What changed in this filing

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Item 1. Financial Statements

2026-08-03 compared with 2026-05-04 · 105 added, 78 removed, 411 unchanged (31% of the section changed)

36 unchanged sentences

$ 0.00001 par value;

80,000 shares authorized as of March 31, 2026 and December 31, 2025;

29,437 and 29,192 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively.

80,000 shares authorized as of June 30, 2026 and December 31, 2025;

29,596 and 29,192 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively.

Additional paid-in capital 1,228,598 1,194,261

10 unchanged sentences

Condensed Consolidated Statements of Operations and Comprehensive Income

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands, except per share data)

2026 2025 2026 2025

Product revenue, net

32 unchanged sentences

Issuance of common stock upon exercise of stock options 145 — 6,501 — — 6,501

145 — 6,501 — — 6,501

Vesting of restricted stock units, net of shares withheld for taxes 100 — ( 16,960 ) — — ( 16,960 )

1 unchanged sentence

Unrealized loss on investments — — — ( 1,577 ) — ( 1,577 )

— — — ( 1,577 ) — ( 1,577 )

Foreign currency translation — — — ( 1,182 ) — ( 1,182 )

— — — ( 1,182 ) — ( 1,182 )

Net income — — — — 55,932 55,932

1 unchanged sentence

29,437 — $ 1,198,257 $ ( 1,623 ) $ 80,095 $ 1,276,729

Issuance of common stock upon exercise of stock options 158 — 15,161 — — 15,161

Vesting of restricted stock units, net of shares withheld for taxes 1 — ( 108 ) — — ( 108 )

Stock-based compensation — — 15,288 — — 15,288

Unrealized loss on investments — — — ( 1,213 ) — ( 1,213 )

Foreign currency translation — — — ( 1,499 ) — ( 1,499 )

Net income — — — — 54,768 54,768

Balances as of June 30, 2026 29,596 — $ 1,228,598 $ ( 4,335 ) $ 134,863 $ 1,359,126

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income

16 unchanged sentences

28,899 — $ 1,129,219 $ 390 $ ( 144,935 ) $ 984,674

Issuance of common stock upon exercise of stock options

28 — 1,796 — — 1,796

Stock-based compensation — — 15,077 — — 15,077

Unrealized loss on investments — — — ( 158 ) — ( 158 )

Foreign currency translation

— — — 925 — 925

— — — — 38,333 38,333

Balances as of June 30, 2025 28,927 — $ 1,146,092 $ 1,157 $ ( 106,602 ) $ 1,040,647

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2026 2025

3 unchanged sentences

Depreciation 2,878 2,759

Accretion on marketable securities

( 576 ) ( 453 )

(Accretion) amortization on marketable securities ( 1,324 ) 464

Amortization of operating lease right-of-use assets 414 418

6 unchanged sentences

Prepaid taxes

( 1,302 ) ( 948 )

Prepaid expenses and other current assets ( 1,892 ) ( 2,009 )

18 unchanged sentences

Taxes paid related to settlement of restricted stock awards — ( 1,812 )

Net cash (used in) financing activities

( 10,459 ) ( 12,466 )

Net cash provided by (used in) financing activities 4,594 ( 10,670 )

Effect of exchange rate changes on cash and cash equivalents ( 3,162 ) 1,230

Net increase (decrease) in cash and cash equivalents

5,009 ( 36,095 )

Net (decrease) increase in cash and cash equivalents ( 68,564 ) 8,964

Cash and cash equivalents at beginning of period 496,304 344,865

16 unchanged sentences

Our innovative technology platform is supported by two in-house, commercial scale Current Good Manufacturing Practice (“CGMP”) manufacturing facilities.

As of March 31, 2026, the Company had a retained earnings balance of $ 80.1 million.

Our operating profitability is dependent upon the continued successful commercialization of VYJUVEK, our U.S.

Food and Drug Administration (“FDA”), European Commission (“EC”), and Japan’s Ministry of Health, Labour, and Welfare (“MHLW”) approved product, as well as successful development, approval and commercialization of our product candidates.

As of June 30, 2026, the Company had a retained earnings balance of $ 134.9 million.

Our operating profitability is dependent upon the continued successful commercialization of VYJUVEK ® , our redosable gene therapy approved in the United States, European Union (“EU”), United Kingdom (“UK”), and Japan, as well as successful development, approval and commercialization of our product candidates.

Management intends to fund future operations through its on hand cash and cash equivalents and revenue generated from the sale of VYJUVEK, and may also seek additional capital through arrangements with strategic partners, the sale of equity, debt financings or other sources.

1 unchanged sentence

The Company expects to incur significant costs in connection with, among other things, advancing its product pipeline, expanding its commercialization capabilities, and complying with EU post-authorization regulatory requirements and EU member state-specific pricing, reimbursement, and market access activities.

The Company believes that its cash and cash equivalents and short-term investments of approximately $ 823.4 million as of March 31, 2026 will be sufficient to allow the Company to fund its planned operations for at least the next 12 months from the date of this Quarterly Report on Form 10-Q.

The Company believes that its cash and cash equivalents and short-term investments of approximately $ 845.6 million as of June 30, 2026 will be sufficient to allow the Company to fund its planned operations for at least the next 12 months from the date of this Quarterly Report on Form 10-Q.

Summary of Significant Accounting Policies

17 unchanged sentences

See Note 2 to our consolidated financial statements included in the 2025 10-K.

There were no material changes to the Company’s significant accounting policies during the three months ended March 31, 2026.

There were no material changes to the Company’s significant accounting policies during the six months ended June 30, 2026.

Recently Issued Accounting Pronouncements, Not Yet Adopted

There were no accounting pronouncements issued or adopted during the three months ended March 31, 2026 that had or are expected to have a material impact on the Company’s condensed consolidated financial statements.

There were no accounting pronouncements issued or adopted during the six months ended June 30, 2026 that had or are expected to have a material impact on the Company’s condensed consolidated financial statements.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

3 unchanged sentences

Early adoption is allowed.

Currently, the Company is assessing the potential impact of this guidance on its consolidated financial statement disclosures.

Currently, the Company is assessing the potential impact of this guidance on its financial statement disclosures.

In December 2025, the FASB issued ASU 2025-11 Interim Reporting (Topic 270):

3 unchanged sentences

Early adoption is allowed.

Currently, the Company is assessing the potential impact of this guidance on its condensed consolidated financial statement disclosures.

Currently, the Company is assessing the potential impact of this guidance on its financial statement disclosures.

Product Revenue, Accounts Receivable and Reserves for Product Sales

The Company’s product revenue, net of sales discounts and allowances totaled $ 116.4 million and $ 88.2 million for the three months ended March 31, 2026 and March 31, 2025, respectively.

The Company’s product revenue, net of sales discounts and allowances totaled $ 119.2 million and $ 96.0 million for the three months ended June 30, 2026 and June 30, 2025, respectively and $ 235.6 million and $ 184.2 million for the six months ended June 30, 2026 and June 30, 2025, respectively.

Product revenue by significant geographic region is as follows:

Three Months Ended March 31,

(in thousands) Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

United States

$ 91,633 $ 96,042 $ 179,122 $ 184,225

19,283 — 39,960 —

8,306 — 16,497 —

Total product revenue, net

$ 119,222 $ 96,042 $ 235,579 $ 184,225

The Company’s accounts receivable, net balance relating to VYJUVEK sales was $ 127.0 million as of March 31, 2026 and $ 127.4 million as of December 31, 2025.

The Company’s accounts receivable, net balance relating to VYJUVEK sales was $ 138.7 million as of June 30, 2026 and $ 127.4 million as of December 31, 2025.

Accounts receivable, net from the Company’s customers who individually accounted for 10% or more of accounts receivable, net consisted of the following:

1 unchanged sentence

2026 December 31,

All other single customers represent less than 10% of outstanding accounts receivable, net in the applicable period.

The following table summarizes changes in allowances and discounts for the three months ended March 31, 2026:

All other single customers represent less than 10% of outstanding accounts receivable, net as of June 30, 2026 and December 31, 2025, respectively.

The following table summarizes changes in allowances and discounts for the six months ended June 30, 2026:

(in thousands) Rebates Prompt Pay Other Accruals Total

3 unchanged sentences

Payments/Credits ( 21,390 ) ( 7,322 ) ( 456 ) ( 29,168 )

Balance as of March 31, 2026

Balance as of June 30, 2026

$ 89,384 $ 4,650 $ 123 $ 94,157

Rebates are included in accrued rebates and other long-term liabilities on the condensed consolidated balance sheets.

Other long-term liabilities are comprised of $ 5.1 million and $ 3.7 million of long-term accrued rebates as of March 31, 2026 and December 31, 2025, respectively.

Other long-term liabilities are comprised of $ 5.9 million and $ 3.7 million of long-term accrued rebates as of June 30, 2026 and December 31, 2025, respectively.

Prompt pay discount is recorded as an allowance against accounts receivable, net on the condensed consolidated balance sheets.

Other accruals are included in accrued expenses and other current liabilities on the condensed consolidated balance sheets.

Provisions for rebates, prompt pay discounts and other accruals are recorded reductions to product revenue, net on the condensed consolidated statements of operations and comprehensive income.

Provisions for rebates, prompt pay discounts and other accruals are recorded as reductions to product revenue, net on the condensed consolidated statements of operations and comprehensive income.

Net Income Per Share Attributable to Common Stockholders

2 unchanged sentences

Common stock equivalents consist of common stock issuable upon (1) exercise of stock options and (2) vesting of restricted stock awards, restricted stock units and performance-based restricted stock units (collectively, “restricted stock”).

For the three months ended March 31, 2026 and 2025, respectively, there were 376 thousand and 413 thousand common stock equivalents outstanding in the form of stock options and 50 thousand and 48 thousand in unvested restricted stock, that have each been excluded from the calculation of diluted net income per common share as their effect would be anti-dilutive.

Three Months Ended March 31,

For the three months ended June 30, 2026 and 2025, respectively, there were 305 thousand and 604 thousand common stock equivalents outstanding in the form of stock options and zero and 275 thousand in unvested restricted stock, that have each been excluded from the calculation of diluted net income per common share as their effect would be anti-dilutive.

For the six months ended June 30, 2026 and 2025, respectively, there were 234 thousand and 520 thousand common stock equivalents outstanding in the form of stock options and zero and 89 thousand in unvested restricted stock, that have each been excluded from the calculation of diluted net income per common share as their effect would be anti-dilutive.

Three Months Ended June 30, Six Months Ended June 30,

(in thousands, except per share data)

2026 2025 2026 2025

$ 54,768 $ 38,333 $ 110,700 $ 74,067

Weighted-average basic common shares

6 unchanged sentences

Fair Value Instruments

The following tables show the Company’s cash and cash equivalents and available-for-sale securities by significant investment category as of March 31, 2026 and December 31, 2025:

March 31, 2026

The following tables show the Company’s cash and cash equivalents and available-for-sale securities by significant investment category as of June 30, 2026 and December 31, 2025:

June 30, 2026

(in thousands)

50 unchanged sentences

Property and equipment, net $ 153,775 $ 150,776

Depreciation expense was $ 1.5 million and $ 1.4 million for the three months ended March 31, 2026 and 2025, respectively.

Depreciation expense capitalized into inventory was $ 1.0 million for the three months ended March 31, 2026 and 2025.

Depreciation expense was $ 1.4 million and $ 1.3 million for the three months ended June 30, 2026 and 2025, respectively, and $ 2.9 million and $ 2.8 million for the six months ended June 30, 2026 and 2025, respectively.

Depreciation expense capitalized into inventory was $ 1.2 million and $ 1.1 million for the three months ended June 30, 2026 and 2025, respectively, and $ 2.2 million and $ 2.0 million for the six months ended June 30, 2026 and 2025, respectively.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of March 31, 2026 and December 31, 2025:

Accrued expenses and other current liabilities consisted of the following as of June 30, 2026 and December 31, 2025:

(in thousands)

15 unchanged sentences

The Company is obligated to make milestone payments under certain of these contracts.

The Company incurred research and development expenses related to commitments under these agreements of $ 2.5 million for the three months ended March 31, 2026 and $ 2.2 million for the three months ended March 31, 2025.

The Company incurred research and development expenses related to commitments under these agreements of $ 2.4 million and $ 2.2 million for the three months ended June 30, 2026 and June 30, 2025, respectively, and $ 4.9 million and $ 4.3 million for the six months ended June 30, 2026 and June 30, 2025, respectively.

Legal Proceedings

In the ordinary course of business, the Company may be subject from time to time to various proceedings, lawsuits, disputes, or claims.

In the ordinary course of business, the Company is subject from time to time to various proceedings, lawsuits, disputes, or claims.

In accordance with FASB ASC Topic 450, Contingencie s (“ASC 450”), the Company accrues a liability for legal contingencies when it is probable that a liability has been incurred, and the amount of the loss can be reasonably estimated.

1 unchanged sentence

In the first quarter of 2025, the Company and certain of its employees received subpoenas from the U.S.

Department of Justice requesting that the Company produce certain documents regarding its sponsored genetic testing program relating to

VYJUVEK and commercial practices relating thereto.

Department of Justice requesting that the Company produce certain documents regarding its sponsored genetic testing program relating to VYJUVEK and commercial practices relating thereto.

The Company is cooperating and providing information in response to the subpoenas.

2 unchanged sentences

The complaint alleged claims for breach of fiduciary duty, unjust enrichment, and waste of corporate assets based on allegedly excessive non-employee director compensation in each of 2021 through 2024.

The parties have reached an agreement in principle on settlement terms but must still negotiate and execute a definitive settlement agreement, which will be filed with the Delaware Court of Chancery and is subject to court approval upon the conclusion of a settlement hearing concerning the fairness of the terms of the proposed settlement.

If approved, the Company will adopt, implement, and maintain certain corporate governance reforms for a period of five (5) years.

The Company has recorded a liability for an estimated amount of the settlement.

The estimated amount of settlement is not material to the condensed consolidated financial statements.

As of March 31, 2026, future minimum commitments under the Company’s operating leases with lease terms in excess of 12 months were as follows:

The parties have entered into a settlement agreement, which was filed with the Court and is subject to Court approval following a fairness hearing scheduled for September 14, 2026.

If the Court approves the settlement, the Company will adopt, implement, and maintain certain corporate governance reforms for a period of five (5) years.

The Company has recorded a liability for the plaintiff’s attorneys fees and expenses (i.e., the settlement amount), which is not material to the condensed consolidated financial statements.

On May 29, 2026, Jonathan Forman filed a lawsuit against the Company in the United States District Court for the District of Delaware (Docket No.

1:26-cv-00628) asserting claims for correction of inventorship, under 35 U.S.C.

§ 256, of U.S.

10,829,529 and U.S.

12,522,636 (together, the “Patents”), which relate to compositions and methods for delivering CFTR polypeptides and which the plaintiff alleges are embodied in the Company’s KB407 product candidate for the treatment of cystic fibrosis.

The plaintiff alleges that he conceived of, and contributed to, the inventions claimed in the Patents and that he was erroneously omitted as a named inventor on the Patents.

In addition to the correction of inventorship, the plaintiff is seeking his attorneys’ fees and his cost and expenses.

The Company believes the plaintiff’s claims are without merit and intends to defend the matter vigorously.

The Company is unable to estimate the possible loss or range of losses, if any, that may result from the matter.

As of June 30, 2026, future minimum commitments under the Company’s operating leases with lease terms in excess of 12 months were as follows:

(in thousands)

Operating Leases

2026 (remaining nine months)

2026 (remaining six months) $ 945

Thereafter 7,279

2 unchanged sentences

Present value of lease liability $ 8,853

As of March 31, 2026 and December 31, 2025, the Company’s weighted-average remaining lease term for operating leases was 10.0 years and 10.1 years, respectively, and the Company’s weighted-average discount rate for operating leases was 9.7 % as of March 31, 2026 and December 31, 2025.

As of June 30, 2026 and December 31, 2025, the Company’s weighted-average remaining lease term for operating leases was 9.8 years and 10.1 years, respectively, and the Company’s weighted-average discount rate for operating leases was 9.7 % as of June 30, 2026 and December 31, 2025.

The components of the Company’s lease expense are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2026 2025 2026 2025

8 unchanged sentences

The Company has historically granted stock options, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) to certain employees.

Shares of common stock remaining available for grant under the Plan were approximately 1.6 million as of March 31, 2026.

Shares of common stock remaining available for grant under the Plan were approximately 1.6 million as of June 30, 2026.

Stock Options

The following table summarizes the Company’s stock option activity for the three months ended March 31, 2026:

The following table summarizes the Company’s stock option activity for the six months ended June 30, 2026:

Stock Options Outstanding Weighted-Average Exercise Price

7 unchanged sentences

Cancelled or forfeited ( 75,646 ) $ 162.08

Outstanding as of March 31, 2026

Outstanding as of June 30, 2026

1,975,104 $ 130.97 7.0 $ 475,417

Exercisable as of March 31, 2026

Exercisable as of June 30, 2026

1,193,485 $ 82.51 5.8 $ 345,113

(1) Aggregate intrinsic value represents the difference between the closing stock price of our common stock on December 31, 2025 and March 31, 2026 and the exercise price of outstanding in-the-money options on the respective date.

The following table summarizes the Company’s stock option activity for the three months ended March 31, 2025:

(1) Aggregate intrinsic value represents the difference between the closing stock price of our common stock on December 31, 2025 and June 30, 2026 and the exercise price of outstanding in-the-money options on the respective date.

The following table summarizes the Company’s stock option activity for the six months ended June 30, 2025:

Stock Options Outstanding Weighted-Average Exercise Price

7 unchanged sentences

Cancelled or forfeited ( 63,985 ) $ 105.98

Outstanding as of March 31, 2025

Outstanding as of June 30, 2025

2,275,288 $ 94.68 7.1 $ 117,142

Exercisable as of March 31, 2025

Exercisable as of June 30, 2025

1,255,141 $ 70.95 6.2 $ 85,882

(1) Aggregate intrinsic value represents the difference between the closing stock price of our Common Stock on December 31, 2024 and March 31, 2025 and the exercise price of outstanding in-the-money options on the respective date.

The total intrinsic value (the amount by which the fair market value exceeds the exercise price) of stock options exercised was $ 32.1 million and $ 1.4 million during the three months ended March 31, 2026 and 2025, respectively.

The weighted-average grant-date fair value per share of options granted to employees and directors was $ 175.20 and $ 116.88 during the three months ended March 31, 2026 and 2025, respectively.

There was $ 92.8 million of unrecognized stock-based compensation expense related to employees’ and directors’ options that is expected to be recognized over a weighted-average period of 3.2 years as of March 31, 2026.

(1) Aggregate intrinsic value represents the difference between the closing stock price of our Common Stock on December 31, 2024 and June 30, 2025 and the exercise price of outstanding in-the-money options on the respective date.

The total intrinsic value (the amount by which the fair market value exceeds the exercise price) of stock options exercised was $ 30.4 million and $ 2.0 million during the three months ended June 30, 2026 and 2025, respectively, and $ 62.5 million and $ 3.4 million for the six months ended June 30, 2026 and 2025, respectively.

The weighted-average grant-date fair value per share of options granted to employees and directors was $ 196.07 and $ 87.69 during the three months ended June 30, 2026 and 2025, respectively, and $ 178.27 and $ 109.93 for the six months ended June 30, 2026 and 2025, respectively.

There was $ 90.6 million of unrecognized stock-based compensation expense related to employees’ and directors’ options that is expected to be recognized over a weighted-average period of 3.1 years as of June 30, 2026.

Restricted Stock Units

The following table summarizes the Company’s RSU activity:

Three Months Ended March 31,

Six Months Ended June 30,

Number of Shares Weighted-Average Grant Date Fair Value

7 unchanged sentences

304,491 $ 194.35 338,878 $ 153.01

There was $ 58.1 million of unrecognized stock-based compensation expense related to employees’ RSU awards that is expected to be recognized over a weighted-average period of 3.1 years as of March 31, 2026.

There was $ 51.9 million of unrecognized stock-based compensation expense related to employees’ RSU awards that is expected to be recognized over a weighted-average period of 2.9 years as of June 30, 2026.

Performance-Based Restricted Stock Units

The following table summarizes the Company’s PSU activity:

Three Months Ended March 31,

Six Months Ended June 30,

Number of Shares Weighted-Average Grant Date Fair Value

7 unchanged sentences

PSUs granted during the period are subject to regulatory performance-based vesting conditions, as determined by the Compensation Committee of the Company’s Board of Directors, and vest on a three year cliff basis upon satisfaction of such conditions.

There was $ 11.6 million of unrecognized stock-based compensation expense related to employees’ PSU awards that is expected to be recognized over a weighted-average period of 2.9 years as of March 31, 2026.

There was $ 10.7 million of unrecognized stock-based compensation expense related to employees’ PSU awards that is expected to be recognized over a weighted-average period of 2.7 years as of June 30, 2026.

Stock-Based Compensation Expense, Net

The Company recorded stock-based compensation expense, net related to its stock options and restricted stock in the condensed consolidated statements of operations and comprehensive income for the three months ended March 31, 2026 and 2025 as follows:

Three Months Ended March 31,

The Company recorded stock-based compensation expense, net related to its stock options, RSUs and PSUs in the condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2026 and 2025 as follows:

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2026 2025 2026 2025

2 unchanged sentences

Total stock-based compensation $ 14,156 $ 14,119 $ 27,765 $ 27,597

The Company capitalized stock-based compensation associated with the allocation of labor costs related to work performed to manufacture VYJUVEK of $ 0.8 million and $ 1.0 million for the three months ended March 31, 2026 and 2025, respectively, into inventory.

The Company recorded an income tax expense of $ 5.5 million for the three months ended March 31, 2026.

The Company capitalized into inventory stock-based compensation associated with the allocation of labor costs related to work performed to manufacture VYJUVEK of $ 1.1 million and $ 1.0 million for the three months ended June 30, 2026 and 2025, respectively, and $ 2.0 million and $ 1.9 million for the six months ended June 30, 2026 and 2025, respectively.

The Company recorded an income tax expense of $ 11.3 million and $ 16.8 million for the three and six months ended June 30, 2026, respectively.

The tax expense for interim periods is calculated using an estimate of the annual effective tax rate, adjusted for discrete items.

If there are any changes to the estimated annual effective tax rate, the Company will make a cumulative adjustment to the income tax provision in the period the change becomes known.

The Company recorded an income tax expense of $ 7.9 million for the three months ended March 31, 2025.

The Company recorded an income tax expense of $ 8.4 million and $ 16.3 million for the three and six months ended June 30, 2025, respectively.

We monitor the realizability of our deferred tax assets taking into consideration all relevant factors at each reporting period.

As of March 31, 2026, except for certain state net operating loss carryforward and tax credit carryforward, we do not have valuation allowance against deferred tax assets.

We continue to maintain a full valuation allowance against certain state attributes as of March 31, 2026, because we concluded they are not more likely than not to be realized as we expect certain state attribute generation in future years to exceed our ability to use these deferred tax assets.

As of June 30, 2026, except for certain state net operating loss carryforward and tax credit carryforward, we do not have valuation allowance against deferred tax assets.

We continue to maintain a full valuation allowance against certain state attributes as of June 30, 2026, because we concluded they are not more likely than not to be realized as we expect certain state attribute generation in future years to exceed our ability to use these deferred tax assets.

We are subject to income taxes in the U.S.

4 unchanged sentences

federal and state deferred tax assets due to historical cumulative losses and uncertainty regarding the realization of such assets.

The Company will continue to evaluate all available evidence each

reporting period and may adjust the valuation allowance in future periods if estimates of future taxable income or other relevant factors change.

The Company will continue to evaluate all available evidence each reporting period and may adjust the valuation allowance in future periods if estimates of future taxable income or other relevant factors change.

Segment Information

2 unchanged sentences

The CODM uses consolidated gross margin, operating margin, net income and total research and development expenses by product candidate or program to assess performance, forecast future financial results and to allocate resources.

The following table presents selected financial information with respect to the Company’s single operating segment for the three months ended March 31, 2026, and 2025:

Three Months Ended

(in thousands) March 31, 2026 March 31, 2025

The following table presents selected financial information with respect to the Company’s single operating segment for the three months ended June 30, 2026, and 2025:

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2026 2025 2026 2025

Product revenue, net

1 unchanged sentence

Cost of goods sold 6,437 7,165 12,760 12,193

95 % 93 % 95 % 93 %

B-VEC 1,539 2,378 2,100 4,353

357 704 1,339 735

KB304 26 424 29 667

2 unchanged sentences

KB707 2,998 2,413 5,435 5,147

Other research programs 736 692

1,214 426 2,006 879

KB803 487 408 1,618 894

Other product candidates 745 626 1,481 1,317

Other research and development costs (1)

6,480 6,505 14,268 13,503

Total research and development

5 unchanged sentences

Interest and other income, net

7,662 7,376 15,414 14,720

Income before income taxes

3 unchanged sentences

$ 54,768 $ 38,333 $ 110,700 $ 74,067

(1) Includes stock-based compensation, other manufacturing expenses related to our product candidates and other unallocated expenses which largely relates to depreciation and other facilities and equipment related costs.

(1) Includes stock-based compensation and other unallocated expenses which consist of shared pre-commercial manufacturing costs, primarily relating to certain raw materials, process development, quality control and quality assurance activities, as well as other manufacturing and facility related costs including rent, storage and depreciation which support the development of multiple product candidates.

Subsequent Events

2 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 1. Financial Statements