What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-15 compared with 2025-11-06 · 88 added, 109 removed, 162 unchanged (55% of the section changed)

14 unchanged sentences

Sarcoidosis and systemic sclerosis (SSc, also known as scleroderma)-associated ILD (SSc-ILD) are two major forms of ILD.

Food and Drug Administration (FDA) has granted efzofitimod orphan drug designations for the treatment of sarcoidosis and for the treatment of SSc, and Fast Track designations for the treatment of pulmonary sarcoidosis and for the treatment of SSc-ILD.

The European Commission has granted efzofitimod orphan drug designations for the treatment of sarcoidosis and for the treatment of SSc, based on the opinion of the European Medicines Agency

(EMA) Committee for Orphan Medicinal Products (COMP).

The Pharmaceutical and Medical Devices Agency (PMDA) has granted efzofitimod orphan drug designation for the treatment of sarcoidosis to Kyorin Pharmaceutical Co., Ltd.

(Kyorin), our partner in Japan.

In September 2021, we announced positive results and clinical proof-of-concept from a double-blind, placebo-controlled Phase 1b/2a clinical trial in 37 patients with pulmonary sarcoidosis.

The study was designed to evaluate the safety, tolerability, immunogenicity and preliminary efficacy of three doses of intravenous (IV) efzofitimod, 1.0, 3.0 and 5.0 mg/kg, in the context of a forced steroid taper.

Efzofitimod was well-tolerated at all doses administered with no serious drug-related adverse events or signal of immunogenicity.

Additionally, the study demonstrated consistent dose response for efzofitimod on key efficacy endpoints and improvements compared to placebo, including measures of steroid reduction, lung function, pulmonary sarcoidosis symptom measures and inflammatory biomarkers.

These data were subsequently presented at the American Thoracic Society (ATS) International Conference and published in the peer-reviewed journal CHEST during 2022.

In October 2024, the same published data for efzofitimod was featured in the Best of CHEST Journals session at the CHEST 2024 Annual Meeting.

Food and Drug Administration (FDA) has granted efzofitimod orphan drug designations for the treatment of sarcoidosis and for the treatment of SSc, and Fast Track designations for the

treatment of pulmonary sarcoidosis and for the treatment of SSc-ILD.

The European Commission has granted efzofitimod orphan drug designations for the treatment of sarcoidosis and for the treatment of SSc, based on the opinion of the European Medicines Agency (EMA) Committee for Orphan Medicinal Products (COMP).

In September 2025, we announced top-line data from a global Phase 3 randomized, double-blind, placebo-controlled clinical trial to evaluate the efficacy and safety of efzofitimod in patients with pulmonary sarcoidosis (the EFZO-FIT study).

The EFZO-FIT study was a 52-week study in 268 patients with pulmonary sarcoidosis consisting of three parallel cohorts randomized equally to either 3.0 mg/kg or 5.0 mg/kg of efzofitimod or placebo dosed intravenously once every four weeks for a total of 12 doses, with a four week safety follow-up.

The study design incorporated a protocol guided steroid taper in the first 12 weeks of the study, followed by continued taper or rescue until week 48.

7 unchanged sentences

Treatment with efzofitimod was also associated with a trend toward a greater proportion of patients achieving steroid-free status for at least six months.

Based on the trial findings, which we believe indicate drug activity for efzofitimod as evidenced by improvements across multiple clinically relevant efficacy endpoints, we plan to meet with the FDA in the first quarter of 2026 to review the results and determine the path forward for efzofitimod in pulmonary sarcoidosis.

In February 2024, we announced an Individual Patient Expanded Access Program (Individual Patient EAP).

The Individual Patient EAP was initiated based on blinded EFZO-FIT study investigator and patient participant feedback.

The program was designed to allow access for patients who completed the Phase 3 EFZO-FIT study and wished to receive treatment with efzofitimod outside of the clinical trial.

The Individual Patient EAP will continue to progress while we engage with the FDA to determine the path forward for efzofitimod in pulmonary sarcoidosis.

The administration of efzofitimod as part of the Individual Patient EAP is independent of the EFZO-FIT study protocol.

As this Individual Patient EAP is independent of the EFZO-FIT study, this program is not an open-label extension (OLE) and no long-term data will be collected by us.

Based on the trial findings, which we believe indicate drug activity for efzofitimod as evidenced by improvements across multiple clinically relevant efficacy endpoints, we held a Type C meeting with the FDA in mid-April 2026 to review the results of the EFZO-FIT study and determine the path forward for efzofitimod in pulmonary sarcoidosis.

In May 2026, we received the official meeting minutes from the FDA.

Based on feedback from the FDA, we plan to continue the development of efzofitimod in pulmonary sarcoidosis in a planned Phase 3 study in patients with chronic, symptomatic pulmonary sarcoidosis with restrictive lung disease utilizing FVC as the primary endpoint of the study and the KSQ-Lung score as the key secondary endpoint.

We chose these endpoints based on the FDA’s indication that FVC and KSQ-Lung are direct measures of how patients suffering from pulmonary sarcoidosis function and feel, and we concluded FVC to be a more appropriate primary endpoint at this time pending further content validation work for KSQ-Lung as recommended by the FDA.

We determined the patient population for the study, those with restrictive lung disease, based on data from the EFZO-FIT study which included 44 patients with restrictive lung disease (defined as FVC percent predicted ≤ 80%) and showed a difference of 124 ml in change from baseline in FVC between restrictive patients treated with 5.0 mg/kg efzofitimod and placebo.

As part of our discussion with the FDA regarding the benefit risk profile for efzofitimod, we plan to increase the frequency of dosing of 5.0 mg/kg efzofitimod or placebo from once every four weeks in past trials to once every three weeks in this next trial.

We are choosing the dosing regimen based on the FDA’s acknowledgment of its reasonableness from a clinical pharmacology perspective, subject to inclusion of adequate safety monitoring and risk mitigation procedures.

We plan to include additional risk mitigation strategies, enhanced safety surveillance for the potential development of anti-synthetase syndrome and a data safety monitoring committee.

We plan to submit an investigational new drug (IND) application for this study in June 2026.

The Phase 3 trial is expected to be a global, randomized, double-blind, placebo-controlled study to evaluate the efficacy and safety of efzofitimod in patients with moderate to severe pulmonary sarcoidosis.

The 54-week study will consist of two parallel cohorts randomized equally to either 5.0 mg/kg efzofitimod or placebo dosed intravenously once every 3 weeks for a total of 17 doses.

The study is intended to enroll up to approximately 372 patients with symptomatic pulmonary sarcoidosis with restrictive lung disease who are receiving a stable dose of ≤ 5.0 mg daily oral corticosteroid and/or a background immunosuppressant.

All background treatment will remain stable throughout the duration of the study.

The primary endpoint of the study will be change from baseline in FVC at week 48 and the key secondary endpoint will be change from baseline in the KSQ-Lung score at week 48.

This planned Phase 3 study and any potential need for additional clinical studies for efzofitimod in pulmonary sarcoidosis, will require a significant amount of additional time and resources to support approval.

In addition, it will require us to obtain additional capital through equity offerings or partnering to conduct such studies.

We believe efzofitimod has potential applications in the treatment of other ILDs, such as chronic hypersensitivity pneumonitis (CHP) and connective tissue disease related ILD (CTD-ILD), including SSc-ILD and rheumatoid arthritis-associated ILD.

2 unchanged sentences

This is a 28-week study with three parallel cohorts randomized 2:2:1 to either 270 mg or 450 mg of efzofitimod or placebo dosed intravenously monthly for a total of six doses.

The study intends to enroll up to 25 patients at multiple centers in the United States.

The study intends to enroll up to 25

patients at multiple centers in the United States.

The objective of the study is to evaluate the efficacy of multiple doses of IV efzofitimod on pulmonary, cutaneous (limited or diffuse) and systemic manifestations in patients with SSc-ILD.

1 unchanged sentence

Secondary endpoints include certain measures regarding safety and tolerability.

In July 2024, we amended the study to add an OLE to patients.

In July 2024, we amended the study to add an open-label extension (OLE) to patients.

Patients who complete the study and wish to receive ongoing treatment with efzofitimod are eligible to participate in the 24-week OLE.

2 unchanged sentences

In January 2020, we entered into a collaboration and license agreement (Kyorin Agreement) with Kyorin for the development and commercialization of efzofitimod for the treatment of ILD in Japan.

Under the terms of the Kyorin Agreement, Kyorin received exclusive rights to develop and commercialize efzofitimod in Japan for all forms of ILD, and is obligated to fund all research,

development, regulatory, marketing and commercialization activities in Japan.

Under the terms of the Kyorin Agreement, Kyorin received exclusive rights to develop and commercialize efzofitimod in Japan for all forms of ILD, and is obligated to fund all research, development, regulatory, marketing and commercialization activities in Japan.

We are responsible for supplying all drug product for Japan, as well as supporting development activities for efzofitimod.

4 unchanged sentences

In February 2023, Kyorin dosed the first patient in Japan in the EFZO-FIT study which triggered a $10.0 million milestone payment to us.

To date, the Kyorin Agreement has generated $20.0 million in upfront and milestone payments to us and we are eligible to receive up to an additional $155.0 million in the aggregate upon achievement of certain development, regulatory and sales milestones, as well as tiered royalties on any net sales in Japan.

To date, the Kyorin Agreement has generated $20.0 million in upfront and milestone payments to us.

On May 12, 2026, we received notice of termination of the Kyorin Agreement with Kyorin.

Kyorin elected to terminate the Kyorin Agreement without cause in accordance with the terms of the Kyorin Agreement, and the termination will become effective 90 days after the date of receipt of the notice of termination (the Termination Date).

Under the terms of the Kyorin Agreement, Kyorin received exclusive rights to develop and commercialize efzofitimod in Japan for all forms of interstitial lung disease and is obligated to fund all research, development, regulatory, marketing and commercialization activities in Japan until the Termination Date.

We are responsible for supplying all drug product for Japan, as well as supporting development activities for efzofitimod, until the Termination Date.

As a result of the termination of the Kyorin Agreement, we will not be entitled to receive any further milestone or other payments, including $155.0 million in the aggregate that would have been due upon achievement of certain development, regulatory and sales milestones, as well as tiered royalties on any net sales in Japan.

Both parties will also cease to have any development or commercialization obligations after the Termination Date and the licenses we granted to Kyorin pursuant to the Kyorin Agreement will cease to be in effect after the Termination Date.

Following the Termination Date, the rights to develop and commercialize efzofitimod in Japan for all forms of ILD will revert to us.

Consequently, we will hold the rights to develop and commercialize efzofitimod globally.

Discovery Platform

8 unchanged sentences

We plan to further elucidate the therapeutic potential of these candidates through mechanistic investigations, including in vitro and in vivo preclinical studies.

ATYR0101 is a fusion protein derived from a domain of aspartyl-tRNA synthetase (DARS).

ATYR0101 binds directly to latent-transforming growth factor beta-binding protein 1 (LTBP1), which regulates transforming growth factor beta (TGFβ), which is at the apex of fibrotic signaling.

Derived from a naturally occurring tRNA synthetase, ATYR0101 interacts with LTBP1 in a unique way that presents a differentiated approach to targeting fibrosis.

ATYR0101 is a fusion protein derived from a domain of aspartyl-tRNA synthetase (DARS) that is engineered with a human Fc region to extend its serum half-life.

The molecule possesses a unique mechanism of action focused on the selective elimination of activated myofibroblasts, which are the primary cellular drivers of pathological extracellular matrix (ECM) deposition in fibrotic diseases.

ATYR0101 specifically targets Latent TGF-β Binding Protein-1 (LTBP-1) within the ECM, binding to a region that encompasses the fibrillin-1 binding domain at the C-terminus.

LTBP-1 serves a dual role in matrix architecture by organizing structural proteins and modulating the signaling of Transforming Growth Factor-beta (TGF-β) through a complex mechanosensory apparatus.

Early data suggest ATYR0101 exerts its antifibrotic effects by inducing apoptosis of myofibroblasts in a TGFβ dependent manner.

We believe ATYR0101 may have broad therapeutic applications in multiple fibrotic diseases, such as lung and kidney fibrosis.

believe ATYR0101 may have broad therapeutic applications in multiple fibrotic diseases, such as pulmonary fibrosis, SSc, liver fibrosis and kidney fibrosis.

ATYR0750 is a fusion protein derived from a domain of alanyl-tRNA synthetase (AARS).

4 unchanged sentences

We have incurred losses and negative cash flows from operations since our inception.

As of September 30, 2025, we had an accumulated deficit of $592.2 million, and we expect to continue to incur net losses for the foreseeable future.

As of September 30, 2025, we had cash, cash equivalents, restricted cash and available-for-sale investments of $92.9 million.

As of March 31, 2026, we had an accumulated deficit of $617.0 million, and we expect to continue to incur net losses for the foreseeable future.

As of March 31, 2026, we had cash, cash equivalents, restricted cash and available-for-sale investments of $68.3 million.

We believe that our current cash, cash equivalents, restricted cash and available-for-sale investments, will be sufficient to meet our material cash requirements from known contractual and other obligations for a period of at least one year from the date of this Quarterly Report.

In addition to the factors discussed under “Material Cash Requirements,” our ability to fund our longer-term operating needs will depend on our ability to raise additional funding through equity or debt offerings, grant funding, collaborations, strategic partnerships and/or licensing arrangements, and other factors, including those discussed in Part II, Item 1A.

In addition to the factors discussed under “Material Cash Requirements,” our ability to fund our longer-term operating needs, including the completion of a planned Phase 3 trial for efzofitimod in pulmonary sarcoidosis, will depend on our ability to raise additional funding through equity or debt offerings, grant funding, collaborations, strategic partnerships and/or licensing arrangements, and other factors, including those discussed in Part I, Item 1A.

“Risk Factors—Risks related to our financial condition and need for additional capital—We will need to raise additional capital or enter into strategic partnering relationships to fund our operations.”

Sources of Cash

From our inception through September 30, 2025, we have financed our operations primarily through the sale of equity securities and convertible debt, venture debt, term loans and through license and collaboration agreement revenues.

We rely primarily on the Jefferies ATM Offering Program for financing our activities.

From our inception through March 31, 2026, we have financed our operations primarily through the sale of equity securities and convertible debt, venture debt, term loans and through license and collaboration agreement revenues.

In recent years, we have relied primarily on our “at-the-market” offering program (the Jefferies ATM Offering Program) implemented through our Open Market Sale Agreement SM with Jefferies LLC (Jefferies) for financing our activities.

Given ongoing volatility in capital markets generally, the price of our common stock has fluctuated materially since the start of 2025 and, since the announcement of top-line data from the EFZO-FIT study particularly, we have experienced a material decline in our stock price.

If markets remain volatile or our stock price continues to remain depressed, this may negatively affect our ability to generate cash from financing activities in future periods, including negatively affecting our ability to generate sufficient funds through our “at-the-market” offering program (the Jefferies ATM Offering Program) implemented through our Open Market Sale Agreement SM with Jefferies LLC (Jefferies).

At-the-Market Offering Programs

In April 2022, we established the Jefferies ATM Offering Program.

In April 2022, we entered into an Open Market Sale Agreement SM with Jefferies implementing the Jefferies ATM Offering Program.

In December 2024, we amended the Jefferies ATM Offering Program.

1 unchanged sentence

Jefferies is entitled to a fixed commission rate of up to 3.0% of the gross sales proceeds of shares sold under the Jefferies ATM Offering Program.

We did not utilize the Jefferies ATM Offering Program during the three months ended March 31, 2026.

During the year ended December 31, 2025, we sold an aggregate of 13,887,177 shares of common stock at a weighted-average price of $4.94 per share for net proceeds of approximately $66.4 million under the Jefferies ATM Offering Program.

During the nine months ended September 30, 2025, we sold an aggregate of 13,887,177 shares of common stock at a weighted-average price of $4.94 per share for net proceeds of approximately $66.4 million under the Jefferies ATM Offering Program.

Kyorin Agreement Milestone Payments

Under the Kyorin Agreement, we have generated $20.0 million in upfront and milestone payments to date and are eligible to receive up to an additional $155.0 million in the aggregate upon the achievement of certain development, regulatory and sales milestones, as well as tiered royalties on any net sales in Japan.

Kyorin has the exclusive rights to develop and commercialize efzofitimod in Japan for all forms of ILD.

The following table sets forth a summary of the net cash flow activity for each of the periods indicated (in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Net cash provided by (used in):

4 unchanged sentences

Operating activities.

Net cash used in operating activities for the nine months ended September 30, 2025 and 2024 was $49.8 million and $56.0 million, respectively.

The net cash used during the nine months ended September 30, 2025 and 2024 was primarily for on-going costs for efzofitimod development and pre-commercialization activities.

The decrease in net cash used in operating activities during the nine months ended September 30, 2025 as compared to the same period in 2024 was due primarily to a decrease in cash used for the EFZO-FIT study as the study substantially completed during the nine months ended September 30, 2025 as well as the timing of certain upfront efzofitimod manufacturing payments made during the nine months ended September 30, 2024.

Net cash used in operating activities for the three months ended March 31, 2026 and 2025 was $12.5 million and $15.4 million, respectively.

The net cash used during the three months ended March 31, 2026 was primarily attributable to costs for efzofitimod development, which includes certain close-out costs relating to the EFZO-FIT study as well as ongoing costs for the EFZO-CONNECT study, as well as discovery costs for our preclinical product candidates.

The net cash used during the three months ended March 31, 2025 was primarily for efzofitimod development, including pre-commercialization activities and manufacturing costs incurred prior to the announcement of top-line data from the EFZO-FIT study.

We expect cash used in operating activities will fluctuate and be dependent upon our ability to obtain additional capital through equity offerings or partnering to enable us to conduct the planned Phase 3 study for efzofitimod in pulmonary sarcoidosis.

Investing activities.

Net cash (used in) provided by investing activities for the nine months ended September 30, 2025 and 2024 was $(21.5) million and $23.3 million, respectively.

The fluctuation in net cash used in investing activities resulted primarily from the timing differences in investment purchases, sales and maturities, and the fluctuation of our portfolio mix between cash equivalents and investment holdings.

Net cash provided by (used in) investing activities for the three months ended March 31, 2026 and 2025 was $11.5 million and $(4.4) million, respectively.

The fluctuation in net cash provided by or used in investing activities resulted primarily from the timing differences in investment purchases, sales and maturities, and the fluctuation of our portfolio mix between cash equivalents and investment holdings.

The average term to maturity in our investment portfolio is less than one year.

Financing activities.

Net cash provided by financing activities for the nine months ended September 30, 2025 and 2024 was $66.1 million and $21.0 million, respectively.

Net cash provided by financing activities for the nine months ended September 30, 2025 primarily consisted of $66.4 million in net proceeds from the issuance of common stock through the Jefferies ATM Offering Program.

Net cash provided by financing activities for the nine months ended September 30, 2024 consisted of $21.4 million in net proceeds from the issuance of common stock through the Jefferies ATM Offering Program.

Net cash (used in) provided by financing activities for the three months ended March 31, 2026 and 2025 was $(0.1) million and $18.6 million, respectively.

Net cash used in financing activities for the three months ended March 31, 2026 primarily consisted of principal payments on our financing lease agreement.

Net cash provided by financing activities for the three months ended March 31, 2025 primarily consisted of $18.8 million in proceeds from the issuance of common stock through the Jefferies ATM Offering Program, net of offering costs.

Material Cash Requirements

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

Our expenses may increase in connection with the potential advancement of efzofitimod in clinical development, manufacturing, regulatory and pre-commercialization activities, and the continuation of our research and development activities with respect to other potential therapies based on tRNA synthetase biology and the seeking of marketing approval for product candidates that we may develop.

Our expenses may increase in connection with the potential advancement of efzofitimod in clinical development, manufacturing, and regulatory activities, and the continuation of our research and development activities with respect to other potential therapies based on tRNA synthetase biology and the seeking of marketing approval for product candidates that we may develop.

In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

3 unchanged sentences

Our future capital requirements are difficult to forecast and will depend on many factors.

Refer to Part II, Item 1A, "Risk Factors - Risks related to our financial condition and need for additional capital—We will need to raise additional capital or enter into strategic partnering relationships to fund our operations.” for a discussion of these factors.

Refer to Part I, Item 1A, "Risk Factors - Risks related to our financial condition and need for additional capital—We will need to raise additional capital or enter into strategic partnering relationships to fund our operations.” for a discussion of these factors.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity offerings, grant funding, collaborations, strategic partnerships and/or licensing arrangements, and when we are closer to commercialization of our product candidates potentially through debt financings.

5 unchanged sentences

If we are unable to raise additional funds, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

As of September 30, 2025, our material cash requirements from known contractual and other obligations consisted primarily of (i) an operating lease for our corporate headquarters and laboratory space, and (ii) our master financing lease agreement for various research and development and informational technology equipment.

As of March 31, 2026, our material cash requirements from known contractual and other obligations consisted primarily of (i) an operating lease for our corporate headquarters and laboratory space, and (ii) our master financing lease agreement for various research and development and informational technology equipment.

Corporate Headquarters Facility Lease

1 unchanged sentence

The term of the lease (the Lease Term) commenced on March 20, 2023 (the Lease Commencement Date) and will continue for 124 months from the Lease Commencement Date.

We also have one option to extend the Lease Term for five years.

We also have one option

to extend the Lease Term for five years.

In April 2024, we entered into a lease amendment for additional common area amenities, effective as of June 2023.

The amendment increased the total rentable square feet from 23,696 rentable square feet to 24,866 rentable square feet.

We provided a $0.7 million security deposit in the form of a letter of credit which is included in restricted cash as of September 30, 2025.

We provided a $0.7 million security deposit in the form of a letter of credit which is included in restricted cash as of March 31, 2026.

Financing Lease

In April 2022, we entered into a financing lease to lease various research and development and information technology equipment over a 48-month term.

Financing lease liabilities totaled $1.0 million as of September 30, 2025.

Additionally, as of September 30, 2025, we have $1.5 million in cash collateral for the financing lease, and this amount is included in restricted cash.

We did not have any off-balance sheet arrangements as of September 30, 2025.

Financing lease liabilities total $0.7 million as of March 31, 2026.

Additionally, as of March 31, 2026, we have $1.1 million in cash collateral for the financing lease, and this amount is included in restricted cash.

We did not have any off-balance sheet arrangements as of March 31, 2026.

Financial Operations Overview

4 unchanged sentences

was incorporated in the State of Delaware in September 2005.

The unaudited condensed consolidated financial statements in this Quarterly Report include our accounts and our 98% majority-owned subsidiary in Hong Kong, Pangu BioPharma, as of September 30, 2025.

The unaudited condensed consolidated financial statements in this Quarterly Report include our accounts and our 98% majority-owned subsidiary in Hong Kong, Pangu BioPharma, as of March 31, 2026.

All intercompany transactions and balances are eliminated in consolidation.

1 unchanged sentence

In January 2020, we entered into the Kyorin Agreement with Kyorin for the development and commercialization of efzofitimod for the treatment of ILD in Japan.

Under the Kyorin Agreement, Kyorin received an exclusive right to develop and commercialize efzofitimod in Japan for all forms of ILD, and Kyorin is obligated to fund all research, development, regulatory, marketing and commercialization activities in Japan.

Under the terms of the Kyorin Agreement, Kyorin received exclusive rights to develop and commercialize efzofitimod in Japan for all forms of ILD, and Kyorin is obligated to fund all research, development, regulatory, marketing and commercialization activities in Japan.

We are responsible for supplying all drug product for Japan, as well as supporting development activities for efzofitimod.

In 2020, Kyorin conducted and funded a Phase 1 clinical trial of efzofitimod (known as KRP-R120 in Japan).

The Phase 1 clinical trial, which was conducted and funded by Kyorin, was a placebo-controlled clinical trial to evaluate the safety, PK and immunogenicity of efzofitimod in 32 healthy Japanese male volunteers.

1 unchanged sentence

Kyorin has also participated in the EFZO-FIT study as the local sponsor in Japan.

In February 2023, Kyorin dosed the first patient in Japan in the EFZO-FIT study which triggered a $10.0 million milestone payment to us.

To date, the Kyorin Agreement has generated $20.0 million in upfront and milestone payments to us.

As mentioned under the caption “Overview” above, we will cease to have any development or commercialization obligations under the Kyorin Agreement after the Termination Date, and we will not be entitled to receive any further milestone or other payments after the Termination Date.

Research and Development Expenses

To date, our research and development expenses have been related primarily to the development of, and clinical trials for, our product candidates, and to research efforts targeting the potential therapeutic application of tRNA synthetase-based immunomodulators.

These expenses consist primarily of:

9 unchanged sentences

These outsourced expenses are typically substantially higher than the expenses we incur on our other product candidates which are all currently in preclinical development.

As such, we separately track and report on the majority of our research and development expenses associated with the advancement of efzofitimod.

As such, we separately track and report on the majority of our research and development expenses associated

with the advancement of efzofitimod.

For our candidates in preclinical development, the nature of the research and development expenses incurred to advance these candidates is primarily internal personnel and laboratory supply expenses.

2 unchanged sentences

Additionally, non-cash research and development expenses such as depreciation and stock-based compensation are not tracked or allocated between product candidates and are shared among all product candidates.

We expect that the levels of our research and development expenses will continue to increase in future years and will consist primarily of costs related to our clinical development and manufacturing of efzofitimod for patients with pulmonary sarcoidosis and SSc-ILD, and other potential therapeutics based on tRNA synthetase biology.

We anticipate that our research and development expenses will fluctuate and be dependent upon our ability to obtain additional capital through equity offerings or partnering to enable us to complete the planned Phase 3 study for efzofitimod in pulmonary sarcoidosis.

At this time, due to the inherently unpredictable nature of preclinical and clinical development and given the early stage of our programs, we are unable to estimate with any certainty the costs we will incur or the timelines we will require in the continued development of our product candidates.

15 unchanged sentences

Results of Operations

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

The following table summarizes our results of operations for the three months ended September 30, 2025 and 2024 (in thousands):

Three Months Ended September 30,

License and collaboration agreement revenues

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

Research and development expenses:

8 unchanged sentences

Other income (expense), net

License and collaboration agreement revenues.

Revenues for the three months ended September 30, 2025 consisted of drug product material sold to Kyorin to support analytical method validation in Japan.

Research and development expenses.

Research and development expenses were $22.1 million and $14.8 million for the three months ended September 30, 2025 and 2024, respectively.

The increase of $7.3 million was due primarily to an increase of $8.2 million in manufacturing costs for preparation toward a potential BLA filing and commercial supply for efzofitimod offset by a decrease of $1.3 million in expenses in EFZO-FIT study as the study substantially completed during the three months ended September 30, 2025.

Preclinical development and other shared research and development expenses increased by $0.4 million, and was primarily attributable to increased discovery costs for our preclinical product candidates.

Non-cash expenses increased by $0.1 million primarily due to

increased non-cash stock-based compensation expense.

We anticipate that our research and development expenses will fluctuate and be dependent upon our determination of the path forward for efzofitimod in pulmonary sarcoidosis.

Research and development expenses were $7.3 million and $11.8 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease of $4.5 million was primarily driven by a reduction in efzofitimod expenses for the EFZO-FIT study since it was completed in September 2025 as well as decreased manufacturing costs due to the timing of certain manufacturing activities being completed.

Preclinical development and other shared research and development expenses increased by $0.8 million, and was primarily attributable to increase in discovery costs for our preclinical product candidates.

Non-cash expenses was consistent as compared to prior year period.

General and administrative expenses.

General and administrative expenses were $4.8 million and $3.3 million for the three months ended September 30, 2025 and 2024, respectively.

Other general and administrative expenses increased by $1.1 million primarily due to higher personnel related costs, professional fees and pre-commercialization costs.

General and administrative expenses were $4.1 million and $4.0 million for the three months ended March 31, 2026 and 2025, respectively.

Other general and administrative expenses were consistent as compared to prior year period.

Non-cash expenses increased by $0.1 million primarily due to increased non-cash stock-based compensation expenses.

We anticipate that our general and administrative expenses will fluctuate and be dependent upon our determination of the path forward for efzofitimod in pulmonary sarcoidosis.

Other income (expense), net.

Other income (expense), net was $1.0 million and $0.9 million for the three months ended September 30, 2025 and 2024, respectively.

The change was primarily a result of higher cash balances as compared to the same period in the prior year.

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

The following table summarizes our results of operations for the nine months ended September 30, 2025 and 2024 (in thousands):

Nine Months Ended September 30,

License and collaboration agreement revenues

Research and development expenses:

Efzofitimod expenses

Preclinical development and other shared research and development expenses

Non-cash expenses (depreciation and stock-based compensation)

Total research and development expenses

General and administrative expenses:

Other general and administrative expenses

Non-cash expenses (depreciation and stock-based compensation)

Total general and administrative expenses

Other income (expense), net

License and collaboration agreement revenues.

Revenues for the nine months ended September 30, 2025 consisted of drug product material sold to Kyorin to support analytical method validation in Japan while revenues for the nine months ended September 30, 2024, consisted of drug product material sold to Kyorin for the Japan portion of the EFZO-FIT study.

Research and development expenses.

Research and development expenses were $49.3 million and $42.1 million for the nine months ended September 30, 2025 and 2024, respectively.

The increase of $7.2 million was due primarily to an increase of $8.9 million in manufacturing costs for preparation toward a potential BLA filing and commercial supply for efzofitimod offset by a decrease of $3.4 million in expenses in EFZO-FIT study as the study substantially completed during the nine months ended September 30, 2025.

Preclinical development and other shared research and development expenses increased by $1.1 million, and was primarily attributable to increased discovery costs for our preclinical product candidates.

Non-cash expenses increased by $0.4 million primarily due to increased non-cash stock-based compensation expense.

We anticipate that our research and development expenses will fluctuate and be dependent upon our determination of the path forward for efzofitimod in pulmonary sarcoidosis.

General and administrative expenses.

General and administrative expenses were $13.7 million and $10.2 million for the nine months ended September 30, 2025 and 2024, respectively.

Other general and administrative expenses increased by $2.4 million was due primarily to higher personnel related costs, professional fees and pre-commercialization costs.

Non-cash expenses increased by $1.1 million primarily due to increased non-cash stock-based compensation expenses.

We anticipate that our general and administrative expenses will fluctuate and be dependent upon our determination of the path forward for efzofitimod in pulmonary sarcoidosis.

Other income, net.

Other income, net was $2.7 million and $3.0 million for the nine months ended September 30, 2025 and 2024, respectively.

The change was primarily a result of lower interest rates as compared to the same period in the prior year.

Other income (expense), net was $0.6 million and $0.9 million for the three months ended March 31, 2026 and 2025, respectively.

The change was primarily a result of lower interest rates and lower interest earned on lower cash balances as compared to the same period in the prior year.

Recent Accounting Pronouncements

3 unchanged sentences

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