What changed in this filing

/stocks — the workspaceLOADING

Item 3. Quantitative and Qualitative Disclosures About Market Risk

2026-08-11 compared with 2026-05-12 · 36 added, 33 removed, 1440 unchanged (5% of the section changed)

1 unchanged sentence

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.

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

Our cash and cash equivalents consisted of bank deposits, money market funds, and U.S.

treasury securities, and our marketable securities consisted of U.S.

government bonds.

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.

Because our marketable securities are short-term in duration, 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.

As of June 30, 2026, we had no outstanding debt.

Foreign Currency Sensitivity

2 unchanged sentences

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.

We believe that, if a 10.0% change in foreign currency exchange rates were to have occurred on June 30, 2026, this change would not have had a material effect on our financial statements.

Inflation Risk

5 unchanged sentences

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 March 31, 2026, 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 June 30, 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 March 31, 2026 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 June 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTH ER INFORMATION

7 unchanged sentences

Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other information in this Quarterly Report and our other filings with the SEC before making investment decisions regarding our common stock.

• We are a biopharmaceutical company with a history of losses.

• We are a biotechnology company with a history of losses.

We expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability.

48 unchanged sentences

Risks Related to Our Business

We are a biopharmaceutical company with a history of losses.

We are a biotechnology company with a history of losses.

We expect to continue to incur significant losses for the foreseeable future and may never achieve or maintain profitability.*

1 unchanged sentence

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 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.

As of June 30, 2026, we had an accumulated deficit of $855.1 million.

Our net loss for the year ended December 31, 2025 was $212.4 million and was $127.0 million for the six months ended June 30, 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.

5 unchanged sentences

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

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.

Our clinical trial experience is limited to the recent completion of the Phase 3 RINGSIDE trial for varegacestat and the ongoing Phase 1 clinical trials for IM-1021, IM-1617 and IM-3050.

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

14 unchanged sentences

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.

We also have limited experience as a company in preparing and submitting marketing applications and, although we recently submitted an NDA for varegacestat, which has been accepted by the FDA and assigned a PDUFA target action date of April 28, 2027, 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.

13 unchanged sentences

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 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.

Based on our current operating plan, 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.

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.

60 unchanged sentences

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.

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

Any failure to timely realize the anticipated benefits of our strategic transaction could have a material adverse effect on our business, operating results, financial condition and stock price.

88 unchanged sentences

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.

Merck KGaA received approval from FDA in November 2023 and from EMA in August 2025 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.

57 unchanged sentences

• 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 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;

21 unchanged sentences

Even if we do receive Fast Track Designation for any of our product candidates, such product candidates may not experience a faster development process, review or approval compared to conventional FDA procedures.

For example, the FDA is reviewing our NDA for varegacestat consistent with its conventional procedures and timeline.

The FDA may also withdraw Fast Track Designation if it believes that the designation is no longer supported by data from our clinical development program.

125 unchanged sentences

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 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.

Our personnel use artificial intelligence, or 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.

51 unchanged sentences

This calculation is made on a product by product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a product that is paid for by Medicare Parts B or D.

Additionally, starting in payment year 2026, CMS will begin to reimburse negotiated drug prices annually for a select number of single source Part D drugs that have been on the market for at least 7 years without generic or biosimilar competition, or the Medicare Drug Price Negotiation Program.

On August 15, 2024, CMS announced the agreed-upon prices of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges.

On January 17, 2025, CMS selected fifteen additional products covered under Part D for price negotiation in 2025.

Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program If a product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease.

Additionally, starting in payment year 2026, CMS began to reimburse negotiated drug prices annually for a select number of single source Part D drugs that have been on the market for at least 7 years without generic or biosimilar competition, or the Medicare Drug Price Negotiation Program.

Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program.

If a product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease.

The IRA permits the U.S.

5 unchanged sentences

Individual states in the United States have also increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program, or SIP, proposal to import certain drugs from Canada for specific state healthcare programs.

It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada.

For example, on June 15, 2026, the FDA approved Colorado’s Section 804 Importation Program, or SIP, proposal to import certain drugs from Canada for specific state healthcare programs.

It is unclear how this and Florida’s similar program, approved by the FDA in 2024, will be implemented and whether they will overcome potential legal, regulatory, or industry challenges in the United States and/or Canada.

Other states have also submitted SIP proposals that are pending review by the FDA.

8 unchanged sentences

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;

(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;

28 unchanged sentences

some state laws that require biotechnology companies to report information on the pricing of certain products;

and some state and local laws require the registration or pharmaceutical sales representatives.

and some state and local laws require certain regulatory licenses to manufacture or distribute pharmaceutical products commercially and/or the registration or pharmaceutical sales representatives.

Ensuring that our future business arrangements with third parties comply with applicable health care laws and regulations could involve substantial costs.

The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance or reporting requirements increases the possibility that a health care company may run afoul of one or more of the requirements.

The shifting compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance or reporting requirements increase the possibility that a health care company may run afoul of one or more of the requirements.

It is possible that governmental authorities will conclude that our business practices, including certain advisory agreements we have entered into with physicians who are paid, in part, in the form of stock or stock options, do not comply with current or future statutes, regulations, agency guidance or case law involving applicable fraud and abuse or other healthcare laws and regulations.

79 unchanged sentences

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 for which we submitted an NDA in the second quarter 2026;

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, which was accepted by the FDA and assigned a PDUFA date of April 28, 2027;

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.

84 unchanged sentences

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.

Even if we succeed in identifying and contracting with one or more alternative suppliers, there is no guarantee that we will face similar delays in the future.

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

478 unchanged sentences

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

As of March 31, 2026, we had 206 full-time employees.

As of June 30, 2026, we had 247 full-time employees.

The continued operation of our business and execution of our plans will require material additional staffing within the next twelve months.

73 unchanged sentences

Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our common stock.

We issued 2,298,586 shares to Zentalis in connection with the Zentalis License Agreement, 2,175,489 shares to Ayala in connection with the Ayala Asset Purchase Agreement, 230,415 shares to BMS in connection with the BMS License Agreement Amendment and 1,805,502 shares to Zentalis in connection with the Zentalis Asset Purchase, all of which are registered for resale on Forms S-3 filed with the SEC in April 2024, October 2024 and November 2024, respectively.

We issued 2,298,586 shares to Zentalis in connection with the Zentalis License Agreement, 2,175,489 shares to Ayala in connection with the Ayala Purchase Agreement, 230,415 shares to BMS in connection with the BMS License Agreement Amendment and 1,805,502 shares to Zentalis in connection with the Zentalis Asset Purchase, all of which are registered for resale on Forms S-3 filed with the SEC in April 2024, October 2024 and November 2024, respectively.

The shares issued to Zentalis in October 2024 are subject to an orderly market disposition for one year from the date of issuance.

2 unchanged sentences

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 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.

The aggregate number of shares of our common stock that may be issued pursuant to stock awards under our 2020 Plan as of June 30, 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 5,000,000 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 March 31, 2026 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.

134 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 3. Quantitative and Qualitative Disclosures About Market Risk