What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-10 compared with 2025-08-11 · 69 added, 65 removed, 214 unchanged (39% of the section changed)

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Median DOR had not yet been reached, with 90.9% (n=20/22) of patients with confirmed responses remaining on study.

In June 2025, we announced additional positive interim data from the FURTHER trial.

In this interim readout, patients treated with 240 mg of firmonertinib were observed to experience 16.0 months median progression free survival and 14.6 months median duration of response.

In June 2025, we announced plans to initiate ALPACCA (FURMO-006), the first randomized global Phase 3 study in first-line NSCLC in patients across PACC mutations.

Enrollment of the first patient in the ALPACCA trial is expected in the fourth quarter of 2025.

In September 2025, we announced our final data from the FURTHER trial of firmonertinib in first-line patients with locally advanced or metastatic EGFRm NSCLC with PACC mutations.

In this final readout, patients treated with 240 mg of firmonertinib were observed to experience 16.0 months median progression free survival and 14.6 months median duration of response.

Further, 68.2% of patients treated in first-line at 240 mg and 43.5% of patients treated in first-line at 160 mg were observed to experience a reduction in tumor size of at least 30% from the baseline in a patient without evidence of progression as measured by RECIST 1.1 criteria, which measurement of reduction is the threshold in this trial for determination of the ORR.

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Firmonertinib was generally well-tolerated with interim safety results.

Interim results may not be indicative of final results;

however, we believe these interim clinical results continue to underscore firmonertinib’s potential in patients whose tumors contain an uncommon EGFRm.

In June 2025, we also announced plans to initiate ALPACCA (FURMO-006), the first randomized global Phase 3 study in first-line NSCLC in patients across PACC mutations.

Enrollment of the first patient in the ALPACCA trial is expected in the second half of 2025.

We entered into the Global Technology Transfer and License Agreement (Allist License Agreement), pursuant to which, we have, among other things, secured an exclusive, royalty bearing and sublicensable license under certain intellectual property, including patents and know-how, owned or controlled by Allist to develop and commercialize any product containing firmonertinib or any of its salts or derivatives as an active ingredient of a product, which is led by a joint collaboration committee, comprising of representatives from both Allist and us.

Under the Allist License Agreement, we are obligated to pay Allist milestone payments up to an aggregate of $765.0 million upon the achievement of certain development, regulatory and sales milestone events as set forth in the Allist License Agreement.

During the six months ended June 30, 2025 and 2024, no milestones were met or achieved.

During the nine months ended September 30, 2025 and 2024, no milestones were met or achieved.

We are also obligated under the Allist License Agreement to pay Allist tiered royalties based on net sales of Licensed Products (as defined in the Allist License Agreement).

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In January 2025, we entered into the Exclusive License Agreement (Lepu Biopharma Agreement) with Lepu Biopharma Co., Ltd.

(Lepu), pursuant to which we have, among other things, secured an exclusive, royalty bearing and

sublicensable license under certain intellectual property, including patents and know-how, owned or controlled by Lepu to develop and commercialize any product containing ARR-217 or the antibody component of ARR-217.

(Lepu), pursuant to which we have, among other things, secured an exclusive, royalty bearing and sublicensable license under certain intellectual property, including patents and know-how, owned or controlled by Lepu

to develop and commercialize any product containing ARR-217 or the antibody component of ARR-217.

Further, we are obligated to pay Lepu milestone payments up to an aggregate of approximately $1.17 billion upon the achievement of certain development, regulatory and sales milestone events as set forth in the Lepu Biopharma Agreement.

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We do not have any products approved for sale and have not generated any revenue from product sales or otherwise.

We have funded our operations to date primarily through the private placement of convertible preferred stock, our initial public offering in January 2024, and “at-the-market” offerings beginning in February 2025.

We have funded our operations to date primarily through the private placement of convertible preferred stock, our initial public offering in January 2024, our “at-the-market” offering, and our underwritten public offering of common stock and pre-funded warrants to purchase common stock in July 2025.

We have incurred significant operating losses since our inception and have not yet generated any revenue.

Our net losses were $95.8 million and $39.3 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had an accumulated deficit of $334.1 million.

Our net losses were $130.8 million and $59.9 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had an accumulated deficit of $369.1 million.

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our preclinical studies, clinical trials and our expenditures on other research and development activities.

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Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

On July 4, 2025, the “One Big Beautiful Bill Act” (the “Act”) was enacted into law.

The Act contains changes to U.S.

tax law including provisions allowing accelerated tax deductions for qualified research and development expenditures.

We are continuing to evaluate the detailed provisions of the Act and their potential impact on our Consolidated Financial Statements.

We have evaluated the detailed provisions of the Act and have determined that there is no material impact on our Condensed Consolidated Financial Statements as of September 30, 2025.

Key Components of Our Results of Operations

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Results of Operations

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

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30,

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:

Three Months Ended September 30,

(in thousands)

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Research and Development

We track outsourced clinical and preclinical costs and other external research and development costs associated with our lead product candidate, firmonertinib, and other discovery-stage programs.

We track outsourced clinical and preclinical costs and other external research and development costs associated with our lead product candidate, firmonertinib, and other early-stage programs.

We do not track internal research and development costs by product candidate.

The following table summarizes our research and development expenses for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30,

The following table summarizes our research and development expenses for the three months ended September 30, 2025 and 2024:

Three Months Ended September 30,

(in thousands)

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Total Firmonertinib

Discovery-stage programs

Early-stage programs

Personnel-related and other internal costs

Total research and development expenses

Research and development expenses were $27.7 million and $21.8 million for the three months ended June 30, 2025 and 2024, respectively.

The increase of $5.9 million was primarily due to an increase of $5.0 million related to expenditures on our lead product candidate, firmonertinib, and $3.5 million in personnel-related costs due to increased headcount, partially offset by a decrease in expenditures of $2.6 million for discovery-stage programs.

Costs related to firmonertinib increased as a result of increased costs related to our FURVENT Phase 3 clinical trial of $2.8 million and increases in general firmonertinib costs of $3.3 million, offset by a decrease of $1.1 million in our FURTHER Phase 1 clinical trial and a decrease in costs related to our FAVOUR trial.

Research and development expenses were $32.2 million and $20.1 million for the three months ended September 30, 2025 and 2024, respectively.

The increase of $12.1 million was primarily due to an increase of $4.2 million related to expenditures on our lead product candidate, firmonertinib, $4.1 million in costs related to early-stage programs, and $3.8 million in personnel-related costs due to increased headcount.

Costs related to firmonertinib increased as a result of increased costs related to our FURVENT Phase 3 clinical trial of $4.9 million, along with $0.2 million in increased costs for our FAVOUR trial and our general firmonertinib costs, respectively.

Those increases were partially offset by a $1.0 million decrease in costs related to our FURTHER Phase 1 clinical trial.

General and Administrative

General and administrative expenses were $5.9 million and $3.9 million for the three months ended June 30, 2025 and 2024, respectively.

The increase of $2.0 million was due primarily to increases of $1.5 million in personnel-related costs and $0.6 million in accounting, legal, and other outside services.

General and administrative expenses were $6.1 million and $4.1 million for the three months ended September 30, 2025 and 2024, respectively.

The increase of $2.0 million was due primarily to increases in personnel-related costs.

Interest and Investment Income

Interest income was $2.2 million and $3.8 million for the three months ended June 30, 2025 and 2024, respectively.

The decrease in interest income is due to decreased invested balances.

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

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

Interest income was $3.3 million and $3.7 million for the three months ended September 30, 2025 and 2024, respectively.

The decrease in interest income is due to decreased average invested balances.

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:

Nine Months Ended September 30,

(in thousands)

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Research and Development

We track outsourced clinical and preclinical costs and other external research and development costs associated with our lead product candidate, firmonertinib, and other discovery-stage programs.

We track outsourced clinical and preclinical costs and other external research and development costs associated with our lead product candidate, firmonertinib, and other early-stage programs.

We do not track internal research and development costs by product candidate.

The following table summarizes our research and development expenses for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

The following table summarizes our research and development expenses for the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

(in thousands)

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Total Firmonertinib

Discovery-stage programs

Early-stage programs

Personnel-related and other internal costs

Total research and development expenses

Research and development expenses were $89.0 million and $38.8 million for the six months ended June 30, 2025 and 2024, respectively.

The increase of $50.3 million was primarily due to an increase of $38.0 million related to expenditures on discovery-stage programs, $6.6 million of expenditures on our lead product candidate, firmonertinib, and $5.7 million in personnel-related costs due to increased headcount.

Costs increases related to discovery-stage programs were largely due to a $40.0 million one-time up front payment pursuant to our collaboration with Lepu.

Costs related to firmonertinib increased as a result of increased costs related to our FURVENT Phase 3 clinical trial of $3.9 million and increases in general firmonertinib costs of $4.5 million, offset by a decrease of $1.9 million in our FURTHER Phase 1 clinical trial and a decrease in costs related to our FAVOUR trial.

Research and development expenses were $121.2 million and $58.9 million for the nine months ended September 30, 2025 and 2024, respectively.

The increase of $62.3 million was primarily due to an increase of $42.1 million related to expenditures on early-stage programs, $10.8 million of expenditures on our lead product candidate, firmonertinib, and $9.5 million in personnel-related costs due to increased headcount.

Cost increases related to early-stage programs were largely due to a $40.0 million one-time up front payment pursuant to our collaboration with Lepu.

Costs related to firmonertinib increased as a result of increased costs related to our FURVENT Phase 3 clinical trial of $8.8 million, increases in general firmonertinib costs of $4.7 million, and $0.2 million in cost increases related to our FAVOUR trial.

These costs were partially offset by a decrease of $2.9 million in our FURTHER Phase 1 clinical trial.

General and Administrative

General and administrative expenses were $11.4 million and $7.6 million for the six months ended June 30, 2025 and 2024, respectively.

General and administrative expenses were $17.5 million and $11.8 million for the nine months ended September 30, 2025 and 2024, respectively.

The increase of $5.8 million was due primarily to increases of $4.9 million in personnel-related costs and $0.7 million in accounting, legal, software, and other outside services.

Interest and Investment Income

Interest income was $4.6 million and $7.1 million for the six months ended June 30, 2025 and 2024, respectively.

The decrease in interest income is due to decreased invested balances.

Interest income was $7.9 million and $10.7 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease in interest income is due to decreased average invested balances.

Liquidity and Capital Resources

Sources of Liquidity

We have previously funded our operations primarily through the private placement of convertible preferred stock, our initial public offering of common stock, and “at-the-market” offering.

We have previously funded our operations primarily through the private placement of convertible preferred stock, our initial public offering of common stock, our “at-the-market” offering, and our underwritten public offering of common stock and pre-funded warrants to purchase common stock in July 2025.

To date, we have raised gross proceeds of $305.0 million from the issuance of convertible preferred stock.

Additionally, in the first quarter of 2024, we completed our initial public offering of 11,180,555 shares of our common stock at a price to the public of $18.00 per share, including the exercise in full by the underwriters of their option to purchase 1,458,333 additional shares of our common stock, for aggregate proceeds of $183.2 million, net of underwriting discounts, commissions and other offering expenses.

As of June 30, 2025, we had cash and cash equivalents and marketable securities of $254.5 million.

As of September 30, 2025, we had cash and cash equivalents and marketable securities of $305.4 million.

On February 3, 2025, we filed an automatic shelf registration statement on Form S-3ASR (File No.

333-284661) with the SEC.

The shelf registration statement consists of (i) a base prospectus pursuant to which we may offer and sell, from time to time, shares of our common stock, shares of our preferred stock, various series of debt securities, warrants, rights, and/or units to purchase any of such securities in one or more registered offerings, and (ii) a prospectus

supplement pursuant to which we may offer and sell, from time to time, up to $250 million of shares of common stock in “at-the-market” offerings.

During the six months ended June 30, 2025, we sold 3,693,224 shares of common stock pursuant to our Open Market Sale Agreement SM with Jefferies LLC (ATM Program) for total proceeds of $81.9 million, net of commissions.

As of June 30, 2025, we have approximately $164.9 million remaining for future issuances of common stock pursuant to the ATM Program.

rights, and/or units to purchase any of such securities in one or more registered offerings, and (ii) a prospectus supplement pursuant to which we may offer and sell, from time to time, up to $250 million of shares of common stock in “at-the-market” offerings.

During the nine months ended September 30, 2025, we sold 3,973,190 shares of common stock pursuant to our Open Market Sale Agreement SM with Jefferies LLC (ATM Program) for total proceeds of $87.3 million, net of commissions and other expenses.

As of September 30, 2025, we have approximately $159.2 million remaining for future issuances of common stock pursuant to the ATM Program.

There has been no material change in the planned use of proceeds as described in the shelf registration statement.

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No amounts have been drawn on this facility at the date of this Quarterly Report.

On July 3, 2025, we closed an underwritten public offering in which we issued and sold an aggregate of 3,059,615 shares of our common stock, including the exercise in full of the underwriters’ option to purchase 576,923 additional shares of common stock, at a public offering price of $19.50 per share, and, in lieu of shares of common stock to certain investors, pre-funded warrants to purchase up to 1,363,469 shares of common stock at a public offering price of $19.4999 per pre-funded warrant, which represents the per share public offering price for the shares less the $0.0001 per share exercise price for each pre-funded warrant.

The proceeds to us, net of underwriting discounts and commissions, were $81.1 million.

On July 3, 2025, we closed an underwritten public offering (the July 2025 Offering) in which we issued and sold an aggregate of 3,059,615 shares of our common stock, including the exercise in full of the underwriters’ option to purchase 576,923 additional shares of common stock, at a public offering price of $19.50 per share, and, in lieu of shares of common stock to certain investors, pre-funded warrants to purchase up to 1,363,469 shares of common stock at a public offering price of $19.4999 per pre-funded warrant, which represents the per share public offering price for the shares less the $0.0001 per share exercise price for each pre-funded warrant.

The proceeds to us, net of underwriting discounts, commissions, and other expenses, were $80.6 million.

Future Funding Requirements

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We cannot be assured that we will ever be profitable or generate positive cash flows from operating activities.

We believe that our existing cash and cash equivalents and marketable securities as of June 30, 2025, along with the net proceeds from the July 2025 public offering of common stock, will be sufficient to meet our anticipated cash requirements through at least twelve months from the issuance date of these financial statements.

We believe that our existing cash and cash equivalents and marketable securities as of September 30, 2025 will be sufficient to meet our anticipated cash requirements through at least twelve months from the issuance date of these financial statements.

However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

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The following table summarizes our cash flows for the periods indicated:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

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Financing activities

Net (decrease) increase in cash and cash equivalents

Net increase in cash and cash equivalents

Operating Activities

Net cash used in operating activities was $94.1 million for the six months ended June 30, 2025 reflecting our net loss of $95.8 million and a $3.9 million decrease in our operating assets and liabilities attributable to the timing in which we pay our vendors for research and development activities.

Net cash used in operating activities was $129.9 million for the nine months ended September 30, 2025 reflecting our net loss of $130.8 million and a $8.5 million decrease in our operating assets and liabilities attributable to the timing in which we pay our vendors for research and development activities.

These decreases were partially offset by $9.3 million in stock-based compensation.

Included in the net loss is a $40.0 million upfront payment made in conjunction with our collaboration with Lepu.

Net cash used in operating activities was $37.7 million for the six months ended June 30, 2024 reflecting our net loss of $39.3 million, offset by $1.4 million in stock-based compensation and a $0.2 million net decrease in our operating assets and liabilities attributable to the timing in which we pay our vendors for research and development activities.

Net cash used in operating activities was $54.0 million for the nine months ended September 30, 2024 reflecting our net loss of $59.9 million, offset by a $3.5 million net decrease in our operating assets and liabilities attributable to the timing in which we pay our vendors for research and development activities, and $2.3 million in stock-based compensation.

Investing Activities

Net cash of $50.7 million was provided by investing activities for the six months ended June 30, 2025.

This was attributable to maturities of marketable securities.

No net cash was provided by investing activities for the six months ended June 30, 2024.

Net cash used by investing activities for each of the nine months ended September 30, 2025 and 2024 were less than $0.1 million .

Financing Activities

Net cash provided by financing activities was $81.9 million for the six months ended June 30, 2025.

This was due to $81.9 million of sales under the ATM Program and $0.4 million of stock option exercises, partially offset by $0.4 million of deferred financing costs.

Net cash provided by financing activities was $185.9 million for the six months ended June 30, 2024, due to the net proceeds from our initial public offering.

Net cash provided by financing activities was $168.3 million for the nine months ended September 30, 2025.

This was due to $87.3 million of proceeds from sales under the ATM Program and $80.6 million from the July 2025 Offering, both net of expenses.

In addition, $0.4 million was provided by stock option exercises.

Net cash provided by financing activities was $186.5 million for the nine months ended September 30, 2024, primarily due to the net proceeds from our initial public offering.

Contractual Obligations and Commitments

As of June 30, 2025, except for the operating lease, we did not have any long-term obligations, capital lease obligations, purchase obligation or long-term liabilities.

As of September 30, 2025, except for the operating lease, we did not have any long-term obligations, capital lease obligations, purchase obligation or long-term liabilities.

We enter into contracts in the normal course of business with third-party CROs and clinical trial sites for our clinical trials, and with supply vendors for other services and products for operating purposes.

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Additionally, we are required to make royalty payments in connection with the sale of products developed under these agreements.

Because the achievement of these milestones and royalties is not probable and payment is not required as of June 30, 2025, such contingencies have not been recorded in our financial statements.

Because the achievement of these milestones and royalties is not probable and payment is not required as of September 30, 2025, such contingencies have not been recorded in our financial statements.

For additional information regarding our agreements, see Note 8 to our accompanying financial statements in Part I, Item 1 of this Quarterly Report.

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We have elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

We intend to rely on other exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.

We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the consummation of our initial public offering, (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the day on which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (Exchange Act) or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We are also a smaller reporting company as defined in the Exchange Act.

We will remain an emerging growth company and a smaller reporting company until December 31, 2025.

As we transition out of emerging growth company status at the end of 2025, we will no longer be able to rely on exemptions provided by the JOBS Act, including without limitation, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.

Accordingly, we expect to incur significant additional legal, accounting and other expenses.

Additionally, our management and other personnel will need to devote a substantial amount of time to these compliance initiatives.

We may continue to be a smaller reporting company even after we are no longer an emerging growth company.

We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

Recent Accounting Pronouncements

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis