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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-07 · 42 added, 43 removed, 170 unchanged (33% of the section changed)

25 unchanged sentences

We have incurred operating losses since our inception and have not yet generated any product revenue.

Our net losses were $57.4 million and $20.7 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, we had an accumulated deficit of $295.1 million.

Our net losses were $81.7 million and $48.8 million for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, we had an accumulated deficit of $319.4 million.

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on a variety of factors including the timing and scope of our clinical and preclinical studies and our expenditures on other research and development activities and the timing of any revenue recognition under our collaboration agreement with Merck.

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To date, we have not generated any revenues from the commercial sale of any products, and we do not expect to generate revenues from the commercial sale of any products for the foreseeable future, if ever.

We recognized $0 and $10.1 million of revenue under the Merck Agreement for the six months ended June 30, 2025 and 2024, respectively.

We recognized $10.0 million and $10.6 million of revenue under the Merck Agreement for the nine months ended September 30, 2025 and 2024, respectively.

Research and Development

To date, our research and development expenses have related primarily to direct and indirect expenses in connection with the development of our TRACTr and TRACIr platforms, discovery efforts and preclinical and clinical development of our product candidates.

To date, our research and development expenses have related primarily to direct and indirect expenses in connection with the development of our TRACTr, TRACIr and ARM platforms, discovery efforts and preclinical and clinical development of our product candidates.

Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.

7 unchanged sentences

• allocated facilities and equipment-related expenses, which include rent, utilities, insurance, and office supplies.

We anticipate that our research and development expenses will substantially increase for the foreseeable future as we continue the development of our TRACTr and TRACIr platforms and the discovery and development of product candidates under our TRACTr and TRACIr platforms.

We anticipate that our research and development expenses will substantially increase for the foreseeable future as we continue the development of our TRACTr, TRACIr and ARM platforms and the discovery and development of product candidates under our TRACTr, TRACIr and ARM platforms.

We cannot determine with certainty the timing of initiation, the duration or the completion costs of clinical trials and preclinical studies of product candidates due to the inherently unpredictable nature of preclinical and clinical development.

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Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024 (in thousands)

Three Months Ended June 30,

Comparison of the Three Months Ended September 30, 2025 and 2024 (in thousands)

Three Months Ended September 30,

Collaboration revenue

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Collaboration Revenue

Collaboration revenues were $0 and $8.9 million for the three months ended June 30, 2025 and 2024, respectively.

The decrease of $8.9 million was primarily due to the achievement of a developmental milestone related to the First Collaboration Target under the Merck Agreement in June 2024 and the completion of our research activities under the Merck Agreement in August 2024.

Collaboration revenues were $10.0 million and $0.4 million for the three months ended September 30, 2025 and 2024, respectively.

The increase of $9.6 million was primarily due to the achievement of a developmental milestone related to the First Collaboration Target under the Merck Agreement in August 2025.

Research and Development Expense

The following table summarizes our direct and indirect research and development expenses for the three months ended June 30, 2025 and 2024 (in thousands):

Three Months Ended June 30,

The following table summarizes our direct and indirect research and development expenses for the three months ended September 30, 2025 and 2024 (in thousands):

Three Months Ended September 30,

Direct costs:

3 unchanged sentences

Total research and development expenses

Research and development expenses were $34.7 million and $14.9 million for the three months ended June 30, 2025 and 2024, respectively.

The increase of $19.8 million was primarily due to increases in preclinical stage programs and other direct unallocated costs of $10.3 million, indirect costs of $5.0 million, direct costs related to the development of JANX007 of $4.2 million and direct costs related to the development of JANX008 of $0.3 million.

Research and development expenses were $34.6 million and $18.6 million for the three months ended September 30, 2025 and 2024, respectively.

The increase of $16.0 million was primarily due to increases in preclinical stage programs and other direct unallocated costs of $10.0 million, which was primarily attributable to manufacturing costs.

Additional increases included indirect costs as a result of increased compensation costs of $4.0 million, direct costs related to the development of JANX007 of $1.6 million and direct costs related to the development of JANX008 of $0.4 million.

General and Administrative Expense

General and administrative expenses were $10.5 million and $7.8 million for the three months ended June 30, 2025 and 2024, respectively.

The increase of $2.7 million was primarily due to increases in stock-based compensation of $2.0 million, other general and administrative expenses of $0.4 million and consulting and professional fees of $0.3 million.

Other income was $11.3 million and $7.9 million for the three months ended June 30, 2025 and 2024, respectively.

General and administrative expenses were $10.6 million and $17.7 million for the three months ended September 30, 2025 and 2024, respectively.

The decrease of $7.1 million was primarily due to a decrease in stock-based compensation expense, which was driven by the modification of a former executive and director’s equity awards in 2024.

Other income was $10.9 million and $7.8 million for the three months ended September 30, 2025 and 2024, respectively.

The increase of $3.1 million was due to an increase in cash and cash equivalents and short-term investments resulting in increased interest income.

Comparison of the Six Months Ended June 30, 2025 and 2024 (in thousands)

Six Months Ended June 30,

Comparison of the Nine Months Ended September 30, 2025 and 2024 (in thousands)

Nine Months Ended September 30,

Collaboration revenue

5 unchanged sentences

Collaboration Revenue

Collaboration revenues were $0 and $10.1 million for the six months ended June 30, 2025 and 2024, respectively.

The decrease of $10.1 million was primarily due to the achievement of a developmental milestone related to the First Collaboration Target under the Merck Agreement in June 2024 and the completion of our research activities under the Merck Agreement in August 2024.

Collaboration revenues were $10.0 million and $10.6 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease of $0.6 million was primarily due to an increase in milestone revenue under the Merck Agreement, offset by the completion of our research activities under the Merck Agreement in August 2024.

Research and Development Expense

The following table summarizes our direct and indirect research and development expenses for the six months ended June 30, 2025 and 2024 (in thousands):

Six Months Ended June 30,

The following table summarizes our direct and indirect research and development expenses for the nine months ended September 30, 2025 and 2024 (in thousands):

Nine Months Ended September 30,

Direct costs:

3 unchanged sentences

Total research and development expenses

Research and development expenses were $59.7 million and $29.0 million for the six months ended June 30, 2025 and 2024, respectively.

The increase of $30.7 million was primarily due to increases in preclinical stage programs and other direct unallocated costs of $14.9 million, indirect costs of $9.5 million, direct costs related to the development of JANX007 of $5.8 million and direct costs related to the development of JANX008 of $0.5 million.

Research and development expenses were $94.3 million and $47.6 million for the nine months ended September 30, 2025 and 2024, respectively.

The increase of $46.7 million was primarily due to increases in preclinical stage programs and other direct unallocated costs of $24.8 million, indirect costs as a result of increased compensation costs of $13.5 million, direct costs related to the development of JANX007 of $7.5 million and direct costs related to the development of JANX008 of $0.9 million.

General and Administrative Expense

General and administrative expenses were $20.3 million and $15.2 million for the six months ended June 30, 2025 and 2024, respectively.

The increase of $5.1 million was primarily due to increases in stock-based compensation of $4.1 million, other general and administrative expenses of $0.7 million and consulting and professional fees of $0.3 million.

Other income was $22.6 million and $13.3 million for the six months ended June 30, 2025 and 2024, respectively.

General and administrative expenses were $30.9 million and $32.8 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease of $1.9 million was primarily due to a decrease in stock-based compensation of $3.9 million as a result of incremental stock-based compensation expense taken in 2024 due to the modification of a former director and executive officer’s equity awards.

This was offset by increases in compensation costs of $1.4 million and other general and administrative costs of $0.6 million.

Other income was $33.6 million and $21.0 million for the nine months ended September 30, 2025 and 2024, respectively.

The increase of $12.6 million was due to an increase in cash and cash equivalents and short-term investments resulting in increased interest income.

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We have incurred net losses and negative cash flows from operations since our inception and anticipate we will continue to incur net losses and negative cash flows for the foreseeable future.

As of June 30, 2025, we had cash, cash equivalents, restricted cash and short-term investments of $996.8 million.

As of September 30, 2025, we had cash, cash equivalents, restricted cash and short-term investments of $989.8 million.

Inclusive in this amount is $0.8 million of restricted cash that is not available for current use.

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In May 2024, we filed a shelf registration statement on Form S-3ASR which included a new prospectus which covers the offering, issuance and sale of up to a maximum aggregate offering price of $150.0 million of our common under the Sale Agreement.

As of June 30, 2025, $150.0 million of common stock remained available for sale under the Sale Agreement.

In July 2023, we closed an underwritten offering of 4,153,717 shares of our common stock and pre-funded warrants to purchase 583,483 shares of common stock at an exercise price of $0.001 per share.

The shares of common stock were sold at a price of $12.46 per share and the pre-funded common stock warrants were sold at a price of $12.459 per pre-funded common stock warrant, resulting in gross proceeds of $59.0 million.

Fees related to the offering included underwriting discounts, commissions, and offering expenses in the aggregate amount of $2.5 million, resulting in net proceeds of $56.5 million.

As of September 30, 2025, $150.0 million of common stock remained available for sale under the Sale Agreement.

In March 2024, we closed an underwritten offering of 5,397,301 shares of our common stock and pre-funded warrants to purchase 1,935,483 shares of common stock at an exercise price of $0.001 per share.

7 unchanged sentences

The following summarizes our cash flows for the periods indicated (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash provided by (used in):

2 unchanged sentences

Financing activities

Net decrease in cash, cash equivalents and restricted cash

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

Operating Activities

Net cash used in operating activities of $40.8 million for the six months ended June 30, 2025 was primarily due to our net loss of $57.4 million and a change in operating assets and liabilities and other non-cash charges of $5.1 million, adjusted for $21.7 million of stock-based compensation expense.

Net cash used in operating activities of $24.9 million for the six months ended June 30, 2024 was primarily due to our net loss of $20.7 million and a change in operating assets and liabilities and other non-cash charges of $15.5 million, adjusted for $11.3 million of stock-based compensation expense.

Net cash used in operating activities of $53.7 million for the nine months ended September 30, 2025 was primarily due to our net loss of $81.7 million and a change in operating assets and liabilities and other non-cash charges of $2.7 million, adjusted for $30.7 million of stock-based compensation expense.

Net cash used in operating activities of $27.1 million for the nine months ended September 30, 2024 was primarily due to our net loss of $48.8 million and a change in operating assets and liabilities and other non-cash charges of $5.1 million, adjusted for $26.8 million of stock-based compensation expense.

Investing Activities

Net cash used in investing activities of $338.8 million for the six months ended June 30, 2025 was primarily due to $338.0 million of net purchases of short-term investments and by our purchase of property and equipment of $0.8 million.

Net cash used in investing activities of $304.6 million for the six months ended June 30, 2024 was primarily due to $304.3 million of net purchases of short-term investments and by our purchase of property and equipment of $0.3 million.

Net cash used in investing activities of $330.5 million for the nine months ended September 30, 2025 was primarily due to $329.6 million of net purchases of short-term investments and by our purchase of property and equipment of $0.9 million.

Net cash used in investing activities of $291.9 million for the nine months ended September 30, 2024 was primarily due to $291.6 million of net purchases of short-term investments and by our purchase of property and equipment of $0.3 million.

Financing Activities

Net cash provided by financing activities of $1.5 million for the six months ended June 30, 2025 was primarily due to proceeds from stock option exercises and shares purchased under our employee stock purchase plan of $1.8 million, adjusted for issuance costs paid in connection with an underwritten offering in December 2024 of $0.3 million.

Net cash provided by financing activities of $324.9 million for the six months ended June 30, 2024 was primarily due to proceeds from the issuance of common stock and pre-funded common stock warrants, net of issuance costs, of $320.1 million, and proceeds from stock option exercises and shares purchased under our employee stock purchase plan of $4.8 million.

Net cash provided by financing activities of $2.0 million for the nine months ended September 30, 2025 was primarily due to proceeds from stock option exercises and shares issued under our employee stock purchase plan (ESPP) of $2.3 million, adjusted for issuance costs paid in connection with an underwritten offering in December 2024 of $0.3 million.

Net cash provided by financing activities of $326.6 million for the nine months ended September 30, 2024 was primarily due to proceeds from the issuance of common stock and pre-funded common stock warrants, net of issuance costs, of $320.1 million and proceeds from stock option exercises and shares issued under our ESPP of $6.5 million.

Funding Requirements

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In October 2021, we entered into a noncancelable agreement to lease office and laboratory space in San Diego, California (Torrey Plaza Lease) with aggregate payments of approximately $38.0 million over the 126-month term of the lease.

The Torrey Plaza Lease

commenced in July 2022.

The Torrey Plaza Lease commenced in July 2022.

See the section within Item 1 of Part I, “Notes to Unaudited Condensed Financial Statements — Note 3 — Commitments and Contingencies” of this Quarterly Report for additional information.

In June 2025, we entered into a noncancelable agreement to sublease additional office space in San Diego, California through January 2028.

We enter into contracts in the normal course of business with various third parties for preclinical and clinical research studies and testing, manufacturing and other services and products for operating purposes.

10 unchanged sentences

For a description of our critical accounting policies, see Item 1 of Part I, “Notes to Unaudited Condensed Financial Statements — Note 1 — Organization and Summary of Significant Accounting Policies” of this Quarterly Report and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” contained in our Annual Report on Form 10-K, filed with the SEC on February 27, 2025.

There have not been any material changes to the critical accounting policies discussed therein during the six months ended June 30, 2025.

There have not been any material changes to the critical accounting policies discussed therein during the nine months ended September 30, 2025.

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