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Item 1A. Risk Factors

2026-02-26 compared with 2025-02-27 · 148 added, 170 removed, 1038 unchanged (23% of the section changed)

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• Due to the significant resources required for the development of our programs, and depending on our ability to access capital, we must prioritize development of certain product candidates.

• A pandemic, epidemic, or outbreak of an infectious disease, or the perception of its effects, may materially and adversely affect our business, operations, and financial condition.

Risks Related to the Discovery, Development and Commercialization of Our Product Candidates

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Risks Related to Our Business, Financial Condition and Capital Requirements

We are in the clinical stages of drug development and have a limited operating history and no products approved for commercial sale, which may make it difficult to evaluate our business and predict our future success and viability.

We are a clinical-stage biopharmaceutical company with a limited operating history, focused on developing therapeutics for neurodegenerative diseases, including Alzheimer’s disease, Parkinson’s disease and ALS, and lysosomal storage diseases, including Hunter syndrome and Sanfilippo syndrome.

We are in the clinical stages of drug development, have no approved products, and may never become profitable.

We are a clinical-stage biopharmaceutical company with a limited operating history, focused on developing therapeutics for neurodegenerative diseases, including Alzheimer’s disease and Parkinson’s disease, and lysosomal storage diseases, including Hunter syndrome and Sanfilippo syndrome.

We commenced operations in May 2015 , have no products approved for commercial sale and have not generated any revenue from product sales.

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Our clinical-stage programs are in various phases ranging from Phase 1 through Phase 3.

To date, we have not completed a pivotal clinical trial, obtained marketing approval for any product candidates, manufactured a commercial scale product or arranged for a third party to do so on our behalf, or conducted sales and marketing activities necessary for successful product commercialization.

To date, we have not completed a pivotal clinical trial, obtained marketing approval for any product candidates, or manufactured a commercial scale product.

Our limited operating history makes any assessment of our future success and viability subject to significant uncertainty.

We will encounter risks and difficulties frequently experienced by clinical-stage biopharmaceutical companies, and we have not yet demonstrated an ability to successfully overcome such risks and difficulties.

We will encounter risks and difficulties frequently experienced by biopharmaceutical companies, and we have not yet demonstrated an ability to successfully overcome such risks and difficulties.

If we do not address these risks and difficulties successfully, our business will suffer.

We have incurred significant net losses since our inception and anticipate that we will continue to incur net losses for the foreseeable future.

We have incurred significant net losses since our inception.

Our net losses were $422.8 million, $145.2 million, and $326.0 million for the years ended December 31, 2024, 2023, and 2022, respectively.

As of December 31, 2024, we had an accumulated deficit of $1.54 billion.

We have invested significant financial resources in research and development activities, including for our preclinical and clinical product candidates and our TV platform.

The amount of our future net losses will depend, in part, on the level of our future expenditures and revenue.

Moreover, our net losses may fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.

We expect to continue to incur significant expenses and increasingly higher operating losses for the foreseeable future.

We anticipate that our expenses will increase substantially if and as we:

• continue our research and discovery activities;

• progress our current and any future product candidates through preclinical and clinical development;

• manufacture product candidates at our manufacturing facility and with our contract manufacturers;

• change or add additional contract manufacturers or suppliers;

• seek regulatory approvals and marketing authorizations for our product candidates;

• establish sales, marketing and distribution infrastructure to commercialize any products for which we obtain approval;

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

• make milestone, royalty or other payments due under any license or collaboration agreements;

• obtain, maintain, protect, and enforce our intellectual property portfolio, including intellectual property obtained through license agreements;

• attract, hire, and retain qualified personnel and incur increased stock-based compensation, especially in light of a competitive compensation environment;

• provide additional internal infrastructure to support our continued research and development operations and any planned commercialization efforts in the future;

• implement additional internal systems and infrastructure related to cybersecurity;

• experience any delays or encounter other issues related to our operations;

• meet the requirements and demands of being a public company;

• defend against any product liability claims or other lawsuits related to our products.

Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

In any particular quarter or quarters, our operating results could be below the expectations of securities analysts or investors, which could cause our stock price to decline.

Drug development is a highly uncertain undertaking and involves a substantial degree of risk.

We have never generated any revenue from product sales, and we may never generate product revenue or be profitable.

We have no products approved for commercial sale and have not generated any revenue from product sales.

To obtain revenue from the sales of our product candidates that are significant or large enough to achieve profitability, we must succeed, either alone or with third parties, in developing, obtaining regulatory approval for, manufacturing, and marketing therapies with significant commercial success.

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• general economic conditions;

• addressing any delays in our clinical trials or other impacts from a pandemic or other global health emergency.

• addressing any delays in our clinical trials or other impacts from a global emergency.

Because of the numerous risks and uncertainties associated with drug development, we are unable to predict the timing or amount of our expenses, or when we will be able to generate any meaningful revenue or achieve or maintain profitability, if ever.

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Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, expand our business, maintain our research and development efforts, diversify our pipeline of product candidates, or continue our operations and cause a decline in the value of our common stock, all or any of which may adversely affect our viability.

We have incurred significant net losses since our inception and anticipate that we will continue to incur net losses for the foreseeable future.

We have incurred significant net losses since our inception.

Our net losses were $512.5 million, $422.8 million, and $145.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.

As of December 31, 2025, we had an accumulated deficit of $2.05 billion.

We have invested significant financial resources in research and development activities, including for our preclinical and clinical product candidates and our TV platform.

The amount of our future net losses will depend, in part, on the level of our future expenditures and revenue.

We expect to continue to incur significant expenses and increasingly higher operating losses for the foreseeable future.

Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

In any particular quarter or quarters, our operating results could be below the expectations of securities analysts or investors, which could cause our stock price to decline.

If we fail to obtain additional financing, we may be unable to complete the development and, if approved, commercialization of our product candidates.

Our operations have required substantial amounts of cash since inception.

We currently fund our operations primarily with the proceeds from our follow-on offering completed in October 2022, payments received from our collaboration agreements with Biogen , Sanofi, Takeda, and a strategic private offering transaction completed in February 2024.

We have a diversified portfolio with numerous programs at various stages of research, discovery, preclinical and clinical development.

Developing our product candidates is expensive, and we expect to continue to spend substantial amounts as we fund our early-stage research projects, advance our programs through preclinical and clinical development, and prepare for potential commercialization.

As of December 31, 2024, we had $1.19 billion in cash, cash equivalents and marketable securities.

We currently fund our operations primarily with the proceeds from our follow-on offerings completed in October 2022 and December 2025, payments received from our collaboration agreements with Biogen , Sanofi, Takeda, and a strategic private offering transaction completed in February 2024.

Developing our product candidates is expensive, and we expect to continue to spend substantial amounts as we fund our early-stage research projects and advance our programs through preclinical and clinical development.

As of December 31, 2025, we had $966.2 million in cash, cash equivalents and marketable securities.

We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our projected operations through at least the next twelve months.

Our estimate as to how long we expect our existing cash, cash equivalents and marketable securities to be available to fund our operations is based on assumptions that may be proven inaccurate, and we could use our available capital resources sooner than we currently expect.

Changing circumstances, some of which may be beyond our control, such as recent bank failures, geopolitical uncertainty, rising inflation or interest rates, or a perceived or actual economic downturn, may cause us to increase our spending significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

Changing circumstances, some of which may be beyond our control, such as geopolitical uncertainty, rising inflation or interest rates, the imposition of tariffs, risks associated with transactions denominated in foreign currency, or a perceived or actual economic downturn, may cause us to increase our spending significantly faster than we currently anticipate, and we may need to seek additional funds sooner than planned.

We may also need to raise additional funds sooner than we anticipate if we choose to expand more rapidly than we presently anticipate.

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Similarly, our potential decisions to delay, terminate, divest, or collaborate with third parties in respect of certain programs may subsequently also prove to be suboptimal and could cause us to miss valuable opportunities.

If we make incorrect determinations regarding the viability or market potential of any of our programs or product candidates or misread trends in the biopharmaceutical industry, in particular for neurodegenerative and lysosomal storage diseases, our business, financial condition, results of operations, and growth prospects could be materially adversely affected.

One of our strategies is to identify and pursue clinical development of additional product candidates.

We currently have several programs in the research, discovery, and preclinical stages of development.

Identifying, developing, obtaining regulatory approval for, and commercializing additional product candidates for the treatment of neurodegenerative and lysosomal storage diseases will require substantial additional funding and is prone to the risks of failure inherent in drug development.

We cannot provide you with any assurance that we will be able to successfully identify or acquire additional product candidates, advance any of these additional product candidates through the development process, successfully commercialize any such additional product candidates, if approved, or assemble sufficient resources to identify, acquire, develop, or, if approved, commercialize additional product candidates.

If we make incorrect determinations regarding the viability, indication size, or market potential of any of our programs or product candidates or misread trends in the biopharmaceutical industry, our business, financial condition, results of operations, and growth prospects could be materially adversely affected.

Risks Related to the Discovery, Development, and Commercialization of Our Product Candidates

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We cannot give any assurance that any of our product candidates will receive regulatory, including marketing, approval, which is necessary before they can be commercialized.

Investment in biopharmaceutical product development involves significant risk that any product candidate will fail to demonstrate adequate efficacy or potency, or an acceptable safety profile, gain regulatory approval, and become commercially viable.

To date, we have invested substantially all of our efforts and financial resources to identify, acquire intellectual property for, and develop our TV platform and our programs, including conducting preclinical studies and clinical trials, and providing general and administrative support for these operations.

Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and then successfully commercialize our product candidates, and we may fail to do so for many reasons, including the following:

• our product candidates may not successfully complete preclinical studies or clinical trials;

• our drug delivery platform technology may not be clinically viable;

• a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;

• our competitors may develop therapeutics or platform technologies that render our product candidates or platform obsolete or less attractive;

• the product candidates and TV platform that we develop may not be sufficiently covered by intellectual property for which we hold exclusive rights;

• the product candidates and TV platform that we develop may be covered by third parties’ patents or other intellectual property or exclusive rights;

• the market for a product candidate may change so that the continued development of that product candidate is no longer reasonable or commercially attractive;

• a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all;

• if a product candidate obtains regulatory approval, we may be unable to establish sales and marketing capabilities, or successfully market such approved product candidate;

• a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors, if applicable.

If any of these events occur, we may be forced to abandon our development efforts for a program or programs, which could have a material adverse effect on our business.

In that event, we may be forced to abandon our development efforts for a program or programs, which could have a material adverse effect on our business.

We have previously discontinued the development of certain molecules prior to completion of preclinical development because we did not believe they met our criteria for potential clinical success.

Further, we canno t be certain that any of our product candidates will be successful in clinical trials.

For instance, in August 2023, together with our collaboration partner Takeda, we discontinued development of TAK-920/DNL919 (ATV:TREM2) in Alzheimer’s disease, based on data from the Phase 1 study and the rapidly evolving treatment landscape, and, in January 2025, we announced that the Phase 2/3 HEALEY ALS Platform Trial evaluating DNL343 for ALS did not meet primary and key secondary endpoints.

For instance, in January 2025, we announced that the Phase 2/3 HEALEY ALS Platform Trial evaluating DNL343 for ALS did not meet primary and key secondary endpoints.

We may in the future advance product candidates into clinical trials and terminate such trials prior to their completion.

We cannot provide any assurance that we will be able to successfully advance any of our product candidates through the development process or, if approved, successfully commercialize any of our product candidates.

We may not be successful in our efforts to continue to create a pipeline of product candidates or to develop commercially successful products.

One of our strategies is to identify and pursue clinical development of additional product candidates.

We currently have several programs in the research, discovery and preclinical stages of development.

We cannot provide you any assurance that we will be able to successfully identify or acquire additional product candidates, advance any of these additional product candidates through the development process, successfully commercialize any such additional product candidates, if approved, or assemble sufficient resources to identify, acquire, develop or, if approved, commercialize additional product candidates.

Our product candidates are based on novel technology in fields that have seen limited success in drug development, which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval.

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Collectively, efforts by biopharmaceutical companies in the fields of neurodegenerative and lysosomal storage diseases have seen limited success in drug development.

There are few effective therapeutic options available for patients with neurodegenerative diseases, such as Alzheimer’s disease, Parkinson’s disease, and ALS, and lysosomal storage diseases, such as Hunter syndrome and Sanfilippo syndrome.

There are few effective therapeutic options available for patients with neurodegenerative diseases, such as Alzheimer’s disease and Parkinson’s disease, and lysosomal storage diseases, such as Hunter syndrome and Sanfilippo syndrome.

Our future success is highly dependent on the successful development of our TV platform and our product candidates for treating neurodegenerative and lysosomal storage diseases.

Developing and, if approved, commercializing our product candidates for treatment of neurodegenerative and lysosomal storage diseases subjects us to a number of challenges, including engineering product candidates to cross the BBB to enable optimal concentration of the therapeutic in the brain and obtaining regulatory approval from the FDA and other regulatory authorities who have only a limited set of precedents to rely on.

Our approach to the treatment of neurodegenerative and lysosomal storage diseases aims to identify and select targets with a genetic link to neurodegenerative and lysosomal storage diseases, as applicable, identify and develop molecules that engage the intended target, identify and develop biomarkers, which are biological molecules found in blood, other bodily fluids or tissues that are signs of a normal or abnormal process or of a condition or disease, to select the right patient population and demonstrate target engagement, pathway engagement and impact on disease progression of our molecules, and engineer our molecules to cross the BBB and act directly in the brain.

Our approach to the treatment of neurodegenerative and lysosomal storage diseases aims to identify and select targets with a genetic link to neurodegenerative and lysosomal storage diseases;

identify and develop molecules that engage the intended target;

identify and develop biomarkers, which are biological molecules found in blood, other bodily fluids, or tissues that are signs of a normal or abnormal process or of a condition or disease, to select the right patient population and demonstrate target engagement, pathway engagement, and impact on disease progression of our molecules;

and engineer our molecules to cross the BBB and act directly in the brain.

This strategy may not prove to be successful.

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Moreover, public perception of drug safety issues, including adoption of new therapeutics or novel approaches to treatment, may adversely influence the willingness of subjects to participate in clinical trials, or if approved, of physicians to subscribe to novel treatments.

We may encounter substantial delays in our clinical trials, or may not be able to conduct or complete our clinical trials on the timelines we expect, if at all.

We may encounter substantial delays in our clinical trials or difficulties enrolling patients, or may not be able to conduct or complete our clinical trials on the timelines we expect, if at all.

Clinical testing is expensive, time consuming, and subject to uncertainty.

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• delays in reaching a consensus with regulatory agencies on trial design;

• delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;

• delays in identifying, recruiting and training suitable clinical investigators;

• delays in obtaining required IRB approval at each clinical trial site;

• delays involving our clinical trial sites, including delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites, delays in identifying, recruiting and training suitable clinical investigators, and delays in obtaining required IRB approval at each clinical trial site;

• imposition of a temporary or permanent clinical hold by regulatory agencies for a number of reasons, including after review of an IND or amendment, CTA or amendment, or equivalent application or amendment;

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or if the FDA or EMA finds that the investigational protocol or plan is clearly deficient to meet its stated objectives;

• delays in identifying, recruiting, and enrolling suitable patients to participate in our clinical trials, and delays caused by patients withdrawing from clinical trials or failing to return for post-treatment follow-up;

• delays in identifying, recruiting, and enrolling suitable patients to participate in our clinical trials;

• difficulty collaborating with patient groups and investigators;

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• changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;

• changes in the approval policies or regulations of the FDA or other regulatory authorities;

• delays due to changes in the staffing, priorities, or leadership of the FDA or other regulatory authorities, or changes to regulatory approval policies or regulations;

• changes in the standard of care on which a clinical development plan was based, which may require new or additional trials;

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We could also encounter delays if a clinical trial is suspended or terminated by us or our collaborators, by the data safety monitoring board for such trial, or by any regulatory authority, or if the IRBs of the institutions in which such trials are being conducted suspend or terminate the participation of their clinical investigators and sites subject to their review.

Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, EMA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions, developments on trials conducted by us or our competitors for related technology that raises regulatory concerns about risk to patients of the technology broadly, or lack of adequate funding to continue the clinical trial.

For example, in January 2022, we announced that the TAK-920/DNL919 (ATV:TREM2) IND application had been placed on clinical hold by the FDA.

In August 2023 we announced that, in agreement with Takeda, we would discontinue clinical development of TAK-920/DNL919 in Alzheimer’s disease.

We cannot assure you that we will ever resume the clinical program for TAK-920/DNL919, nor can we assure you that our other product candidates will not be subject to new, partial, or full clinical holds in the future, which may impact development plans.

We may also pause the advancement of lead molecules in favor of a backup molecule with a superior safety or efficacy profile, such as we did in our RIPK1 program, switching our focus from DNL747 to SAR443820/DNL788.

Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA, EMA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product candidate, changes in governmental regulations or administrative actions, developments in trials conducted by us or our competitors for related technology that raise regulatory concerns about risk to patients of the technology broadly, or lack of adequate funding to continue the clinical trial.

Our product candidates have been subject to clinical holds in the past and we cannot assure you that others will not be subject to new, partial, or full clinical holds in the future.

For example, in August 2023, following imposition of a clinical hold by the FDA, we announced that we and Takeda would discontinue clinical development of TAK-920/DNL919 in Alzheimer’s disease.

Additionally, in December 2025, we announced that DNL952 was placed on clinical hold.

Although protocol amendments were implemented for DNL952 and the program resumed, there could be safety findings or concerns that result in additional pauses, protocol modifications, or permanent discontinuation of development.

Any clinical holds by the FDA, if not timely lifted, could impact our development plans.

Delays in the completion of any clinical trial of our product candidates will increase our costs, slow down our product candidate development and approval process and delay or potentially jeopardize our ability to commence product sales and generate revenue.

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We may experience difficulties in patient enrollment and retention in our clinical trials for a variety of reasons, including:

• public health crises;

• the size and nature of the patient population;

• the size and nature of the patient population, the proximity of patients to trial sites, and the size of the study population required for analysis of the trial's primary endpoints;

• the patient eligibility criteria defined in the protocol, including biomarker-driven identification and/or certain highly-specific criteria related to stage of disease progression, which may limit the patient populations eligible for our clinical trials to a greater extent than competing clinical trials for the same indication that do not have biomarker-driven patient eligibility criteria;

• the size of the study population required for analysis of the trial’s primary endpoints;

• the proximity of patients to a trial site;

• the design of the trial;

• our ability to recruit clinical trial investigators with the appropriate competencies and experience;

• competing clinical trials for similar therapies or targeting patient populations meeting our patient eligibility criteria;

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• our ability to obtain and maintain patient consents;

• the risk that patients enrolled in clinical trials will not complete such trials, for any reason, including the risk of higher drop-out rates if participants become infected with the global virus or other infectious diseases that impact their participation in our trials.

Our inability to enroll and retain a sufficient number of patients for our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.

Enrollment delays and retention challenges in our clinical trials may result in increased development costs for our product candidates, delay our ability to obtain clinical data, and jeopardize our ability to obtain marketing approval for the sale of our product candidates.

• the risk that patients enrolled in clinical trials will not complete such trials, for any reason.

Our inability to enroll and retain a sufficient number of patients for our clinical trials may increase development costs for our product candidates, delay our ability to obtain clinical data and/or obtain marketing approval, or may require us to abandon one or more clinical trials altogether.

Our clinical trials may reveal significant adverse events, toxicities, or other side effects and may fail to demonstrate substantial evidence of the safety and efficacy or potency of our product candidates, which would prevent, delay, or limit the scope of regulatory approval and commercialization.

Before obtaining regulatory approvals for the commercial sale of any of our product candidates, we must demonstrate through lengthy, complex, and expensive preclinical studies and clinical trials that our product candidates are both safe and effective for use in each target indication.

For those product candidates that are subject to regulation as biological drug products, we will need to demonstrate that they are safe, pure, and potent for use in their target indications.

Each product candidate must demonstrate an adequate risk versus benefit profile in its intended patient population and for its intended use.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.

Failure can occur at any time during the clinical trial process.

The results of preclinical studies of our product candidates may not be predictive of the results of early-stage or later-stage clinical trials, and results of early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials.

The results of clinical trials in one set of patients or disease indications may not be predictive of those obtained in another.

In some instances, there can be significant variability in safety or efficacy or potency results between different clinical trials of the same product candidate due to numerous factors, including changes in trial procedures set forth in protocols, differences in the size and type of the patient populations, changes in and adherence to the dosing regimen and other clinical trial protocols and the rate of dropout among clinical trial participants.

It is impossible to predict when or if our product candidates will prove effective or safe in humans, or if our product candidates will receive marketing authorization.

Clinical testing is expensive and can take many years to complete, and the outcome is inherently uncertain.

Open-label extension studies may also extend the timing and increase the cost of clinical development substantially.

Pro duct candidates in later stages of clinical trials may fail to show the desired safety and efficacy or potency profile despite having progressed through preclinical studies and initial clinical trials.

A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or potency or unacceptable safety issues, notwithstanding promising results in earlier trials.

This is particularly true in neurodegenerative and lysosomal storage diseases, where failure rates historically have been higher than in many other disease areas.

Most product candidates that begin clinical trials are never approved by regulatory authorities for commercialization.

We cannot be certain that our current clinical trials or any other future clinical trials will be successful.

Additionally, any safety concerns observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of our product candidates in those and other indications, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Even if such clinical trials are successfully completed, we cannot guarantee that the FDA will approve the product candidates for the proposed indications, and more trials could be required before we submit our product candidates for approval.

For instance, while we plan to submit a biologics license application ("BLA") for accelerated approval of DNL310, we expect the FDA will require us to conduct a confirmatory trial post any approval.

T o the extent that the results of the trials are not satisfactory to the FDA or foreign regulatory authorities for support of a marketing application, we may be required to expend significant resources, which may not be available to us, or to conduct additional trials in support of potential approval of our product candidates.

Failure can occur at any time during the clinical trial process.

In addition, t he results of preclinical studies of our product candidates may not be predictive of the results of early-stage or later-stage clinical trials, and results of early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials.

In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product or product candidate due to numerous factors, including changes in clinical trial procedures set forth in protocols, differences in the size and type of the patient populations, adherence to the dosing regimen and other clinical trial protocols and the rate of discontinuation among clinical trial participants.

If we fail to produce positive results in our planned clinical trials of any of our product candidates, the development timeline and marketing authorization and commercialization prospects for our product candidates, and, correspondingly, our business and financial prospects, would be materially and adversely affected.

We cannot be certain that our current clinical trials or any future clinical trials will be successful.

Even if such clinical trials are successfully completed, we cannot guarantee that the FDA will approve the product candidates for the proposed indications, and more information or trials could be required before we submit our product candidates for approval.

For instance, although the FDA has accepted our biologics license application ("BLA") for accelerated approval of DNL310, our PDUFA target date was extended to enable the submission of updated clinical pharmacology information in response to an information request from the FDA.

T o the extent that the FDA or foreign regulatory authorities are not satisfied with the support we have provided, we may be required to expend significant resources to conduct additional trials in support of potential approval of our product candidates.

Even if regulatory approval is secured for any of our product candidates, the terms of such approval, such as requiring us to narrow our indications to a smaller subset, may also limit its commercial potential.

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Adverse events or other undesirable side effects caused by our product candidates could cause us, our collaborators, or regulatory authorities to interrupt, delay, or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA, EMA, or other comparable foreign regulatory authorities.

Our most advanced product candidates, DNL310, DNL126, BIIB122/DNL151, eclitasertib (SAR443122/DNL758), TAK-594/DNL593, and DNL343 , are currently our only clinical stage product candidates.

It is possible that as we test our product candidates in larger, longer and more extensive clinical trials, including with different dosing regimens, or as the use of our product candidates becomes more widespread following any marketing authorization, illnesses, injuries, discomforts and other adverse events that were observed or went undetected in earlier trials will be reported.

If such events become known later in development or upon approval, if any, or if such events are incorrectly believed to have been caused by our products, then our business, financial condition, results of operations and prospects may be harmed.

For any products approved in the future, these events could hinder or prevent market acceptance of any approved products or reduce the duration of time that physicians expect to use our product in particular patients.

Our most advanced product candidates, DNL310, DNL126, BIIB122/DNL151, eclitasertib (SAR443122/DNL758), TAK-594/DNL593, DNL628, and DNL952 , are currently our only clinical stage product candidates.

Adverse events and other side effects may result from higher dosing, repeated dosing, and/or longer-term exposure to our product candidates and could lead to delays and/or termination of the development of these product candidates.

For example, in August 2023, together with our collaboration partner Takeda, we made the strategic decision to discontinue clinical development of TAK-920/DNL919 in Alzheimer's disease following a clinical hold by the FDA.

In 2020, we paused clinical studies with DNL747 in our RIPK1 program.

Chronic toxicity studies with DNL747 in cynomolgus monkeys showed dose- and duration-dependent adverse preclinical findings at exposures higher than those tested in the clinic.

These findings, which are considered off-target and molecule-specific, may impact the ability to increase the dose of DNL747 and achieve higher levels of target inhibition without time consuming additional clinical safety studies in patients to evaluate the long-term safety and tolerability.

For example, in December 2025, we announced the imposition of a clinical hold on the DNL952 (ETV:GAA) IND application related to hypersensitivity reactions in preclinical studies.

This hold was lifted in January 2026 following amendments to the study protocol's starting dosage, inclusion criteria, safety monitoring commitments, and stopping rules.

Drug-related side effects could affect patient recruitment, the ability of enrolled patients to complete the trial, and/or result in potential product liability claims.

Additionally, if one or more of our product candidates receives marketing approval, and we or others, including our collaborators, later identify undesirable side effects or adverse events caused by such products, a number of potentially significant negative consequences could result, including but not limited to:

• regulatory authorities may withdraw approvals of such product and cause us to recall our product;

• regulatory authorities may require additional warnings on the label;

• we may be required to change the way the product is administered or conduct additional clinical trials or post-approval studies;

• we may be required to create a Risk Evaluation and Mitigation Strategy plan to assure safe use;

• we could be sued and held liable for harm caused to patients;

• our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of the particular product candidate, if approved, and could significantly harm our business, financial condition, results of operations, and growth prospects.

We cannot predict whether our product candidates will cause toxicities in humans that would preclude or lead to the revocation of regulatory approval based on nonclinical studies or clinical trials.

Additionally, if one or more of our product candidates receives marketing approval, and we or others, including our collaborators, later identify undesirable side effects or adverse events caused by such products, regulatory authorities could withdraw approval, and/or require a product recall, additional label warnings, changes to the way our product is administered, or additional clinical trials or post-approval studies.

We could also be sued and held liable for harm caused to patients.

Any of these events could harm our reputation, business, financial condition, and growth prospects.

Interim, topline, and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available, and are subject to audit and verification procedures that could result in material changes in the final data.

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Our competitors, either alone or with collaborative partners, may succeed in developing, acquiring, or licensing on an exclusive basis drug or biologic products that are more effective, safer, more easily commercialized, or less costly than our product candidates or may develop proprietary technologies or secure patent protection that we may need for the development of our technologies and products.

A number of large pharmaceutical and biotechnology companies are developing products for the treatment of the neurodegenerative and lysosomal storage disease indications for which we have research programs, including Alzheimer’s disease, Parkinson’s disease, Hunter syndrome, and ALS.

Companies that we are aware are developing therapeutics in the neurodegenerative and lysosomal storage disease areas include companies with significant financial resources.

Companies that we are aware are developing therapeutics in the neurodegenerative and lysosomal storage disease areas include companies with significant financial resources, established presence in the market, and expertise in research, development, manufacturing, and commercialization .

In addition to competition from other companies targeting neurodegenerative indications, any products we may develop may also face competition from other types of therapies, such as gene-editing therapies.

Many of our current or potential competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do.

Mergers and acquisitions may result in even more resources being concentrated among a smaller number of our competitors.

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The same risks would apply to our internal manufacturing facilities and capabilities.

Under a lease for approximately 60,000 rentable square feet of laboratory, office, and warehouse premises, we substantially completed the build-out of our Utah site and are in the process of establishing our clinical manufacturing capabilities for biologic therapeutics including the manufacture of materials for toxicology studies and drug substance for early human clinical studies.

Under a lease for approximately 60,000 rentable square feet of laboratory, office, and warehouse premises, we have completed the build-out of our Utah site and have begun to manufacture materials for toxicology studies and drug substance for human clinical studies.

There can be no assurance that our current and future efforts to scale our internal manufacturing capabilities will succeed.

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If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to sell and market any product candidates we may develop, we may not be successful in commercializing those product candidates if and when they are approved.

We have initiated a build-out of a sales and marketing infrastructure and may enter into arrangements with third parties for commercialization of future product candidates.

We have initiated the build-out of our sales and marketing infrastructure and have begun to enter into arrangements with third parties for the commercialization of DNL310.

There are risks involved with both establishing our own commercial capabilities and entering into arrangements with third parties to perform these services.

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If we do not establish commercialization capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates if approved.

Furthermore, if we receive commercial approval in the United States and intend to seek approval in other countries, we may rely on third-party distributors and other commercial partners outside the United States, such as local agents, wholesalers, importers and logistics providers, to market, distribute and support any potential commercial products, and our ability to enter and compete in non-U.S.

markets may depend on the performance of these third parties.

These partners are subject to complex and evolving foreign laws and regulatory regimes and may be required to obtain, maintain and renew various licenses, approvals and registrations and to comply with local requirements relating to importation, storage and handling, serialization and traceability, pharmacovigilance, recordkeeping and reporting, and promotional and marketing activities.

If any such third party fails to obtain or maintain required authorizations, violates applicable laws or industry codes, engages in misconduct or misrepresentations, or otherwise performs poorly (including through inadequate forecasting, inventory management, product storage or handling, documentation, complaint management or recall support), we could experience delayed market entry, interruption of supply, product seizures, import holds or other enforcement actions, and we may incur significant costs to investigate, remediate or transition to alternative partners.

In addition, we may have limited ability to monitor and control our foreign distributors’ activities, and we could be subject to regulatory scrutiny, civil or criminal penalties, reputational harm, reduced sales, or termination of our commercial agreements as a result of their acts or omissions.

Even if any product candidates we develop receive marketing approval, they may fail to achieve the degree of market acceptance by physicians, patients, healthcare payors, and others in the medical community necessary for commercial success.

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Our inability to promptly obtain coverage and profitable payment rates from both government-funded and private payors for any approved products we may develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize product candidates, and our overall financial condition.

If any of our small molecule product candidates obtain regulatory approval, additional competitors could enter the market with generic versions of such drugs, which may result in a material decline in sales of affected products.

If any of our small molecule product candidates obtain regulatory approval, competitors may file abbreviated new drug applications under the Drug Price Competition and Patent Term Restoration Act of 1984 (the "Hatch-Waxman Act") seeking approval of generic versions, or submit 505(b)(2) new drug applications referencing our approved products.

Although the Hatch-Waxman Act provides certain periods of regulatory exclusivity and we may obtain patent protection eligible for listing in the FDA's Orange Book, we cannot predict which patents, if any, will be eligible for listing, whether generic applicants will challenge those patents through Paragraph IV certifications, or the outcome of any resulting litigation.

If any of our Orange Book-listed patents are successfully challenged, the affected product could immediately face generic competition and its sales would likely decline rapidly and materially, which could require us to write off a portion or all of the intangible assets associated with the affected product and could materially and adversely affect our results of operations and cash flows.

See "Risks Related to Our Intellectual Property."

Our biologic, or large molecule, product candidates for which we intend to seek approval may face competition sooner than anticipated.

Even if we are successful in achieving regulatory approval to commercialize a product candidate faster than our competitors, our large molecule product candidates may face competition from biosimilar products.

In the United States, our large molecule product candidates, including DNL310, are regulated by the FDA as biologic products and we intend to seek approval for these product candidates pursuant to a BLA pathway.

In the United States, our large molecule product candidates, including DNL310, are regulated by the FDA as biologic products.

We are seeking approval for DNL310 pursuant to a BLA pathway and may do so for other large molecule product candidates in our pipeline.

The Biologics Price Competition and Innovation Act of 2009 (the "BPCIA"), created an abbreviated pathway for the approval of biosimilar and interchangeable biologic products.

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Accordingly, if any of our small molecule product candidates are approved, competitors could file ANDAs for generic versions of our small molecule drug products or 505(b)(2) NDAs that reference our small molecule drug products, respectively.

See “Risks Related to Our Intellectual Property.”

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

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This landmark Supreme Court decision may invite more companies and other stakeholders to bring lawsuits against the FDA to challenge longstanding decisions and policies of the FDA, including the FDA's statutory interpretations of market exclusivities and the "substantial evidence" requirements for drug approvals, which could undermine the FDA's authority, lead to uncertainties in the industry, and disrupt the FDA's normal operations, any of which could delay the FDA's review of our regulatory submissions.

We cannot predict the full impact of this decision, future judicial challenges brought against the FDA, or the nature or extent of government regulation that may arise from future legislation or administrative action.

Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical, clinical or other studies.

Moreover, regulatory authorities may fail to approve companion diagnostics that we contemplate using with our therapeutic product candidates.

We have not submitted for, or obtained regulatory approval for any product candidate, and it is possible that none of our existing product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval.

Changes to the leadership at federal agencies under the new administration, as well as executive orders and actions, such as a freeze on hiring and a freeze on implementing new regulations and on external communications, may impact our clinical development and timelines.

We have not obtained regulatory approval for any product candidate, and it is possible that none of our existing product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval.

Even if we do receive approval from the FDA for our pending BLA or for a future application, we may not receive, or be deemed ineligible to receive, a Rare Pediatric Disease Priority Review Voucher.

Changes to the leadership and staffing at federal agencies may also impact our clinical development and timelines.

Applications for our product candidates could fail to receive regulatory approval in an initial or subsequent indication for many reasons, including but not limited to the following:

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We currently and may in the future conduct clinical trials for our product candidates outside the United States, and the FDA, EMA, and applicable foreign regulatory authorities may not accept data from such trials.

We currently conduct clinical trials outside the United States, including in Europe, and may continue to do so in the future.

We currently conduct clinical trials outside the United States and may continue to do so in the future.

The acceptance of data from clinical trials conducted outside the United States or another jurisdiction by the FDA, EMA, or applicable foreign regulatory authority may be subject to certain conditions.

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We could also be asked to conduct post-marketing clinical trials to verify the safety and efficacy of our non-biologic products or safety, purity, and potency for our biologic products, in general or in specific patient subsets.

We plan to seek accelerated approval of DNL310.

If successful, we expect the FDA will require us to conduct a confirmatory study to verify the predicted clinical benefit and safety profile.

The results from the confirmatory study may not support the clinical benefit or safety profile, which would result in approval being withdrawn.

We are seeking accelerated approval of DNL310.

If successful, the FDA may require us to conduct a confirmatory study to verify the predicted clinical benefit and safety profile.

The Food and Drug Omnibus Reform Act reformed the accelerated approval pathway, such as requiring the FDA to specify conditions for post-approval study requirements and setting forth procedures for the FDA to withdraw a product on an expedited basis for non-compliance with post-approval requirements.

An unsuccessful post-marketing study or failure to complete such a study could result in the withdrawal of marketing approval.

An unsuccessful post-marketing study or failure to complete such a study could result in the withdrawal of our marketing approval.

If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, or disagrees with the promotion, marketing, or labeling of a product, such regulatory agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market.

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2021), the FDA clarified in a January 2023 notice that the FDA intends to continue to apply its longstanding interpretation of the regulations to matters outside of the scope of the Catalyst order – that is, the agency will continue tying the scope of orphan-drug exclusivity to the uses or indications for which a drug is approved, which permits other sponsors to obtain approval of a drug for new uses or indications within the same orphan designated disease or condition that have not yet been approved.

It is unclear how future litigation, legislation, agency decisions, and administrative actions will impact the scope of the orphan drug exclusivity.

The Consolidated Appropriations Act of 2026, signed into law in February 2026, codified this longstanding FDA interpretation of the Orphan Drug Act, allowing the FDA to approve multiple versions of the same orphan drug for different subindications and subpopulations.

Healthcare legislative measures aimed at reducing healthcare costs may have a material adverse effect on our business and results of operations.

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In August 2022, Congress passed the Inflation Reduction Act of 2022 ("IRA"), which includes prescription drug provisions that have significant implications for the pharmaceutical industry and Medicare beneficiaries, including allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries, among other changes.

Various industry stakeholders, including pharmaceutical companies, the U.S.

Chamber of Commerce, and the Pharmaceutical Research and Manufacturers of America, have initiated lawsuits against the federal government asserting that the price negotiation provisions of the IRA are unconstitutional.

The impact of these judicial changes, future litigation brought in view of the Supreme Court's overrule of the Chevron doctrine, legislative, executive, and administrative actions and any future healthcare measures and agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear.

Various industry stakeholders have initiated lawsuits against the federal government asserting that the price negotiation provisions of the IRA are unconstitutional.

Further, the current administration has issued executive orders focused on decreasing prescription drug prices, including directing the Secretary of HHS to establish a mechanism through which American patients can buy drugs directly from manufacturers who sell at a most-favored-nation price and directing the U.S.

Trade Representative and Secretary of Commerce to take action to ensure foreign countries are not engaged in practices that purposefully and unfairly undercut market prices and drive price hikes in the United States.

In November 2025, CMS announced a voluntary initiative called the GENEROUS Model (GENErating cost Reductions fOr U.S.

Medicaid Model) to introduce the option of most-favored-nation pricing to the Medicaid program, whereby a drug manufacturer may voluntarily offer supplemental rebates to participating state Medicaid programs for a manufacturer’s covered outpatient drugs.

Government agreements with pharmaceutical companies and other government measures that use most-favored-nation pricing targets for prescription drugs, including the use of international pricing reference to set drug prices in the United States, or that increase generic and biosimilar drug entry sooner than expected can have a material adverse effect on our industry, ability to set adequate pricing for new drugs to recover research and development costs, ability to attract potential investors and potential buyers in the future.

The impact of these legislative, executive, and administrative actions and any future healthcare measures and agency rules implemented by the government on us and the pharmaceutical industry as a whole is unclear.

At the state level, a number of states are considering or have recently enacted state drug price transparency and reporting laws that could substantially increase our compliance burdens and expose us to greater liability under such state laws once we begin commercialization after obtaining regulatory approval for any of our products.

Since its enactment, there have been executive, judicial and congressional challenges to certain aspects of the ACA and IRA.

It is unclear how future litigation or healthcare measures promulgated by the Biden administration will impact our business, financial condition, and results of operations.

It is unclear how future litigation or healthcare measures will impact our business, financial condition, and results of operations.

Complying with any new legislation or changes in healthcare regulation could be time-intensive and expensive, resulting in material adverse effect on our business.

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Additionally, the U.S.

Department of Justice recently issued a final rule that takes effect in April 2025 and places limitations, and in some cases prohibitions, on certain transfers of sensitive personal data to business partners located in China or with other specified links to China (and other designated countries).

Department of Justice recently implemented a final rule that places limitations, and in some cases prohibitions, on certain transfers of sensitive personal data to business partners located in China or with other specified links to China (and other designated countries).

The GDPR, UK GDPR, CCPA, CPRA, and many other federal, state, and foreign laws and regulations relating to privacy and data protection are still being tested in courts, and they are subject to new and differing interpretations by courts and regulatory officials.

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It is possible that these laws, regulations, or other actual or asserted obligations may be interpreted and applied in a manner that is inconsistent with our practices and our compliance efforts may be unsuccessful.

We cannot guarantee that we or our vendors may be in compliance with all applicable international laws and regulations as currently maintained and enforced or as they evolve.

Our actual or alleged non-compliance could result in government-imposed fines or orders requiring that we change our practices, which could adversely affect our business.

In addition to the risks associated with enforcement activities and potential contractual liabilities, our ongoing efforts to comply with evolving laws and regulations may be costly and require ongoing modifications to our policies, procedures and systems.

Our ongoing efforts to comply with evolving laws and regulations may be costly and require ongoing modifications to our policies, procedures and systems.

In addition, if we are unable to properly protect the privacy and security of protected health information, we could be alleged or found to have breached certain contractual obligations.

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therefore, our dealings with these prescribers and purchasers are subject to regulation under the FCPA.

Recently the Securities and Exchange Commission (the "SEC"), and Department of Justice have increased their FCPA enforcement activities with respect to biotechnology and pharmaceutical companies.

There is no certainty that all of our employees, agents, contractors, or collaborators, or those of our affiliates, will comply with all applicable laws and regulations, particularly given the high level of complexity of these laws.

Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers, or our employees, the closing down of our facilities, requirements to obtain export licenses, cessation of business activities in sanctioned countries, implementation of compliance programs, and prohibitions on the conduct of our business.

Any such violations could include prohibitions on our ability to offer our products in one or more countries and could materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, and our business, prospects, operating results, and financial condition.

Any such violations could include prohibitions on our ability to offer our products in one or more countries and could materially damage our reputation, business, operating results, financial condition, and international expansion efforts.

In addition, if we enter a commercialization phase, our products may be subject to U.S.

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Inadequate funding for the FDA, USPTO, SEC, and other government agencies could hinder or result in the suspension of their operations, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes.

Average review times at the FDA have fluctuated in recent years as a result.

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government shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical government employees and stop critical activities.

The new administration’s freeze on hiring and return-to-office policy may disrupt normal operations of federal agencies, including the FDA.

Regulatory agency staffing changes may disrupt normal operations of federal agencies, including the FDA.

If a prolonged government shutdown or other disruption occurs, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, or to provide feedback on our clinical development plans, which could have a material adverse effect on our business.

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Our reliance on third parties for the manufacture of the majority of the materials for our research programs, preclinical studies, and clinical trials may increase the risk that we will not have sufficient quantities of such materials, product candidates, or any medicines that we may develop and commercialize, or that such supply will not be available to us at an acceptable cost, which could delay, prevent, or impair our development or commercialization efforts.

Although we have substantially completed the build-out of our Utah site to enable our clinical manufacturing capabilities for biologic therapeutics, we are in the process of scaling up manufacturing activities.

We currently rely on third-party manufacturers for the manufacture of our materials for preclinical studies and clinical trials and expect to continue to do so for some or all of our materials for preclinical studies, clinical trials, and for commercial supply of any product candidates that we may develop.

Although we have begun to manufacture biologic therapeutics, in our Utah site, we currently rely on third-party manufacturers for the manufacture of many of our materials for preclinical studies and clinical trials, and expect to continue to do so for the foreseeable future for a portion of our materials for preclinical studies, clinical trials, and commercial supply.

We may be unable to establish any further agreements with third-party manufacturers or to do so on acceptable terms.

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Our dependence on these third-party suppliers and the challenges we may face in obtaining adequate supplies of raw materials involve several risks, including limited control over pricing, availability, quality, and delivery schedules.

Unexpected changes in tariffs, trade barriers, price and exchange controls, and other regulatory requirements, including recently imposed tariffs which may impact certain of our key raw materials that we import, could impact our cost of goods for our product candidates.

As a small company, our negotiation leverage is limited and we are likely to get lower priority than our larger competitors.

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We seek to protect our proprietary position by in-licensing intellectual property and filing patent applications in the United States and abroad relating to our TV platform, programs and product candidates, as well as other technologies that are important to our business.

Given that the development of our technology and product candidates is at an early stage, our intellectual property portfolio with respect to certain aspects of our technology and product candidates is also at an early stage.

Our portfolio includes technology and product candidates that are in the early stages of development, and the corresponding intellectual property is also at an early stage.

In addition, we cannot be certain that any patents we own or in-license in the United States adequately cover the Fc domain portion of our TV platform that binds to transferrin receptor, or adequately cover the antibodies, enzymes or proteins being developed in our TV-enabled programs.

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Furthermore, European applications have the option, upon grant of a patent, of becoming a Unitary Patent and therefore subject to UPC.

This will be a significant change in European patent practice.

As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty.

This is a significant change in European patent practice.

As the UPC is a new court system, there is limited precedent for the court, increasing the uncertainty.

Proceedings to enforce our intellectual property and proprietary rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly, could put our patent applications at risk of not issuing, and could provoke third parties to assert claims against us.

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If such an event were to occur, it could have a material adverse effect on our business.

In addition, a decree was adopted by the Russian government in March 2022, allowing Russian companies and individuals to exploit inventions owned by patentees that have citizenship or nationality in, are registered in, or predominately have primary place of business or profit-making activities in the United States and other countries that Russia has deemed unfriendly without consent or compensation.

Consequently, we may be unable to prevent third parties from practicing our inventions in Russia or from selling or importing products made using our inventions in and into Russia.

Accordingly, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.

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Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any patent application related to our TV platform, product candidates or other technologies or (ii) invent any of the inventions claimed in our or our licensor’s patents or patent applications.

Further, changes in the leadership of the PTO and other federal agencies under the new administration may lead to new policies and changes in the regulations that may impact the timelines of our patents applications.

Further, changes in the leadership or staffing of the PTO and other federal agencies may lead to new policies and changes in the regulations that may impact the timelines of our patents applications.

The America Invents Act also includes a number of significant changes that affect the way patent applications will be prosecuted and also may affect patent litigation.

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Ryan Watts, and our scientific and medical personnel.

The loss of the services provided by any of our executive officers, other key employees, and other scientific and medical advisors, and our inability to find suitable replacements, could result in delays in the development of our product candidates and harm our business.

We primarily conduct our operations at our facility in South San Francisco, a region that is headquarters to many other biopharmaceutical companies and many academic and research institutions.

The majority of our operations are conducted at our facility in South San Francisco, a region that is headquarters to many other biopharmaceutical companies and many academic and research institutions.

Competition for skilled personnel is intense and the turnover rate can be high, which may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all.

We expect that we may need to recruit talent from outside of our region, and doing so may be costly and difficult.

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided restricted stock and stock option grants that vest over time.

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As of December 31, 2025, we ha d approximately 503 employees, all of whom were full-time.

As our development plans and strategies develop, we must add a significant number of additional managerial, operational, financial, and other personnel.

As our development plans and strategies develop, we must add additional managerial, operational, financial, and other personnel.

Future growth will impose significant added responsibilities on members of management, including recruiting, integrating, and retaining additional employees;

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Our future financial performance and our ability to continue to develop and, if approved, commercialize our product candidates will depend, in part, on our ability to effectively manage any future growth.

Our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to manage these growth activities.

We currently rely, and for the foreseeable future will continue to rely, in substantial part on certain independent organizations, advisors, and consultants to provide certain services.

There can be no assurance that the services of these independent organizations, advisors, and consultants will continue to be available to us on a timely basis when needed, or that we can find qualified replacements.

In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed, or terminated, and we may not be able to obtain regulatory approval of our product candidates or otherwise advance our business.

There can be no assurance that we will be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, if at all.

In addition, we may be unable to effectively manage our outsourced activities or the quality or accuracy of the services provided by consultants may be compromised for any reason.

If we are not able to effectively manage our growth, we may not be able to successfully implement the tasks necessary to further develop our product candidates and, accordingly, may not achieve our research, development, and commercialization goals.

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In addition, if we undertake such a transaction, we may issue dilutive securities, assume or incur debt obligations, incur large one-time expenses and acquire intangible assets that could result in significant future amortization expense.

In December 2025, we entered into a royalty funding agreement with Royalty Pharma.

This agreement makes available to us up to $275.0 million in milestone payments.

However, these milestone payments are subject to satisfaction of certain conditions related to the regulatory approval of tividenofusp alfa by specific deadlines.

Should we not satisfy such conditions by the applicable deadlines, or if we fail to meet our obligations or default under this agreement, we may not receive any milestone payments, or the payments to us could be substantially less than the maximum amounts available under the agreement.

Our internal computer systems, or those used by our third-party research institution collaborators, CROs, or other contractors or consultants, may fail or suffer other breakdowns, cyberattacks, or information security breaches or incidents that could compromise the confidentiality, integrity, and availability of such systems and data, expose us to liability, and affect our reputation.

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We also rely on third-party vendors and their information technology systems.

Commercialization will require the implementation of computer systems that are increasingly complex to install, secure, and maintain.

Despite the implementation of security measures, our internal computer systems and those of our collaborators, CROs, and other contractors and consultants may be vulnerable to damage, outages and interruptions resulting from computer viruses and other malicious code or unauthorized access, or breached, compromised, or otherwise subject to security incidents due to operator error, malfeasance, or other system disruptions.

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Any of the foregoing could result in financial, legal, business, or reputational harm to us.

Business disruptions, including as a result of global pandemics, could seriously harm our future revenue and financial condition and increase our costs and expenses.

Our operations, and those of our third-party research institution collaborators, CROs, CDMOs, suppliers, clinical trial sites, and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, public health crises, and other natural or man-made disasters or business interruptions, for which we are partly uninsured.

For example, the global pandemic caused a temporary disruption in our ability to recruit participants for our clinical trials in the calendar year 2020 and the first quarter of 2021.

We are increasing our use of artificial intelligence (AI) systems to enhance productivity and efficiency;

however, the use of AI presents operational, legal, regulatory, cybersecurity, and reputational risks.

Many AI systems generate probabilistic outputs based on patterns in training data rather than deterministic rules, and they may produce results that are inaccurate, incomplete, misleading, biased, or not explainable, including “hallucinations,” and their performance may vary based on inputs, updates, or changes in underlying data.

As a result, our use of AI could lead to inaccurate analyses, degraded data quality, improper actions or decisions, operational disruptions, or data loss.

Our use of AI may also raise ethical and legal challenges, including outcomes that reflect or amplify bias or discrimination, lack of transparency or traceability, and evolving compliance obligations under data protection, intellectual property, and laws and regulations specifically governing the development, deployment, and use of AI.

In addition, AI tools may increase the risk that confidential, proprietary, or personal data is exposed, misused, or inappropriately processed (including through training, retention, or sharing by third-party providers), and could increase cybersecurity threats such as unauthorized access, prompt-injection, data exfiltration, or other security incidents.

We may also face claims or investigations related to the use of AI, including alleged infringement or misappropriation of third-party intellectual property, or allegations that AI-generated outputs were relied upon inappropriately.

These risks could require additional expenditures, reduce the effectiveness of our operations, result in regulatory scrutiny, litigation, fines, contractual liability, or reputational harm, and could materially adversely affect our business, operating results, financial condition, and stock price.

If we do not adopt AI or other machine-learning technologies effectively or at an appropriate pace, we may also be less competitive relative to peers who do.

Business disruptions, including as a result of geopolitical events and global pandemics, could seriously harm our future revenue and financial condition and increase our costs and expenses.

Our operations, and those of our third-party research institution collaborators, CROs, CDMOs, suppliers, clinical trial sites, and other third-party partners, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, public health crises, and other natural or man-made disasters or business interruptions, for which we are partly uninsured.

In addition, we rely on our third-party research institution collaborators for conducting research and development of our product candidates, and they may be affected by bank failures or instability in the financial services sector, government shutdowns, or withdrawn funding.

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Our business is subject to risks associated with conducting business internationally.

In addition to a subsidiary located in Zurich, Switzerland, some of our suppliers and collaborative relationships are located outside the United States.

In addition to a subsidiary located in Zurich, Switzerland, we have suppliers and collaborative relationships located outside the United States.

Accordingly, our future results could be harmed by a variety of factors, including:

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• differing and changing regulatory requirements in non-U.S.

• challenges enforcing our contractual and intellectual property rights, especially in those non-U.S.

countries that do not offer the same level of intellectual property protection as the United States;

• potentially reduced protection for intellectual property rights;

• difficulties in compliance with non-U.S.

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• changes in a specific country’s or region’s political or economic environment;

• trade protection measures, import or export licensing requirements, or other restrictive government actions;

• negative consequences from changes in tax laws;

• trade protection measures, import or export licensing requirements, or other restrictive government actions by U.S.

• differing reimbursement regimes, including price controls;

• negative consequences from changes in tax laws or tariffs;

• compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad;

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• potential liability under the FCPA, UK Bribery Act, or comparable foreign laws;

• production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

• business interruptions resulting from geopolitical actions, including war and armed conflict, terrorism, natural disasters including earthquakes, typhoons, floods, and fires, or health epidemics;

• cyberattacks, which are growing in frequency, sophistication and intensity, and are becoming increasingly difficult to detect.

In particular, given the new administration in the United States, there is currently significant uncertainty about the future relationship between the United States and various other countries, most significantly China, with respect to trade policies, treaties, tariffs, taxes, and other limitations on cross-border operations.

In particular, there is currently significant uncertainty about the future relationship between the United States and various other countries, most significantly China, with respect to trade policies, treaties, tariffs, taxes, and other limitations on cross-border operations.

government has and continues to make significant additional changes in U.S.

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Under Sections 382 and 383 of the United States Internal Revenue Code of 1986, as amended, (the "Code"), if a corporation undergoes an “ownership change” (generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period), the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited.

We have experienced ownership changes in the past, and we may also experience ownership changes in the future as a result of subsequent shifts in our stock ownership, including in connection with our October 2022 offering, some of which are outside our control.

Limitations may also apply under state law.

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• failure or discontinuation of any of our product development and research programs;

• failure to develop our TV platform;

• failure to commercialize our TV platform;

• results of preclinical studies, clinical trials, or regulatory approvals of product candidates of our competitors, or announcements about new research programs, product candidates, or technologies of our competitors;

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We are unable to predict the effect that sales may have on the prevailing market price of our common stock.

Sales of our common stock by current stockholders may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate, and make it more difficult for you to sell shares of our common stock.

Furthermore, sales of our common stock by current stockholders may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate, and make it more difficult for you to sell shares of our common stock.

Certain holders of shares of our common stock have rights, subject to conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

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We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances, and licensing arrangements.

For example, on February 27, 2024, we announced a strategic private offering transaction in which we sold 3,244,689 shares of our common stock and pre-funded warrants to purchase 26,046,065 shares of our common stock, resulting in net proceeds of approximately $499.3 million.

For example, in December 2025, we sold 9,142,857 shares of common stock and pre-funded warrants to purchase 2,285,714 shares of our common stock in an underwritten public offering.

In January 2026, in connection with the same offering, the underwriters exercised their option to purchase an additional 746,468 shares of common stock, on which date we received aggregate net proceeds of approximately $12.4 million.

Our security holders may be further diluted by the exercise of the pre-funded warrants issued.

2 unchanged sentences

If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms unfavorable to us.

In December 2025, for example, we announced a royalty funding agreement that, upon certain conditions including regulatory approval within specified timelines and payment of milestones, would entitle Royalty Pharma plc to 9.25% royalty on future net sales of tividenofusp alfa.

To the extent that we raise additional capital through the sale of equity or debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder.

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Our directors, executive officers, holders of more than 5% of our outstanding stock, and their respective affiliates beneficially own a significant percentage of our outstanding common stock.

As a result, these stockholders, if they act together, may significantly influence all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions.

This concentration of ownership may have the effect of delaying or preventing a change in control of our company that our other stockholders may believe is in their best interests.

As a result, these stockholders, if they act together, may significantly influence all matters requiring stockholder approval, including approval of significant corporate transactions and the election of directors, as with the recent board nomination and election of a director designated by Baker Brothers Life Sciences L.P.

and 667, L.P.

("Baker Brothers") pursuant to a nominating agreement.

Any concentration of ownership may result in such holders exerting influence over us and may have the effect of delaying or preventing a change in control of our company that our other stockholders may believe is in their best interests.

This in turn could have a material adverse effect on our stock price and may prevent attempts by our stockholders to replace or remove the board of directors or management.

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We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake or system failures.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.

33 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-K

Item 1A. Risk Factors