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Item 2. Management’s Discussion and Analysis

2026-05-11 compared with 2025-11-05 · 113 added, 122 removed, 134 unchanged (64% of the section changed)

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Graphite’s assets and liabilities were measured and recognized at their fair values as of the closing of the Merger.

We are a commercial pharmaceutical company focused on the commercialization of VIZZ ™ (aceclidine ophthalmic solution) 1.44%, the first and only FDA-approved aceclidine-based eye drop for the treatment of presbyopia, a condition impacting an estimated 1.8 billion people globally and 128 million people in the United States.

We are commercializing VIZZ in the United States and continue to establish licensing partnerships internationally to provide access to VIZZ globally.

We are a commercial pharmaceutical company focused on the commercialization of VIZZ ® (aceclidine ophthalmic solution) 1.44%, the first and only FDA-approved aceclidine-based eye drop for the treatment of presbyopia, a condition impacting an estimated 1.8 billion people globally and 128 million people in the United States (“U.S”).

We are commercializing VIZZ in the U.S.

and continue to establish licensing partnerships internationally to provide access to VIZZ globally.

We believe that a once-daily pharmacological eye drop that can effectively and safely improve near vision throughout the full workday, without the need for reading glasses, is a highly attractive commercial product with an estimated U.S.

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VIZZ contracts the iris sphincter muscle resulting in a pinhole effect and uniquely achieves a sub-2mm pupil that extends depth of focus to significantly improve near vision without causing a myopic shift.

Aceclidine, the sole active ingredient in VIZZ, is a new chemical entity (“NCE”) in the United States and its FDA approval marks a global first in the treatment of presbyopia.

VIZZ has patent protection until 2044 in the United States, at a minimum, due to a robust intellectual property portfolio underpinned by issued patents.

Aceclidine, the sole active ingredient in VIZZ, is a new chemical entity (“NCE”) in the U.S.

and its FDA approval marks a global first in the treatment of presbyopia.

VIZZ has patent protection until 2044 in the U.S., at a minimum, due to a robust intellectual property portfolio underpinned by issued patents.

On July 31, 2025, the FDA approved VIZZ, making it the first and only aceclidine-based product approved by the FDA.

VIZZ has five years of NCE exclusivity in the United States, expiring in July 2030.

VIZZ has five years of NCE exclusivity in the U.S., expiring in July 2030.

The Company commercially launched VIZZ in the U.S.

in August 2025, with direct-to-eye care professional sales and marketing activities initiated immediately upon approval.

Professional product sample distribution by the sales force to optometrists and ophthalmologists and commercial product shipments to customers via our e-pharmacy partner were initiated in October 2025, and we anticipate product will be broadly available in retail pharmacies in the middle of the fourth quarter of 2025.

Professional product sample distribution by the sales force to optometrists and ophthalmologists and commercial product shipments to customers via our e-pharmacy partner were initiated in October 2025, and product became broadly available in retail pharmacies beginning in November 2025.

Financial Overview

As of September 30, 2025 , we had $202.2 million of cash, cash equivalents, restricted cash, and marketable secu rities.

We believe that our existing cash, cash equivalents and marketable securities as of September 30, 2025 will allow us to

continue to commercialize VIZZ, and will be sufficient to fund the Company to positive operating cash flow.

We have incurred net losses in each year since inception, and as of September 30, 2025 , we had an accumulated deficit of $191.2 million .

As of March 31, 2026 , we had $258.4 million of cash, cash equivalents, restricted cash, and marketable secu rities.

We believe that our existing cash, cash equivalents and marketable securities as of March 31, 2026 will allow us to continue to

commercialize VIZZ, and we anticipate will be sufficient to fund the Company to positive operating cash flow.

We have incurred net losses in each year since inception, and as of March 31, 2026 , we had an accumulated deficit of $268.6 million .

These losses have resulted principally from costs incurred in connection with research and development activities and selling, general and administrative costs associated with our operations.

We expect to continue to incur significant expenses related to product sales, marketing, manufacturing, and distribution of VIZZ as we begin commercialization, and additional costs associated with being a public company, including audit, legal, regulatory and tax-related services associated with maintaining compliance with an exchange listing and SEC requirements.

As a result of these and other factors, and while we believe that our existing cash, cash equivalents and marketable securities as of September 30, 2025 will fund the Company to positive operating cash flow, it is possible that we may require additional financing to fund our operations and planned growth.

We expect to continue to incur significant expenses related to product sales, marketing, manufacturing, and distribution of VIZZ as we are in the early stages of commercialization, and additional costs associated with being a public company, including audit, legal, regulatory and tax-related services associated with maintaining compliance with an exchange listing and SEC requirements.

As a result of these and other factors, while we believe that our existing cash, cash equivalents and marketable securities as of March 31, 2026 will fund the Company to positive operating cash flow, it is possible that we may require additional financing to fund our operations and planned growth.

Since our inception, we have financed our operations primarily through public offerings of our common stock, proceeds from the Merger, and private placements of our common stock and convertible preferred stock.

Concurrent with the closing of the Merger on March 21, 2024, we completed a private placement (the “March 2024 PIPE Financing”) of 3,559,565 shares of common stock for an aggregate gross purchase price of $53.5 million.

Additionally, on July 17, 2024, we completed a private placement (the “July 2024 PIPE Financing”) with Ridgeback Capital Investments, L.P.

of 1,578,947 shares of common stock for an aggregate gross purchase price of $30.0 million.

As of September 30, 2025, we have sold an aggregate of 920,500 shares of common stock under the sales agreement with TD Securities (USA) LLC (the “Sales Agreement”) , resulting in net proceeds to the Company of $26.1 million.

As of September 30, 2025, the Company had $123.5 million of capacity remaining under the Sales Agreement.

In October 2025, the Company sold an aggregate of 2,698,134 shares of common stock at a weighted-average price of $45.79 under the Sales Agreement, utilizing the remaining capacity under the Sales Agreement.

License Agreements

Additionally, on July 17, 2024, we completed a private placement (the “July 2024 PIPE Financing”) of 1,578,947 shares of common stock for an aggregate gross purchase price of $30.0 million.

As of December 31, 2025, we have sold an aggregate of 3,618,634 shares of common stock under the sales agreement with TD Securities (USA) LLC (the “Sales Agreement”) , resulting in net proceeds to the Company of $147.1 million.

As of March 31, 2026, the Company had no remaining capacity remaining under the Sales Agreement.

License and Distribution Agreements

CORXEL License and Collaboration Agreement

In April 2022, we entered into a License and Collaboration Agreement with CORXEL Pharmaceuticals (formerly known as Ji Xing Pharmaceuticals Hong Kong Limited) (“CORXEL”) granting CORXEL an exclusive license (the “CORXEL License” formerly referred to as the “Ji Xing License”) to certain of our intellectual property rights to develop, use, import, and sell products containing LNZ100 (“Products”) for use in the treatment of presbyopia in humans in mainland China, Hong Kong Special Administrative Region, Macau Special Administrative Region, and Taiwan (collectively, “Greater China”).

In April 2022, we entered into a License and Collaboration Agreement with CORXEL Pharmaceuticals (formerly known as Ji Xing Pharmaceuticals Hong Kong Limited) (“CORXEL”) granting CORXEL an exclusive license (the “CORXEL License” formerly referred to as the “Ji Xing License”) to certain of our intellectual property rights to develop, use, import, and sell products containing LNZ100 (commercially known as VIZZ in the U.S.) (“Products”) for use in the treatment of presbyopia in humans in mainland China, Hong Kong Special Administrative Region, Macau Special Administrative Region, and Taiwan (collectively, “Greater China”).

We also granted CORXEL (i) the right to negotiate in good faith and enter into agreements to purchase Products from us for clinical and commercial uses at cost plus a negotiated percentage and (ii) the right of first negotiation to obtain a regional license from us on other products we might develop outside of the field of presbyopia for commercialization in Greater China.

We received nonrefundable, non-creditable upfront payments totaling $15.0 million as initial consideration under the CORXEL License during the year ended December 31, 2022.

In addition, we received $5.0 million upon submission of the NDA for LNZ100 to the National Medical Products Administration (“NMPA”) in Greater China for the treatment of presbyopia and another $5.0 million upon FDA approval of VIZZ during the three months ended September 30, 2025.

In addition, we received $5.0 million upon submission of the New Drug Application (“NDA”) for VIZZ to the National Medical Products Administration (“NMPA”) in Greater China for the treatment of presbyopia and another $5.0 million upon FDA approval of VIZZ during the year ended December 31, 2025.

We are also eligible to receive (i) up to an additional $85.0 million in regulatory and sales milestone payments, (ii) tiered, escalating royalties in the range of 5% to 15% on net sales of Products in Greater China by CORXEL, its affiliates and sublicensees, and (iii) tiered, deescalating royalties in the range of 15% to 5% of sublicensing income received by CORXEL prior to the regulatory approval of the first Product in Greater China.

The $15.0 million upfront payments allocated to that single performance obligation was recognized on execution of the CORXEL License during the year ended December 31, 2022.

During the three months ended September 30, 2025, the first regulatory milestone under the CORXEL License was achieved upon submission of the NDA for LNZ100 to the NMPA.

During the year ended December 31, 2025, the first regulatory milestone under the CORXEL License was achieved upon submission of the NDA for VIZZ to the NMPA.

A second regulatory milestone under the CORXEL License was achieved upon FDA approval of VIZZ.

We recognized revenue and received payment totaling $10.0 million for the achievement of both regulatory milestones during the three months ended September 30, 2025.

No other contractual milestones were met under the CORXEL License during the three and nine months ended September 30, 2025 or 2024.

On October 27, 2024, CORXEL and the Company announced positive topline data from the Phase 3 JX07001 clinical trial of LNZ100 in patients with presbyopia in China.

In this China Phase 3 safety and efficacy trial, LNZ100 achieved the primary endpoint and key secondary endpoints, with statistically significant three-lines or greater improvement in Best Corrected Distance Visual Acuity (“BCDVA”) at near, without losing one-line or more in distance visual acuity.

We recognized revenue and received payment totaling $10.0 million for the achievement of both regulatory milestones during the year ended December 31, 2025.

No contractual milestones were met under the CORXEL License during the three months ended March 31, 2026 or 2025.

Lotus Pharmaceutical Co., LTD.

License and Commercialization Agreement

On May 7, 2025, we entered into a license and commercialization agreement providing an exclusive license (the “Lotus License”) to certain of our IP to commercialize LNZ100 for the treatment of presbyopia in humans in the Republic of Korea, the Kingdom of Thailand, Republic of the Philippines, the Socialist Republic of Vietnam, Malaysia, Negara Brunei Darussalam, the Republic of Indonesia, and the Republic of Singapore (collectively, “Southeast Asia”).

Under the terms of the Lotus License, we received a $5.0 million nonrefundable, non-creditable upfront payment, and are eligible to receive up to $120.0 million of regulatory and commercial milestone payments, as well as tiered, double-digit royalties on future net sales in Southeast Asia.

On May 7, 2025, we entered into a license and commercialization agreement providing an exclusive license (the “Lotus License”) to certain of our intellectual property to commercialize VIZZ for the treatment of presbyopia in humans in the Republic of Korea, the Kingdom of Thailand, Republic of the Philippines, the Socialist Republic of Vietnam, Malaysia, Negara Brunei Darussalam, the Republic of Indonesia, and the Republic of Singapore (collectively, “Southeast Asia”).

Under the terms of the Lotus License, we received a $5.0 million nonrefundable, non-creditable upfront payment, and are

eligible to receive up to $120.0 million of regulatory and commercial milestone payments, as well as tiered, escalating royalties in the range of 10% to 20% on future net sales in Southeast Asia.

Laboratoires Théa License and Commercialization Agreement

On July 7, 2025, we entered into a license and commercialization agreement providing an exclusive license (the “Théa License”) to register and commercialize LNZ100 for the treatment of presbyopia in Canada.

Under the terms of the Théa License, we received a $2.5 million nonrefundable, non-creditable upfront payment, and are eligible to receive up to $67.5 million in regulatory and commercial milestone payments, as well as tiered, double-digit royalties on future net sales in Canada.

On July 7, 2025, we entered into a license and commercialization agreement providing an exclusive license (the “Théa License”) to register and commercialize VIZZ for the treatment of presbyopia in Canada.

Under the terms of the Théa License, we received a $2.5 million nonrefundable, non-creditable upfront payment, and are eligible to receive up to $67.5 million in regulatory and commercial milestone payments, as well as tiered, escalating royalties in the range of 10% to 20% on future net sales in Canada.

Lunatus Global Medical Supplies Distribution Agreement

On January 2, 2026, we entered into a distribution agreement appointing an exclusive distributor for VIZZ in the United Arab Emirates, Kingdom of Saudi Arabia, Kuwait, Qatar, Bahrain, Oman, Jordan, Lebanon, and Iraq (collectively, the “Middle East”) (the “Lunatus License”).

Under the terms of the Lunatus License, we received a nonrefundable, non-creditable upfront payment, and are eligible to receive regulatory and commercial milestone payments and a per unit fee for each unit sold to Lunatus for distribution in the Middle East, pending regulatory approval.

Key Trends and Factors Affecting Comparability Between Periods

• License revenue increased during the three and nine months ended September 30, 2025 relative to the three and nine months ended September 30, 2024 as a result of upfront payments received under the Lotus and Théa Licenses, as well as the achievement of two regulatory milestones under the CORXEL License.

• License revenue increased during the three months ended March 31, 2026 relative to the three months ended March 31, 2025 as a result of the upfront payment received under the Lunatus License.

We may generate future revenue from additional license and collaboration agreements to commercialize VIZZ outside the U.S.

We have not recorded any product sales revenue for the periods presented.

• We expect that selling, general and administrative expenses will continue to increase in 2025, relative to 2024, as we have built a cross-functional commercial team consisting of marketing, commercial operations and an 88-territory sales force, and will continue to strategically support our sales and commercial infrastructure with capabilities designed to scale when necessary to support the commercial launch of VIZZ.

These expenses increased during the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, and we expect such expenses to continue to increase for the foreseeable future.

• Our research and development costs decreased during the three months ended September 30, 2025, relative to the comparative period in 2024 primarily due to FDA approval of VIZZ during the three months ended September 30, 2025.

• Our selling, general and administrative expenses will continue to increase in 2026, relative to 2025, as we have built a cross-functional commercial team consisting of marketing, commercial operations and an 88-territory sales force that is currently expanding to 117 territories, and will continue to strategically support our sales and commercial infrastructure with capabilities designed to scale when necessary to support the commercialization of VIZZ.

We expect such expenses to continue to increase for the foreseeable future due to the recent launch of our direct-to-consumer (“DTC”) marketing campaign and the expansion of our sales force.

• Our research and development costs decreased during the three months ended March 31, 2026, relative to the comparative period in 2025 primarily due to FDA approval of VIZZ.

On a prospective basis subsequent to FDA approval on July 31, 2025, certain expenses that were historically classified as research and development expenses were and will be prospectively classified into sales, general and administrative expenses, including certain medical affairs and chemistry, manufacturing and controls expenses that indirectly support VIZZ.

In addition, our research and development costs decreased during the nine months ended September 30, 2025, relative to the nine months ended September 30, 2024, primarily as a result of reduced clinical research expenses related to the substantial completion of our Phase 3 CLARITY trials in March 2024 and the prospective classifications noted above.

We expect our research and development costs will continue to decrease over the remainder of 2025, relative to 2024, given the completion of the CLARITY trials, the subsequent reduction of clinical activities over 2024 and the FDA approval of VIZZ.

We expect our research and development costs will be near zero over the remainder of 2026, relative to 2025, given the FDA approval of VIZZ.

Recent Developments

FDA Approval and Commercial Launch of VIZZ

On July 31, 2025, the FDA approved VIZZ, the first and only aceclidine-based product approved by the FDA.

VIZZ has five years of NCE exclusivity in the United States, expiring in July 2030.

We commercially launched VIZZ in the U.S.

in August 2025, with direct-to-eye care professional sales and marketing activities initiated immediately upon approval.

CORXEL New Drug Application Submission

In July 2025, a regulatory milestone was achieved upon the submission of the NDA for LNZ100 to the NMPA in Greater China for the treatment of presbyopia.

Submission of Marketing Authorization Application to the Medicines and Healthcare products Regulatory Agency

On April 20, 2026, we announced the submission of a Marketing Authorization Application (“MAA”) to the United Kingdom’s Medicines and Healthcare products Regulatory Agency (“MHRA”) for the review and approval of VIZZ.

The submission of the MAA in the United Kingdom represented the sixth ex-U.S.

regulatory submission for VIZZ.

Submission of Marketing Authorization Application to European Medicines Agency

On March 10, 2026, we announced the submission of an MAA to the European Medicines Agency (“EMA”) for the review and approval of VIZZ.

If approved, the EMA's positive opinion would serve as a foundational step toward making VIZZ available to the millions of Europeans living with age-related blurry near vision.

The submission of the MAA in Europe represented the fifth ex-U.S.

regulatory submission for VIZZ.

Basis of Presentation

The following discussion highlights our results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described and provides information that management believes is relevant for an assessment and understanding of the unaudited condensed consolidated balance sheets and statements of operations and comprehensive loss presented herein.

The following discussion and analysis are based on our unaudited condensed consolidated financial statements and related notes thereto, which we have prepared in accordance with U.S.

The following discussion and analysis are based on our unaudited condensed consolidated financial statements and related notes thereto, which we have prepared in accordance

You should read the discussion and analysis together with such unaudited condensed consolidated financial statements and the related notes thereto.

Components of Statements of Operations and Comprehensive Loss

We have not generated any revenue from product sales through September 30, 2025, however, we expect to generate revenue from sales of VIZZ beginning in the fourth quarter of 2025.

We have generated revenue related to various license and collaboration agreements, and in the future may generate revenue from payments received under additional licenses or collaboration agreements we may enter into with respect to VIZZ.

Product Sales, net

Beginning in the fourth quarter of 2025, we have generated revenue from sales of VIZZ, which are recorded net of invoice discounts for prompt payment and distribution service fees, product returns and other incentives.

License Agreements

We have generated revenue related to various license and collaboration agreements, and in the future may generate revenue from payments received under our current license and collaboration agreements or additional licenses, commercialization and distribution agreements we may enter into with respect to VIZZ.

Operating Expenses

Cost of Sales

Cost of sales consists of direct and indirect costs related to the manufacturing and distribution of VIZZ, including raw materials, third-party manufacturing costs, packaging services, and freight costs.

Cost of sales also includes period costs related to certain operations personnel and inventory adjustment charges.

The Company began capitalizing inventory costs upon FDA approval of VIZZ in July 2025.

Prior to FDA approval of VIZZ, manufacturing and other inventory costs were recorded to research and development expenses, resulting in zero cost inventory.

Cost of sales of VIZZ will increase on a per unit basis after zero cost inventory is depleted, which we expect to occur during 2026.

Selling, General and Administrative

Selling, general and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation, related to our executive, finance, business development, sales and marketing, human resources and other corporate functions.

Other selling, general and administrative expenses include marketing, and advertising costs to support our 88-territory sales force, professional fees for legal, tax and business consulting services, public company related expenses such as audit fees and insurance costs, intellectual property and patent costs, facility costs and travel costs.

Other selling, general and administrative expenses include marketing, and advertising costs to support our sales force, professional fees for legal, tax and business consulting services, public company related expenses such as audit fees and insurance costs, intellectual property and patent costs, facility costs and travel costs.

Subsequent to the FDA approval of VIZZ, selling, general and administrative expenses also include salaries and related benefits and stock-based compensation costs related to our quality assurance, regulatory, supply chain and operations, and medical affairs functions.

Research and Development

Research and development expenses, which consist primarily of costs associated with our product research and development efforts, are expensed as incurred.

Research and development expenses consist primarily of:

Research and development expenses, which consisted primarily of costs associated with our product research and development efforts, were expensed as incurred.

Research and development expenses consisted primarily of:

(i) employee related costs, including salaries, benefits and share-based compensation expense for employees engaged in research and development activities;

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and (iv) allocated facility-related costs.

Costs for certain activities, such as nonclinical studies and clinical trials are generally recognized based on the evaluation of the progress of completion of specific tasks using information and data provided by our vendors and collaborators.

Costs for certain activities, such as nonclinical studies and clinical trials were generally recognized based on the evaluation of the progress of completion of specific tasks using information and data provided by our vendors and collaborators.

Other Income, net

Other income, net consists of interest income earned on cash, cash equivalents, and short-term investments, changes in the fair value of long-term investments due to observable price changes in orderly transactions for an identical or similar investment, and the change in fair value of preferred stock warrants liability.

Upon completion of the Merger, the preferred stock warrants became exercisable into shares of common stock and will no longer continue to be remeasured at each reporting date.

Other income, net consists of interest income earned on cash, cash equivalents, and short-term investments and changes in the fair value of long-term investments due to observable price changes in orderly transactions for an identical or similar investment.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table presents the results of operations for the periods indicated (amounts in thousands, except percentages):

Three Months Ended September 30,

Three Months Ended March 31,

2026 2025 $ Change % Change

Product sales, net $ 1,651 $ — $ 1,651 N/A

License revenue 250 — 250 N/A

Cost of sales 1,076 — 1,076 N/A

Selling, general and administrative expenses 44,960 11,113 33,847 305 %

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Other income, net 2,647 2,312 335 14 %

Product Sales, net

Following the FDA approval of VIZZ in July 2025, sales of commercial product began in October 2025.

Product sales, net for the three months ended March 31, 2026 was $1.7 million and was primarily driven by approximately 25,000 paid and filled monthly prescriptions in the period.

We had no product sales during the three months ended March 31, 2025.

License Revenue

License revenue increased during the three months ended September 30, 2025 due to revenue recognized from the upfront payment under the Théa License and the achievement of two regulatory milestones under the CORXEL License.

There was no license revenue in the three months ended September 30, 2024.

License revenue for the three months ended March 31, 2026 was comprised of revenue recognized from the upfront payment under the Lunatus License.

There was no license revenue in the three months ended March 31, 2025.

Cost of Sales

Cost of sales for the three months ended March 31, 2026 was primarily driven by two nonrecurring charges to inventory stemming from an out-of-specification temperature excursion of inventory while in transit from our manufacturer and a write-off of packaging supplies associated with a manufacturing process transition.

There was no cost of sales during the three months ended March 31, 2025.

Selling, General and Administrative

Selling, general and administrative expenses increased $21.1 million, or 325%, to $27.6 million for the three months ended September 30, 2025 compared to $6.5 million for the three months ended September 30, 2024.

The change was primarily driven by increases of $12.2 million in employee salaries and related expenses due to a rise in headcount, including the hiring of our 88-territory sales force, $4.9 million in pre-commercial and commercial marketing, advertising and sales infrastructure expenses as we prepared for and subsequently executed the commercial launch of VIZZ, $1.1 million in chemistry and control and regulatory related expenses which were classified as selling, general and administrative expenses subsequent to FDA approval, $1.1 million in travel related costs primarily related to our sales force, $0.9 million in other corporate overhead and $0.6 million in legal costs.

Selling, general and administrative expenses increased $33.8 million, or 305%, to $45.0 million for the three months ended March 31, 2026 compared to $11.1 million for the three months ended March 31, 2025.

The change was primarily driven by increases of $17.2 million in commercial marketing, advertising and sales infrastructure expenses as we launched our DTC marketing campaign in January 2026, $12.8 million in employee salaries and related expenses due to an increase in headcount, including the hiring of our sales force, $1.8 million in chemistry and control and regulatory related expenses which were classified as selling, general and administrative expenses subsequent to FDA approval, $1.1 million in travel related costs primarily related to our sales force, and a $0.8 million nonrecurring write-off of sample packaging and materials due to a manufacturing transition.

Research and Development

Research and development expenses incurred for the three months ended September 30, 2025 were primarily driven by pre-approval and contingent product manufacturing activities to support the commercial launch of VIZZ, which were recorded in research and development prior to FDA approval on July 31, 2025, while research and development expenses incurred for the three months ended September 30, 2024 were primarily incurred to further refine the manufacturing process for VIZZ.

Research and development expenses decreased by $2.7 million, or 41%, to $3.8 million for the three months ended September 30, 2025 compared to $6.5 million for the three months ended September 30, 2024.

Subsequent to FDA approval, people-related, chemistry and control, and regulatory costs previously classified as research and development expenses were prospectively classified as selling, general and administrative expenses, resulting in period over period decreases in research and development expenses of $1.3 million, $0.9 million, and $0.8 million, respectively.

The reduction in research and development expenses were partially offset by a $0.6 million increase in contingent product manufacturing costs incurred prior to FDA approval.

Research and development expenses decreased by $5.8 million, or 100%, for the three months ended March 31, 2026 compared to $5.8 million for the three months ended March 31, 2025.

Prior to FDA approval of VIZZ on July 31, 2025, costs related to the production of inventory were expensed in the period incurred within research and development expenses, resulting in zero cost inventory.

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Other Income, net

Other income, net for the three months ended September 30, 2025, was $2.2 million, compared to $2.7 million for the three months ended September 30, 2024.

Interest income earned on our cash, cash equivalents, and marketable securities decreased period over period due to a lower balance of marketable securities and slightly less favorable interest rates.

Comparison of the Nine Months Ended September 30, 2025 and 2024

The following table presents the results of operations for the periods indicated (amounts in thousands, except percentages):

Nine Months Ended September 30,

2025 2024 $ Change % Change

License revenue $ 17,500 $ — $ 17,500 N/A

Selling, general and administrative expenses 51,505 19,452 32,053 165 %

Research and development expenses 18,670 23,933 (5,263) (22) %

Other income, net 6,944 6,268 676 11 %

License Revenue

License revenue increased during the nine months ended September 30, 2025 due to revenue recognized from the upfront payments under the Lotus and Théa Licenses, and the achievement of two regulatory milestones under the CORXEL License.

There was no license revenue in the nine months ended September 30, 2024.

Selling, General and Administrative

Selling, general and administrative expenses increased $32.1 million, or 165%, to $51.5 million for the nine months ended September 30, 2025 compared to $19.5 million for the nine months ended September 30, 2024.

Increases in the comparative period included $19.1 million in employee salaries and related expenses due to a rise in headcount, including the hiring of our 88-territory sales force, $8.1 million in pre-commercial and commercial marketing, advertising and sales infrastructure as we prepared for and subsequently executed the commercial launch of VIZZ, $1.8 million in travel expenses primarily related to our sales force, $1.7 million in other corporate overhead, and $1.1 million in chemistry and control and regulatory related expenses which were classified as selling, general and administrative expenses subsequent to FDA approval.

Research and Development

Research and development expenses incurred for the nine months ended September 30, 2025 were primarily driven by pre-approval and contingent product manufacturing activities to support the commercial launch of VIZZ, while research and development expenses incurred for the nine months ended September 30, 2024 were primarily incurred to further refine the manufacturing process for VIZZ.

Research and development expenses decreased $5.3 million, or 22%, to $18.7 million for the nine months ended September 30, 2025 compared to $23.9 million for the nine months ended September 30, 2024.

The decrease was primarily driven by a $7.0 million decrease in clinical and nonclinical research expense for our clinical trials, and a $1.9 million decrease in contract regulatory consulting expenses associated with the prior period preparation and filing of our NDA for VIZZ.

The decrease was partially offset by a $2.2 million increase in contingent product manufacturing costs incurred prior to FDA approval and a $1.2 million increase in employee salaries and related expenses due to increased non-clinical regulatory and CMC headcount.

Other Income, net

Other income, net for the nine months ended September 30, 2025, was $6.9 million, compared to $6.3 million for the nine months ended September 30, 2024.

Interest income earned on our cash, cash equivalents, and marketable securities increased by $0.8 million as a result of an overall increase in cash on-hand in 2025 over the comparative period.

During the nine months ended September 30, 2024, we recorded a $1.0 million charge due to an increase in the fair value of the preferred stock warrants liability, resulting in a non-recurring, non-cash charge at the close of the Merger, and $1.3 million in other income related to an increase in the fair value of the Company's equity investment without a readily determinable fair value.

Other income, net for the three months ended March 31, 2026, was $2.6 million, compared to $2.3 million for the three months ended March 31, 2025.

Interest income earned on our cash, cash equivalents, and marketable securities increased period over period due to a higher balance of marketable securities.

Liquidity and Capital Resources

Sources of Liquidity

As of September 30, 2025, we had $202.2 million of cash, cash equivalents and marketable securities.

We have incurred net losses in each year since inception and as of September 30, 2025, we had an accumulated deficit of $191.2 million.

Our net losses were $16.7 million and $10.2 million for the three months ended September 30, 2025 and 2024, respectively, and $46.2 million and $37.1 million for the nine months ended September 30, 2025 and 2024, respectively.

These losses have

resulted principally from costs incurred in connection with research and development activities and selling, general and administrative costs associated with our operations.

As of March 31, 2026, we had $258.4 million of cash, cash equivalents and marketable securities.

We have incurred net losses in each year since inception and as of March 31, 2026, we had an accumulated deficit of $268.6 million.

Our net losses were $41.5 million and $14.6 million for the three months ended March 31, 2026 and 2025, respectively.

These losses have resulted principally from costs incurred in connection with research and development activities and selling, general and administrative costs associated with our operations.

We expect to continue to incur significant expenses and operating losses as we begin commercialization of VIZZ, including costs related to product sales, marketing, manufacturing, and distribution.

From inception through September 30, 2025, we received funding of $13.0 million from our initial seed financing, $47.0 million from the sale of Series A Convertible Preferred stock, $10.0 million from the sale of Series A-1 Convertible Preferred Stock, gross proceeds of $83.5 million from the sale of Series B Convertible Preferred stock, approximately $117.8 million in cash and cash equivalents from the Merger, approximately $53.5 million in gross cash proceeds from the March 2024 PIPE Financing, and $30.0 million in gross cash proceeds from the July 2024 PIPE Financing.

From inception through March 31, 2026, we received funding of $13.0 million from our initial seed financing, $47.0 million from the sale of Series A Convertible Preferred stock, $10.0 million from the sale of Series A-1 Convertible Preferred Stock, gross proceeds of $83.5 million from the sale of Series B Convertible Preferred stock, approximately $117.8 million in cash and cash equivalents from the Merger, approximately $53.5 million in gross cash proceeds from the March 2024 PIPE Financing, and $30.0 million in gross cash proceeds from the July 2024 PIPE Financing.

On April 4, 2025, we entered into a Sales Agreement (the “Sales Agreement”) with TD Securities (USA) LLC (“TD Cowen”) under which we may offer and sell up to $150.0 million of shares of our common stock from time to time through an “at the market” offering program under which TD Cowen will act as sales agent.

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We have no obligation to sell any shares under the Sales Agreement and may at any time suspend solicitation and offers under the Sales Agreement.

The shares will be issued pursuant to our shelf registration statement on Form S-3, including the prospectus supplement contained therein, which was declared effective by the SEC on April 14, 2025.

There were no transactions executed under the Sales Agreement during the three months ended September 30, 2025.

During the nine months ended September 30, 2025 , the Company sold an aggregate of 920,500 shares of common stock at a weighted-average price of $28.75 under the Sales Agreement, resulting in net proceeds of $26.1 million .

As of September 30, 2025, the Company had $123.5 million of capacity remaining under the Sales Agreement.

The shares were issued pursuant to our shelf registration statement on Form S-3, including the prospectus supplement contained therein, which was declared effective by the SEC on April 14, 2025.

During the year ended December 31, 2025 , the Company sold an aggregate of 3,618,634 shares of common stock at a weighted-average price of $41.45 under the Sales Agreement, resulting in net proceeds of $147.7 million, utilizing the full capacity of the Sales Agreement .

Funding Requirements

We believe that our cash, cash equivalents, and marketable securities as of September 30, 2025 will allow us to continue to build infrastructure and commercialize VIZZ, and such funds are anticipated to fund the Company to positive operating cash flow.

We believe that our cash, cash equivalents, and marketable securities as of March 31, 2026 will allow us to continue to build infrastructure and commercialize VIZZ, and such funds are anticipated to fund the Company to positive operating cash flow.

This belief is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than expected.

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We intend to evaluate financing opportunities from time to time, and our ability to obtain financing will depend, among other things, on our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing.

We cannot be assured that additional financing will be available to us on favorable terms when

required, or at all.

We cannot be assured that additional financing will be available to us on favorable terms when required, or at all.

If we raise additional funds through the issuance of equity or equity-linked securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, and our stockholders may experience dilution.

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The following table summarizes our cash flows for the periods presented (amounts in thousands):

Nine Months Ended September 30,

Three Months Ended March 31,

Net cash (used in) provided by:

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Financing activities 14 44

Net increase in cash and cash equivalents $ 5,127 $ 6,020

Net (decrease) increase in cash and cash equivalents $ (407) $ 2,884

Net Cash Used in Operating Activities

Net cash used in operating activities primarily results from net loss adjusted for non-cash expenses, changes in working capital components, amounts due to contract research organizations to conduct our clinical programs, manufacturing of drug product and employee-related expenditures for research and development and selling, general and administrative activities.

Cash flows from operating activities will continue to be impacted by the commercial launch of VIZZ, and will also be impacted by any potential future revenue from commercialization activities and licensing arrangements.

Cash flows will also continue to be affected by other operating and general administrative activities, including operating as a public company.

For the nine months ended September 30, 2025, cash used in operating activities was $36.1 million and resulted from a net loss of $46.2 million, offset by $6.3 million in non-cash adjustments primarily driven by share-based compensation expense and a $3.8 million increase in operating assets.

For the nine months ended September 30, 2024, cash used in operating activities was $50.3 million and resulted from a net loss of $37.1 million, in addition to an approximate $14.4 million cash outflow from the payment of accounts payable and accrued liabilities associated with the Merger and accrued clinical activities, offset by $3.2 million in non-cash adjustments primarily driven by share-based compensation expense and the change in the fair value of preferred warrants.

Net Cash Provided by (Used in) Investing Activities

Cash provided by investing activities for the nine months ended September 30, 2025 was $14.1 million, primarily due to $162.6 million in proceeds from maturities of marketable securities, and partially offset by $147.7 million of purchases of marketable securities and $0.8 million in purchases of property and equipment.

Cash used in investing activities for the nine months ended September 30, 2024 was $142.6 million, primarily due to $195.3 million of purchases of marketable securities, and partially offset by $53.0 million in proceeds from maturities of marketable securities.

Net cash used in operating activities primarily results from net loss adjusted for non-cash expenses, changes in working capital components, costs to manufacture VIZZ and employee-related expenditures.

Cash flows from operating activities will continue to be impacted by commercialization activities for VIZZ and any potential future revenue from commercialization activities and licensing or distribution arrangements.

Cash flows will also continue to be affected by other operating and general administrative activities.

For the three months ended March 31, 2026, cash used in operating activities was $33.6 million and resulted from a net loss of $41.5 million, offset by $4.4 million in non-cash adjustments primarily driven by share-based compensation expense and a $3.5 million increase in operating assets.

For the three months ended March 31, 2025, cash used in operating activities was $16.0 million and resulted from a net loss of $14.6 million, in addition to an approximate $2.0 million cash outflow from the payment of accounts payable and accrued liabilities and a $1.0 million increase in operating assets, offset by $1.5 million in non-cash adjustments primarily driven by share-based compensation expense.

Net Cash Provided by Investing Activities

Cash provided by investing activities for the three months ended March 31, 2026 was $33.2 million, primarily due to $49.2 million in proceeds from maturities of marketable securities, and partially offset by $16.1 million of purchases of marketable securities.

Cash provided by investing activities for the three months ended March 31, 2025 was $18.9 million, primarily due to $52.1 million in proceeds from maturities of marketable securities, and partially offset by $33.1 million of purchases of marketable securities.

Net Cash Provided by Financing Activities

Cash provided by financing activities for the nine months ended September 30, 2025 was primarily driven by $26.1 million in net proceeds from common stock sold under the Sales Agreement and $0.8 million in proceeds from exercises of stock options.

For the nine months ended September 30, 2024, cash provided by financing activities was $198.9 million and includes $117.8 million in cash and cash equivalents acquired in the Merger, $53.5 million in gross cash proceeds from the March 2024 PIPE Financing, $30.0 million in gross cash proceeds from the July 2024 PIPE Financing, and approximately $3.9 million in net cash proceeds from exercises of stock options.

Cash provided by financing activities for the three months ended March 31, 2026 and March 31, 2025 was driven by proceeds from exercises of stock options.

Material Cash Requirements from Contractual Obligations

In February 2022, we entered into a lease for 2,930 square feet of office space in Del Mar, California.

In March 2023, we entered into a lease amendment for a 647 square feet expansion of our office space at the same facility.

The term of the lease, as amended, is forty-eight months from the original commencement date, terminating March 31, 2026, unless terminated sooner.

In April 2024, we entered into a lease for 9,795 square feet of office space in Solana Beach, California.

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See Note 6 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for further details related to our office leases.

We also have contracts with various suppliers and manufacturing companies to supply the active pharmaceutical ingredient used in VIZZ, and manufacture the drug product used in the regulatory process and clinical trials.

We also have contracts with various suppliers and manufacturing companies to supply the active pharmaceutical ingredient used in VIZZ, and manufacture the drug product for commercial sale and used in the regulatory process.

The scope of the services under these contracts can be modified and the contracts cancelled by us upon written notice.

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While our significant accounting policies are described in more detail in the notes to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our condensed consolidated financial statements.

Stock-Based Compensation Expense

Stock-based compensation expense represents the cost of the grant date fair value of equity awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis.

Revenue Recognition

Product Sales, net

To date, product sales, net has consisted of sales of VIZZ to (i) certain wholesalers (who in turn sell VIZZ to retail pharmacies) and (ii) directly to patients through our e-pharmacy partner.

Product sales, net is recognized net of reserves for variable components, including but not limited to distribution service fees, prompt pay discounts and product returns.

These variable components are reassessed each reporting period, and adjustments are recorded on a cumulative catch-up basis, which affects product sales, net in the period of adjustment.

The actual amounts of variable consideration ultimately received may differ from our estimates.

To date, actual amounts have not differed materially from our estimates.

Share-Based Compensation Expense

Share-based compensation expense represents the cost of the grant date fair value of equity awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis.

We estimate the fair value of equity awards using the Black-Scholes option pricing model and recognize forfeitures as they occur.

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We will continue to apply this process until a sufficient amount of historical information regarding the volatility of our own stock price becomes available.

Risk-Free Interest Rate —The risk-free interest rate is based on a United States Treasury instrument whose term is consistent with the expected term of the stock options.

Risk-Free Interest Rate —The risk-free interest rate is based on a U.S.

Treasury instrument whose term is consistent with the expected term of the stock options.

Expected Dividend Yield —The expected dividend yield is based on the Company’s historical and expected dividend payouts.

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We are also a “smaller reporting company” because the market value of our stock held by non-affiliates was less than $700 million as of June 30, 2025 and the Company's annual revenue was less than $100 million during the fiscal year ended December 31, 2025.

We may continue to be a smaller reporting company in any given year if either (i) the market value of our stock held by non-affiliates is less than $250 million as of the last day of the most recently completed second quarter or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million as of the last day of the most recently completed second quarter.

We may continue to be a smaller reporting company in any given year if either (i) the market value of our stock held by non-affiliates is less than $250 million as of June 30 in the most recently completed fiscal year or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million as of June 30 in the most recently completed fiscal year.

If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis