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Item 3. Quantitative and Qualitative Disclosures About Market Risk

2026-05-12 compared with 2025-11-06 · 224 added, 177 removed, 1249 unchanged (24% of the section changed)

Quantitative and Qualitative Disclo sures About Market Risk

The information under this item is not required to be provided by smaller reporting companies.

Interest Rate Risk

As of March 31, 2026, we had cash and cash equivalents of $582.7 million, which consisted of bank deposits and money market funds.

The primary objective of our investment activities is to preserve capital to fund our operations while earning a low-risk return.

Because money market funds generally invest in highly liquid, short-term instruments, we believe that our exposure to interest rate risk is not significant, and a hypothetical 10% change in market interest rates during any of the periods presented would not have had a significant impact on the total value of our portfolio or expected interest income.

As of March 31, 2026, we had no investments in debt securities and had no outstanding debt.

Foreign Currency Sensitivity

We are not currently exposed to significant market risk related to changes in foreign currency exchange rates;

however, we do contract with vendors that are located outside of the United States and may be subject to fluctuations in foreign currency rates.

We may enter into additional contracts with vendors located outside of the United States in the future, which may increase our foreign currency exchange risk.

We believe that, if a 10.0% change in foreign currency exchange rates were to have occurred on March 31, 2026, this change would not have had a material effect on our financial statements.

Inflation Risk

Inflation generally affects us by increasing our costs.

We do not believe that inflation has had a material effect on our business, financial condition or results of operations during any periods presented herein.

Controls an d Procedures

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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.

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.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures, as of March 31, 2026, were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

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.

No changes in our internal control over financial reporting occurred during the quarter ended March 31, 2026 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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• We have a limited operating history, which may make it difficult to evaluate our drug development capabilities and predict our future performance.

• We have not yet demonstrated successful completion of clinical development, submitted a New Drug Application, or NDA, or Biologics License Application, or BLA, obtained FDA approval for marketing, or successfully commercialized a product, and we may be unable to do so.

Furthermore, varegacestat, which we recently acquired, is currently in Phase 3 clinical development, but such acquisition and prior clinical success is not indicative of our ability to obtain NDA approval or successfully commercialize varegacestat.

• We have submitted an NDA for one of our product candidates, but we have not submitted a Biologics License Application, or BLA, obtained FDA approval for marketing, or successfully commercialized a product, and we may be unable to do so.

• We may be unable to advance any of our product candidates into and through clinical development, obtain regulatory approvals and ultimately commercialize them, or we could experience significant delays in doing so.

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• We may fail to realize the business benefits anticipated as a result of completed or future strategic transactions.

• As a targeted radioligand therapy, our IM-3050 program may face additional and potentially unpredictable challenges.

• Clinical trials are expensive, time-consuming and difficult to design and implement.

• Preliminary results from our preclinical studies and clinical trials that we announce or publish from time to time may change as more data become available and as the data undergo audit and verification procedures.

Furthermore, clinical development has an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results and generally could be impacted by other factors beyond our reasonable control.

• If we encounter difficulties enrolling participants in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

• We may experience delays in completion of our clinical trials based on study design.

• We face substantial competition, which may result in others discovering, developing or commercializing products more quickly or marketing them more successfully than us.

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• If we or others identify undesirable side effects caused by any of our current or future product candidates undergoing clinical trials, our ability to market and derive revenue from the product candidate could be compromised.

• We and the third parties with whom we work are subject to stringent and evolving U.S.

and foreign laws, regulations, and rules;

contractual obligations;

industry standards;

and other obligations related to data privacy or security.

Our (or the third parties with whom we work) actual or perceived failure to comply with such obligations could lead to regulatory investigations;

government enforcement actions;

private litigation (including class claims) and mass arbitration demands;

fines and penalties;

disruptions of our business operations;

adverse publicity or other reputational harm;

and other consequences that could negatively affect our operating results and business.

• Health care legislative, regulatory and administrative reform measures, as well as changes or instability at government agencies including FDA, may have a material adverse effect on our business and results of operations.

• If third parties on which we rely to conduct our current and future preclinical studies and clinical trials do not perform as contractually required, fail to satisfy regulatory or legal requirements or miss expected deadlines, our programs could be delayed with material and adverse impacts on our business and financial condition.

• Because we rely on third parties for manufacturing, supply and testing, some of which may be sole source vendors, for preclinical and clinical development materials and commercial supplies, our supply may become limited or interrupted or may not be of satisfactory quantity or quality.

• If our information technology systems or data, or those of the third parties with whom we work are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions;

fines and penalties;

disruptions of our business operations;

reputational harm;

and other adverse consequences.

• It is difficult and costly to protect our intellectual property and our proprietary technologies, and we may not be able to ensure their protection.

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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.

As of September 30, 2025, we had an accumulated deficit of $658.3 million.

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.

As of March 31, 2026, we had an accumulated deficit of $782.0 million.

Our net loss for the year ended December 31, 2025 was $212.4 million and $53.8 million for the three months ended March 31, 2026.

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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We have a limited operating history, which may make it difficult to evaluate our drug development capabilities and predict our future performance.

Other than our recent acquisition of varegacestat, a product candidate in late-stage clinical trials, and initiation of the Phase 1 clinical trial for IM-1021 in February 2025, we have not undertaken clinical trials for any of our drug candidates.

Our clinical trial experience is limited to the recent completion of the Phase 3 RINGSIDE trial for varegacestat and the ongoing Phase 1 clinical trial for IM-1021.

We have no drugs approved for commercial sale and have not generated any revenue from drug sales.

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Our current and future drug candidates require additional discovery research, preclinical development, clinical development, regulatory approval in multiple jurisdictions to market, manufacturing validation, obtaining current good manufacturing practice, or cGMP, manufacturing supply, capacity and expertise, building of a commercial and distribution organization, substantial investment and significant marketing efforts before we generate any revenue from drug sales.

Our short history as an operating company makes any assessment of our future success or viability subject to significant uncertainty.

Our limited history as an operating company makes any assessment of our future success or viability subject to significant uncertainty.

We will encounter risks and difficulties frequently experienced by early clinical-stage companies in evolving fields.

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In addition, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown circumstances.

As we advance our drug candidates, we will need to transition from a company with a research focus to a company capable of supporting clinical development and, if successful, commercial activities.

As we advance our drug candidates, we will need to continue to scale and enhance our capabilities to support clinical development and, if successful, commercial activities.

We may not be successful in such a transition.

We have not yet demonstrated successful completion of clinical development, submitted a New Drug Application or NDA, or Biologics License Application, or BLA, obtained FDA approval for marketing, or successfully commercialized a product, and we may be unable to do so.

As an organization, we have not yet demonstrated an ability to successfully complete clinical development, obtain regulatory approvals for marketing, manufacture a commercial-scale product, conduct sales and marketing activities necessary for successful commercialization, or arrange for a third party to do any of the foregoing on our behalf.

We have submitted an NDA for one of our product candidates, but we have not submitted a Biologics License Application, or BLA, obtained FDA approval for marketing, or successfully commercialized a product, and we may be unable to do so.*

As an organization, we have not yet demonstrated an ability to obtain regulatory approvals for marketing, manufacture a commercial-scale product, conduct sales and marketing activities necessary for successful commercialization, or arrange for a third party to do any of the foregoing on our behalf.

Prior to obtaining approval to commercialize a product candidate in the United States or elsewhere, we must demonstrate with substantial evidence from well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses.

We have not previously completed any clinical trials for any of our current product candidates.

We also have limited experience as a company in preparing and submitting marketing applications and have not previously submitted an NDA, a BLA, or other comparable foreign regulatory submission for any product candidate.

Except for our recently completed Phase 3 RINGSIDE trial for varegacestat, we have not previously completed any clinical trials for any of our current product candidates.

We also have limited experience as a company in preparing and submitting marketing applications and, although we recently submitted an NDA for varegacestat, we have not previously submitted a BLA, or foreign regulatory submission comparable to an NDA or BLA for any product candidate.

In addition, we have had limited interactions with the FDA or other comparable foreign regulatory authorities and cannot be certain how many additional clinical trials of our product candidates will be required or how such additional trials should be designed.

Consequently, we may be unable to successfully and efficiently execute and complete necessary clinical trials in a way that leads to submission of an application for and obtaining regulatory approval of any of our product candidates.

Notably, varegacestat’s prior development was not conducted by us.

As a result, our assumptions about varegacestat’s development potential are based in large part on the data generated from clinical trials conducted by Ayala and we may observe materially and adversely different results in ongoing or future clinical trials.

Notably, varegacestat’s prior development was largely conducted by Ayala.

As a result, our assumptions about varegacestat’s potential are based in large part on the data generated from clinical trials conducted by Ayala as well as our own completion of the Phase 3 RINGSIDE trial, and we may observe materially and adversely different results in future clinical trials or commercial use.

In addition, results from nonclinical studies and clinical trials can be interpreted in different ways.

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The research and development of biotechnology products is capital-intensive.

If our product candidates continue to advance through preclinical studies and clinical trials, we will need substantial additional funds to expand our development, regulatory, manufacturing, marketing and sales capabilities.

If our product candidates advance through preclinical studies, clinical trials, regulatory review and, if approved, commercialization, we will need substantial additional funds to expand our development, regulatory, manufacturing, marketing and sales capabilities.

We have used substantial funds to develop and acquire our product candidates and will require significant funds to continue to advance our ADC platform and conduct further research and development, including preclinical studies and clinical trials, to seek regulatory approvals and to manufacture and market products, if any, that are approved for commercial sale.

In addition, we incur additional costs associated with operating as a public company.

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.

Based on our current operating plan, we expect that our existing cash and cash equivalents as of March 31, 2026 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.

Our monthly spending levels vary based on new and ongoing research and development and other corporate activities.

Because the length of time and activities associated with successful research and development of biotechnology products is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities.

Our monthly spending levels vary based on new and ongoing research and development, pre-commercialization activities and other corporate activities.

Because the length of time and activities associated with successful research and development of biotechnology products and the potential successful commercialization of any approved product is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities.

Any additional capital-raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and, if approved, commercialize our current and any future programs or product candidates.

Additional funding may not be available on acceptable terms, or at all.

As a result of the war between Russia and Ukraine, conflict in the Middle East, bank failures, inflationary pressures on the economy and monetary policy responses taken by government agencies, including tariffs and the prospects of trade wars, and other macroeconomic and political factors, the global credit and financial markets have experienced and may in the future experience extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability.

As a result of the war between Russia and Ukraine, the conflict between the United States and Iran and more generally in the Middle East, bank failures, inflationary pressures on the economy and monetary policy responses taken by government agencies, including tariffs and the prospects of trade wars, and other macroeconomic and political factors, the global credit and financial markets have experienced and may in the future experience extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, and uncertainty about economic and geopolitical stability.

If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain in a timely manner on favorable terms or at all.

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We may be unable to advance any of our product candidates into and through clinical development, obtain regulatory approvals and ultimately commercialize them, or we could experience significant delays in doing so.*

Some of our candidates are in the early stages of development efforts, and we will need to continue to progress our product candidates through preclinical studies and submit INDs to the FDA or appropriate regulatory documents to applicable foreign authorities prior to initiating their clinical development.

Additionally, we acquired varegacestat, a Phase 3 clinical asset, which requires additional clinical data before we can submit an NDA to the FDA and other applicable foreign authorities.

We also only recently initiated our Phase 1 clinical study for IM-1021 and have not yet initiated our Phase 1 clinical study for IM-3050.

We have no products on the market that have gained regulatory approval.

Some of our product candidates are in the early stages of development efforts, and we will need to continue to progress our product candidates through preclinical studies and submit INDs to the FDA or appropriate regulatory documents to applicable foreign authorities prior to initiating their clinical development.

We have three early clinical stage assets that are currently or are expected to soon be under evaluation in Phase 1 trials.

We have no products on the market that have gained regulatory approval and despite the positive results of the Phase 3 RINGSIDE trial and our NDA submission for varegacestat, the NDA may not be approved by the FDA.

Our ability to generate revenue and achieve and sustain profitability depends on our ability to continue to identify programs and nominate product candidates, advance them into preclinical and clinical development and obtain regulatory approvals for and successfully commercializing them, either alone or through a collaboration.

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We cannot be certain of the timely completion or outcome of our research and development activities or our planned clinical studies and cannot predict if the FDA or other regulatory authorities will ultimately support the further advancement of our product candidates.

Most of our product candidates are in the early stages of development, other than varegacestat, which is a Phase 3 clinical asset, and IM-1021, which is a Phase 1 clinical asset, and we are subject to the risks of failure inherent in the development of candidates based on novel approaches, targets and mechanisms of action.

Most of our product candidates are in the early stages of development, other than varegacestat, which recently completed the Phase 3 RINGSIDE trial, and IM-1021, IM-3050 and IM-1617, which are Phase 1 clinical assets, and we are subject to the risks of failure inherent in the development of product candidates based on novel approaches, targets and mechanisms of action.

Reports of adverse events or safety concerns involving our product candidates could result in the limitation, denial or withdrawal of regulatory approval by the FDA or other regulatory authorities for any or all indications, the need to conduct additional trials, implementation of a REMS or the inclusion of unfavorable information in our product labeling and, in turn, could delay or prevent us from commercializing the applicable product or product candidate.

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failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all;

• the FDA or other regulatory agencies interpreting our data differently than we do.

• the FDA or other regulatory agencies interpreting our data differently than we do or requiring us to conduct additional preclinical studies or clinical trials.

Further, we and any existing or potential future partners may never receive necessary marketing and commercialization approvals from regulatory authorities.

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Our scientific research that forms the basis of our ADC platform is ongoing.

Further, the scientific evidence to support the feasibility of discovering and developing products based on our technologies has not been established.

In addition, our ADC platform are not proven to be superior to competing technologies.

Our ADC platform is not proven to be superior to competing technologies.

Even if we are successful in building our pipeline, the product candidates that we identify may not be suitable for clinical development or generate acceptable clinical data, including as a result of being shown to have unacceptable effects or other characteristics that indicate that they are unlikely to be products that will receive marketing approval from regulatory authorities or achieve market acceptance.

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In the natural course of progressing our product candidates, we may make decisions about prioritization that may prove to be incorrect.

In addition, because we have limited financial and other resources, we may be limited in our ability to pursue all potential product candidates of interest, including IM-1021, IM-3050 and varegacestat, even if we would otherwise choose to do so if these limitations did not exist.

In addition, because we have limited financial and other resources, we may be limited in our ability to pursue all potential product candidates of interest, including IM-1021, IM-3050, IM-1617 and varegacestat, even if we would otherwise choose to do so if these limitations did not exist.

For these reasons, we may fail to capitalize on viable opportunities.

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We may fail to realize the business benefits anticipated as a result of completed or future strategic transactions.*

The success of our business strategy to pursue acquisitions and in-licenses of assets will depend, in part, on our ability to successfully integrate, develop and advance the acquired assets.

The success of our business strategy to pursue acquisitions and in-licenses of assets depends, in part, on our ability to successfully integrate, develop and advance the acquired assets.

If we are unable to do so following the consummation of such transaction, the anticipated benefits of such transaction may not be realized fully or at all, or may take longer to realize than expected.

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All these factors could decrease or delay the expected accretive effect of the transactions, negatively impact our stock price, or have a material adverse effect on our business, financial condition and results of operations.

As a targeted radioligand therapy, our IM-3050 program may face additional and potentially unpredictable challenges.*

Lutetium-177 (177Lu), or Lu-177, oncology therapy is relatively new;

only two Lu-177 therapies have been approved in the United States or the European Union and only a limited number of clinical trials of products based on Lu-177 therapies have commenced.

As such, it is difficult to accurately predict the developmental challenges we may incur in advancing IM-3050 through clinical trials, if at all.

The IM-3050 program is subject to risks described above as well as others that may include:

• interruptions to our ability to obtain and deliver on a timely basis sufficient supply of raw materials, isotopes and clinical trial materials for our nonclinical needs and potential future clinical and commercial needs;

• we may not be able to find and retain suitable vendors, including contract research organizations, or CROs and clinical manufacturing organizations, for our development due to the limited number of suppliers qualified to work with radioactive material, or we may develop sole-source relationships with vendors, which may present additional risks inherent to a sole-source relationship;

• if we initiate a clinical trial, our ability to recruit patients may be negatively impacted by the limited number of sites that can administer radioligand therapies;

• if our product is successfully approved for commercial sale, our revenue may be negatively impacted by the limited number of sites that can administer radioligand therapies;

• due to the short half-life of Lu-177, we may incur significant expense developing the means required to effectively and timely distribute drug products to clinical sites and, if approved, to sites for administration to patients.

Clinical trials are expensive, time-consuming and difficult to design and implement.*

Human clinical trials are expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements.

For example, we will incur additional expenses related to our varegacestat, IM-1021 and IM-3050 clinical trials.

Additionally, because our other product candidates are based on new technologies and discovery approaches, we expect that they will require extensive research and development and have substantial manufacturing and processing costs.

For example, we will incur additional expenses related to our ongoing clinical trials and any future clinical trials.

Additionally, because many of our product candidates are based on new technologies and discovery approaches, we expect that they will require extensive research and development and have substantial manufacturing and processing costs.

In addition, costs to treat study participants and to treat potential side effects that may result from our product candidates may be significant.

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A number of pharmaceutical companies have suffered significant setbacks in advanced clinical trials due to lack of efficacy or safety profiles, notwithstanding promising results in earlier trials.

In addition, varegacestat’s prior development was not conducted by us, and we did not conduct many of the preclinical studies for IM-1021, which we initially in-licensed from Zentalis and subsequently acquired in October 2024.

In addition, other than the Phase 3 RINGSIDE trial, varegacestat’s prior development was not conducted by us, and we did not conduct many of the preclinical studies for IM-1021.

As a result, our assumptions about the potential of these programs are based in large part on the data generated in preclinical studies and clinical trials conducted by these third parties.

Results from nonclinical studies and clinical trials can be interpreted in different ways.

Results from preclinical studies and clinical trials can be interpreted in different ways.

We may observe materially and adversely different results in any ongoing or future preclinical studies or clinical trials, or later discover errors or other issues with the data generated by these third parties.

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• failure to perform in accordance with the FDA’s good clinical practice, or GCP, requirements, or applicable regulatory guidelines in other countries;

• patients who enroll in clinical trials may later drop out due to adverse events, a perception they are not benefiting from participating in the study, fatigue with the clinical study process or personal issues;

• any unresolved ethical issues associated with enrolling patients in clinical trials in lieu of prescribing existing treatments that have established safety and efficacy profiles;

• participants who enroll in clinical trials may later drop out due to adverse events, a perception they are not benefiting from participating in the study, fatigue with the clinical study process or personal issues;

• any unresolved ethical issues associated with enrolling participants in clinical trials in lieu of prescribing existing treatments that have established safety and efficacy profiles;

• addressing participant safety concerns that arise during the course of a trial, including occurrence of adverse events that are viewed to outweigh potential benefits;

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• having inadequate supply or quality of components, materials, diagnostics or other supplies necessary for the conduct of our preclinical studies or clinical trials.

Furthermore, we expect to rely on CROs, clinical trial sites and other vendors to ensure the proper and timely conduct of our clinical trials and, while we expect to enter into agreements governing their committed activities, we have limited influence over their actual performance or circumstances that could affect their performance.

Clinical trials may be suspended or terminated by us, our partners, the IRBs of the institutions in which such trials are being conducted, the Data Safety Monitoring Board for such trials or by the FDA or other regulatory authorities 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 or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, inability to recruit appropriate subjects or an adequate number of subjects, failure to demonstrate a benefit from using a drug or therapeutic biologic, changes in governmental regulations or administrative actions, lack of adequate funding to continue the clinical trial and other factors beyond our control.

Furthermore, we expect to rely on CROs, clinical trial sites, manufacturers and other vendors to ensure the proper and timely conduct of our clinical trials and, while we expect to enter into agreements governing their committed activities, we have limited influence over their actual performance or circumstances that could affect their performance.

If we experience delays in the completion of, or termination of, any clinical trial of any of our programs, the commercial prospects will be harmed, and our ability to generate product revenue, if any, will be delayed.

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Delays in enrollment may result in increased costs or may affect the timing or outcome of the planned clinical trials, which could prevent completion of these trials and adversely affect our ability to advance the development of our pipeline.

We may experience delays in completion of our clinical trials based on study design.*

The clinical trial for varegacestat, RINGSIDE Part B is an event-driven study, which means that ending the study is tied to the occurrence of a certain number of events.

It is not possible to predict accurately when the requisite events will occur, if at all.

Given this inherent uncertainty, there can be no assurance that timing for completion of the study and reporting of data will be achieved as and when anticipated by the Company.

Any delays in our clinical programs could significantly harm our business, financial condition and prospects.

We face substantial competition, which may result in others discovering, developing or commercializing products more quickly or marketing them more successfully than us.

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If any of our current or future product candidates are eventually approved for sale, they will likely compete with a range of treatments that are either in development or currently marketed for use in those same disease indications.

With respect to varegacestat, we expect to compete with companies advancing treatments for desmoid tumors, including SpringWorks Therapeutics, Inc.

With respect to varegacestat, we expect to compete with companies advancing treatments for desmoid tumors, including Merck KGaA (successor to SpringWorks Therapeutics, Inc.) and Parabilis Medicines, Inc.

In November 2023, SpringWorks received FDA approval for its oral gamma secretase inhibitor, OGSIVEO ® (nirogacestat), for the treatment of adult patients with progressing tumors who require systemic treatment.

Parabilis is evaluating the small molecule zolucatetide in a Phase 1/2 study that includes patients with desmoid tumors.

Desmoid tumor treatments also include surgery, hormonal therapy, cryotherapy, targeted therapy and chemotherapy.

In July 2025, Merck KGaA announced the closing of the acquisition of SpringWorks.

We cannot predict the nature or extent of any impact that this acquisition of SpringWorks will have on the competitive landscape for varegacestat.

Regarding IM-3050, we are aware of several other companies developing FAP-targeted radioligand therapies, which may represent direct competition to that program.

For instance, Novartis, Yantai LNC Biotechnology, and Perspective Therapeutics have disclosed FAP-targeted radioligand therapies in clinical development.

Additionally, our IM-3050 program faces competition from competitors who may have superior access to a consistent supply of radioactive isotopes.

We cannot predict the nature or extent of any impact that the acquisition of SpringWorks by Merck KGaA will have on the competitive landscape for varegacestat.

IM-1021 is a ROR1 ADC program with the potential to address hematologic and solid tumor indications.

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has disclosed a ROR1 ADC program in clinical development.

Regarding IM-3050, we are aware of several other companies developing FAP-targeted radioligand therapies, which may represent direct competition to that program.

For instance, Novartis, Ratio Therapeutics, Perspective Therapeutics and Sinotau Pharmaceutical Group have disclosed FAP-targeted radioligand therapies in clinical development.

Additionally, our IM-3050 program faces competition from competitors who may have superior access to clinical supplies.

We are not aware of any competitive ADC that pursues IM-1617's target.

The most direct competition may come from other oncology companies pursuing the same indications that we may ultimately select for pivotal development.

Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, performing preclinical studies, conducting clinical studies, integrating assets into their portfolio, obtaining regulatory approvals and marketing approved products than we have.

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• regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication or a limitation on the indications for use or impose restrictions on the distribution in the form of a REMS in connection with approval.

Our IM-3050 program may face additional and potentially unpredictable challenges.*

Lutetium-177 (177Lu), or Lu-177, oncology therapy is relatively new;

only two Lu-177 therapies have been approved in the United States or the European Union and only a limited number of clinical trials of products based on Lu-177 therapies have commenced.

As such, it is difficult to accurately predict the developmental challenges we may incur in advancing IM-3050 through clinical trials, if at all.

The IM-3050 program is subject to risks described above as well as others that may include:

• we may not be able to find and retain suitable vendors, including CROs and clinical manufacturing organizations, for our development due to the limited number of suppliers qualified to work with radioactive material, which may present additional risks inherent to limited-source circumstances, including the risks associated with acquiring the required supply of diagnostic radiotracer, which delayed commencement of our Phase 1 clinical trial for IM-3050;

• our ability to recruit participants may be negatively impacted by the limited number of sites that can administer radioligand therapies;

• if our product is successfully approved for commercial sale, our revenue may be negatively impacted by the limited number of sites that can administer radioligand therapies;

If any of our product candidates is approved for marketing and commercialization in the future and we are unable to develop sales, marketing and distribution capabilities on our own or enter into agreements with third parties to perform these functions on acceptable terms, we will be unable to successfully commercialize any such future products.

We currently have no sales, marketing or distribution capabilities, which are necessary in order to commercialize each product candidate that gains FDA approval.

It would be expensive and time-consuming to build these capabilities or enter into strategic partnerships with third parties to perform these services.

We are currently in the early stages of building our internal sales and marketing capabilities to prepare for the commercialization of varegacestat, if approved, and we have never commercialized a product.

It will be expensive and time-consuming to build these capabilities or enter into strategic partnerships with third parties to perform these services.

If we decide to market any approved products directly, we will need to commit significant financial and managerial resources to develop a marketing and sales force with technical expertise and supporting distribution, administration and compliance capabilities.

We have no prior experience as a company with the marketing, sale or distribution of pharmaceutical products and there are significant risks involved in the building and managing of a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team.

Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of these products.

If we rely on third parties with such capabilities to market any approved products or decide to co-promote products with partners, we will need to establish and maintain marketing and distribution arrangements with third parties, and there can be no assurance that we will be able to enter into such arrangements on acceptable terms or at all.

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We intend to seek such designation for some or all of our additional product candidates.

The Fast Track program is intended to expedite or facilitate the process for reviewing new product candidates that meet certain criteria.

Specifically, drugs and biologic are eligible for Fast Track designation if they are intended, alone or in combination with one or more drugs or biologics, to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition.

Drugs and biologic are eligible for Fast Track designation if they are intended, alone or in combination with one or more drugs or biologics, to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition.

Fast Track designation applies to the combination of the product candidate and the specific indication for which it is being studied.

The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once a biologics license application, or biologics license applications, or BLA, or NDA is submitted, the application may be eligible for priority review.

The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once a BLA or NDA is submitted, the application may be eligible for priority review.

An NDA or BLA submitted for a Fast Track product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA or BLA on a rolling basis before the complete application is submitted.

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A failure to obtain accelerated approval or any other form of expedited development, review or approval for any of our product candidates would result in a longer time period to commercialization of such product candidate, if any, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.

We may fail to obtain orphan drug designations from the FDA for our product candidates, and even if we obtain such designations, we may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity.*

We may fail to obtain orphan drug designations for our product candidates, and even if we obtain such designations, we may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity.

Regulatory authorities in some jurisdictions, including the United States, may designate biologics or drugs designed to address relatively small patient populations as “orphan drugs.” Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug or biologic intended to treat a rare disease or condition, which is defined as occurring in a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States, where there is no reasonable expectation that the cost of developing the drug or biologic will be recovered from sales in the United States.

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Even if we, or any future collaborators, obtain orphan drug designation for a product candidate, we, or they, may not be able to obtain or maintain orphan drug exclusivity for that product candidate.

For example, European orphan designation may be removed if varegacestat will not offer significant benefit relative to the authorized product nirogacestat.

Loss of European orphan designation for varegacestat for the treatment of desmoid tumors would materially adversely impact the commercialization of varegacestat in the European Union.

Further, even if we, or any future collaborators, obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active ingredients may be approved for the same disease or condition.

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We and the third parties with whom we work are subject to stringent and evolving U.S.

and foreign laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security.

Our (or the third parties with whom we work) actual or perceived failure to comply with such obligations could lead to regulatory investigations or government enforcement actions;

and foreign laws, regulations, and rules;

contractual obligations;

industry standards;

and other obligations related to data privacy or security.

Our (or the third parties with whom we work) actual or perceived failure to comply with such obligations could lead to regulatory investigations;

government enforcement actions;

private litigation (including class claims) and mass arbitration demands;

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disruptions of our business operations;

adverse publicity;

adverse publicity or other reputational harm;

and other consequences that could negatively affect our operating results and business.

In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) personal information and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, and sensitive third-party data.

Due to these data processing activities, we and the third parties with whom we work, including our current and potential collaborators are subject to numerous data privacy and security obligations, such as federal, state, local and foreign laws and regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations related to data privacy and security.

Due to these data processing activities, we and the third parties with whom we work, including our current and potential collaborators, are subject to numerous data privacy and security obligations, such as federal, state, local and foreign laws and regulations;

industry standards;

external and internal privacy and security policies;

contractual requirements;

and other obligations related to data privacy or security.

In the United States, numerous federal, state and local laws and regulations, including federal health information privacy laws (e.g., the Health Insurance Portability and Accountability Act, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH), state data breach notification laws, state health information privacy laws, federal and state consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws), that govern the collection, use, disclosure and protection of health-related and other personal information apply to our operations or the operations of the third parties with whom we work.

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As applicable, such rights include the right to access, correct, or delete certain personal information, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.

The exercise of these rights may impact our business and ability to provide our products and services.

The exercise of these rights may impact our business.

Certain states also impose stricter requirements for processing certain personal information, including sensitive information, such as conducting data privacy impact assessments.

Certain of these state laws allow for statutory fines for noncompliance.

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.

We are and may in the future become subject to U.S.

state laws governing the privacy of consumer health data.

For example, Washington’s My Health My Data Act defines consumer health data broadly, places restrictions on companies’ processing of consumer health data (including imposing stringent requirements for consents), grants consumers certain rights with respect to their consumer health data, and creates a private right of action to allow individuals to sue for violations of the law.

Other states have passed, are considering, and may adopt similar laws.

While certain U.S.

state consumer privacy laws currently have certain exceptions for protected health information that is subject to HIPAA and certain information processed in connection with clinical trials, these laws increase compliance costs and potential liability with respect to other personal information we maintain.

Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.

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or private litigation related to processing of personal information brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.

Compliance with foreign data privacy and security laws and regulations requires us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impacts our ability to operate in certain jurisdictions.

In the ordinary course of business, we transfer personal data from Europe and other jurisdictions to the United States or other countries.

Europe and certain other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.

In particular, the European Economic Area (EEA) and the United Kingdom (UK) have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate.

In Europe, the Network and Information Security Directive, or NIS2, aims to improve the resilience and incident response capabilities of entities operating in a number of sectors, including the health sector.

Non-compliance with NIS2, if determined to be applicable to us, may lead up to administrative fines of a maximum of €10 million or up to 2% of total worldwide turnover of the preceding financial year.

Compliance with foreign data privacy and security laws and regulations requires us to take on more onerous obligations in our contracts, restricts our ability to collect, use, disclose and otherwise process data, or in some cases, impacts our ability to operate in certain jurisdictions.

In the ordinary course of business, we transfer personal information from Europe and other jurisdictions to the United States or other countries.

Europe and certain other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal information to other countries.

In particular, the European Economic Area (EEA) and the United Kingdom (UK) have significantly restricted the transfer of personal information to the United States and other countries whose privacy laws it generally believes are inadequate.

Other jurisdictions may adopt or have already adopted similarly stringent data localization and cross-border data transfer laws.

Although there are currently various mechanisms that can be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA standard contractual clauses, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these mechanisms to lawfully transfer personal data to the United States.

If there were no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups.

Although there are currently various mechanisms that can be used to transfer personal information from the EEA and UK to the United States in compliance with law, such as the EEA standard contractual clauses, the UK's International Data Transfer Agreement / Addendum, and the EU-U.S.

Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these mechanisms to lawfully transfer personal information to the United States.

If there were no lawful manner for us to transfer personal information from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal information necessary to operate our business.

Additionally, companies that transfer personal information out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups.

Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.

Regulators in the United States are also increasingly scrutinizing certain personal data transfers and have and may further impose personal data localization requirements or restrictions on cross-border personal data transfers.

Additionally, the U.S.

Regulators in the United States are also increasingly scrutinizing certain personal information transfers and have and may further impose personal information localization requirements or restrictions on cross-border personal data transfers.

For example, the U.S.

Department of Justice issued a rule entitled the Preventing Access to U.S.

Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons, which places additional restriction on certain data transactions involving countries of concern (e.g., China, Russia, Iran) and covered individuals (i.e., individuals and entities located in or controlled by individuals or entities located in those jurisdictions) that may impact certain business activities such as vendor engagements, sale or sharing of data, employment of certain individuals, and investor agreements.

Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons, which places additional restriction on certain data transactions involving countries of concern (e.g., China, Russia, Iran) and covered persons that may impact certain business activities such as vendor engagements, sale or sharing of data, employment of certain individuals, and investor agreements.

Violations of the rule could lead to significant civil and criminal fines and penalties.

The rule applies regardless of whether data is anonymized, key-coded, pseudonymized, de-identified or encrypted, which presents particular challenges for companies like ours and may impact our ability to transfer data in connection with certain transactions or agreements.

We may also become subject to new laws that regulate non-personal data.

For example, the European Union’s Data Act imposes certain data and cloud service interoperability and switching obligations to enable users to switch between cloud service providers without undue delay or cost, as well as certain requirements concerning cross-border international transfers of, and governmental access to, non-personal data outside the EEA.

We may also become subject to new laws that regulate non-personal information.

Depending on how this Act and any similar laws are implemented and interpreted, we may have to adapt our business practices and contractual arrangements to comply with such obligations.

Our employees and personnel use generative artificial intelligence, or AI, technologies to perform their work, and the disclosure and use of personal information in AI technologies is subject to various privacy laws and other privacy obligations.

Governments have passed and are likely to pass additional laws regulating AI.

Our personnel use artificial intelligence (“AI”) technologies, including generative AI, to support aspects of their work, and the disclosure and use of personal information in AI technologies is subject to various privacy laws and other privacy obligations.

Governments have passed and are likely to pass additional laws and regulations regulating AI technologies.

Our use of this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits.

If we are unable to use AI, it could make our business less efficient and result in competitive disadvantages.

In addition to data privacy and security laws, we are or may become contractually subject to industry standards adopted by industry groups.

If we are unable to use AI technologies, it could make our business less efficient and result in competitive disadvantages.

Several jurisdictions around the globe, including Europe and certain U.S.

states, have proposed, enacted, or are considering laws governing the development and use of AI technologies, such as the EU’s AI Act.

For example, the EU AI Act sets out a risk-based framework, subjecting certain AI technologies to numerous compliance obligations, including transparency, conformity and risk assessment, monitoring and human oversight requirements.

Under the EU AI Act, non-compliant companies may be subject to administrative fines of up to 35 million Euros or 7% of a company’s total worldwide annual turnover for the preceding financial year, whichever is the higher.

Certain of our activities subject us to the EU AI Act and depending on how the EU AI Act is implemented and interpreted, we may have to adapt our business practices, contractual arrangements, and services to comply with such obligations.

We expect other jurisdictions will adopt similar laws.

In addition to data privacy and security laws, we are contractually subject to industry standards, and we may in the future become contractually subject to additional such obligations.

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.

For example, some clinical trial sites who share data about clinical trial participants contractually limit our ability to use and disclose personal information.

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.

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.

We publish policies, materials and statements, such as statements related to compliance with certain certifications or self-regulatory principles, regarding data privacy, security, and artificial intelligence.

Regulators are increasingly scrutinizing such 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.

Additionally, these obligations are subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.

Preparing for and complying with these obligations requires us to devote significant resources, and has in the past and may in the future necessitate changes to our services, information technologies, systems, and practices and to those of any third parties with whom we work.

Failure or the perceived failure to address or comply with applicable data privacy and security obligations, could result in government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);

litigation (including class claims) or mass arbitration demands;

We may at times fail (or be perceived to fail) in our efforts to comply with our data privacy or security obligations.

Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations, which could negatively impact our business operations.

If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant adverse consequences, including but not limited to:

government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);

litigation (including class-action claims) and mass arbitration demands;

additional reporting requirements and/or oversight;

bans on processing personal information;

bans or restrictions on processing personal information;

orders to destroy or not use personal information;

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Claims that we or the third parties with whom we work have violated individuals’ privacy rights, failed to comply with data privacy and security laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend and could result in adverse publicity that could harm our business.

Plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands.

Plaintiffs have become increasingly active in bringing privacy-related claims against companies, including class-action claims and mass arbitration demands.

Some of these claims allow for the recovery of statutory damages on a per-violation basis and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.

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or substantial changes to our business model or operations.

Health care legislative reform measures may have a material adverse effect on our business and results of operations.*

Health care legislative, regulatory and administrative reform measures, as well as changes or instability at government agencies including FDA, may have a material adverse effect on our business and results of operations.*

In the United States, there have been and continue to be a number of legislative initiatives to contain health care costs.

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If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad, particularly given the recent change in administration.

The current Trump administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, CMS and related agencies.

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.

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;

(3) eliminating the Biden administration’s executive order that directed HHS to establishing an AI task force and developing a strategic plan, directing HHS to lower prescription drug costs for Medicare through a variety of initiatives, including by improving upon the Medicare Drug Negotiation Program, and establishing Most-Favored-Nation pricing for pharmaceutical products;

(5) imposing tariffs of imported pharmaceutical products;

In addition, changes in leadership, funding, staffing levels or other operational matters at the FDA and other governmental agencies could result in delays, extended review times and other disruptions to the regulatory review and approval process for our product candidates and have other operational impacts, which could materially and adversely affect the timing and outcome of our regulatory submissions and progress of our product candidates.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.

The Trump administration is pursuing policies to reduce regulations and expenditures across government including at the U.S.

Department of Health and Human Services, or HHS, the FDA, the Centers for Medicare & Medicaid Services, or CMS, and related agencies.

These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy and personnel changes that create additional uncertainty for our business.

These actions include, for example, (1) directing agencies to reduce workforce and program cuts;

and (2) directing HHS to lower prescription drug costs for Medicare through a variety of initiatives, including by improving upon the Medicare Drug Negotiation Program, and establishing Most-Favored-Nation pricing for pharmaceutical products;

(3) imposing tariffs on imported pharmaceutical products;

(4) directing certain federal agencies to enforce existing law regarding hospital and plan price transparency and by standardizing prices across hospitals and health plans;

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.

and (5) as part of the Make America Healthy Again Commission's Strategy Report, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising.

Additionally, the current administration recently called on Congress to enact "The Great Healthcare Plan," to codify and expand Most-Favored Nation pricing, lower government subsidies to private insurance companies, increase healthcare price transparency, expand pharmaceutical drugs available for over-the-counter purchase, and enact restrictions on pharmacy benefit manager, or PBM, payment methodologies, among other things.

Additionally, in its June 2024 decision in Loper Bright Enterprises v.

Raimondo, the U.S.

Supreme Court overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes.

The Loper Bright decision could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations, including those issued by the FDA.

Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA.

Supreme Court's decision greatly reduced judicial deference to regulatory agencies, which could increase successful legal challenges to federal regulations affecting our operations.

We expect that additional state and federal health care reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for health care products and services, which could result in reduced demand for our product candidates or additional pricing pressures, or otherwise adversely impact our operations.

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Competition that our products could face from generic versions of our products could materially and adversely affect our future revenue, profitability, and cash flows and substantially limit our ability to obtain a return on the investments we have made in those product candidates.

Disruptions at the FDA, the SEC and other government agencies caused by funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.*

Disruptions at the FDA, the SEC and other government agencies caused by shutdowns, funding shortages or global health concerns could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new or modified products from being developed, approved or commercialized in a timely manner or at all, or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, 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, and other events that may otherwise affect the FDA’s ability to perform routine functions.

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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.

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.

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

For example, in recent years the U.S.

government has shut down several times 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.

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.

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.

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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In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted.

We are monitoring these regulations as several of our programs move into later stages of development, including varegacestat which is in Phase 3 clinical development;

We are monitoring these regulations as several of our programs move into later stages of development, including varegacestat for which we submitted an NDA in the second quarter 2026;

however, a majority of our programs are currently in the earlier stages of development and we will not be able to assess the impact of price regulations for a number of years.

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As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

Additionally, we or our collaborators may develop companion diagnostic tests for use with our current and future potential product candidates.

Additionally, we or our collaborators may develop in vitro diagnostic tests for use with our current and future potential product candidates.

We or our collaborators will be required to obtain coverage and reimbursement for these tests separately and apart from the coverage and reimbursement we may seek for our current and future potential product candidates.

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A number of legislative and regulatory changes in the health care system in the United States and other major health care markets have been proposed and/or adopted in recent years, and such efforts have expanded substantially in recent years.

For example, HHS has been empowered to (1) negotiate drug prices annually for a select number of single source Part D drugs and biologics without generic or biosimilar competition;

and (2) impose rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

Each year up to twenty (20) products will be selected by HHS for the Medicare Drug Price Negotiation Program.

Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis.

We believe that the efforts of governments and third-party payors to contain or reduce the cost of health care and legislative and regulatory proposals to broaden the availability of health care will continue to affect the business and financial condition of pharmaceutical and biotechnology companies.

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If third parties on which we rely to conduct our current and future preclinical studies and clinical trials do not perform as contractually required, fail to satisfy regulatory or legal requirements or miss expected deadlines, our programs could be delayed with material and adverse impacts on our business and financial condition.*

We currently rely, and intend to continue to rely, on third-party clinical investigators, CROs, clinical data management organizations and consultants to design, conduct, supervise and monitor certain preclinical studies and any clinical trials, including for the Phase 3 clinical trial of varegacestat and the Phase 1 clinical trials of IM-1021 and IM-3050.

Since we rely on these third parties and will not have the ability to conduct certain preclinical studies or clinical trials independently, we will have less control over the timing, quality and other aspects of such preclinical studies and clinical trials than we would have had we conducted them on our own.

Since we rely on these third parties and do not have the ability to conduct certain preclinical studies or clinical trials independently, we will have less control over the timing, quality and other aspects of such preclinical studies and clinical trials than we would have had we conducted them on our own.

These investigators, CROs and consultants are not our employees and we will have limited control over the amount of time and resources that they dedicate to our programs.

These third parties may have contractual relationships with other entities, some of which may be our competitors, which may draw time and resources from our programs.

In addition, these third parties may have contractual relationships with other entities, some of which may be our competitors, which may draw time and resources from our programs.

The third parties with which we may contract might not be diligent, careful or timely in conducting our preclinical studies or clinical trials, resulting in the preclinical studies or clinical trials being delayed or unsuccessful.

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Any adverse development or delay in our clinical trials could have a material and adverse impact on our commercial prospects and may impair our ability to generate revenue.

In addition, if we or any of our CROs or vendors fail to comply with current and evolving laws, regulations and guidelines, the results generated in our clinical trials may be deemed insufficient or unreliable, and regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

Any noncompliance with these laws, regulations and guidelines may negatively impact the integrity of the data collected in our clinical trials and may prevent approval or require us to repeat clinical trials or add patients to ongoing clinical trials, which would be costly and could delay the regulatory submission and/or approval process.

Because we rely on third parties for manufacturing, supply and testing, some of which may be sole source vendors, for preclinical and clinical development materials and commercial supplies, our supply may become limited or interrupted or may not be of satisfactory quantity or quality.*

We currently rely, and intend to continue to rely, on third-party contract manufacturers for all of our preclinical and clinical trial product materials and commercial supplies, including for our Phase 3 clinical trial of varegacestat and our Phase 1 clinical trials of IM-1021, IM-3050, IM-1617, IM-1340 and IM-1335.

We currently rely, and intend to continue to rely, on third-party contract manufacturers for all of our preclinical and clinical trial product materials and commercial supplies.

We do not intend to produce any meaningful quantity of materials needed for preclinical and clinical development through our internal resources, and we do not currently own manufacturing facilities for producing such supplies.

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In particular, any replacement of our manufacturers could require significant effort and expertise because there may be a limited number of qualified replacements.

In addition, certain of our product candidates may require the development, manufacture or use of companion diagnostics or other specialized testing performed by third parties.

We may rely on a limited number of vendors, or a single vendor, for such diagnostic or testing services, and any failure by these third parties to perform as expected, comply with applicable regulatory requirements, or maintain adequate capacity could delay, disrupt or prevent our clinical development programs, regulatory approval or commercialization efforts.

For example, we currently rely on limited suppliers for our diagnostic radiotracer supply for IM-3050, and shipment of the radiotracer was delayed, impacting our ability to commence our Phase 1 clinical trial for IM-3050.

Even if we succeed in identifying and contracting with one or more alternative suppliers, there is no guarantee that we will be able to avoid further delays.

The manufacturing process for a program or product candidate is subject to FDA and other regulatory authority review.

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The delays associated with the verification of a new manufacturer could negatively affect our ability to develop in a timely manner or within budget.

Certain Chinese biotechnology companies, CROs and contract development and manufacturing organizations may become subject to trade restrictions, tariffs, sanctions, other regulatory requirements, or proposed legislation by the U.S.

Certain Chinese biotechnology companies, CROs and contract development and manufacturing organizations are subject to trade restrictions, tariffs, sanctions, other regulatory requirements, or proposed legislation by the U.S.

government, which could potentially impact services available for our research and development or our ability to secure the materials we need for our product candidates.

For example, the House of Representatives of the prior Congress (the 118 th Congress) passed the BIOSECURE Act, which proposed targeting U.S.

government contracts, grants, and loans for entities that use biotechnology equipment or services from certain named Chinese biotechnology companies, and potentially additional Chinese biotechnology companies designated in the future.

The language of the proposed BIOSECURE Act would, among other things, prohibit U.S.

federal agencies from entering into or renewing any contract with any entity that uses biotechnology equipment or services produced or provided by a “biotechnology company of concern.” The version of the bill passed by the prior House of Representatives included a grandfathering provision allowing biotechnology equipment and services provided or produced by named biotechnology companies of concern under a contract or agreement entered into before the effective date until January 1, 2032.

The BIOSECURE Act did not become law in the 118 th Congress.

It is unclear whether the current Congress (the 119 th Congress) will introduce the BIOSECURE Act or similar legislation in this congressional session and, if so, how the scope, prohibitions, or designated biotechnology companies of concern may differ from the version of the BIOSECURE Act passed by the House in the prior 118 th Congress.

The United States has recently passed legislation, namely the BIOSECURE Act to prohibit U.S.

federal executive agencies from procuring or obtaining any biotechnology equipment or service produced or provided by a “biotechnology company of concern” or entering into or renewing a contract, loan, or grant with an entity that uses such biotechnology equipment or equipment.

Specifically, the National Defense Authorization Act, or NDAA, for Fiscal Year 2026, which includes the BIOSECURE Act as an amendment, was signed into law by President Trump on December 18, 2025.

The BIOSECURE Act prohibits the U.S.

Government from procuring or obtaining biotechnology equipment or services produced or provided by a “biotechnology company of concern,” or BCC;

entering into, extending, or renewing government contracts with an entity that directly or indirectly uses biotechnology equipment or services from a BCC in performance of that federal contract;

and/or issuing grants or loans to purchase, obtain, or use biotechnology equipment or services produced by a BCC.

The BIOSECURE Act also prohibits U.S.

government loan and grant recipients from using federal loan or grant money to enter into contracts with entities that use equipment from BCCs in the performance of any federal prime contract or subcontract.

Companies designated as a BCC include those that are identified on the U.S.

Department of Defense’s annual List of Chinese Military Companies, also known as the 1260H List, and the U.S.

Government also has the ability to designate entities as BCCs through a separate designation process.

There is a “safe harbor” provision providing that the restrictions do not apply to equipment or services that were formerly but are no longer provided by a “biotechnology company of concern,” as well as a “grandfathering” provision providing that the prohibitions shall not apply for a five-year period to biotechnology equipment or services produced or provided under a contract or agreement entered into before the applicable effective date.

Given the BIOSECURE Act, we may be restricted in our ability to work with certain Chinese biotechnology companies to the extent we would contract with, or otherwise receive funding from, the U.S.

Since we engage third party vendors located outside the United States, we are exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies of the United States or applicable foreign government, political unrest or unstable economic conditions.

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Depending on the designation, potential consequences can range from a comprehensive prohibition on all transactions or dealings with designated parties, or a limited prohibition on certain types of activities, such as exports and financing activities, with designated parties.

Additionally, a trade war could lead to tariffs on supplies and materials we use that are manufactured internationally, including in China.

Additionally, geopolitical conditions could lead to tariffs on supplies and materials we use that are manufactured internationally, including in China.

Any of these matters could materially and adversely affect our business and results of operations.

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If we are unable to make arrangements with a vendor for a particular need, or maintain our relationship with that vendor, on commercially reasonable terms, we may not be able to develop and commercialize our programs or product candidates successfully or operate our business as we intend, which could harm our business, result of operations, financial condition and prospects.

A cyber attack or breach of our information technology systems or data, or those of the third parties with whom we work, could cause adverse consequences, including but not limited to regulatory investigations or actions;

If our information technology systems or data, or those of the third parties with whom we work are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions;

fines and penalties;

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and other adverse consequences.

In the ordinary course of business, we, our collaborators, our vendors, and other third parties with whom we work may process proprietary, confidential, and sensitive data, including our clinical trial data, health-related data or personal information, or collectively, sensitive data.

In the ordinary course of our business, we and the third parties with whom we work process proprietary, confidential, and other sensitive information, including our clinical trial data, health-related data and personal information, or collectively, sensitive data.

Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties with whom we work.

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For example, we have clinical trial activities in regions experiencing geopolitical or other conflicts, including in Israel, where businesses have experienced an increase in cyberattacks in relation to the Israel/Hamas conflict.

We and the third parties with whom we work are subject to a variety of evolving threats, including social-engineering attacks (including through deep fakes, which are increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.

We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which are increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.

In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds.

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Threat actors may also gain access to other networks and systems after a compromise of our networks and systems.

Remote work has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.

For example, threat actors may use an initial compromise of one part of our environment to gain access to other parts of our environment, or leverage a compromise of our networks or systems to gain access to the networks or systems of third parties with whom we work, such as through phishing or supply chain attacks.

Remote work has increased risks to our information technology systems and data, as more of our personnel utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.

Future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.

Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.

We rely on third parties and technologies to operate critical business systems to process sensitive data in a variety of contexts, including cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, and other functions.

We rely on third parties to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee email, and other functions.

Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.

If the third parties with whom we work experience a material security incident or other interruption, we could experience adverse consequences.

If the third parties with whom we work experience a security incident or other interruption, we could experience adverse consequences.

While we may be entitled to damages if the third parties with whom we work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.

In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or third-parties’ with whom we work supply chains have not been compromised.

While we have implemented security measures designed to protect against and recover from security incidents, there can be no assurance that these measures will be effective.

We take steps designed to detect, mitigate and remediate vulnerabilities in our information security systems (such as our hardware and/or software, including that of third parties with whom we work), but we may not be able to detect, mitigate, and remediate all such vulnerabilities including on a timely basis.

While we have implemented security measures designed to protect against and recover from security incidents, there can be no assurance that these measures have been or will be effective.

We take steps designed to detect, mitigate and remediate vulnerabilities in our information security systems (such as our hardware and/or software, including that of third parties with whom we work).

However, we have not been and may not in the future be able to detect, mitigate, and remediate all such vulnerabilities, including on a timely basis.

Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities.

Vulnerabilities could be exploited and result in a security incident.

Certain of the previously identified or similar threats have in the past and may in the future cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the third parties upon whom we rely.

A security incident or other interruption could disrupt or otherwise impact our ability (and that of third parties upon whom we rely) to conduct our business.

Certain of the previously identified or similar threats have in the past and may in the future cause a security incident or other interruption that has, and could in the future, result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the third parties with whom we work.

A security incident or other interruption could disrupt or otherwise impact our ability (and that of third parties with whom we work) to conduct our business.

We have in the past and may in the future expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.

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or other adverse consequences, any of which could have a material adverse effect on our business, results of operations, financial condition, prospects and cash flows.

Further, some of our contracts do not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.

Although we have insurance coverage, including cybersecurity insurance, in place, we cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims by third parties or losses that we directly incur.

Further, some of our contracts do not contain limitations of liability, and even where they do, there can be no assurance that such limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.

We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims by third parties or losses that we directly incur.

In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive data about us from public sources, data brokers, or other means that reveal competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.

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In some cases we may not have control over the prosecution, maintenance, defense or enforcement of the patents that we license, and may not have sufficient ability to provide input into the patent prosecution, maintenance and defense process with respect to such patents, and potential future licensors may fail to take the steps that we believe are necessary or desirable in order to obtain, maintain, defend and enforce the licensed patents.

If we fail to comply with our obligations under any license, collaboration or other intellectual property-related agreements, we may be required to pay damages and could lose intellectual property rights that may be necessary for developing, commercializing and protecting our current or future targeted therapeutics, or we could lose certain rights to grant sublicenses.

We are reliant upon in-licenses to certain patent rights and proprietary technologies from third parties that are or may become important or necessary to our ADC platform and/or targeted therapeutics pipeline.

If we fail to comply with our obligations under any license or other intellectual property-related agreements, we may be required to pay damages and could lose intellectual property rights that may be necessary for developing, commercializing and protecting our current or future targeted therapeutics, or we could lose certain rights to grant sublicenses.

We are reliant upon in-licenses to certain patent rights and proprietary technologies from third parties that are or may become important or necessary to our targeted therapeutics pipeline.

Our current license agreements impose, and any future license agreements we enter into are likely to impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent prosecution, and enforcement or other obligations on us.

In addition, certain of our license agreements require us to bear the costs of filing and maintaining patent applications.

If we are in breach of our license agreements, we may be required to pay damages and the licensor may have the right to terminate the license.

Termination of any of our license agreements could result in a material adverse effect on our ability to use our ADC platform and/or targeted therapeutics and our ability to develop, manufacture, and sell products that are discovered using or are otherwise covered by technology licensed under those agreements, or could enable a competitor to gain access to the licensed technology.

If we are in breach of any of our license agreements, we may be required to pay damages and the licensor may have the right to terminate the license.

Termination of any of our license agreements could result in a material adverse effect on our ability to develop, manufacture, and sell products that are discovered using or are otherwise covered by technology licensed under those agreements, or could enable a competitor to gain access to the licensed technology.

Under our current and future license agreements, we may not have all intellectual property rights necessary for developing, commercializing, and protecting our current or future targeted therapeutics.

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We face competition for personnel from other companies, universities, public and private research institutions, government entities and other organizations.

As of September 30, 2025, we had 168 full-time employees.

As of March 31, 2026, we had 206 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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We may experience difficulties in managing our growth and expanding our operations.

As our product candidates enter and advance through preclinical studies and any clinical trials, including our Phase 1 clinical trial of IM-1021 and our Phase 3 clinical trial of varegacestat, we will need to expand our development, regulatory and manufacturing capabilities or contract with other organizations to provide these capabilities for us.

As our product candidates enter and advance through preclinical studies, clinical trials and potential marketing approval, we will need to expand our development, regulatory, manufacturing, marketing and sales capabilities or contract with other organizations to provide these capabilities for us.

We may also experience difficulties in the discovery and development of new product candidates using our ADC platform if we are unable to meet demand as we grow our operations.

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Additionally, in February 2024, we filed an automatic shelf registration statement on Form S-3, pursuant to which we have, and may in the future issue from time-to-time securities in one or more offerings at prices and terms to be determined at the time of sale.

For example, in February 2024 and January 2025, we raised $230.0 million and $172.5 million, respectively, before deducting underwriting discounts and commissions and estimated offering expenses payable by us, through the public offering of our common stock.

In connection with the closing of the public offerings, we issued and sold 11,500,000 shares of our common stock in February 2024 and 22,258,064 shares of our common stock in January 2025.

For example, in February 2024, January 2025, and December 2025 we raised $230.0 million, $172.5 million, and $460.5 million respectively, before deducting underwriting discounts and commissions and estimated offering expenses payable by us, through the public offering of our common stock.

In connection with the closing of the public offerings, we issued and sold 11,500,000 shares of our common stock in February 2024, 22,258,064 shares of our common stock in January 2025, and 21,418,750 shares of our common stock in December 2025.

In May 2024, we also entered into the 2024 ATM Agreement with TD Cowen, pursuant to which we may offer and sell, from time to time through TD Cowen, at our option, shares of our common stock.

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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.

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.

The aggregate number of shares of our common stock that may be issued pursuant to stock awards under our 2020 Plan as of March 31, 2026 shall not exceed 15,300,059 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.

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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The aggregate number of stock awards that may be issued under the Inducement Grant may not exceed 2,137,080 shares.

We currently are an “emerging growth company” and our election of reduced reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors.*

We currently are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act, or JOBS Act.

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.

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.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our share price may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies.

We have elected to avail ourselves of an exemption that allows us to delay adopting new or revised accounting standards until such time as those standards apply to private companies.

As a result, we will not be subject to the same new or revised accounting standards as other public companies that comply with the public company effective dates, including but not limited to the new lease accounting standard.

We have also elected to take advantage of certain of the reduced disclosure obligations in this Annual Report and may elect to take advantage of other reduced reporting requirements in future filings.

As a result of these elections, the information that we provide to our stockholders may be different than you might receive from other public reporting companies.

However, if we later decide to opt out of the extended period for adopting new accounting standards, we would need to disclose such decision and it would be irrevocable.

As of June 30, 2025, the market value of our common stock held by non-affiliates exceeded $700.0 million.

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.

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:

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.

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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To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire, if at all.

Under current law, U.S.

federal net operating loss, or NOL, carryforwards generated in taxable periods beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such NOL carryforwards in a taxable year is limited to 80% of taxable income in such year.

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Unfavorable global economic and political conditions, including tariffs and trade barriers, could adversely affect our business, financial condition or results of operations.*

The results of our operations could be adversely affected by general conditions in the global economy, the global financial markets and the global political conditions.

The results of our operations could be adversely affected by general conditions in the global economy, the global financial markets and global political conditions.

The United States and global economies are facing inflation, higher interest rates and potential recession.

Furthermore, uncertainties associated with a severe or prolonged economic downturn, recessions or depressions, or political disruption such as potential trade wars, tariffs or the war between Ukraine and Russia and the conflicts in the Middle East, and other macroeconomic developments could result in a variety of risks to our business, including weakened demand for our product candidates, if approved, relationships with any vendors or business partners located in affected geographies and our ability to raise additional capital when needed on acceptable terms, if at all.

Furthermore, uncertainties associated with a severe or prolonged economic downturn, recessions or depressions, or political disruption such as potential trade wars, tariffs or wars and conflicts, including those between Ukraine and Russia and the conflicts between the United States and Iran and more generally in the Middle East, and other macroeconomic developments could result in a variety of risks to our business, including weakened demand for our product candidates, if approved, relationships with any vendors or business partners located in affected geographies and our ability to raise additional capital when needed on acceptable terms, if at all.

A weak or declining economy or political disruption, including any international trade disputes, could also strain our manufacturers or suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our potential products, if approved.

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Current or future tariffs could complicate or disrupt our existing and future supply chain and may result in increased research and development expenses.

Trade restrictions affecting the import of necessary materials could result increased costs to us or cause delays in our research and development timelines, thereby placing us at a competitive disadvantage as compared to companies operating in regions with more favorable trade relationships or with more resources than ours or those of our vendors.

Trade restrictions affecting the import of necessary materials could result in increased costs to us or cause delays in our research and development timelines, thereby placing us at a competitive disadvantage as compared to companies operating in regions with more favorable trade relationships or with more resources than ours or those of our vendors.

In addition, as we advance toward future commercialization, tariffs and trade restrictions could hinder our ability to establish cost-effective production capabilities and vendor relationships.

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federal tax reform) has resulted in significant changes to the taxation of business entities including, among other changes, changes to the taxation of income derived from international operations, changes in the deduction and amortization of research and development expenditures, and limitations on the deductibility of business interest.

Future guidance from the Internal Revenue Service and other tax authorities with respect to any legislation may affect us, and certain aspects of such legislation could be repealed or modified in future legislation.

The Trump administration and the U.S.

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

What changed 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk