What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-10-28 compared with 2025-08-06 · 70 added, 69 removed, 222 unchanged (39% of the section changed)

16 unchanged sentences

In October 2023, we received FDA approval for an expanded indication in plaque psoriasis down to 6 years of age.

We are currently working with the FDA to potentially further expand this indication in plaque psoriasis down to 2 years of age.

In September 2025, we submitted a supplemental New Drug Application (sNDA) to FDA to expand the indication of ZORYVE cream 0.3% for the treatment of plaque psoriasis in children down to the age of 2.

In June 2023, we had our first commercial launch outside of the United States following Health Canada approval of ZORYVE cream 0.3% for the treatment of plaque psoriasis in individuals 12 years or age or older.

5 unchanged sentences

ZORYVE cream 0.15% was also approved by Health Canada in March 2025 and commercially launched in April 2025.

ZORYVE cream 0.15% is a once-daily, steroid-free cream that provides rapid disease clearance and significant reduction in itch and has been specifically developed to be a treatment option for long-term disease control.

We have also completed a Phase 3 trial of ZORYVE cream 0.05% in pediatric patients 2 to 5 years of age with mild to moderate

atopic dermatitis (INTEGUMENT-PED).

Based on the positive results from the INTEGUMENT-PED study, and given our recent approval of ZORYVE cream 0.15% for the treatment of mild to moderate atopic dermatitis in individuals 6 years of age or older, we submitted a supplemental new drug application (sNDA) for topical ZORYVE cream 0.05% for children 2 to 5 years of age in December 2024, which was accepted by the FDA with a Prescription Drug User Fee Act (PDUFA) target action date in October 2025.

We conducted INTEGUMENT-OLE, an open label extension study of the long-term safety of ZORYVE cream 0.15% in subjects 6 years of age or older and ZORYVE cream 0.05% in subjects between the ages 2 and 5 years, for which we reported positive results in September 2023 and August 2024, respectively.

We also received FDA approval for ZORYVE cream 0.05% for treatment of mild to moderate atopic dermatitis in children 2 to 5 years of age and plan to commercially launch in October 2025.

ZORYVE cream 0.15% and 0.05% are once-daily,

steroid-free creams that provide rapid disease clearance and significant reduction in itch and have been specifically developed to be treatment options for long-term disease control.

In June 2025, we initiated INTEGUMENT-INFANT, a Phase 2 study to evaluate the safety and efficacy of investigational ZORYVE cream 0.05% in infants as young as 3 months to less than 2 years with atopic dermatitis, which potentially could serve as the basis for a further expansion of the indication for ZORYVE cream 0.05% to this group of patients.

3 unchanged sentences

Promotion of ZORYVE in primary care and pediatrics under the Kowa agreement began in late September 2024.

In addition to ZORYVE, we had been developing ARQ-255, a deep penetrating topical formulation of ivarmacitinib, a potent and highly selective topical Janus kinase type 1 (JAK 1) inhibitor, for the treatment of alopecia areata.

Following the completion of a Phase 1b study in the middle of 2025, the Company has elected to halt further development of the program.

In addition to ZORYVE, we had developed ARQ-255, a deep penetrating topical formulation of ivarmacitinib, a potent and highly selective topical Janus kinase type 1 (JAK 1) inhibitor, for the treatment of alopecia areata.

Following the completion of a Phase 1b study in the middle of 2025, we elected to halt further development of the program.

In September 2022, we acquired Ducentis BioTherapeutics LTD (Ducentis) and its lead asset, DS-234 (now ARQ-234), a fusion protein that is a potent and highly selective checkpoint agonist of the CD200 Receptor (CD200R).

1 unchanged sentence

ARQ-234 could potentially be used to treat other inflammatory conditions as well.

The Company submitted an Investigational New Drug (IND) application to the FDA in July 2025.

We have incurred net losses in each year since inception, including net losses of $40.9 million and $87.7 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had an accumulated deficit of $1,162.9 million and cash, cash equivalents, restricted cash, and marketable securities of $191.1 million.

As of June 30, 2025, we had $100.0 million outstanding under the Loan Agreement.

The Company submitted an Investigational New Drug (IND) application to the FDA in July 2025, and anticipates commencing a Phase 1 study of ARQ-234 in the first quarter of 2026.

We have incurred annual net losses in each year since inception, including net losses of $33.5 million and $129.3 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had an accumulated deficit of $1,155.5 million and cash, cash equivalents, restricted cash, and marketable securities of $191.4 million.

As of September 30, 2025, we had $100.0 million outstanding under the Loan Agreement.

We paid down $100.0 million of principal related to the Loan Agreement using available cash in October 2024, with the right to re-draw that principal for a defined period.

We expect to continue to incur losses and significant expenses in 2025 as we commercialize ZORYVE, and as we advance our product candidates and label extensions through clinical trials, regulatory submissions and commercialization.

We expect to incur commercialization expenses related to the sales, marketing, manufacturing, and distribution of ZORYVE, while we focus our clinical development spend on ARQ-234 and ZORYVE label expansions, if we obtain regulatory approval for them.

While we do not anticipate the need to obtain funds through financings or other sources to support our current operations, if our available cash and marketable securities balances, amounts available under the Loan Agreement, and anticipated future cash flows from operations are insufficient to cover these expenses, we may need to fund our operations through equity or debt financings or other sources, such as future potential collaboration agreements.

While we generated net income for the quarter ended September 30, 2025, the extent of any net income or losses for future periods is uncertain and we may continue to incur net losses in future periods.

We expect to continue to incur significant expenses as we commercialize ZORYVE, and as we advance our product candidates and label extensions through clinical trials, regulatory submissions and commercialization.

While we do not anticipate the need to obtain funds through financings or other sources to support our current planned operations, if our available cash and marketable securities balances, amounts available under the Loan Agreement, and anticipated future cash flows from operations are insufficient to cover these expenses, we may need to fund our operations through equity or debt financings or other sources, such as future potential collaboration agreements.

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

Any failure to obtain sufficient funds on acceptable terms if or when needed could have a material adverse effect on our business, results of operations, and financial condition.

See “Liquidity, Capital Resources, and Requirements” below and Note 1 to the condensed consolidated financial statements for additional information.

We rely on third parties to conduct our nonclinical studies and clinical trials and for manufacturing and supply of our product candidates.

12 unchanged sentences

Prior to the date on which the initial regulatory approval was received for each product, costs of inventory production were recorded as research and development expense.

Subsequent to initial regulatory approval, costs of production are capitalized into inventory, and as that inventory is sold and recognized as revenue, the cost is recognized in cost of sales.

During the second half of 2025, the Company expects to have sold its remaining finished goods inventory produced using raw material components for which the cost was previously recognized as research & development expense.

As of June 30, 2025 and December 31, 2024, the value of this inventory, mostly at the raw materials stage, was approximately $0.7 million and $5.5 million, respectively.

Subsequent to initial regulatory approval, costs of production are capitalized into inventory, and as that inventory is sold and revenue is recognized, the cost of the inventory is recognized in cost of sales.

During the second half of 2025, the Company expects to have sold its remaining finished goods inventory produced prior to regulatory approval for which the cost was previously recognized as research & development expense.

As of September 30, 2025 and December 31, 2024, the value of this inventory, mostly at the raw materials stage, was approximately $0.2 million and $5.5 million, respectively.

Research and Development Expenses

3 unchanged sentences

In addition, employee costs, including salaries, payroll taxes, benefits, stock-based compensation and travel for employees contributing to research and development activities are classified as research and development costs.

We allocate direct external costs on a program specific basis (topical roflumilast program, topical JAK inhibitor program, CD200R program, and early stage programs).

We allocate direct external costs on a program specific basis (topical roflumilast program and CD200R program).

Our internal costs are primarily related to personnel or professional services and apply across programs, and thus are not allocable on a program specific basis.

We expect to continue to incur research and development expenses in the future as we develop our product candidates.

In particular, we expect to incur research and development expenses for the development of ARQ-234 for atopic dermatitis and for ZORYVE label expansions.

In particular, we expect to incur research and development expenses for the development of ARQ-234 for atopic dermatitis and for ZORYVE label expansions and life cycle management.

We have entered, and may continue to enter, into license agreements to access and utilize certain molecules for the treatment of dermatological diseases and disorders.

19 unchanged sentences

Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

Comparison of the Three Months Ended September 30, 2025 and 2024

Product Revenue, Net

8 unchanged sentences

product revenue following the FDA approval and subsequent commercial launch of ZORYVE foam for scalp and body psoriasis in June 2025.

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 $ %

10 unchanged sentences

*Not applicable

Product revenue, net, for ZORYVE cream 0.3% increased by $10.4 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily driven by higher end customer demand for ZORYVE cream in the United States and Canada.

Product revenue, net, for ZORYVE foam increased by $25.6 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, driven by its commercial launch in the United States in January 2024, higher end customer demand, and its commercial launch in Canada in December 2024.

Product revenue, net, for ZORYVE cream 0.15% increased by $14.6 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, driven by its commercial launch in the United States in July 2024.

Product revenue, net, for ZORYVE cream 0.3% increased by $8.5 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily driven by higher end customer demand in the United States and Canada.

Product revenue, net, for ZORYVE foam increased by $29.5 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily driven by higher end customer demand related to seborrheic dermatitis in the United States, the commercial launch of ZORYVE foam for the treatment of plaque psoriasis of the scalp and body in the United States in June 2025, as well as the commercial launch of ZORYVE foam for seborrheic dermatitis in Canada in December 2024.

Product revenue, net, for ZORYVE cream 0.15% increased by $16.5 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily driven by higher end customer demand and, to a lesser extent, net price improvement in the United States.

Cost of Sales

Cost of sales increased by $4.0 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

The increase was primarily due to greater ZORYVE cream and foam product sales relative to the comparative period.

Cost of sales increased by $3.2 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

The increase was due to the increase in royalty expense and cost of products sold, consistent with the growth in ZORYVE cream and foam product revenue.

Research and Development Expenses

Three Months Ended June 30, Change

Three Months Ended September 30, Change

2025 2024 $ %

8 unchanged sentences

Total research and development expense $ 19,604 $ 19,501 $ 103 1 %

Research and development expenses increased slightly by $0.2 million, or 1%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Research and development expenses increased slightly by $0.1 million, or 1%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Direct external costs decreased due to lower ARQ-234 preclinical costs and the completion of a Phase 1b study in our topical JAK inhibitor program for the treatment of alopecia areata, which we elected to halt.

These decreases were partially offset by an increase in expenses related to a Phase 2 study of ZORYVE cream 0.05% for the treatment of atopic dermatitis in infants.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $11.0 million, or 19%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

The increase was primarily due to our continued commercialization efforts and growing revenue for ZORYVE and consisted of $7.3 million in sales and marketing expenses and $4.7 million in compensation and personnel-related expenses.

Selling, general and administrative expenses increased by $3.6 million, or 6%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

The increase was primarily due to continued commercialization efforts and growing revenue for ZORYVE and consisted of $2.2 million in compensation and personnel-related expenses and $2.0 million in sales and marketing expenses, partially offset by decreases in costs related to professional services.

Other Income, Net

Other income, net decreased by $3.1 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to less interest income resulting from lower cash, cash equivalents, and marketable securities balances.

Other income, net decreased by $2.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to less interest income resulting from lower cash, cash equivalents, and marketable securities balances, coupled with the impact of lower investment yields.

Interest Expense

Interest expense decreased by $4.5 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, due to a lower outstanding principal balance on our long-term debt driven by our $100.0 million principal paydown in October 2024, coupled with the impact of lower interest rates.

Interest expense decreased by $3.6 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, due to a lower outstanding principal balance on our long-term debt driven by our $100.0 million principal paydown in October 2024, coupled with the impact of lower interest rates.

See Note 8 to the condensed consolidated financial statements for additional information.

Comparison of the Six Months Ended June 30, 2025 and 2024

Comparison of the Nine Months Ended September 30, 2025 and 2024

Product Revenue, Net

7 unchanged sentences

product revenue following the FDA approval and subsequent commercial launch of ZORYVE foam for scalp and body psoriasis in June 2025.

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

2025 2024 $ %

10 unchanged sentences

*Not applicable

Product revenue, net, for ZORYVE cream 0.3% increased by $18.8 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily driven by higher end customer demand for ZORYVE cream in the United States and Canada.

Product revenue, net, for ZORYVE foam increased by $49.3 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, driven by its commercial launch in the United States in January 2024, higher end customer demand, and its commercial launch in Canada in December 2024.

Product revenue, net, for ZORYVE cream 0.15% increased by $24.8 million for the six months ended June 30, 2025, driven by its commercial launch in the United States in July 2024.

Product revenue, net, for ZORYVE cream 0.3% increased by $27.2 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily driven by higher end customer demand in the United States and Canada.

Product revenue, net, for ZORYVE foam increased by $78.8 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily driven by higher end customer demand for seborrheic dermatitis in the United States, the commercial launch of ZORYVE foam for plaque psoriasis of the scalp and body in the United States in June 2025, as well as the commercial launch of ZORYVE foam for seborrheic dermatitis in Canada in December 2024.

Product revenue, net, for ZORYVE cream 0.15% increased by $41.3 million for the nine months ended September 30, 2025, primarily driven by its commercial launch in the United States in July 2024.

Other Revenue

Other revenue of $2.0 million for the six months ended June 30, 2025 relates to license revenues received in connection with the Huadong Agreement.

Other revenue for the six months ended June 30, 2024 includes $25.0 million received as an upfront payment in connection with the Sato Agreement and a $3.0 million milestone payment received in connection with the Huadong Agreement.

Other revenue of $2.0 million for the nine months ended September 30, 2025 relates to license revenues received in connection with the Huadong Agreement.

Other revenue for the nine months ended September 30, 2024 includes $25.0 million received as an upfront payment in connection with the Sato Agreement and a $3.0 million milestone payment received in connection with the Huadong Agreement.

See Note 6 to the condensed consolidated financial statements for additional information.

Cost of Sales

Cost of sales increased by $9.6 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, and was primarily due to the increase in ZORYVE cream and foam product sales, amortization expense recorded in connection with the AstraZeneca milestones achieved in the first quarter of 2025 and the second half of 2024, and greater royalties paid to AstraZeneca.

Cost of sales increased by $12.8 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, and was due to a $2.5 million increase in amortization expense recorded in connection with the AstraZeneca milestones achieved in the first quarter of 2025, with the remainder due to the increase in royalty expense and cost of products sold consistent with the growth in ZORYVE cream and foam product revenue.

Research and Development Expenses

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

2025 2024 $ %

8 unchanged sentences

Total research and development expense $ 56,600 $ 61,940 $ (5,340) (9) %

Research and development expenses decreased by $5.4 million, or 13%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The decrease was primarily due to the completion of Phase 3 studies of roflumilast cream in atopic dermatitis, coupled with lower costs related to the development of early stage programs.

Research and development expenses decreased by $5.3 million, or 9%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The decrease was primarily

due to lower ARQ-234 preclinical costs and the completion of a Phase 1b study in our topical JAK inhibitor program for the treatment of alopecia areata, which we elected to halt.

We expect research and development expenses in future periods to increase primarily due to the development and clinical study associated with ARQ-234 and ZORYVE life cycle management.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $20.2 million, or 18%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The increase was primarily due to $12.4 million higher compensation and personnel-related expenses and $7.7 million higher sales and marketing expenses.

These higher expenses were primarily due to our continued commercialization efforts for ZORYVE.

Selling, general and administrative expenses increased by $23.8 million, or 14%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The increase was primarily due to continued commercialization efforts and growing revenue for ZORYVE, and consisted of $13.4 million higher sales and marketing expenses and $12.1 million higher compensation and personnel-related expenses.

These increases were partially offset by a decrease in professional services costs.

Other Income, Net

Other income, net decreased by $4.4 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to less interest income resulting from lower cash, cash equivalents, and marketable securities balances.

Other income, net decreased by $6.6 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to less interest income resulting from lower cash, cash equivalents, and marketable securities balances, coupled with the impact of lower investment yields.

Interest Expense

Interest expense decreased by $9.0 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, due to a lower outstanding principal balance on our long-term debt driven by our $100.0 million principal paydown in October 2024, coupled with the impact of lower interest rates.

Interest expense decreased by $12.5 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, due to a lower outstanding principal balance on our long-term debt driven by our $100.0 million principal paydown in October 2024, coupled with the impact of lower interest rates.

See Note 8 to the condensed consolidated financial statements for additional information.

1 unchanged sentence

Sources of Liquidity

Our primary sources of capital to date have been private placements of preferred stock, our IPO completed in January 2020, our follow-on financings in October 2020, February 2021, August 2022, October 2023, and March 2024, our Loan Agreement, our ATM program, and revenue from the sale of ZORYVE cream 0.3% and foam.

We have incurred operating losses since our inception and have an accumulated deficit as a result of ongoing efforts to develop and commercialize our products and product candidates, including conducting nonclinical and clinical trials and providing selling, general and administrative support for these operations.

As of June 30, 2025, we had cash, cash equivalents, restricted cash, and marketable securities of $191.1 million, and an accumulated deficit of $1,162.9 million.

As of June 30, 2025, we had $100.0 million outstanding under the Loan Agreement.

We have incurred annual operating losses since our inception and have an accumulated deficit as a result of ongoing efforts to develop and commercialize our products and product candidates, including conducting nonclinical and clinical trials and providing selling, general and administrative support for these operations.

As of September 30, 2025, we had cash, cash equivalents, restricted cash, and marketable securities of $191.4 million, and an accumulated deficit of $1,155.5 million.

As of September 30, 2025, we had $100.0 million outstanding under the Loan Agreement.

We paid down $100.0 million of principal related to the Loan Agreement using available cash on October 8, 2024, with the right to re-draw that principal for a defined period.

4 unchanged sentences

If we are unable to obtain additional funding from these or other sources if or when needed it may be necessary to significantly reduce our current rate of spending through, among other things, reductions in staff and delaying, scaling back, or stopping certain research and development programs, nonclinical studies, clinical trials or other development activities, and commercialization efforts.

Insufficient liquidity may also require us to relinquish rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose.

In addition, market conditions impacting financial institutions could impact our ability to access some or all of our cash, cash equivalents and marketable securities, and we may be unable to obtain alternative funding when and as needed on acceptable terms, if at all.

10 unchanged sentences

• the cost of commercialization activities for ZORYVE or any future product candidates that are approved for sale, including marketing, sales and distribution costs, and any discounts or rebates to obtain access;

• our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of any such agreements that we may enter into;

• our ability to acquire attractive assets or businesses or to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of any such agreements that we may enter into;

• the costs related to milestone payments to AstraZeneca or any future collaborator or licensing partner, upon the achievement of predetermined milestones;

11 unchanged sentences

With the approval of ZORYVE cream 0.3% on July 29, 2022, the tranche B term loans were funded in August 2022.

As of June 30, 2025 and December 31, 2024, the aggregate principal amount outstanding under the Loan Agreement was $100.0 million.

As of September 30, 2025 and December 31, 2024, the aggregate principal amount outstanding under the Loan Agreement was $100.0 million.

In October 2024, we made a 2024 Partial Prepayment of $100.0 million, which reduced the aggregate principal amount outstanding under the Loan Agreement to $100.0 million.

In connection with the 2024 Partial Prepayment, we are obligated to pay a prepayment penalty of $1.0 million by June 30, 2026 and a final fee of $6.95 million, representing the final fee applicable to the amount of the 2024 Partial Prepayment, on January 1, 2027.

As a result of such 2024 Partial Prepayment, subject us generating a minimum net product revenue for the trailing six (6) month period ending as of the month prior to the borrowing date equal to 80% of our projected net product revenue as set forth in its annual plan for the respective period, we will be able to draw down the tranche C-1 and tranche C-2 term loans.

As a result of such 2024 Partial Prepayment, subject to us generating a minimum net product revenue for the trailing six (6) month period ending as of the month prior to the borrowing date equal to 80% of our projected net product revenue as set forth in its annual plan for the respective period, we will be able to draw down the tranche C-1 and tranche C-2 term loans.

The tranche C-1 term loan availability will expire on March 31, 2026 and the tranche C-2 term loan availability will expire on June 30, 2026.

3 unchanged sentences

As a result of such 2024 Partial Prepayment, the applicable interest rate will be a per annum interest rate equal to 5.95% plus the greater of (a) 2.50% and (b) the one-month SOFR.

On June 30, 2025, the rate was 10.27%.

On September 30, 2025, the rate was 10.20%.

The benchmark SOFR is subject to change in the event of certain events with respect to the benchmark rate.

12 unchanged sentences

Notwithstanding the prepayment or termination of the Term Loan, the exit fee will expire 10 years from the date of the Loan Agreement.

We were in compliance with all covenants under the Loan Agreement as of June 30, 2025.

We were in compliance with all covenants under the Loan Agreement as of September 30, 2025.

The following table sets forth our cash flows for the periods indicated:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

4 unchanged sentences

Effect of exchange rate changes on cash 109 (1)

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

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

$ (24,524) $ 46,145

Net Cash Used in Operating Activities

During the six months ended June 30, 2025, net cash used in operating activities was $30.1 million, which consisted of a net loss of $40.9 million and a change in net operating assets and liabilities of $12.6 million, partially offset by net non-cash charges of $23.4 million.

During the nine months ended September 30, 2025, net cash used in operating activities was $31.8 million, which consisted of a net loss of $33.5 million and a change in net operating assets and liabilities of $32.5 million, partially offset by net non-cash charges of $34.2 million.

The net non-cash charges were primarily related to stock-based compensation expense of $30.3 million and amortization of intangible assets of $4.1 million.

During the six months ended June 30, 2024, net cash used in operating activities was $76.7 million, which consisted of a net loss of $87.7 million and a change in net operating assets and liabilities of $9.7 million, partially offset by net non-cash charges of $20.7 million.

During the nine months ended September 30, 2024, net cash used in operating activities was $111.4 million, which consisted of a net loss of $129.3 million and a change in net operating assets and liabilities of $13.5 million, partially offset by net non-cash charges of $31.4 million.

The net non-cash charges were primarily related to stock-based compensation expense of $32.3 million.

Net Cash Provided by (Used in) Investing Activities

During the six months ended June 30, 2025, net cash provided by investing activities was $29.2 million, which was comprised primarily of proceeds from the maturities of marketable securities of $129.1 million, offset by purchases of marketable securities of $89.3 million and a milestone payment made to AstraZeneca of $10.0 million.

During the six months ended June 30, 2024, net cash used in investing activities was $90.8 million, which was comprised primarily of purchases of marketable securities of $231.7 million, offset by proceeds from the maturities of marketable securities of $140.9 million.

During the nine months ended September 30, 2025, net cash provided by investing activities was $3.9 million, which was comprised primarily of proceeds from the maturities of marketable securities of $172.4 million, offset by purchases of marketable securities of $157.8 million and a milestone payment made to AstraZeneca of $10.0 million.

During the nine months ended September 30, 2024, net cash used in investing activities was $6.1 million, which was comprised primarily of purchases of marketable securities of $237.4 million, offset by proceeds from the maturities of marketable securities of $231.5 million.

Net Cash Provided by Financing Activities

During the six months ended June 30, 2025, net cash provided by financing activities was $1.8 million, which was comprised primarily of $1.3 million of proceeds from the issuance of our common stock pursuant to our employee stock purchase plan.

During the six months ended June 30, 2024, net cash provided by financing activities was $163.2 million, which was comprised primarily of $161.7 million of net proceeds from our February 2024 public stock offering.

During the nine months ended September 30, 2025, net cash provided by financing activities was $3.3 million, which was comprised primarily of proceeds from the issuance of our common stock upon exercise of employee stock options and purchase of shares pursuant to our employee stock purchase plan.

During the nine months ended September 30, 2024, net cash provided by financing activities was $163.6 million, which was comprised primarily of $161.7 million of net proceeds from our March 2024 public stock offering.

Contractual Obligations and Contingent Liabilities

There have been no material changes outside the ordinary course of business to our contractual obligations and commitments as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Other than the changes described in Notes 6 and Note 7 to the condensed consolidated financial statements in Item 1, related to our lease amendment and Ducentis, there have been no material changes outside the ordinary course of business to our contractual obligations and commitments as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

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