What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-12 compared with 2025-03-11 · 149 added, 172 removed, 176 unchanged (65% of the section changed)

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Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

We are a clinical-stage cell therapy company expecting to enter pivotal trials in 2025 and advancing a pipeline of proprietary next-generation autologous CAR T-cell product candidates for patients with hematologic malignancies and solid tumors.

We are pioneering novel approaches designed to generate T cells that drive long-lasting clinical responses.

The patient’s own living cells are the starting point for our investigational CAR T-cell therapies, and we enhance them with our innovative CAR constructs, technology and manufacturing protocols.

In hematologic malignancies, we are focused on advancing to pivotal trials a product candidate designed to deliver improved outcomes over first-generation CD19 CAR T-cell therapies for patients with aggressive large B-cell lymphoma.

Our lead program, IMPT-314, is a dual-targeting CD19/CD20 CAR T-cell product candidate designed to increase complete response rates and prolong the duration of response as compared to the approved CD19‑targeted CAR T-cell therapies.

IMPT-314 is designed with a true ‘OR’ logic gate to target B cells that express either CD19 or CD20 with full potency and is manufactured with a process that enriches for CD62L+ cells to generate cell products with more naïve and central memory CAR T cells with enhanced stemlike features and antitumor activity.

To realize the potential of cell therapy for solid tumors, Lyell is also developing next-generation CAR T-cell product candidates enhanced with our anti-exhaustion and additional arming technologies and manufactured with our proprietary protocols.

These approaches are designed to endow CAR T cells with attributes needed to drive durable tumor cytotoxicity and achieve consistent and long-lasting clinical responses, including the ability to resist exhaustion, maintain qualities of durable stemness and function in the hostile tumor microenvironment.

We are a late-stage clinical cell therapy company advancing a pipeline of proprietary next-generation autologous CAR T-cell product candidates for patients with cancer.

Our goal is to fully realize the curative potential of cell therapy for patients with hematologic malignancies and solid tumors.

To achieve this, we are pioneering novel approaches designed to generate T‑cell therapies that drive long-lasting clinical responses.

Our investigational CAR T-cell therapies start with the identification of promising cancer targets.

We then engineer the patient’s own living immune cells and arm them with our innovative enhancements, including CAR constructs, technologies or manufacturing protocols that are designed to endow T-cells with more potent cancer cell killing capabilities.

In hematologic malignancies, we are focused on delivering to patients meaningfully improved outcomes over currently approved, first-generation CD19 CAR T cell products.

Our lead product candidate ronde-cel, also known as LYL314, is a dual-targeting CD19/CD20 CAR T-cell product candidate designed to increase complete response rates and prolong the duration of response as compared to the approved CD19‑targeted CAR T-cell therapies.

Ronde-cel is designed with a true ‘OR’ logic gate to target B cells that express either CD19 or CD20 with full potency and is manufactured with a process that enriches for CD62L‑positive cells to generate more naïve and central memory CAR T cells with enhanced stemlike features and antitumor activity.

We are currently conducting a pivotal single-arm clinical trial (PiNACLE) evaluating ronde-cel in patients with R / R LBCL receiving treatment in the 3L+ setting and have initiated a Phase 3 head-to-head CAR T-cell therapy randomized controlled trial (PiNACLE-H2H) for patients with LBCL receiving treatment in the 2L setting.

The PiNACLE‑H2H Phase 3 trial will randomize patients to either ronde-cel or investigator’s choice of axi-cel or liso-cel.

To realize the potential of cell therapy for solid tumors, in November 2025 we acquired an exclusive global license for LYL273 (excluding mainland China, Hong Kong, Macau and Taiwan), a GCC-targeted CAR T-cell product candidate previously known as GCC19CART, from ICT.

A 67% overall response rate and an 83% disease control rate with a manageable safety profile have been reported at the highest dose level tested to date in patients with refractory mCRC in a U.S.

Phase 1 clinical trial as of the data cutoff date of October 28, 2025.

LYL273 is enhanced with CD19 CAR expression and controlled cytokine release designed to improve CAR T-cell expansion, immune cell infiltration and cancer cell killing in the hostile tumor microenvironment.

Clinical proof-of-concept for this program was initially demonstrated in 15 patients with mCRC in an investigator-sponsored clinical trial conducted in China and published in JAMA Oncology (September 2024).

We were incorporated in June 2018.

Our primary activities to date have included clinical development of investigational T‑cell therapies, conducting research and development, acquiring technology, entering into strategic collaboration and license agreements, enabling and executing manufacturing activities in support of our product candidate development efforts, executing clinical trials, organizing and staffing the company, business planning, establishing and maintaining our intellectual property portfolio, regulatory submissions and other preparations to initiate and execute clinical trials, raising capital and providing general and administrative support for these activities.

For additional information regarding our business, see “Business” in Part I, Item 1 of this Annual Report on Form 10-K.

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We are advancing a pipeline of next-generation CAR T-cell product candidates.

Our lead program, IMPT-314, is in Phase 1/2 clinical development for relapsed or refractory aggressive large B-cell lymphoma and our preclinical programs target solid tumor indications.

Each of our programs target cancers with large unmet need with substantial patient populations (see Table 1).

Our ongoing Phase 1/2 trial of ronde-cel, our lead program, is a multi-cohort, multi-center, open-label dose-escalation and dose-expansion clinical trial designed to evaluate the safety and clinical benefit of ronde-cel.

We have also initiated two pivotal trials of ronde-cel:

PiNACLE and PiNACLE-H2H.

PiNACLE is a single-arm trial of ronde-cel that is enrolling patients receiving treatment in the 3L+ setting.

This registration trial is a seamless expansion of the 3L+ cohort from the Phase 1/2 trial.

The dose is 100 x 10 6 CAR T cells and the primary endpoint is overall response rate.

Patients may be treated with ronde-cel in either the inpatient or outpatient setting.

More information about the PiNACLE trial can be found on clinicaltrials.gov (NCT05826535).

PiNACLE-H2H is a Phase 3 head-to-head CAR T-cell therapy randomized controlled clinical trial of ronde-cel versus investigator’s choice of either axi-cel or liso-cel in patients with R/R LBCL receiving treatment in the 2L setting.

Patients randomized to ronde-cel will be treated with a dose of 100 x 10 6 CAR T cells;

patients in the control arm will be treated as per the product label.

The primary endpoint of the trial is event-free survival.

Patients may be treated with ronde‑cel in either the inpatient or outpatient setting.

More information about the PiNACLE-H2H trial can be found on clinicaltrials.gov (NCT07188558).

With the initiation of PiNACLE-H2H, the 2L cohort in the Phase 1/2 clinical trial is no longer enrolling additional patients.

We acquired in November 2025 an exclusive global license from ICT for LYL273, a GCC-targeted CAR T-cell product candidate enhanced with CD19 CAR expression and controlled cytokine release designed to improve CAR T-cell expansion, immune cell infiltration and cancer cell killing in the hostile solid tumor microenvironment.

Our nonclinical programs under development target antigens in solid tumor indications.

Each of our programs target cancers with large unmet need with substantial patient populations.

A next-generation dual-targeting CD19/CD20 CAR T-cell product candidate designed to increase complete response rates and prolong the duration of response as compared to the approved CD19‑targeted CAR T-cell therapies for the treatment of large B-cell lymphoma.

• A Phase 1/2 clinical trial is ongoing and currently enrolling patients in the 3 rd line+ and 2 nd line settings who have not previously received CAR T-cell therapy.

IMPT-314 has received Fast Track Designation from the U.S.

Food and Drug Administration for the treatment of relapsed/refractory aggressive large B-cell lymphoma in the 3 rd line+ setting.

• Initial data from the Phase 1/2 trial was presented at the ASH 2024 Annual Meeting on December 9, 2024.

Data from 23 patients with R/R, CAR T-naive large B-cell lymphoma who received IMPT-314 were reported.

The efficacy evaluable population consisted of 17 patients.

The overall response rate was 94% (16/17 patients), with 71% (12/17 patients) achieving a complete response by three months.

The median follow up was 6.3 months (range 1.2 – 12.5 months) and 71% of patients were experiencing a response at last follow-up.

In the safety evaluable population of 23 patients, no Grade 3+ CRS was reported.

Grade 3 ICANS was reported in 13% (3/23) of patients with a median time to complete ICANS resolution of 5 days, and rapid improvement to Grade 2 or lower with standard therapy.

• More mature data from the ongoing Phase 1/2 trial in the 3 rd line+ setting and initial data from patients in the 2 nd line setting are expected to be presented in mid-2025.

• We expect to initiate a pivotal trial in mid-2025 in patients with relapsed/refractory large B-cell lymphoma in the 3 rd line+ setting who have not yet received CAR T-cell therapy.

• We expect to initiate a pivotal trial by early 2026 in patients with relapsed/refractory large B-cell lymphoma in the 2 nd line setting who have not yet received CAR T-cell therapy.

Preclinical Pipeline, Technologies and Manufacturing Protocols

• The first IND for a fully-armed CAR T-cell product candidate with an undisclosed target for solid tumors is expected in 2026.

Lyell is advancing next-generation fully-armed CAR T-cell product candidates, meaning they are armed with multiple technologies, each designed to address different barriers to effective cell therapies, including T-cell exhaustion, lack of durable stemness, as well as immune suppression within the hostile tumor microenvironment.

• During the past year, we presented nonclinical and clinical data from our suite of anti-exhaustion and manufacturing technologies demonstrating their potential to improve T-cell function in solid tumors.

• We presented data at the Society for Immunotherapy of Cancer (SITC) 2024 from a validated nonclinical xenograft model of non-small cell lung cancer, demonstrating that combining c-Jun overexpression and NR4A3 knockout achieves tumor control and prolonged survival even at very low doses (100,000 CAR T cells/dose) compared to c‑Jun overexpression alone (1,000,000 CAR T cells/dose).

The study presented potential molecular mechanisms underlying the functional reduction of T-cell exhaustion and enhancement of memory‑related characteristics of CAR T cells enhanced with c-Jun overexpression and NR4A3 knockout after antigen encounter in vitro and in vivo.

• We presented translational clinical data at SITC 2024 from an in-human Phase 1 trial of CAR T-cells enhanced with c‑Jun overexpression and manufactured with Epi-R, showing reduced T-cell exhaustion and enhanced stemness of CAR T cells, resulting in CAR T-cell tumor infiltration with histological evidence of T-cell mediated tumor lysis in patients with ROR1 positive triple-negative breast cancer and non-small cell lung cancer.

ROR1 CAR T cells enhanced with c-Jun overexpression demonstrated lower exhaustion and maintenance of stem- and memory-like phenotypes in the peripheral blood post-infusion, suggesting c-Jun overexpression can delay CAR T-cell exhaustion in patients.

• We delivered an oral presentation at SITC 2024 demonstrating successful incorporation of an anti-TGF-β scFv domain into a novel bispecific CAR designed to mediate TGF-β blockade and overcome the suppressive solid tumor microenvironment.

In nonclinical models, these bispecific CAR T-cells demonstrated long term maintenance of effector function with resistance towards both exhaustion and the conversion of regulatory T cells in repeated antigen stimulation challenges, as well as effective tumor infiltration and anti-tumor function in vivo.

• We presented data at SITC 2024 suggesting Stim-R is a viable replacement for feeder cells in TIL manufacturing and has the potential to overcome limitations that may arise in feeder cell‑mediated TIL expansion.

Stim-R™ is our customizable and degradable biomimetic emulating physiologic, cell‑like presentation of signal molecules.

Corporate Updates

• To accelerate the pivotal trials of IMPT-314 and focus resources on next-generation solid tumor CAR T-cell programs in preclinical development, we have streamlined expenses and focused our development on IMPT-314 and preclinical solid tumor CAR T-cell programs.

Our net cash use in 2025 is expected to be between $175 million and $185 million.

• The pivotal PiNACLE single-arm trial in patients with R/R LBCL in the 3L+ setting who have not yet received CAR T-cell therapy is ongoing following an End-of-Phase 1 meeting.

Updated data from the PiNACLE trial were presented at ASH 2025.

• The oral presentation at ASH 2025 included updated data from the PiNACLE trial including a best overall response rate of 93% and a complete response rate of 76% in 29 efficacy-evaluable patients with R/R LBCL in the 3L+-setting.

The median progression-free survival was 18 months as of the data cutoff date of September 5, 2025.

Data were also presented from the 2L cohort efficacy-evaluable population in 18 patients (94% with high-risk primary refractory disease) and demonstrated an 83% best overall response rate and a 61% complete response rate.

The safety profile was appropriate for outpatient administration.

Data from 25 patients treated with ronde-cel and receiving dexamethasone prophylaxis revealed no reports of Grade 3 or higher CRS and one case (4%) of Grade 3 or higher ICANS.

• The Phase 3 randomized controlled PiNACLE-H2H trial evaluating ronde-cel versus investigator’s choice of axi-cel or liso-cel in 2L LBCL patients has been initiated.

Patient dosing commenced in February 2026 in the PiNACLE-H2H trial and clinical site activation is ongoing in the United States, Canada and Australia.

• A Phase 1/2 clinical trial is ongoing and is enrolling patients in the 3L+-setting who have not previously received CAR T-cell therapy.

The 2L cohort of this Phase 1/2 clinical trial is no longer enrolling patients following the initiation of enrollment into the 2L PiNACLE-H2H trial.

• Ronde-cel has received RMAT designation, as well as Fast Track Designation, from the FDA for the treatment of adults with relapsed and/or refractory diffuse LBCL in the 3L+-setting and has also received RMAT designation for the treatment of LBCL in the 2L setting.

LYL273 (formerly known as GCC19CART):

Guanylyl cyclase C-targeted CAR T-cell product candidate for the treatment of mCRC and other GCC-expressing cancers

• We acquired LYL273 in November 2025, a GCC-targeted CAR T-cell product candidate with promising dose-dependent clinical activity in patients with advanced mCRC in a Phase 1 trial conducted in the U.S.

LYL273 was granted Fast Track designation for the treatment of mCRC by the FDA.

• A 67% best overall response rate, an 83% disease control rate and an 8-month median progression-free survival with a manageable safety profile have been reported at the highest dose level tested to date in patients with refractory mCRC in the U.S.

Phase 1 clinical trial as of the data cutoff date of October 28, 2025.

• LYL273 is enhanced with CD19 CAR expression and controlled cytokine release designed to improve CAR T‑cell expansion, immune cell infiltration and cancer cell killing in the hostile tumor microenvironment.

• Clinical proof-of-concept for this program was initially demonstrated in 15 patients with mCRC in an investigator-sponsored clinical trial conducted in China and published in JAMA Oncology (September 2024).

Phase 1 clinical trial is continuing to enroll patients to determine the recommended Phase 2 dose.

Nonclinical Pipeline and Technologies

• Lyell is advancing next-generation fully-armed CAR T-cell product candidates with multiple enhancements, each designed to address different barriers to effective cell therapies, including T-cell exhaustion, lack of durable stemness and immune suppression within the hostile tumor microenvironment.

• We presented new translational data in an oral presentation at ASH 2025 from the ongoing Phase 1/2 clinical trial of ronde-cel, which showed that ronde-cel manufactured with CD62L enrichment achieved robust expansion and high expression of memory-related genes after infusion in patients with LBCL.

An evaluation of ronde-cel and published data for CD19 CAR T-cell products demonstrated that ronde-cel had a higher proportion of CD62L‑positive T cells with a higher proportion of memory-cell phenotype prior to infusion (ronde-cel, N = 34;

axi-cel, N = 110;

and tisa-cel, N = 31).

In addition, ronde-cel had up to a three-fold higher expansion in patients after infusion compared to the expansion of approved CD19 CAR T-cell products.

The product memory‑cell phenotype was positively correlated with expansion.

Peripheral blood samples collected from patients one month after infusion (N = 9) also had a higher proportion of CAR T cells with a memory phenotype compared to cells from axi-cel-treated patients (N = 4).

Ronde-cel CAR-positive T cells collected from patients one (N = 7) and two months (N = 3) after infusion demonstrated sustained capacity to proliferate, kill tumor cells over 72 hours and secrete cytokines (N = 3).

Additional Pipeline and Business Updates

Acquisition of ImmPACT

Pursuant to the Agreement and Plan of Merger (the Merger Agreement) by and among us, ImmPACT, Inspire Merger Sub Inc., a Delaware corporation and our indirect, wholly-owned subsidiary, and WT Representative LLC, a Delaware limited liability company, solely in its capacity as the representative, agent and attorney-in-fact of ImmPACT securityholders, dated October 24, 2024, we acquired all of the outstanding equity interests of ImmPACT in exchange for an upfront payment of $30.0 million in cash (in addition to approximately $11.9 million for ImmPACT’s existing cash balance) and the issuance of 37.5 million shares of our common stock at closing.

Contingent consideration following the closing includes (a) additional equity consideration of 12.5 million shares of our common stock upon the achievement of the earlier to occur of (i) the demonstration of certain clinical milestones or (ii) the receipt of certain regulatory approvals and (b) a low single‑digit royalty on future net sales of IMPT-314 in the United States.

Contingent consideration payable in our Consolidated Balance Sheet as of December 31, 2024 consists of the additional equity consideration of 12.5 million shares of our common stock.

As a result of the acquisition of ImmPACT, we assumed its rights and obligations under its license agreement with the Regents of the University of California, acting through The Technology Development Group of UCLA, dated February 18, 2021 (the UCLA License Agreement).

Pursuant to the UCLA License Agreement, we are obligated to pay a nominal, tiered annual license maintenance fee each year of the term of the UCLA License Agreement until we make the first commercial sale of a licensed product and, upon the achievement of specified development, regulatory and commercial milestones, we are obligated to pay UCLA one-time milestone payments of up to an aggregate amount in the mid-single digit millions for each commercialized licensed product.

In addition, we are obligated to pay UCLA a tiered royalty on worldwide annual net sales of any commercialized licensed products in the low- to mid-single digits percentage, subject to specified and capped reductions and a tiered minimum annual royalty payment of between a low-five figure and a low-six figure amount.

On November 6, 2025, we entered into the ICT License Agreement for the development and commercialization of LYL273, a novel GCC-targeted CAR T-cell product candidate for the treatment of mCRC and other GCC-expressing cancers.

Pursuant to the terms of the ICT License Agreement, we received exclusive global rights, outside of mainland China, Hong Kong, Macau and Taiwan, to research, develop, manufacture, commercialize and otherwise exploit LYL273 in exchange for an upfront payment of $40 million in cash and the issuance of 1.9 million shares of our common stock.

In addition, ICT is eligible to receive additional cash and equity payments of (i) a potential $30 million clinical milestone payment, up to $115 million upon the achievement of certain late‑stage regulatory milestones and up to $675 million in commercial sales milestones;

(ii) up to an additional 1.85 million shares of our common stock based on the achievement of certain clinical and regulatory milestones;

and (iii) tiered royalties ranging from mid-single-digits up to 10% on annual net sales in the United States and low to mid-single-digit royalties on annual net sales in other countries within the licensed territory.

Macroeconomic Environment

Our business and operations may be affected by worldwide economic conditions, which may continue to be impacted by global macroeconomic challenges such as the effects of the ongoing geopolitical conflicts in Ukraine, armed conflicts and turmoil in the Middle East, tensions in U.S.-China relations, inflationary pressures, fluctuations in the interest rate environment, disruption between the U.S.

and its trading partners due to tariffs or other policies, instability in the banking industry, supply constraints and overall market volatility.

Our business and operations may be affected by worldwide economic conditions, which may continue to be impacted by global macroeconomic challenges such as the effects of disruption between the U.S.

and its trading partners due to tariffs or other policies, ongoing geopolitical conflicts and related U.S.

involvement, tensions in geopolitical relations, inflationary pressures, fluctuations in the interest rate environment, instability in the banking industry, supply constraints and overall market volatility.

Economic uncertainty may persist into the remainder of 2026, and the market dynamics discussed above and similar adverse conditions may negatively impact our business.

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We have no products approved for sale and have never generated any revenue from product sales.

We have generated revenue primarily from the recognition of the upfront payment under the Collaboration and License Agreement, entered into in 2019 and amended in June 2020 and December 2021 (GSK Agreement) with GlaxoSmithKline Intellectual Property (No.

5) Limited and Glaxo Group Limited (together, GSK).

GSK terminated the GSK Agreement effective December 2022 and we do not expect further revenue from the collaboration.

See Note 4, License, Collaboration and Success Payment Agreements , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for additional details regarding termination of the GSK Agreement.

In the future, we may generate additional revenue from other collaborations, strategic alliances, licensing agreements, product sales, or a combination of these.

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Research and Development

To date, research and development expenses consist of costs incurred by us for the discovery and development of our technology platforms and product candidates, and include costs incurred in connection with strategic collaborations, costs to license technology, personnel-related costs, including stock-based compensation expense, facility and technology related costs, research and laboratory expenses, as well as other expenses, which include consulting fees and other costs.

To date, research and development expenses consist of costs incurred by us for the discovery and development of our technology platforms and product candidates, and include costs incurred in connection with conducting and completing current and planned clinical trials, strategic collaborations, costs to license technology, personnel-related costs, stock-based compensation expense, facility and technology related costs, research and laboratory expenses, as well as other expenses, which include consulting fees and other costs.

Upfront payments and milestones paid to third parties in connection with technology platforms that have not reached technological feasibility and do not have an alternative future use are expensed as incurred.

Research and development costs also include expenses related to the November 2023 reduction in workforce, which was substantially completed in 2023.

Research and development expenses also include non-cash expenses related to the change in the estimated fair value of the success payment obligations over their respective requisite service terms granted to Fred Hutchinson Cancer Center (Fred Hutch) and The Board of Trustees of the Leland Stanford Junior University (Stanford).

See the subsection titled “Critical Accounting Policies and Estimates— Success Payments ” below.

As of December 31, 2022, Fred Hutch had provided the requisite service obligation to earn the potential success payment consideration under the continued collaboration.

For the year ended December 31, 2023 and future periods, the change in the Fred Hutch success payment liability fair value was recognized in other income, net, as the requisite service obligation had been met.

As of September 30, 2024, Stanford had provided the requisite service obligation to earn the potential success payment consideration under the continued collaboration.

For the last three months of the year ended December 31, 2024 and future periods, the change in the Stanford success payment liability fair value was recognized in other income, net, as the requisite service obligation had been met.

Stanford has provided the requisite service obligation to earn the potential success payment consideration under their collaboration agreements as of September 30, 2024.

For reporting periods beginning on October 1, 2024, the change in the success payment liability fair value is recognized in other (expense) income, net, as the requisite service obligations had been met.

See Note 4, License, Collaboration and Success Payment Agreements , in the accompanying notes to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10‑K for additional information.

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We deploy our employee and infrastructure resources across multiple research and development programs for identifying and developing product candidates and establishing manufacturing capabilities.

Due to the stage of development and number of ongoing programs and our ability to use resources across several programs, most of our research and development costs are not recorded on a program-specific basis.

These include costs for personnel, laboratory and other indirect facility and operating costs.

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General and Administrative

General and administrative costs include personnel-related expenses, including stock-based compensation expense for personnel in executive, legal, finance and other administrative functions, legal costs, transaction costs related to collaboration and licensing agreements, as well as fees paid for accounting and tax services, consulting fees and facilities costs not otherwise included in research and development expenses.

General and administrative costs include personnel-related expenses, including stock-based compensation expense for personnel in executive, legal, finance and other administrative functions, legal costs, transaction costs related to licensing and collaboration agreements, as well as fees paid for accounting and tax services, consulting fees and facilities costs not otherwise included in research and development expenses.

Legal costs include those related to corporate, dispute and patent matters.

We anticipate that our general and administrative expenses will increase over the foreseeable future to support our continued research and development activities, operations generally, future business development opportunities, consulting fees, as well as the costs of operating as a public company such as costs related to accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and Securities and Exchange Commission (SEC) requirements, director and officer insurance costs and investor and public relations costs.

We anticipate that our general and administrative expenses will increase over the foreseeable future to support our continued research and development activities, operations generally, future business development opportunities, consulting fees, as well as the costs of operating as a public company such as costs related to accounting, audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance costs and investor and public relations costs.

Other Operating Income, Net

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Acquired In-Process Research and Development

Acquired in-process research and development (IPR&D) consists primarily of the expense of the acquired IPR&D asset recognized as part of the acquisition of ImmPACT in October 2024, which was determined to have no alternative future use.

Acquired in-process research and development (IPR&D) consists primarily of the LYL273 license acquired in November 2025 and the IPR&D assets recognized as part of the October 2024 ImmPACT acquisition.

These assets were expensed upon acquisition as they were determined to have no alternative future use.

See Note 3, Acquisition , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for additional information.

Impairment of Long-Lived Assets

Impairment of long-lived assets consists primarily of the expense associated with our 2024 annual impairment assessment, with the impairment loss measured as the amount by which the carrying value of our asset group exceeded its fair value.

The impairment loss was allocated on a pro rata basis to our lease right-of-use assets and associated leasehold improvements.

Impairment of long-lived assets consists primarily of the expense associated with our 2025 impairment of our West Hills, Los Angeles lease right-of-use asset and our 2024 annual impairment assessment.

The impairment losses are measured as the amount by which the carrying value of the asset group exceeded its fair value.

See Note 5, Impairment of Long-Lived Assets , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for additional information.

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Interest income, net consists primarily of interest earned on our cash, cash equivalents and marketable securities balances.

Other Income, Net

Other income, net for the year ended December 31, 2024 consists primarily of the change in fair value associated with our contingent consideration payable related to the ImmPACT acquisition and changes in the fair value of our success payment liabilities.

Other income, net for the year ended December 31, 2023 consists primarily of changes in the fair value of our success payment liabilities to Fred Hutch.

Other income, net for the year ended December 31, 2022 consists primarily of a gain to record the PACT Series D convertible preferred shares and changes in the fair value of an equity warrant investment for the year ended December 31, 2022.

Other (Expense) Income, Net

Other (expense) income, net consists primarily of the changes in fair value of our SPA put/call, contingent consideration payable and our success payment liabilities.

The SPA put/call refers to a combined financial instrument arising from the Securities Purchase Agreement (SPA) we entered into in July 2025.

It represents (i) our right to require certain investors to purchase additional shares of common

stock upon the achievement of specified milestones (Put Right) and (ii) the investors' reciprocal right to purchase additional shares (Investor Call).

Because these rights are mutually exclusive, they are accounted for as a single financial instrument (SPA put/call).

See Note 13, Stockholders’ Equity , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for additional information.

Impairment of Other Investments

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Year Ended December 31,

2024 2023 2022 2024 vs 2023

$ 61 $ 130 $ 84,683 $ (69) $ (84,553)

Operating expenses:

Research and development

171,603 182,945 159,188 (11,342) 23,757

General and administrative

52,041 66,983 117,307 (14,942) (50,324)

Other operating income, net

(3,309) (2,790) (4,754) (519) 1,964

Acquired in-process research and development

87,184 — — 87,184 —

Impairment of long-lived assets

51,297 — — 51,297 —

Total operating expenses

358,816 247,138 271,741 111,678 (24,603)

Loss from operations

(358,755) (247,008) (187,058) (111,747) (59,950)

Interest income, net

24,068 23,453 7,053 615 16,400

Other income, net

4,694 1,846 1,887 2,848 (41)

Other (expense) income, net

Impairment of other investments

Total other income, net

15,761 12,376 3,940 3,385 8,436

$ (342,994) $ (234,632) $ (183,118) $ (108,362) $ (51,514)

Total other (loss) income, net

Research and Development Expenses

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Year Ended December 31,

2024 2023 2022 2024 vs 2023

$ 67,693 $ 81,717 $ 70,483 $ (14,024) $ 11,234

Research activities, collaborations and outside services

53,654 50,470 41,682 3,184 8,788

Research activities, collaborations, outside services and other

Facilities, technology and depreciation

50,564 51,688 52,153 (1,124) (465)

Success payments

(308) (930) (5,130) 622 4,200

Total research and development expenses

$ 171,603 $ 182,945 $ 159,188 $ (11,342) $ 23,757

Research and developm ent expenses were $158.7 million and $171.6 million for the years ended December 31, 2025 and 2024, respectively.

The decrease of $11.3 million was primarily due to a decrease of $14.0 million i n personnel‑related expenses and a decrease of $1.1 million in facilities, technology and depreciation expenses mainly due to the decrease in headcount associated with the Company’s November 2023 reduction in workforce and lower software implementation costs.

These decreases were offset by an increase o f $3.2 million in research activities, collaborations and outside services primarily driven by clinical trial activity and a change of $0.6 million in success payment expense primarily driven by the change in our stock price.

The decrease of $12.9 million was primarily due to a reduction of $12.3 million i n personnel‑related expenses including a decrease of $5.5 million in employee stock compensation expense due to a decline in the value of new awards granted and a $9.2 million reduction in facilities, technology and depreciation expenses due primarily to decreased depreciation in 2025 following our prior year impairment of long-lived assets .

The decline in research and development expenses was partially offset by a $8.6 million increase in research activities, collaborations, outside services and other expenses.

This increase was primarily driven by $19.7 million in stock-based compensation expense for an equity-based ICT milestone deemed probable of achievement as of December 31, 2025, which was partially offset by decreased research and laboratory supplies expense, collaboration agreement expenses and consulting expenses.

General and Administrative Expenses

General and administrative expenses were $45.1 million and $52.0 million for the years ended December 31, 2025 and 2024, respectively.

The decrease of $14.9 million was primarily due to a $13.0 million reduction in personnel costs, including a $10.3 million decrease in stock-based compensation expense, primarily related to significant awards being fully expensed in previous periods and a decrease of $2.7 million in personnel-related expenses mainly due to a decrease in headcount associated with the Company’s November 2023 reduction in workforce.

The decrease of $6.9 million was primarily due to a $5.7 million reduction in personnel costs, including a $5.5 million decrease in stock-based compensation expense, primarily related to a reduction in the value of new awards granted, in addition to decreases in outside service expenses.

Other Operating Income, Net

Other operating income, net was $2.1 million and $3.3 million for the years ended December 31, 2025 and 2024, respectively.

The increase of $0.5 million was due to an increase in sublease income due to the addition of a new sublessee at the Company’s headquarters in South San Francisco, California in September 2024.

The decrease of $1.2 million was due primarily to increased losses on property and equipment disposals of $2.0 million principally associated with the closure of our West Hills facility following the successful technology transfer of ronde-cel to the LyFE Manufacturing Center TM , partially offset by increased sublease income of $0.6 million.

Acquired In-Process Research and Development

Acquired IPR&D was $87.2 million and zero for the years ended December 31, 2024 and 2023, respectively.

Acquired IPR&D consists primarily of the expense of the acquired IPR&D asset recognized as part of the acquisition of ImmPACT Bio USA Inc.

in October 2024 as the asset was determined to have no alternative future use.

Acquired IPR&D was $66.3 million and $87.2 million for the years ended December 31, 2025 and 2024, respectively.

Acquired IPR&D consists primarily of the expense of the acquired IPR&D asset recognized as part of the ICT license acquisition in November 2025 and acquisition of ImmPACT Bio USA Inc.

in October 2024 as both IPR&D assets were determined to have no alternative future use.

See Note 3, Acquisition , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for additional information.

Impairment of Long-Lived Assets

Impairment of long-lived assets was $51.3 million and zero for the years ended December 31, 2024 and 2023, respectively.

Impairment of long-lived assets expense of $51.3 million consists of $12.6 million of impairment expense of our lease right-of-use assets and $38.7 million of impairment expense for the associated leasehold improvements.

Impairment of long-lived assets was $1.4 million and $51.3 million for the years ended December 31, 2025 and 2024, respectively.

Impairment of long-lived assets expense of $1.4 million for the year ended December 31, 2025 consisted of the impairment of our West Hills, Los Angeles right-of-use lease asset, resulting from the closure of the facility subsequent to the successful transition of the manufacturing of ronde-cel to our LyFE Manufacturing Center.

Impairment of long-lived assets expense of $51.3 million for the year ended December 31, 2024 consisted of $12.6 million of impairment expense of our lease right-of-use assets and $38.7 million of impairment expense for the associated leasehold improvements.

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Interest income, net was $13.1 million and $24.1 million for the years ended December 31, 2025 and 2024, respectively.

The increase of $0.6 million was primarily driven by higher interest rates in 2024.

Other Income, Net

Other income, net was $4.7 million and $1.8 million for the years ended December 31, 2024 and 2023, respectively.

Other income, net of $4.7 million for the year ended December 31, 2024 was primarily driven by a $3.8 million gain resulting from the change in the fair value of our contingent consideration payable related to the ImmPACT acquisition and changes in the fair value of our success payment liabilities.

The decrease of $11.0 million was primarily driven by decreased interest rates in 2025 coupled with lower cash equivalent and marketable securities balances.

Other (Expense) Income, Net

Other (expense) income, net was $(18.1) million and $4.7 million for the years ended December 31, 2025 and 2024, respectively.

The change of $(22.8) million in other (expense) income, net was primarily driven by a $19.2 million loss resulting from the change in the fair value of our SPA put/call liability due to the increase in our stock price since the issuance of the SPA put/call.

Impairment of Other Investments

For the year ended December 31, 2024, the $13.0 million impairment consisted of the full impairment of one of our other investments.

For the year ended December 31, 2023, the $12.9 million impairment consisted of the full impairment of two of our other investments.

Impairment of other investments was zero and $13.0 million for the years ended December 31, 2025 and 2024, respectively.

The $13.0 million impairment for the year ended December 31, 2024 consisted of the full impairment of one of our other investments.

See Note 7, Other Investments , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for additional information.

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Sources of Liquidity

Since our inception, we have funded our operations primarily through the sale and issuance of convertible preferred stock, the sale of common stock in connection with our IPO and business development activities.

As of December 31, 2024, we ha d $383.5 million in cas h, cash equivalents and marketable securities.

Since our inception, we have funded our operations primarily through the sale and issuance of convertible preferred stock, business development activities and the sale of common stock in connection with our IPO and in a private placement financing.

As of December 31, 2025, we ha d $247.2 million in cas h, cash equivalents and marketable securities, excluding restricted cash.

Since our inception, we have incurred significant operating losses.

We have not yet commercialized any product candidates and we may never generate revenue from sales of any product candidates.

We have not yet

commercialized any product candidates and we do not expect to generate revenue from sales of any product candidates for a number of years, if ever.

We had an accumulated deficit of $1.6 billion as of December 31, 2025.

From June 29, 2018 (inception) through December 31, 2024, we raised an aggregate of $1.4 billion in gross proceeds from the sales of our convertible preferred stock and the IPO.

On February 28, 2024, we entered into a sales agreement (the Sales Agreement) with Cowen and Company, LLC as the Company’s sales agent (Agent) with respect to an at-the-market offering program.

From June 29, 2018 (inception) through December 31, 2025, we raised an aggregate of $1.5 billion in gross proceeds primarily from the sales of our convertible preferred stock, the IPO and our July 2025 private placement of our common stock.

In February 2024, we entered into the Sales Agreement with Cowen as our sales agent (Agent) with respect to an at-the-market offering program.

In accordance with the terms of the Sales Agreement, we may offer and sell from time to time through the Agent shares of our common stock having an aggregate offering amount of up to $150.0 million (the Placement Shares).

Sales of the Placement Shares, if any, will be made at prevailing market prices on Nasdaq at the time of sale, or as otherwise agreed with the Agent, by any method permitted by law deemed to be an “at-the-market offering” as defined in Rule 415 of the Securities Act.

We will pay commissions to the Agent of up to 3% of the gross proceeds of the sale of the Placement Shares sold under the Sales Agreement and reimburse the Agent for certain expenses.

Neither us nor the Agent is obligated to sell any shares and, to date, we have not made any sales under the Sales Agreement.

Neither us nor the Agent is obligated to sell any shares.

As of December 31, 2025, we had not made any sales under the Sales Agreement.

On July 25, 2025, we issued 3,753,752 shares of common stock at a purchase price of $13.32 per share at an initial closing pursuant to the SPA for gross proceeds of approximately $50 million.

On March 6, 2026, we issued 1,952,360 shares of common stock at a purchase price of $25.61 per share at a subsequent closing pursuant to the SPA for gross proceeds of approximately $50.0 million.

Future Funding Requirements

We expect to incur additional losses in the foreseeable future as we conduct and expand our research and development efforts, including conducting nonclinical studies and clinical trials, integration of ImmPACT into our business, developing new product candidates, establishing internal manufacturing capabilities and funding our operations generally.

We expect to incur additional losses in the foreseeable future as we conduct and expand our research and development efforts, including conducting nonclinical studies and clinical trials, developing new product candidates, establishing, improving and maintaining internal manufacturing capabilities and funding our operations generally.

Based on our current operating plan, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months.

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• the costs, timing and outcome of regulatory review of any of our current and future product candidates;

• the cost of manufacturing clinical and commercial supplies of our current and future product candidates;

• the cost of manufacturing clinical and commercial supplies of our current and future product candidates, including increases in these costs as a result of tariffs;

• the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval;

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• expenses to attract, hire and retain skilled personnel;

• the costs and estimated financial impact of our reduction in workforce in the fourth quarter of 2023;

• the costs of operating as a public company, including legal, accounting and other related expenses as well as costs relating to maintaining or expanding our operational, financial and management systems;

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• the extent to which we acquire or invest in businesses, products and technology platforms;

• integration of businesses, products and technology platforms, such as ImmPACT, into our business.

Until such time as we complete nonclinical and clinical development and receive regulatory approval of our product candidates and can generate significant revenue from product sales, if ever, we expect to finance our operations from the sale of additional equity or debt financings, or other capital which come in the form of strategic collaborations, licensing, or other arrangements.

• integration of any new businesses, products and technology platforms, such as LYL273, into our business.

Until such time as we complete nonclinical and clinical development and receive regulatory approval of our product candidates and can generate significant revenue from product sales, if ever, we expect to finance our operations from the sale of additional equity or debt financings, or other capital that comes in the form of strategic collaborations, licensing, or other arrangements.

In the event that additional capital is required, we may not be able to raise it on terms acceptable to us, or at all.

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If we raise funds through strategic collaboration, licensing, or other arrangements, we may relinquish significant rights or grant licenses on terms that are not favorable to us.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from actual or

perceived changes in interest rates and economic inflation, and otherwise.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from tariffs, actual or perceived changes in interest rates and economic inflation, and otherwise.

If we are unable to raise additional capital when desired, our business, results of operations and financial condition would be adversely affected.

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We continually evaluate our liquidity and capital resources to ensure that we can adequately and efficiently finance our operations.

As of December 31, 2024 , our material cash requirements consisted primarily of paying salaries and benefits, administering clinical trials, conducting research, improving our manufacturing capabilities, providing the technology and facilities necessary to support our operations, funding operating lease obligations and other payments related to our collaboration and license agreements and the Merger Agreement.

See Note 4, License, Collaboration and Success Payment Agreements , Note 11, Leases , and Note 3, Acquisition , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for additional information.

As of December 31, 2025 , our material cash requirements consisted primarily of paying salaries and benefits, administering clinical trials, conducting research, improving our manufacturing capabilities, providing the technology and facilities necessary to support our operations, funding operating lease obligations and other payments related to our license and collaboration agreements, and the acquisitions of ImmPACT and our LYL273 license.

See Note 4, License, Collaboration and Success Payment Agreements , Note 11, Leases , and Note 3, Acquisitions , in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K for additional information.

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

Year Ended December 31,

2024 2023 2022

Net cash (used in) provided by:

Operating activities

$ (162,394) $ (163,694) $ (169,555)

Investing activities

122,424 184,048 (11,540)

Financing activities

1,326 1,743 10,635

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

$ (38,644) $ 22,097 $ (170,460)

Operating Activities

During the year ended December 31, 2024, net cash used in operating activities was $162.4 million, primarily reflecting our net loss of $343.0 million, partially offset by non-cash items primarily related to acquired IPR&D expense of $87.2 million, impairment of long-lived assets expense of $51.3 million , stock-based compensation expense o f $33.1 million , depreciation and amortization expense of $19.6 million and impairment of other investments of $13.0 million.

During the year ended December 31, 2025, net cash used in operating activities was $150.0 million, primarily reflecting our net loss of $274.4 million, partially offset by non-cash items primarily related to acquired IPR&D expense of $66.3 million, stock-based compensation expense o f $41.8 million, loss on SPA put/call of $19.2 million, depreciation and amortization expense of $11.5 million and the loss on property and equipment disposals, net of $3.3 million.

Additional reductions of n et cash used in operating activities include t he decrease of net operating assets and liabilities of $9.9 million and n on-cash net amortization and accretion on marketable securitie s of $5.0 million .

During the ye ar ended December 31, 2024, net cash used in operating activities was $162.4 million , primarily reflecting our net loss of $343.0 million , partially offset by non-cash items mainly related to acquired IPR&D expense of $87.2 million, impairment of long-lived assets expense of $51.3 million, stock-based compensation expense o f $33.1 million , depreciation and amortization expense of $19.6 million and impairment of other investments of $13.0 million.

Non-cash net amortization and accretion on marketable securitie s of $14.7 million also contributed to net cash used in operating activities.

During the ye ar ended December 31, 2023, net cash used in operating activities was $163.7 million , primarily reflecting our net loss of $234.6 million , partially offset by non-cash items mainly related to stock-based compensation expense of $47.1 million , depreciation and amortization expense of $20.3 million and impairment of other investments of $12.9 million.

Non-cash net amortization and accretion on marketable securities of $9.6 million also contributed to net cash used in operating activities.

Investing Activ ities

During the year ended December 31, 2024, cas h provided by investing activities was $122.4 million, consisting of net maturities and purchases of marketable securities of $154.2 million, partially offset by the $31.3 million acquisition of ImmPACT net of cash acquired.

During the year ended December 31, 2023, cash used in investing activities was $184.0 million , consisting of net maturities and purchases of marketable securities of $186.7 million, partially offset by purchases of property and equipment of $2.7 million .

During the year ended December 31, 2025, cas h provided by investing activities was $54.1 million, consisting of net maturities and purchases of marketable securities of $95.8 million, partially offset by the $41.2 million acquisition of the LYL273 license.

During the year ended December 31, 2024, cash provided by investing activities was $122.4 million , consisting of net maturities and purchases of marketable securities of $154.2 million, partially offset by the $31.3 million acquisition of ImmPACT, net of cash acquired.

Financing Activities

During the year ended December 31, 2024, cash provided by financing activities was $1.3 million, consisting of $1.2 million in proceeds from our employee stock purchase plan and $0.2 million in proceeds from the exercise of stock options, partially offset by $0.1 million in taxes paid related to the net share settlement of equity awards.

During the year ended December 31, 2025, cash provided by financing activities was $50.4 million, consisting primarily of proceeds from the issuance of $50.0 million of common stock under the SPA and $0.4 million in proceeds from our employee stock purchase plan.

Critical Accounting Policies and Significant Judgments and Estimates

Critical Accounting Estimates

Our audited consolidated financial statements are prepared in accordance with U.S.

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If we determine an acquisition does not meet the definition of a business combination under the acquisition method of accounting, the transaction is accounted for as an asset acquisition.

For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition, with cost allocated to acquired assets on a relative fair value basis.

Direct transaction costs are recognized as part of the cost of an asset acquisition.

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Goodwill is not recognized in an asset acquisition.

In an asset acquisition, upfront payments allocated to IPR&D are recorded in research and development expense if we determine that there is no alternative future use, and subsequent milestone payments are recorded in research and development expense when achieved for technology that has not yet met product feasibility.

In an asset acquisition, upfront payments allocated to IPR&D are recorded in acquired in-process research and development expense if we determine that there is no alternative future use, and subsequent milestone payments are recorded in research and development expense when achieved for technology that has not yet met product feasibility.

Contingent Consideration

Contingent consideration relates to the potential payments to the pre-acquisition stockholders of ImmPACT for meeting certain clinical and/or regulatory milestones.

For transactions accounted for as asset acquisitions, we record contingent consideration at fair value at the date of the acquisition when deemed probable.

Liabilities for contingent consideration are remeasured each reporting period and subsequent changes in fair value are recognized within other income, net in our Consolidated Statements of Operations and Comprehensive Loss.

The assumptions utilized in the calculation of the fair values include the probability of success and our stock price.

Contingent consideration relates to the payments to the pre-acquisition stockholders of ImmPACT for meeting certain clinical and/or regulatory milestones.

We record contingent consideration at fair value at the date of the acquisition when deemed probable.

Liabilities for contingent consideration are remeasured each reporting period and subsequent changes in fair value are recognized within other (expense) income, net in our consolidated statements of operations and comprehensive loss.

The assumptions utilized in the calculation of the fair values include the probability of success and our

Contingent consideration involves certain assumptions requiring significant judgment and actual results may differ from estimated amounts.

Revenue Recognition

We recognize revenue from research services generally as services are provided while revenue from non‑refundable upfront fees are recognized over time by measuring progress towards satisfaction of the relevant performance obligation using the input method ( i.e.

, cumulative actual costs incurred relative to total estimated costs).

The estimation of measure of progress is complex, involves significant judgment and is affected by our estimates of the total costs required to complete the performance obligations including the total internal personnel costs and external costs to be incurred.

Changes in these estimates can have a material effect on our revenue recognition.

For a further description of our revenue recognition, see Note 2, Basis of Presentation and Significant Accounting Policies, in the accompanying notes to our audited consolidated financial statements included in Part II, Item 8, of this Annual Report on Form 10-K.

Stock-based Compensation

Under ASC 718, the Company measures and recognizes expense for restricted stock awards (RSAs), restricted stock units (RSUs), performance-based restricted stock units (PSUs), employee stock purchases related to the Employee Stock Purchase Plan and stock options granted to employees, directors and consultants based on the fair value of the awards on the date of grant.

Stock-based compensation expense for RSAs, RSUs and stock options is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award.

The Company accounts for forfeitures as they occur.

For RSAs, RSUs and certain PSUs, the fair value of the Company’s common stock is used to determine the resulting stock-based compensation expense.

The fair value of stock options is estimated on the date of grant using a Black-Scholes option pricing model which requires management to apply judgment and make estimates, using inputs including:

• Fair Value of Common Stock—The fair value of common stock is based on the closing price as reported on The Nasdaq Global Select Market on the date of grant.

• Expected Term—The expected term represents the period that a stock-based award is expected to be outstanding.

The Company generally uses the simplified method to determine the expected term, which is based on the average of the time-to-vesting and the contractual life of the option.

The Company generally uses the simplified method as provided for under the applicable guidance for entities with a limited history of relevant stock option exercise activity.

• Expected Volatility—The expected volatility of stock options is based on the historical volatility of the stock of similar entities within the Company’s industry over a period commensurate with the Company’s expected term assumption.

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

Treasury securities in effect at the time of grant for a period that is commensurate with the Company’s expected term assumption.

• Expected Dividend—The Company has not historically paid, and does not expect for the foreseeable future to pay, a dividend.

Therefore, the Company used an expected dividend yield of zero.

For awards with performance conditions that vest upon a performance condition being met, compensation expense is recognized for the number of shares expected to be earned after assessing the probability that a certain performance condition will be met and the targeted payout level associated with the performance condition expected to be achieved.

At each reporting date, the Company is required to evaluate whether achievement of a performance condition is probable.

Cumulative adjustments are recorded each quarter to reflect the estimated outcome of the performance-related conditions until the date results are determined and settled.

If performance conditions are not met or not expected to be met, any compensation expense previously recognized associated with the awards will be reversed.

The fair values of the Company’s PSUs that have market-based metrics are estimated using Monte Carlo simulations.

The Company applies an accelerated attribution method to recognize stock-based compensation expense over the applicable service period for these awards.

The number of shares expected to be earned is considered in the grant date valuation;

therefore, the expense is not subsequently adjusted to reflect the actual shares ultimately earned.

Valuation of Other Investments

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Due to these indicators, we assessed the valuation of these investments and determined the fair values to be negligible and the impairments to be other-than-temporary in nature.

As a result, we recorded impairment expense of $13.0 million for one investment the year ended December 31, 2024 , $12.9 million for two investments for the year ended December 31, 2023 and $5.0 million for one investment for the year ended December 31, 2022.

As a result, we recorded zero impairment expense for the year ended December 31, 2025 , $13.0 million for one investment for the year ended December 31, 2024 and $12.9 million for two investments for the year ended December 31, 2023.

The impairment expenses were recorded within impairment of other investments on our consolidated statements of operations and Comprehensive Loss and as a reduction of the other investments on our consolidated balance sheets.

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If such review indicates the carrying amount of the long-lived assets is not recoverable, the carrying amount of such assets is reduced to fair value.

We have recorded impairment of long-lived assets of $51.3 million during the year ended December 31, 2024.

We have recorded impairment of long-lived assets of $1.4 million and $51.3 million during the years ended December 31, 2025 and 2024, respectively .

Securities Purchase Agreement Put/Call

We evaluate freestanding equity‑linked instruments to determine their classification and measurement.

Management concluded that the SPA put/call issued in July 2025 does not meet the definition of a derivative and does not qualify for equity classification, and we accordingly account for the instrument as a financial asset measured at fair value through earnings.

The determination of fair value requires significant judgment, particularly in assessing the probability and timing of milestone achievement and the relative likelihood of the mutually exclusive outcomes under the put and call rights.

We use Monte Carlo simulation valuation models that incorporate assumptions such as stock price volatility, risk‑free interest rates and milestone probabilities.

Because these assumptions are inherently uncertain, changes in inputs such as the probability of milestone achievement could materially affect the reported fair value of the SPA put/call and the related gains or losses recognized in earnings.

Recently Adopted and Recent Accounting Pronouncements

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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-K

Item 7. Management’s Discussion and Analysis