What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-11 compared with 2026-05-12 · 102 added, 55 removed, 158 unchanged (50% of the section changed)

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In December 2025, we announced positive topline results from the global pivotal Phase 3 RINGSIDE trial of varegacestat in patients with progressing desmoid tumors.

We submitted a new drug application, or NDA, for varegacestat in April 2026, and we plan to submit a marketing authorization application, or MAA, with the European Medicines Agency, or EMA, by the end of 2026.

We submitted a new drug application, or NDA, for varegacestat in April 2026, which has been accepted by the U.S.

Food and Drug Administration, or FDA, and assigned a Prescription Drug User Fee Act, or PDUFA, target action date of April 28, 2027.

Additionally, we plan to submit a marketing authorization application, or MAA, with the European Medicines Agency, or EMA, by the end of 2026.

IM-1021, a receptor tyrosine kinase-like orphan receptor 1, or ROR1, antibody-drug conjugate, is currently under evaluation in a Phase 1 trial.

In November 2025, we reported observed objective responses at multiple dose levels in B-cell lymphoma patients treated with IM-1021, and we plan to share initial lymphoma data in 2026.

In June 2026, we dosed the first participant in a Phase 1 trial of IM-1617, a potential first-in-class ADC, in patients with advanced solid tumors.

IM-3050 is a fibroblast activation protein, or FAP, targeted radioligand therapy, or RLT.

In March 2026, we initiated the first site for a Phase 1 trial of IM-3050 in patients with FAP-expressing solid tumors.

IM-1617, a first-in-class ADC, received initial new drug, or IND, clearance in April 2026, and we plan to initiate a Phase 1 trial in the second quarter of 2026.

In July 2026, we dosed the first participant in a Phase 1 trial of IM-3050 in patients with FAP-expressing solid tumors.

Our preclinical assets include two solid tumor ADCs with anticipated 2026 IND submissions:

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We believe that combining novel targets with a broad toolbox of linkers and payloads supports our mission to design and develop a diverse pipeline of ADCs that address unmet medical need.

We have not generated any revenues from product sales and will not be able to do so unless and until we receive regulatory approval for our product candidates.

If we are successful in obtaining regulatory approval for varegacestat, we expect to incur significant expenses related to developing our sales, marketing, market access, patient services and commercial operations functions.

Our current programs

Varegacestat (formerly AL102)

Our lead clinical asset is varegacestat, an investigational, oral, once-daily GSI therapy under evaluation for the treatment of desmoid tumors.

In December 2025, we reported positive Phase 3 RINGSIDE (Part B) topline results showing that the study met all primary and key secondary endpoints.

Varegacestat achieved the primary endpoint of progression free survival, delivering an 84% reduction in the risk of disease progression or death versus placebo (HR=0.16, p<0.0001).

The confirmed objective response rate, or ORR, based on RECIST v1.1 was 56% with varegacestat vs.

9% with placebo (p<0.0001), as assessed by blinded independent central review.

In an exploratory analysis, varegacestat demonstrated a median best change in tumor volume of -83% vs.

+11% with placebo, as assessed by blinded independent central review.

In addition, the trial met all key secondary endpoints, with varegacestat achieving statistically significant improvements vs.

placebo in landmark tumor volume reduction and worst pain intensity.

The Phase 3 RINGSIDE topline and Phase 2 RINGSIDE data also show that varegacestat has a safety profile consistent with other GSI therapies.

Our lead product candidate is varegacestat, an investigational, oral, once-daily GSI therapy under evaluation for the treatment of desmoid tumors.

In December 2025, we reported positive Phase 3 RINGSIDE (Part B) topline results and, in May 2026, detailed efficacy and safety results were presented at the 2026 American Society of Clinical Oncology Annual Meeting.

Varegacestat achieved the primary endpoint of progression-free survival, delivering an 84% reduction in the risk of disease progression or death versus placebo, with a hazard ratio, or HR, of 0.16 (p<0.0001).

Varegacestat also achieved all key secondary endpoints.

The confirmed objective response rate, or ORR, based on RECIST v1.1 was 56% with varegacestat versus 9% with placebo (p<0.0001), as assessed by blinded independent central review.

Varegacestat achieved a statistically significant improvement in change in worst pain intensity score at week 12, as assessed with the Gounder/Desmoid Tumor Research Foundation Desmoid Tumor Symptom/Impact scale.

At week 12, patients treated with varegacestat experienced a mean change from baseline of -2.24 (standard error, or SE:

0.27), compared with +0.18 (SE:

0.27) for patients receiving placebo, for a treatment difference of -2.42 (SE:

A clinically significant difference of more than 2 points was observed as early as the first evaluation at week 4.

Varegacestat also achieved a statistically significant improvement in change in tumor volume at week 24, as assessed by blinded independent central review.

In an exploratory analysis, varegacestat demonstrated a median best change in tumor volume of -83% versus +11% with placebo, also as assessed by blinded independent central review.

The Phase 3 data also show that varegacestat has a safety profile consistent with other GSI therapies.

We acquired varegacestat from Ayala Pharmaceuticals, Inc., or Ayala, in March 2024.

We submitted an NDA for varegacestat in April 2026, and we plan to submit an MAA with the EMA by the end of 2026.

We submitted an NDA for varegacestat in April 2026.

In July 2026, the FDA accepted the NDA and assigned a PDUFA target action date of April 28, 2027.

We plan to submit an MAA with the EMA by the end of 2026.

IM-1021 (Solid Tumor and B-Cell Lymphoma ADC)

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We expect to present initial lymphoma data for IM-1021 in 2026.

IM-1617 (Solid Tumor ADC)

IM-1617 is a potential first-in-class ADC that targets an undisclosed receptor that is preferentially expressed in a broad array of solid tumors, including colorectal cancer, or CRC, non-small cell lung cancer, or NSCLC, and breast and ovarian cancers.

The target is a receptor tyrosine kinase that promotes tumor cell survival and mediates immune cell exclusion, providing potential for a secondary mechanism of action.

In June 2026, we dosed the first participant in a Phase 1 clinical trial of IM-1617.

We expect the study to include participants with advanced solid tumors, including colorectal cancer, non-small cell lung cancer, and breast cancer.

IM-3050 (FAP Radioligand Therapy)

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In vivo data show single dose antitumor activity and tolerability.

In March 2026, we initiated the first site for a Phase 1 trial of IM-3050 in patients with FAP-expressing solid tumors.

IM-1617 (Solid Tumor ADC)

The target is a receptor tyrosine kinase that promotes tumor cell survival and mediates immune cell exclusion, providing potential for a secondary mechanism of action.

We received IND clearance for this program in April 2026 and plan to initiate a Phase 1 trial in the second quarter of 2026.

In July 2026, we dosed the first participant in a Phase 1 trial of IM-3050 in patients with FAP-expressing solid tumors.

IM-1340 (Solid Tumor ADC)

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Collaboration revenue

We have not generated any revenue from product sales and do not expect to do so for the foreseeable future.

To date, we have generated our revenue through a Collaboration and Option Agreement, or the Collaboration Agreement, with AbbVie Global Enterprises Ltd., or AbbVie, which terminated in accordance with its terms in July 2025.

To date, we have only generated revenue through a Collaboration and Option Agreement, or the Collaboration Agreement, with AbbVie Global Enterprises Ltd., or AbbVie, which terminated in accordance with its terms in July 2025.

Revenue recognized under the Collaboration Agreement consisted of payments received from AbbVie and was recognized over the performance period.

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Results of operations

Comparison of the three months ended March 31, 2026 and 2025

Comparison of the three months ended June 30, 2026 and 2025

The following table summarizes our results of operations for the periods presented (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Collaboration revenue

6 unchanged sentences

(1) Amounts include non-cash share-based compensation expense as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Research and development

2 unchanged sentences

Collaboration revenue

There was no collaboration revenue for the three months ended March 31, 2026.

Collaboration revenue for the three months ended March 31, 2025 related to certain research and development activities allocated to AbbVie.

There was no collaboration revenue for the three months ended June 30, 2026.

Collaboration revenue for the three months ended June 30, 2025 related to certain research and development activities allocated to AbbVie.

As of June 30, 2025, we had recognized all revenue and costs associated with our performance obligation under the agreement.

Research and development expenses

Research and development expenses increased by $9.5 million, from $36.9 million for the three months ended March 31, 2025 to $46.4 million for the three months ended March 31, 2026.

Research and development expenses increased by $19.4 million, from $40.5 million for the three months ended June 30, 2025 to $59.9 million for the three months ended June 30, 2026.

The table below summarizes the components of our research and development expenses for the periods presented (in thousands).

For the three months ended March 31, 2026, we revised the presentation of our research and development expenses in the table below to align with how management evaluates our research programs and expenses.

For the three months ended June 30, 2026, we revised the presentation of our research and development expenses in the table below to align with how management evaluates our research programs and expenses.

Prior period amounts have been reclassified to conform to the current year presentation.

Three Months Ended March 31,

Three Months Ended June 30,

Direct research and development

1 unchanged sentence

Indirect research and development (6)

(1) The decrease for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was due primarily to a decrease in clinical trial activities following the readout of topline data for our Phase 3 trial in December 2025.

(2) The increase for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was due primarily to an increase in clinical trial activities associated with our Phase 1 trial.

(3) The increase for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was due primarily to an increase in activities associated with our planned Phase 1 trial.

(4) The increase for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was due primarily to IND-enabling and clinical trial activities associated with our planned Phase 1 trial.

(5) The increase for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was due primarily to increased IND-enabling activities for our product candidates.

(6) The increase for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was due primarily to an increase in personnel related costs, including share-based compensation, in support of our product candidates and discovery programs.

(1) The decrease for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was due primarily to a decrease in clinical trial and manufacturing activities required to support our NDA filing in April 2026.

(2) The increase for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was due primarily to an increase in clinical trial and manufacturing activities associated with our Phase 1 trial.

(3) The decrease for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was due primarily to the timing of IND-enabling activities, partially offset by an increase in clinical trial activities associated with our Phase 1 trial.

(4) The increase for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was due primarily to an increase in activities associated with our Phase 1 trial.

(5) The increase for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was due primarily to increased IND-enabling activities for our product candidates.

(6) The increase for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was due primarily to an increase in personnel related costs, including share-based compensation and allocated support costs, in support of our product candidates and discovery programs.

General and administrative expenses

General and administrative expenses increased by $2.3 million, from $10.7 million for the three months ended March 31, 2025 to $13.0 million for the three months ended March 31, 2026.

The increase was primarily a result of a $1.8 million increase in personnel-related costs from an increase in headcount, including a $1.0 million increase in share-based compensation.

General and administrative expenses increased by $8.2 million, from $10.0 million for the three months ended June 30, 2025 to $18.3 million for the three months ended June 30, 2026.

The increase was primarily related to increases in expenses related to commercialization readiness, as well as an increase in personnel-related costs including share-based compensation from an increase in headcount to support overall growth.

Interest income

Interest income increased by $2.5 million from $3.0 million for the three months ended March 31, 2025 to $5.5 million for the three months ended March 31, 2026.

The increase was primarily a result of higher cash and cash equivalent balances, partially offset by lower interest rates during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Interest income increased by $1.9 million from $3.1 million for the three months ended June 30, 2025 to $5.0 million for the three months ended June 30, 2026.

The increase was primarily a result of higher cash, cash equivalent, and marketable securities balances, partially offset by lower interest rates during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Comparison of the six months ended June 30, 2026 and 2025

The following table summarizes our results of operations for the periods presented (in thousands):

Six Months Ended June 30,

Collaboration revenue

Operating expenses:

Research and development (1)

General and administrative (1)

Total operating expenses

Loss from operations

Interest income

(1) Amounts include non-cash share-based compensation expense as follows (in thousands):

Six Months Ended June 30,

Research and development

General and administrative

Total share-based compensation expense

Collaboration revenue

There was no collaboration revenue for the six months ended June 30, 2026.

Collaboration revenue for the six months ended June 30, 2025 related to certain research and development activities allocated to AbbVie.

As of June 30, 2025, we had recognized all revenue and costs associated with our performance obligation under the agreement.

Research and development expenses

Research and development expenses increased by $28.9 million, from $77.3 million for the six months ended June 30, 2025 to $106.3 million for the six months ended June 30, 2026.

The table below summarizes the components of our research and development expenses for the periods presented (in thousands):

Six Months Ended June 30,

Direct research and development

Varegacestat (1)

Indirect research and development (6)

(1) The decrease for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was due primarily to a decrease in clinical trial and manufacturing activities required to support our NDA filing in April 2026.

(2) The increase for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was due primarily to an increase in clinical trial and manufacturing activities associated with our Phase 1 trial.

(3) The decrease for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was due primarily to the timing of IND-enabling activities, partially offset by an increase in clinical trial activities associated with our Phase 1 trial.

(4) The increase for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was due primarily to an increase in clinical trial activities associated with our Phase 1 trial.

(5) The increase for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was due primarily to increased IND-enabling activities for our product candidates.

(6) The increase for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was due primarily to an increase in personnel related costs, including share-based compensation and allocated support costs, in support of our product candidates and discovery programs.

General and administrative expenses

General and administrative expenses increased by $10.5 million, from $20.7 million for the six months ended June 30, 2025 to $31.2 million for the six months ended June 30, 2026.

Interest income

Interest income increased by $4.4 million from $6.1 million for the six months ended June 30, 2025 to $10.5 million for the six months ended June 30, 2026.

The increase was primarily a result of higher cash, cash equivalent, and marketable securities balances, partially offset by lower interest rates during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Liquidity and capital resources

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Since inception, we have incurred significant operating losses and negative cash flows from operations.

Our net losses were $53.8 million and $41.6 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, we had cash and cash equivalents of $582.7 million and an accumulated deficit of $782.0 million.

Our net losses were $73.1 million and $43.4 million for the three months ended June 30, 2026 and 2025, respectively, and $127.0 million and $85.0 million for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, we had cash and cash equivalents of $217.7 million, marketable securities of $302.3 million and an accumulated deficit of $855.1 million.

In January 2025, we issued and sold 22,258,064 shares of our common stock at $7.75 per share in a public offering for net proceeds of $161.7 million, after deducting underwriting discounts and commissions and offering expenses payable by us.

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We have agreed to pay TD Cowen a commission of up to 3.0% of the aggregate gross proceeds from any ATM Shares sold through the 2024 ATM Agreement.

As of March 31, 2026, we had sold an aggregate of 6,655,587 shares of common stock under the 2024 ATM Agreement for gross proceeds of $65.9 million and net proceeds of approximately $64.5 million, with approximately $134.1 million remaining available for future offerings.

No shares of common stock were sold under the 2024 ATM Agreement during the three months ended March 31, 2026 and 2025.

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

Three Months Ended March 31,

As of June 30, 2026, we had sold an aggregate of 6,655,587 shares of common stock under the 2024 ATM Agreement for gross proceeds of $65.9 million and net proceeds of approximately $64.5 million, with approximately $134.1 million remaining available for future offerings.

No shares of common stock were sold under the 2024 ATM Agreement during the six months ended June 30, 2026.

The following table summarizes our sources and uses of cash for the six months ended June 30, 2026 and 2025 (in thousands):

Six Months Ended June 30,

Cash used in operating activities

Cash (used in) provided by investing activities

Cash (used in) provided by financing activities

Cash used in investing activities

Cash provided by financing activities

Net (decrease) increase in cash and cash equivalents and restricted cash

Operating activities

Net cash used in operating activities for the three months ended March 31, 2026 was $58.6 million, consisting primarily of our net loss of $53.8 million and a net change in operating assets and liabilities of $13.6 million, partially offset by noncash charges of $8.8 million.

Net cash used in operating activities for the six months ended June 30, 2026 was $120.3 million, consisting primarily of our net loss of $127.0 million and a net change in operating assets and liabilities of $11.7 million, partially offset by noncash charges of $18.3 million.

The noncash charges primarily consisted of $16.8 million of share-based compensation.

The change in operating assets and liabilities primarily consisted of an increase in accounts payable of $1.4 million, an increase in prepaid expenses and other assets of $5.1 million, and a decrease in accrued expenses and other current liabilities of $9.7 million.

Net cash used in operating activities for the three months ended March 31, 2025 was $53.1 million, consisting primarily of our net loss of $41.6 million and a net change in operating assets and liabilities of $17.0 million, partially offset by noncash charges of $5.6 million.

The change in operating assets and liabilities primarily consisted of an increase in prepaid expenses and other assets of $12.0 million, partially offset by an increase in accounts payable of $2.6 million.

Net cash used in operating activities for the six months ended June 30, 2025 was $102.5 million, consisting primarily of our net loss of $85.0 million and a net change in operating assets and liabilities of $28.8 million, partially offset by noncash charges of $11.4 million.

The noncash charges primarily consisted of $11.1 million of share-based compensation.

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Investing activities

Net cash used in investing activities for the three months ended March 31, 2026 was $12.0 million, consisting of $9.0 million in payments related to in-process research and development (IPR&D) assets included in accrued expenses and other current liabilities as of December 31, 2025, and $3.0 million of purchases of property and equipment.

Net cash provided by investing activities for the three months ended March 31, 2025 was $5.1 million, consisting of $15.0 million from maturities of marketable securities, partially offset by $6.2 million of upfront and milestone payments related to IPR&D assets and $3.7 million of purchases of property and equipment.

Net cash used in investing activities for the six months ended June 30, 2026 was $316.4 million, consisting of $302.2 million of purchases of marketable securities, $9.0 million in payments related to in-process research and development (IPR&D) assets included in accrued expenses and other current liabilities as of December 31, 2025, and $5.2 million of purchases of property and equipment.

Net cash used in investing activities for the six months ended June 30, 2025 was $59.1 million, consisting of $123.3 million of purchases of marketable securities, $6.2 million of purchases of IPR&D assets and $4.6 million of purchases of property and equipment, partially offset by $75.0 million from maturities of marketable securities.

Financing activities

Net cash used in financing activities for the three months ended March 31, 2026 was $0.1 million, consisting of $0.4 million in payments related to offering costs from the December 2025 financing accrued as of December 31, 2025, partially offset by $0.2 million from the exercise of options.

Net cash provided by financing activities for the three months ended March 31, 2025 was $162.2 million, consisting of gross proceeds of $172.5 million from the January 2025 financing and $0.2 million from the exercise of options, partially offset by offering costs of $10.5 million from the January 2025 financing.

Net cash provided by financing activities for the six months ended June 30, 2026 was $0.9 million, consisting of $1.3 million from the exercise of options, partially offset by $0.4 million in payments related to offering costs from the December 2025 financing accrued as of December 31, 2025.

Net cash provided by financing activities for the six months ended June 30, 2025 was $162.2 million, consisting of gross proceeds of $172.5 million from the January 2025 financing and $0.4 million from the exercise of options, partially offset by offering costs of $10.8 million from the January 2025 financing.

Funding requirements

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We expect that our primary uses of capital will be for the potential commercial launch of varegacestat for the treatment of desmoid tumors, if approved, continued commercial development and manufacturing scale-up for varegacestat, continued clinical and preclinical development of other pipeline assets, as well as for working capital and other general corporate purposes including potential strategic transactions, legal and other regulatory compliance expenses, compensation and related expenses, risk management and general overhead costs.

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.

We expect that our existing cash, cash equivalents and marketable securities as of June 30, 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.

We will need additional financing to support our continuing operations and pursue our research and development strategy and commercialization of varegacestat, if approved.

28 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis