333 and APG808 programs, as well as potential future programs, on a work order basis.

Under the WuXi Biologics MSA, we are obligated to pay WuXi Biologics a service fee and all non-cancellable obligations in the amount specified in each work order associated with the agreement for the provision of services.

The WuXi Biologics MSA terminates on the later of (i) June 20, 2027 or (ii) the completion of services under all work orders executed by the parties prior to June 20, 2027, unless terminated earlier.

The term of each work order terminates upon completion of the services under such work order, unless terminated earlier.

We can terminate the WuXi Biologics MSA or any work order at any time upon 30 days’ prior written notice and immediately upon written notice if WuXi Biologics fails to obtain or maintain required material governmental licenses or approvals.

Either party may terminate a work order (i) at any time upon six months’ prior notice with reasonable cause, provided however that if WuXi Biologics terminates a work order in such manner, no termination or cancellation fees shall be paid by us and (ii) immediately for cause upon (a) the other party’s material breach that remains uncured for 30 days after notice of such breach, (b) the other party’s bankruptcy or (c) a force majeure event that prevents performance for a period of at least 90 days.

Cell Line License Agreement — WuXi Biologics (Hong Kong) Limited

In June 2022, Paragon and WuXi Biologics entered into a cell line license agreement (the “Cell Line License Agreement”), which was subsequently novated to us by Paragon in the second quarter of 2023.

Under the Cell Line License Agreement, we received a non-exclusive, worldwide, sublicensable license to certain of WuXi Biologics’ know-how, cell line, biological materials (the “WuXi Biologics Licensed Technology”) and media and feeds to make, have made, use, sell and import certain therapeutic products produced through the use of the cell line licensed by WuXi Biologics under the Cell Line License Agreement (the “WuXi Biologics Licensed Products”).

Specifically, the WuXi Biologics Licensed Technology is used to manufacture a component of the APG777, APG990, APG333 and APG808 programs.

In consideration for the license, we have paid WuXi Biologics a non-refundable license fee of $150,000.

Additionally, if we manufacture all of our commercial supplies of bulk drug product with a manufacturer other than WuXi Biologics or its affiliates, we are required to make royalty payments to WuXi Biologics in an amount equal to a fraction of a single digit percentage of global net sales of WuXi Biologics Licensed Products manufactured by a third-party manufacturer (the “Royalty”).

If we manufacture part of our commercial supplies of the WuXi Biologics

Licensed Products with WuXi Biologics or its affiliates, then the Royalty will be reduced accordingly on a pro rata basis.

The Cell Line License Agreement will continue indefinitely unless terminated (i) by us upon six months’ prior written notice and our payment of all undisputed amounts due to WuXi Biologics through the effective date of termination, (ii) by WuXi Biologics for a material breach by us that remains uncured for 60 days after written notice, (iii) by WuXi Biologics if we fail to make a payment and such failure continues for 30 days after receiving notice of such failure, or (iv) by either party upon the other party’s bankruptcy.

Letter of Intent — Samsung Biologics Limited

In the fourth quarter of 2024, we executed a Letter of Intent for the manufacturing of drug product with Samsung Biologics, under which we recognized $9.9 million of research and development expenses.

Overview of Financial Results

We have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products for several years, if at all.

If our development efforts for our programs are successful and result in regulatory approval or collaboration or license agreements with third parties, we may generate revenue in the future from product sales or payments from collaboration or license agreements that we may enter into with third parties, or any combination thereof.

Operating Expenses

Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.

Research and Development

Research and development expenses consist primarily of costs incurred in connection with the development and research of our programs.

These expenses include:

• costs of funding research performed by third parties, including Paragon, that conduct research and development and preclinical or clinical activities on our behalf;

• the cost to acquire in-process research and development, with no alternative future use associated with asset acquisitions, such as the Option Agreements, and License Agreements;

• expenses incurred in connection with continuing our current research programs and preclinical development of any programs we may identify, including under agreements with third parties, such as consultants and contractors;

• the cost of developing and validating our manufacturing process for use in our preclinical studies and current and future clinical trials;

• personnel-related expenses, including salaries, bonuses and equity-based compensation expense.

We measure and recognize asset acquisitions or licenses to intellectual property that are not deemed to be business combinations based on the cost to acquire or license the asset or group of assets, which includes transaction costs.

In an asset acquisition or license to intellectual property, the cost allocated to acquired in-process research and development, with no alternative future use is recognized as research and development expense on the acquisition date.

We expense research and development costs as incurred.

Non-refundable advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid

The prepaid amounts are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered or the services rendered.

Our primary focus since inception has been the identification and development of our pipeline programs.

Our research and development costs primarily consist of external costs, such as fees paid to Paragon under the Option Agreements and the License Agreements.

We do not separately track or segregate the amount of costs incurred under the Option Agreement due to the early-stage and discovery nature of the services.

We do not allocate personnel-related costs by program because these resources are used and these costs are deployed across multiple programs under development, and, as such, are not separately classified.

We expect that our research and development expenses will increase substantially for the foreseeable future as we continue to invest in research and development activities related to the continued development of our programs, developing any future programs, including investments in manufacturing, as we advance any programs we may identify and continue to conduct clinical trials.

The success of programs we may identify and develop will depend on many factors, including the following:

• timely and successful completion of preclinical studies;

• effective INDs or comparable foreign applications that allow commencement of our planned clinical trials or future clinical trials for any programs we may develop;

• successful enrollment and completion of clinical trials;

• positive results from our future clinical trials that support a finding of safety and effectiveness, acceptable PK profile, and an acceptable risk-benefit profile in the intended populations;

• receipt of marketing approvals from applicable regulatory authorities;

• establishment of arrangements through our own facilities or with third-party manufacturers for clinical supply and, where applicable, commercial manufacturing capabilities;

• establishment, maintenance, defense and enforcement of patent, trademark, trade secret and other intellectual property protection or regulatory exclusivity for any products we may develop;

• maintenance of a continued acceptable safety, tolerability and efficacy profile of any programs we may develop following approval.

Any changes in the outcome of any of these variables with respect to the development of programs that we may identify could mean a significant change in the costs and timing associated with the development of such programs.

For example, if the U.S.

Food and Drug Administration (“FDA”) or another regulatory authority were to require us to conduct clinical trials beyond those that we currently anticipate will be required for the completion of clinical development of a program, or if we experience significant delays in our clinical trials due to patient enrollment or other reasons, we would be required to expend significant additional financial resources and time on the completion of clinical development.

We may never obtain regulatory approval for any of our programs.

General and Administrative

General and administrative expenses consist primarily of personnel-related expenses, including salaries, bonuses, and equity-based compensation, for individuals in our executive, finance, legal, operations, human resources, business development, commercial and other administrative functions.

Other significant general and administrative expenses include legal fees relating to corporate matters, professional fees for accounting, auditing, tax and administrative consulting services, insurance costs and recruiting costs.

These costs relate to the operation of the business, unrelated to the research and development function, or any individual program.

We expect that our general and administrative expenses will increase substantially for the foreseeable future as we increase our headcount to support the expected growth in our research and development activities and the potential commercialization of our programs, if approved.

We also expect to continue incurring expenses associated with being a public company, including increased costs of accounting, audit, legal, regulatory and tax-related services associated

with maintaining compliance with exchange listing and SEC requirements, director and officer insurance costs, and investor and public relations costs.

Other Income (Expense), Net

Interest Income

Interest income consists of interest income earned from our cash, cash equivalents, and marketable securities and amortization of investment discounts.

Since our inception, we have not recorded any income tax benefits for the net losses we have incurred or for the research and development tax credits generated in each period as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss (“NOL”) carryforwards and the vast majority of our tax credit carryforwards will not be realized.

As of December 31, 2024, we had U.S.

federal NOL carryforwards of approximately $68.1 million, which may be available to reduce future taxable income and have an indefinite carryforward period but are limited in their usage to an annual deduction equal to 80% of annual taxable income.

We also had state net operating loss carryforwards of approximately $28.5 million, which will begin to expire in 2043 for state tax purposes.

As of December 31, 2024, we also had U.S.

federal and research and development tax credit carryforwards of approximately $10.5 million, which may be available to reduce future tax liabilities.

We also had California research and development credit carryforwards of approximately $1.5 million.

Additionally, we had Massachusetts research and development credit carryforwards of approximately $2.1 million.

federal and Massachusetts research and development tax credit carryforwards expire at various dates beginning in 2042 and the California research and development tax credit carryforwards do not expire.

We have recorded a full valuation allowance against our net deferred tax assets at the balance sheet date.

Results of Operations

A discussion regarding our financial condition and results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 is presented below.

A discussion regarding our financial condition and results of operations for the year ended December 31, 2023 compared to the period from February 4, 2022 (inception) to December 31, 2022 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed with the SEC on March 5, 2024.

Comparison of the Year Ended December 31, 2024 and Year Ended December 31, 2023

The following table summarizes our consolidated statements of operations for the periods presented (in thousands):

YEAR ENDED DECEMBER 31,

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income, net:

Interest income

Total other income, net

Net loss before taxes

Provision for income taxes

Net loss after taxes

Research and Development Expense

The following table summarizes our research and development expenses incurred for the periods presented (in thousands):

YEAR ENDED DECEMBER 31,

External research and development costs by program:

APG990/APG279 (1)

APG333/APG777 + APG333 (2)

Unallocated research and development costs:

External-discovery related costs and other

Personnel-related (excluding equity-based compensation)

Equity-based compensation

Depreciation expense

Total research and development expenses

(1) External research and development costs for APG990/APG279 for the year ended December 31, 2023 were recorded as unallocated external discovery related costs as the development candidate for APG990 was nominated in May 2024.

(2) External research and development costs for APG333/APG777+APG333 for the year ended December 31, 2023 were recorded as unallocated external discovery related costs as the development candidate for APG333 was nominated in October 2024.

Research and development expenses for the years ended December 31, 2024 and 2023 were $167.9 million and $68.4 million, respectively.

The increase of $99.5 million was primarily driven by further development of our APG777, APG990/APG279 and APG333/APG777+APG333 programs and advancement of our pipeline into clinical trials, as well as increases in personnel costs and equity-based compensation expense, associated with the growth in our research and development team.

Research and development expense related to the APG777 program for the years ended December 31, 2024 and 2023 were $49.2 million and $21.6 million, respectively.

The increase of $27.6 million was primarily driven by an increase in clinical trial-related expenses and clinical manufacturing activities to support our Phase 1 and Phase 2 clinical trials.

For the year ended December 31, 2024, we recorded $20.0 million of research and development expense related to the APG990/APG279 program, which included milestone payments of $1.0 million and $2.0 million to Paragon, related to the nomination of a development candidate in May 2024 and the first dosing of a human patient in a Phase 1 clinical trial in August 2024, respectively.

No such expenses were recorded for the year ended December 31, 2023, as APG990/APG279 expenses were recorded as unallocated external-discovery related costs until the program candidate was nominated in 2024.

For the year ended December 31, 2024, we recorded $28.1 million of research and development expenses related to the APG333/APG333+APG777 program, which included a $2.0 million research initiation fee and milestone payments of $3.0 million and $5.0 million to Paragon related to the nomination of a development candidate in October 2024 and the first dosing of a human patient in a Phase 1 clinical trial in December 2024, respectively.

No such expenses were recorded for the year ended December 31, 2023, as expenses related to the APG333/APG333+APG777 program were recorded as unallocated external-discovery related costs until the program candidate was nominated in 2024.

For the years ended December 31, 2024 and 2023, we recorded $10.3 million and $20.8 million of research and development expense related to the APG808 program, respectively.

The decrease of $10.5 million was primarily driven by decreased clinical manufacturing activities in 2024.

Personnel-related expenses and equity-based compensation increased by $29.6 million and $8.4 million in the year ended December 31, 2024, respectively, compared to the year ended December 31, 2023, primarily driven by increased headcount and an increase in the fair value of equity awards granted.

External-discovery related costs and other expenses decreased by $3.9 million, primarily driven by the nomination of development candidates under APG333/APG777+APG333 and APG990/APG279 in 2024, as expenses related to the programs were recorded as unallocated external-discovery related costs until the program candidates were nominated in 2024.

General and Administrative Expense

The following table summarizes our general and administrative expenses for the periods presented (in thousands):

YEAR ENDED DECEMBER 31,

Personnel-related (excluding equity-based compensation)

Equity-based compensation

Legal and professional fees

Total general and administrative expenses

General and administrative expenses for the year ended December 31, 2024 were $49.0 million, compared to $24.6 million for the year ended December 31, 2023.

The increase of $24.4 million was primarily due to increases of $8.9 million and $8.9 million in personnel related expense and equity-based compensation, respectively, primarily driven by increased headcount and an increase in the fair value of equity awards granted.

Additionally, other general and administrative expenses increased $4.6 million, primarily due to increases in IT related costs, D&O insurance and other employee related expenses.

The increase in total general and administrative expenses were the result of the expansion of our operations to support the growth in our business and the cost of operating as a public company.

Other Income, Net

Interest income increased $25.7 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, which was primarily related to interest on our cash, cash equivalents and marketable securities.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have incurred significant losses.

We have not yet commercialized any of our programs, which are in various phases of early-stage development, and we do not expect to generate revenue from sales of any of our programs for several years, if at all.

To date, we have financed our operations from the proceeds from the issuance of preferred units and the sale of common stock in our IPO, our March 2024 Offering and our ATM Facility (as defined below).

As of December 31, 2024, we had cash and cash equivalents of $141.8 million, marketable securities of $378.9 million and long-term marketable securities of $210.4 million.

Prior to our IPO, we received gross proceeds of $169.0 million from sales of our preferred units.

In connection with our IPO in July 2023, we issued and sold an aggregate of 20,297,500 shares of common stock (inclusive of 2,647,500 shares pursuant to the exercise in full of the underwriters’ option to purchase additional shares) at a price of $17.00 per share for aggregate net proceeds of $315.4 million, after deducting underwriting discounts and commissions and other offering expenses.

In connection with our March 2024 Offering, we issued and sold an aggregate of 7,790,321 shares of common stock (inclusive of 1,016,128 shares pursuant to the exercise in full of the underwriters’ option to purchase additional shares) at a public offering price of $62.00 per share, for aggregate net proceeds of $450.0 million after deducting underwriting discounts and commissions and other offering expenses.

In August 2024, we entered into an Open Market Sale Agreement (the “Sale Agreement”) with Jefferies LLC (the “Sales Agent”), pursuant to which we may offer and sell shares of common stock up to a maximum aggregate offering price of $300.0 million, from time to time, through an at the market offering program (the “ATM Facility”).

During the three months ended December 31, 2024, we sold 926,049 shares of common stock under the ATM at a price per share of $48.50 resulting in net proceeds of $43.6 million.

As of December 31, 2024, $255.1 million remained available for sale under the Sale Agreement.

The following table provides information regarding our cash flows for the periods presented (in thousands):

YEAR ENDED DECEMBER 31,

Net cash, cash equivalents, and restricted cash provided by (used in):

Operating activities

Investing activities

Financing activities

Net increase (decrease) in cash, cash equivalents, and restricted cash

Net Cash used in Operating Activities

Cash used in operating activities resulted primarily from our net losses adjusted for non-cash charges and changes in components of operating assets and liabilities, which are generally attributable to timing of payments, and the related effect on certain account balances, operational and strategic decisions and contracts to which we may be a party.

For the year ended December 31, 2024, operating activities used $171.2 million of cash, primarily due to a net loss of $182.1 million and amortization of discounts on marketable securities of $12.2 million.

This was partially offset by non-cash charges of $23.3 million for equity-based compensation and $1.7 million for lease expense.

For the year ended December 31, 2023, operating activities used $74.8 million of cash, primarily due to a net loss of $84.0 million, partially offset by non-cash charges of $6.1 million for equity-based compensation and net changes in our operating assets and liabilities of $6.1 million.

Net Cash used in Investing Activities

Net cash used in investing activities for the year ended December 31, 2024 was $300.5 million, primarily related to the $649.5 million purchase of marketable securities and $1.1 million purchase of property and equipment.

This was partially offset by the maturities of $350.1 million of marketable securities.

Net cash used in investing activities for the year ended December 31, 2023 was $273.9 million, which was primarily related to the $303.7 million purchase of marketable securities, partially offset by the maturities of $30.0 million in marketable securities.

Net Cash provided by Financing Activities

For the year ended December 31, 2024, financing activities provided $495.1 million of cash, primarily related to the issuance and sale of common stock from our March 2024 Offering, net of paid issuance costs, and the issuance of common stock under our ATM Facility in December 2024.

For the year ended December 31, 2023, financing activities provided $315.4 million of cash related to the issuance and sale of common stock from our IPO, net of paid issuance costs.

Future Funding Requirements

To date, we have not generated any revenue from product sales.

We do not expect to generate revenue from product sales unless and until we successfully complete preclinical and clinical development of, receive regulatory approval for, and commercialize a program and we do not know when, or if at all, that will occur.

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and studies and initiate clinical trials.

In addition, if we obtain regulatory approval for any programs, we expect to incur significant expenses related to product sales, marketing, and distribution to the extent that such sales, marketing and distribution are not the responsibility of potential collaborators.

We expect to incur additional costs associated with operating as a public company.

The timing and amount of our operating expenditures will depend

largely on the factors set out above.

For more information, see the section titled “Risk Factors—Risks Related to Our Limited Operating History, Financial Position and Capital Requirements.”

Our funding requirements and timing and amount of our operating expenditures will depend on many factors, including, but not limited to:

• the rate of progress in the development of our APG777, APG990, APG333 and APG808 programs;

• the scope, progress, results and costs of preclinical studies and clinical trials for any other current and future programs;

• the number and characteristics of programs and technologies that we develop or may in-license;

• the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our programs for which we receive marketing approval;

• the costs necessary to obtain regulatory approvals, if any, for any approved products in the United States and other jurisdictions, and the costs of post-marketing studies that could be required by regulatory authorities in jurisdictions where approval is obtained;

• the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims;

• the continuation of our existing licensing arrangements and entry into new collaborations and licensing arrangements;

• the costs we incur in maintaining business operations;

• the costs of hiring additional clinical, quality control, manufacturing and other scientific personnel;

• the costs adding operational, financial and management information systems and personnel;

• the costs associated with being a public company;

• the costs and timing of future laboratory facilities;

• the revenue, if any, received from commercial sales of our programs for which we receive marketing approval;

• the effect of competing technological and market developments;

• the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for programs.

Identifying potential programs and product candidates and conducting preclinical studies and clinical trials is a time consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales.

In addition, our programs, if approved, may not achieve commercial success.

Our commercial revenues, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if ever.

Accordingly, we will need to obtain substantial additional funds to achieve our business objectives.

Adequate additional funds may not be available to us on acceptable terms, or at all.

We do not currently have any committed external source of funds.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, our stockholders’ ownership interests could be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect our stockholders’ rights.

Additional 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 debt, making capital expenditures or declaring dividends, and may require the issuance of warrants, which could potentially dilute our stockholders’ ownership interests.

If we raise additional funds through strategic collaborations or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, 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 additional funds through equity or debt financings when needed, we may be required to delay, limit or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates to third parties that we would otherwise prefer to develop and market ourselves.

As of December 31, 2024, we had $141.8 million of cash and cash equivalents, $378.9 million of marketable securities and $210.4 million of long-term marketable securities.

Based on our current operating plan, as of the date of this Annual Report, we estimate that our existing cash, cash equivalents, marketable securities and long-term marketable securities will be sufficient to enable us to fund our operating expenses and capital expenditure requirements through at least the next 12 months following the issuance of our consolidated financial statements included elsewhere in this Annual Report.

Moreover, based on our current operating plan, we estimate that such funds will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2028.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

Contractual Obligations and Other Commitments

We enter into contracts in the normal course of business with contract research organizations (“CROs”), contract manufacturing organizations (“CMOs”) and other third parties for preclinical research studies and testing, clinical trials, manufacturing and other services.

These contracts do not contain any minimum purchase commitments and provide for termination by us upon prior written notice.

Payments due upon cancellation consist only of payments for services provided and expenses incurred up to the date of cancellation, including non-cancelable obligations of our service providers and, in some cases, wind-down costs.

The exact amounts of such obligations are dependent on the timing of termination and the terms of the associated agreement.

Accordingly, these payments are not disclosed as the amount and timing of such payments are not known.

Our agreements to license intellectual property include potential milestone payments that are dependent upon the development of products using the intellectual property licensed under the agreements and contingent upon the achievement of specific development and clinical milestones.

As of December 31, 2024, we have incurred $17.0 million of the maximum aggregate potential milestone payments.

We are also obligated to pay royalties to (i) Paragon at a royalty rate of a low single-digit percentage based on net sales of any products under the License Agreements, once commercialized and (ii) WuXi Biologics at a royalty rate of a fraction of a single digit percentage of global net sales of WuXi Biologics Licensed Products manufactured by a third-party manufacturer.

We do not have any off-balance sheet arrangements that are material or reasonably likely to become material to our financial condition or results of operations.

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 consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States.

The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported revenues recognized and expenses incurred during the reporting periods.

Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

We define our critical accounting policies as those accounting principles generally accepted in the United States of America that are most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report, we believe the following accounting policies used in preparation of our consolidated financial statements require the most significant judgments and estimates.

Research and Development Expense

Research and development costs are expensed as incurred.

Research and development expenses consist of costs incurred in performing research and development activities, including salaries and bonuses, overhead costs, contract services and other related costs.

The value of goods and services received from CROs and CMOs in the reporting period are estimated based on the level of services performed, and progress in the period in cases when we have not received an invoice from the supplier.

In circumstances where amounts have been paid in excess of costs incurred, we record a prepaid expense.

When billing terms under these contracts do not coincide with the timing of when the work is performed, we are required to make estimates of outstanding obligations to those third parties as of period end.

Any accrual estimates are based on a number of factors, including our knowledge of the progress towards completion of the specific tasks to be performed, invoicing to date under the contracts, communication from the vendors of any actual costs incurred during the period that have not yet been invoiced and the costs included in the contracts.

Significant judgments and estimates may be made in determining the accrued balances at the end of any reporting period.

Actual results could differ from the estimates made by us.

JOBS Act Transition Period and Smaller Reporting Company Status

As of June 30, 2024, the market value of our common stock held by non-affiliates exceeded $700 million, and as a result, as of January 1, 2025, we no longer qualified as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) or as a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act of 1934, as amended (the “Exchange Act”).

We have transitioned to a large accelerated filer, as defined in Rule 12b-2 of the Exchange Act.

As a large accelerated filer, and subject to applicable transition periods, we are subject to certain disclosure requirements that are applicable to other public companies that were not applicable to us as an emerging growth company and smaller reporting company, including compliance with the auditor attestation requirements in the assessment of our internal control over financial reporting imposed by the Sarbanes-Oxley Act of 2002 and full disclosure obligations regarding executive compensation.

Additionally, we are no longer able to take advantage of transition periods for complying with new or revised accounting standards that are available to emerging growth companies.

Recently Issued Accounting Pronouncements

We have reviewed all recently issued accounting standards and have determined that, other than as disclosed in Note 2 to our consolidated financial statements included elsewhere in this Annual Report, such standards are not expected to have a material impact on our consolidated financial statements or do not otherwise apply to our operations.

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-K

Item 5. Market for Registrant’s Common Equity