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Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures.
−Removed: Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures, as of June 30, 2025, were effective at the reasonable assurance level.
+Added: Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures, as of September 30, 2025, were effective at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
−Removed: No changes in our internal control over financial reporting occurred during the quarter ended June 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
+Added: No changes in our internal control over financial reporting occurred during the quarter ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTH ER INFORMATION
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Since our inception, we have devoted substantially all of our resources to research and development, raising capital, pursuing strategic transactions, building our management team and building our intellectual property portfolio, and we have incurred significant operating losses.
−Removed: As of June 30, 2025, we had an accumulated deficit of $600.8 million.
−Removed: Our net loss for the year ended December 31, 2024 was $293.0 million and $85.0 million for the six months ended June 30, 2025.
+Added: As of September 30, 2025, we had an accumulated deficit of $658.3 million.
+Added: Our net loss for the year ended December 31, 2024 was $293.0 million and $142.5 million for the nine months ended September 30, 2025.
To date, we have not generated any revenue from product sales, and we have not identified or sought or obtained regulatory approval for the marketing or sale of any product.
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In addition, we incur additional costs associated with operating as a public company.
−Removed: Based on our current operating plan, we expect that our existing cash, cash equivalents and marketable securities as of June 30, 2025 will be sufficient to fund our current and planned operating expenses and capital expenditures for at least 12 months from the filing date of this Quarterly Report on Form 10-Q.
+Added: Based on our current operating plan, we expect that our existing cash and cash equivalents as of September 30, 2025 will be sufficient to fund our current and planned operating expenses and capital expenditures for at least 12 months from the filing date of this Quarterly Report on Form 10-Q.
Our future capital requirements and the period for which we expect our existing resources to support our operations may vary significantly from what we expect.
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Certain states also impose stricter requirements for processing certain personal information, including sensitive information, such as conducting data privacy impact assessments.
−Removed: These state laws allow for statutory fines for noncompliance.
−Removed: While there is currently an exception for protected health information that is subject to HIPAA and clinical trial regulations in certain U.S.
+Added: Certain of these state laws allow for statutory fines for noncompliance.
+Added: While there are currently exceptions for protected health information that is subject to HIPAA and certain information processed in connection with clinical trials in certain U.S.
state privacy laws, these laws increase compliance costs and potential liability with respect to other personal information we maintain.
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If we are unable to use AI, it could make our business less efficient and result in competitive disadvantages.
−Removed: In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry groups, and we may become subject to such additional obligations in the future.
+Added: In addition to data privacy and security laws, we are or may become contractually subject to industry standards adopted by industry groups.
We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
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We publish privacy policies, marketing materials, whitepapers, and other statements, such as statements related to compliance with certain certifications or self-regulatory principles, regarding data privacy and security.
−Removed: Regulators in the United States are increasingly scrutinizing these statements, and if these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
+Added: Regulators are increasingly scrutinizing these statements, and if these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
Obligations related to data privacy and security (and consumers’ data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty.
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In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.
−Removed: For example, on July 4, 2025, the annual reconciliation bill, the "One Big Beautiful Bill Act" (“OBBBA”), was signed into law, which is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program.
−Removed: OBBBA also narrows access to ACA marketplace exchange enrollment and declines to extend the ACA enhanced advanced premium tax credits, set to expire in 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance.
+Added: For example, on July 4, 2025, the annual reconciliation bill, the "One Big Beautiful Bill Act", or OBBBA, was signed into law, which is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program.
+Added: OBBBA also narrows access to ACA marketplace exchange enrollment and declines to extend the ACA enhanced advanced premium tax credits, set to expire at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance.
Further, among other things, the IRA has multiple provisions that may impact the prices of products that are both sold into the Medicare program and throughout the United States.
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These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business.
−Removed: These actions include, for example, (1) directives to reduce agency workforce, program cuts;
+Added: These actions include, for example, (1) directives to reduce agency workforce and program cuts;
(2) rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation to consider new payment and healthcare models to limit drug spending;
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(5) imposing tariffs of imported pharmaceutical products;
−Removed: and (6) directing certain federal agencies to enforce existing law regarding hospital and plan price transparency and by standardizing prices across hospitals and health plans.
+Added: (6) directing certain federal agencies to enforce existing law regarding hospital and plan price transparency and by standardizing prices across hospitals and health plans;
+Added: and (7) as part of the Make America Healthy Again, or MAHA, Commission's recent Strategy Report, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising.
Additionally, in its June 2024 decision in Loper Bright Enterprises v.
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Disruptions at the FDA and other agencies may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
−Removed: For example, in recent years, including beginning on December 22, 2018, the U.S.
−Removed: government shut down several times and certain regulatory agencies, such as the FDA and the SEC, had to furlough critical employees and stop critical activities.
+Added: For example, as of the filing of this Quarterly Report as well as in recent years, including beginning on December 22, 2018, the U.S.
+Added: government shut down and certain regulatory agencies, such as the FDA and the SEC, had to furlough critical employees and stop critical activities.
If a prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
−Removed: Further, in our operations as a public company, future government shutdowns or delays could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.
+Added: Further, in our operations as a public company, existing or future government shutdowns or delays could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.
Even if we receive regulatory approval of our product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense, and we may be subject to penalties if we fail to comply with regulatory requirements.
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We face competition for personnel from other companies, universities, public and private research institutions, government entities and other organizations.
−Removed: As of June 30, 2025, we had 155 full-time employees.
+Added: As of September 30, 2025, we had 168 full-time employees.
The continued operation of our business and execution of our plans will require material additional staffing within the next twelve months.
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In addition, pursuant to our 2024 Inducement Plan, as amended, our board of directors, or a committee thereof, is authorized to grant inducement awards to new hires as a material inducement to their employment with us.
−Removed: The aggregate number of shares of our common stock that may be issued pursuant to stock awards under our 2020 Plan as of June 30, 2025 shall not exceed 10,774,732 shares, and the aggregate number of shares of our common stock that may be issued pursuant to stock awards under our 2024 Inducement Plan, as amended, shall not exceed 3,500,000 shares.
+Added: The aggregate number of shares of our common stock that may be issued pursuant to stock awards under our 2020 Plan as of September 30, 2025 shall not exceed 10,774,732 shares, and the aggregate number of shares of our common stock that may be issued pursuant to stock awards under our 2024 Inducement Plan, as amended, shall not exceed 3,500,000 shares.
Additionally, the number of shares of our common stock reserved for issuance under our 2020 Plan will automatically increase on January 1 of each year, beginning on January 1, 2021 and continuing through and including January 1, 2030, by 4% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors.
Unless our board of directors elects not to increase the number of shares available for future grant each year, our stockholders may experience additional dilution, which could cause our stock price to fall.
−Removed: Additionally, pursuant to Morphimmune Inc.’s 2020 Equity Incentive Plan, or the Morphimmune Plan, the aggregate number of shares that may be issued pursuant to stock awards under the Morphimmune Plan as of June 30, 2025 may not exceed 2,822,308 shares.
+Added: Additionally, pursuant to Morphimmune Inc.’s 2020 Equity Incentive Plan, or the Morphimmune Plan, the aggregate number of shares that may be issued pursuant to stock awards under the Morphimmune Plan as of September 30, 2025 may not exceed 2,822,308 shares.
Although we did not initially anticipate issuing awards under the Morphimmune Plan, depending on our needs, we may in the future issue awards under the Morphimmune Plan.
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We currently are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, or JOBS Act.
−Removed: For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, or Section 404, reduced disclosure obligations regarding executive compensation in our annual report and our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
+Added: Until December 31, 2025, we intend to take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, or Section 404, reduced disclosure obligations regarding executive compensation in our annual report and our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
In addition, as an emerging growth company, we are only required to provide two years of audited financial statements and two years of selected financial data in our annual report.
−Removed: We could be an emerging growth company for up to five years following the completion of our initial public offering, although circumstances could cause us to lose that status earlier, including if we are deemed to be a “large accelerated filer,” which occurs when the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior June 30, or if we have total annual gross revenue of $1.235 billion or more during any fiscal year before that time, in which cases we would no longer be an emerging growth company as of the following December 31, or if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time, in which case we would no longer be an emerging growth company immediately.
+Added: We will no longer be an emerging growth company effective as of December 31, 2025, the end of the fiscal year following the fifth anniversary of our initial public offering.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.
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As of June 30, 2025, the market value of our common stock held by non-affiliates exceeded $700.0 million.
−Removed: As a result, effective December 31, 2025, we will be a large accelerated filer and thus will cease to be an emerging growth company.
−Removed: Additionally, we will no longer qualify as a smaller reporting company beginning with our first Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2026.
+Added: As a result, we will no longer be a smaller reporting company beginning with our first Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2026.
+Added: Based on recent SEC guidance, we will, however, continue to be a non-accelerated filer through at least our fiscal year ending December 31, 2026.
As a result of this transition, we will be subject to certain disclosure and compliance requirements that apply to other public companies that did not previously apply to us due to our status as an emerging growth company and smaller reporting company.
These requirements include, but are not limited to:
−Removed: the requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404;
−Removed: the requirement that we provide more detailed disclosures regarding executive compensation;
−Removed: and the requirement that we hold a non-binding advisory vote on executive compensation and obtain shareholder approval of any golden parachute payments not previously approved.
+Added: the requirement that we provide more detailed disclosures regarding executive compensation and the requirement that we hold a non-binding advisory vote on executive compensation and obtain shareholder approval of any golden parachute payments not previously approved.
+Added: We will not, however, be subject to the requirement that our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting under Section 404 while we are a non-accelerated filer.
Our ability to use net operating loss carryforwards and other tax attributes may be limited.
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Any failure to implement and maintain effective internal control over financial reporting could also adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will be required to include in our periodic reports that will be filed with the SEC.
−Removed: As of June 30, 2025, the market value of our common stock held by non-affiliates exceeded $700.0 million.
−Removed: As a result, effective December 31, 2025, we will be a large accelerated filer and thus will cease to be an emerging growth company.
−Removed: Additionally, we will no longer qualify as a smaller reporting company beginning with our first Quarterly Report on Form 10-Q for the quarterly period ending March 31, 2026.
−Removed: As a result of this transition, we will be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm with our Annual Reports on Form 10-K starting with the Annual Report on Form 10-K for the fiscal year ending December 31, 2025.
Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock.
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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.