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Item 2. Management’s Discussion and Analysis

2026-05-12 compared with 2025-11-06 · 89 added, 134 removed, 155 unchanged (59% of the section changed)

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and the sections entitled “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 25, 2026, or 2025 Form 10-K.

We are a clinical-stage biopharmaceutical company harnessing the power of human genetics to develop novel, small molecule precision medicines for patients living with kidney and metabolic diseases, including obesity.

We are advancing a pipeline using our Compass platform, which allows us to identify and characterize genetic variants in disease and then link those variants to the biological pathways that drive disease in specific patient groups through a process we refer to as variant functionalization.

We are a clinical-stage biopharmaceutical company harnessing the power of human genetics to develop novel, small molecule precision medicines for patients living with kidney and metabolic diseases.

We are advancing a pipeline using our Compass platform, which allows us to identify and characterize genetic variants associated with health and disease and then determine how these drive risk for and protection against disease in specific patient groups through a process we refer to as variant functionalization.

Our Compass platform has been purpose-built to inform all phases of our drug discovery and development process through clinical trial design.

We are currently advancing two wholly-owned lead programs, MZE829 and MZE782, each of which represents a novel precision medicine-based approach.

We are currently advancing two wholly-owned clinical programs, MZE829 and MZE782, each of which represents a novel precision medicine-based approach.

Our goal is to bring novel precision medicines to patients with kidney and metabolic diseases, which is where we believe we can maximize our impact on human health.

Our most advanced program, MZE829, is an oral, small molecule inhibitor of apolipoprotein L1, or APOL1, for the treatment of patients with APOL1-mediated kidney disease, or AMKD, a genetically defined sub-set of chronic kidney disease, or CKD, for which there is no approved treatment today.

We initiated a Phase 2 trial of MZE829 in November 2024 and dosed our first patient in February 2025.

In March 2026, we announced positive topline clinical proof of concept data from our Phase 2 trial of MZE829 in patients with AMKD, in which we enrolled 15 patients.

The results demonstrated that treatment with MZE829 led to a clinically meaningful mean reduction in proteinuria, as measured by urinary albumin-to-creatinine ratio.

MZE829 was generally well tolerated, with no serious adverse events or severe treatment-related adverse events reported.

We plan to continue enrollment in the Phase 2 trial and to advance MZE829 into a pivotal development program.

We anticipate reporting additional data from the Phase 2 trial in late 2026 or early 2027.

Our second program, MZE782, is an oral, small molecule inhibitor for the treatment of patients with phenylketonuria, or PKU, an inherited metabolic disorder, and for patients with CKD.

In September 2025, we reported results from our Phase 1 clinical trial of MZE782, in which we enrolled 112 healthy adult volunteers.

MZE782 was well tolerated across all doses in all cohorts and demonstrated a favorable pharmacokinetics profile after single and multiple oral doses.

MZE782 produced dose-dependent increases in 24-hour urinary excretion of the neutral amino acids phenylalanine and glutamine across both single ascending dose and multiple ascending dose cohorts, confirming target engagement and SLC6A19 inhibition.

We also observed dose-dependent changes in estimated glomerular filtration rate in healthy individuals with MZE782, similar to those seen with SGLT2 inhibitors, suggesting a potential beneficial effect on kidney physiology in CKD patients.

We plan to initiate Phase 2 proof-of-concept trials of MZE782 in patients with PKU by mid-2026 and in patients with CKD in the second half of 2026.

We anticipate reporting topline data from the Phase 2 trial of MZE782 in patients with PKU in 2027.

Since our inception, we have focused substantially all of our efforts and financial resources on research and development activities for our programs and on establishing arrangements and collaborations with third parties for the development of our therapeutic candidates.

To date, we have not generated any revenue from product sales and we do not expect to generate any revenue from commercial sales for the foreseeable future.

Except for the one-time, nonrefundable upfront payments we received pursuant to the license agreements we entered into with several biotechnology companies in 2024, including the exclusive license agreement with Shionogi & Company, Ltd., or Shionogi, we expect to continue incurring significant operating losses for the foreseeable future due to the cost of research and development, clinical trials, preclinical studies and the regulatory approval process for our therapeutic candidates.

We have incurred significant losses and negative cash flows from operations since our inception, except for the net income and cash provided by operations due to license revenue recognized during the year ended December 31, 2024, and we expect to incur significant and increasing losses as a result of our continued research and development activities.

During the three and nine months ended September 30, 2025, we incurred a net loss of $30.1 million and $96.6 million, respectively.

During the three and nine months ended September 30, 2024, we incurred a net loss of $24.8 million and net income of $81.8 million, respectively.

As of September 30, 2025, we had an accumulated deficit of $455.0 million and do not expect positive cash flows from operations in the foreseeable future.

We expect to continue incurring significant expenses and increasing losses for the foreseeable future.

To date, we have not generated any revenue from product sales and have financed our operations primarily through sales of our equity and convertible promissory notes, debt financing, as well as one-time, nonrefundable upfront payments we received pursuant to the license agreements we entered into with several biotechnology companies in 2024, including the exclusive license agreement with Shionogi & Company, Ltd., or Shionogi.

We do not expect to generate any revenue from commercial sales for the foreseeable future.

We expect to continue incurring significant operating losses for the foreseeable future due to the cost of research and development, clinical trials, preclinical studies and the regulatory approval process for our therapeutic candidates.

We have incurred significant losses and negative cash flows from operations and we expect to incur significant and increasing losses for the foreseeable future as a result of our continued research and development activities.

During the three months ended March 31, 2026 and 2025, we incurred a net loss of $24.2 million and $32.8 million, respectively.

As of March 31, 2026, we had an accumulated deficit of $513.8 million and do not expect positive cash flows from operations for the foreseeable future.

Our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned research and development activities, as well as upon revenue from our license agreements.

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In addition, we expect to incur additional costs associated with operating as a public company.

As of September 30, 2025, we had cash, cash equivalents and marketable securities of $383.9 million.

Since our inception, we have financed our operations primarily through issuances of our equity, license agreements with biotechnology companies and issuances of convertible promissory notes.

In September 2025, we entered into a securities purchase agreement, or the Private Placement, with certain investors, pursuant to which we issued and sold an aggregate of 4,000,002 shares of our common stock at a purchase price of $16.25 per share and pre-funded warrants, or the Pre-Funded Warrants, to purchase up to an aggregate of 5,231,090 shares of our common stock at a purchase price of $16.249 per Pre-Funded Warrant, resulting in gross proceeds of $150.0 million.

The Pre-Funded Warrants have an exercise price of $0.001 per share, are immediately exercisable and do not expire.

As of March 31, 2026, we had cash, cash equivalents and marketable securities of $362.9 million.

Since our inception, we have financed our operations primarily through issuances of our equity and convertible promissory notes, debt financing, and license agreements with biotechnology companies.

We will require substantial additional capital to develop our therapeutic candidates and fund operations for the foreseeable future.

Until such time as we can generate sufficient revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings, debt financings, collaborations and licensing arrangements.

We are party to a loan and security agreement that provides us with a line of credit of up to $50.0 million.

To date, we have not drawn down any funds from this debt facility and do not currently intend to do so.

Adequate additional financing may not be available to us on favorable terms, or at all.

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The amount and timing of our future funding requirements will depend on many factors including the pace and results of our development efforts.

We cannot assure you that we will ever be profitable or generate positive cash flows from operating activities.

We cannot assure that we will ever be profitable or generate positive cash flows from operating activities.

We selectively pursue strategic collaborations related to the development of certain targets, therapeutic programs, or disease areas where we believe third-party expertise or resources could be beneficial.

In 2020, we formed a spin-out company, Broadwing Bio LLC, or Broadwing, with Alloy Therapeutics, Inc., or Alloy, to develop therapeutic antibody therapies for ANGPTL7 and another undisclosed target in ophthalmic diseases, informed by our Compass platform.

As of September 30, 2025, we owned approximately 48% of the outstanding equity of Broadwing, and we expect our ownership to be significantly diluted upon the conversion of outstanding convertible notes issued by Broadwing.

As of March 31, 2026, we owned approximately 48% of the outstanding equity of Broadwing, and we expect our ownership to be significantly diluted upon the conversion of outstanding convertible notes issued by Broadwing.

We retain certain opt-in rights to jointly develop and commercialize certain therapeutic candidates developed through Broadwing with Alloy.

We are not involved in the development of Broadwing’s therapeutic candidate.

MZE782 Phase 1 Trial Results

On September 11, 2025, we announced positive clinical results from the Phase 1 healthy volunteer study of MZE782.

The Phase 1 trial of MZE782 was a randomized, double-blind, placebo-controlled study evaluating single ascending doses and multiple ascending doses of orally administered MZE782 in 112 healthy adult volunteers.

The single ascending doses, or SAD, ranged from 30 mg to 960 mg and the multiple ascending doses, or MAD, with dosing once or twice daily for seven days, ranged from 120 mg to 240 mg twice daily and 120 mg to 720 mg once daily.

The primary objective was to evaluate the safety and tolerability of single and multiple ascending oral doses of MZE782 in healthy volunteers.

Secondary and exploratory endpoints included pharmacokinetics, food effect, pharmacodynamic measures of target engagement, specifically urinary excretion of phenylalanine, or Phe, and glutamine, or Gln, as predictive biomarkers of SLC6A19 inhibition and disease control, and estimated glomerular filtration rate, or eGFR.

MZE782 was well tolerated across all doses in all cohorts.

There were no serious adverse events, no severe adverse events and no treatment-related adverse events, or TRAEs, leading to discontinuation.

In the single ascending dose portion of the study (n=56), there were a total of three TRAEs reported that were all mild in severity and not seen at the higher doses.

Headache was reported in two patients (4%) and diarrhea was reported in one patient (2%).

There were no TRAEs reported in the MAD portion of the study.

No clinically relevant changes in vital signs, laboratory tests or electrocardiograms were observed.

MZE782 demonstrated a favorable plasma pharmacokinetics profile after single and multiple oral doses.

Oral administration was associated with consistent absorption, with a time to maximum concentration (tmax) of six hours and a half-life (t1/2) of 11 hours.

Exposure increased proportionally with dose, and steady-state was achieved by Day 3.

This is supportive of a once- or twice-daily dosing regimen to be evaluated in Phase 2.

MZE782 produced dose-dependent increases in 24-hour urinary excretion of the neutral amino acids Phe and Gln across both SAD and MAD cohorts, confirming target engagement and SLC6A19 inhibition.

All participants in the MAD cohorts of the Phase 1 study were assessed for changes in eGFR.

MZE782 demonstrated a dose-dependent initial eGFR dip over seven days of dosing that was similar in magnitude to what has been observed in patients initiating SGLT2 and RAAS inhibitors.

We plan to initiate two Phase 2 proof-of-concept trials of MZE782, evaluating plasma Phe reduction in phenylketonuria, or PKU, and proteinuria reduction in chronic kidney disease, or CKD, in 2026.

Exclusive license agreement

Exclusive license agreement with Shionogi

In March 2024, we entered into an exclusive license agreement, or the License Agreement, with Shionogi, pursuant to which we granted Shionogi an exclusive, worldwide, sublicensable license to research, develop, manufacture and commercialize MZE001 and certain other small molecule compounds modulating glycogen synthase 1, or the Licensed Products.

As consideration for the licensed rights and the transfer of know-how and materials, we received an upfront payment of $150.0 million, which is the only payment we have received under the License Agreement to date.

As consideration for the licensed rights and the transfer of know-how and materials, we received an upfront payment of $150.0 million in May 2024 upon the effectiveness of the License Agreement.

The License Agreement also requires that Shionogi pay us up to $275.0 million in the aggregate in milestone payments upon the completion of certain clinical and regulatory milestones and up to $330.0 million in the aggregate in milestone payments if certain sales milestones are achieved.

In April 2026, we received $20.0 million following the achievement of a clinical development milestone upon dosing of the first patient in Shionogi's Phase 2 study of MZE001 in patients with Pompe disease.

The License Agreement also requires that Shionogi pay us tiered royalties ranging from percentages in the low double-digits to twenty on net sales of Licensed Products, subject to certain deductions.

The License Agreement will expire on a Licensed-Product by Licensed-Product and country-by-country basis upon the expiration of the royalty term for such Licensed Product, which will be the latest of the date when there are no remaining valid claims covering the applicable Licensed Product, the expiration of regulatory exclusivity for the applicable Licensed Product, or 11 years after the first commercial sale of the applicable Licensed Product, subject to earlier termination by the parties.

As of September 30, 2025, we estimate that the last patent right for the only currently issued patent licensed under the License Agreement will expire in 2042, without giving effect to any potential patent term extensions, patent term adjustments , or future patents that may or may not issue with respect to the Licensed Products.

As of March 31, 2026, we estimate that the last patent right for the only currently issued patent licensed under the License Agreement will expire in 2042, without giving effect to any potential patent term extensions, patent term adjustments , or future patents that may or may not issue with respect to the Licensed Products.

Upon expiration of the License Agreement, the licenses granted to Shionogi will become fully paid-up, perpetual, irrevocable and royalty-free.

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General and administrative expenses consist primarily of personnel-related costs, including salaries, bonuses, benefits, and stock-based compensation expense, for personnel in executive, finance, accounting, corporate development, and other administrative functions.

General and administrative expenses also include legal fees, professional fees paid for accounting, auditing, consulting, tax, and investor relations services, insurance costs, and facility costs not otherwise included in research and development expenses, and public company expenses such as costs associated with compliance with the rules and regulations of the SEC and Nasdaq.

We expect that our general and administrative expenses will continue to increase significantly in the foreseeable future as additional administrative personnel and services are required to manage these functions of a public company and as our pipeline of therapeutic candidates expands.

Interest and other income, net

Interest and other income, net consists of interest income earned on our cash, cash equivalents and marketable securities, interest expense, foreign currency re-measurement and transaction gains and losses.

We expect interest income to increase as a result of the receipt of net proceeds of approximately $127.8 million from our initial public offering completed in February 2025 and net proceeds of approximately $141.3 million from our Private Placement completed in September 2025.

However, interest income may vary each reporting period depending on our average cash deposits, money market fund balances and other investment balances during the period and prevailing market interest rates.

We expect foreign currency gains and losses to vary each reporting period depending on the fluctuations in foreign currency exchange rates.

Change in fair value of convertible promissory notes

From December 2023 through April 2024, we issued a total of $40.7 million aggregate principal amount of convertible promissory notes, which contained automatic conversion features triggered upon a qualified preferred stock financing or a qualified public offering.

We elected to apply the fair value option, as per Accounting Standards Codification, or ASC, Section 825-10, to the outstanding convertible promissory notes issued.

As such, the convertible promissory notes were recognized at fair value with changes in fair value recognized in the condensed statements of operations and comprehensive (loss) income.

We recorded a net loss of $2.6 million and $7.2 million in the condensed statements of operations and comprehensive (loss) income for the three and nine months ended September 30, 2024, respectively, reflecting the change in the fair value of the convertible promissory notes.

The impact of interest expense on the convertible promissory notes is included within the changes in fair value.

In connection with the private placement of our Series D convertible preferred stock, or Series D Preferred Stock, in November 2024, which was a qualified preferred stock financing pursuant to the terms of the convertible promissory notes, the outstanding convertible promissory notes automatically converted into 39,395,572 shares of Series D-1 convertible preferred stock, or Series D-1 Preferred Stock, at a conversion price of $1.10336 per share.

No convertible promissory notes were outstanding as of December 31, 2024.

Accordingly, no change in fair value of convertible promissory notes was recorded in the condensed statements of operations and comprehensive (loss) income for the three and nine months ended September 30, 2025.

Income tax benefit (expense)

We are subject to corporate United States federal and state income taxation.

We account for income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns subject to a determinable valuation allowance.

Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

In evaluating the ability to recover our deferred income tax assets, we consider all available positive and negative evidence, including our operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis.

In the event we determine that we would be able to realize our deferred income tax assets in the future in excess of our net recorded amount, we would make an adjustment to the valuation allowance that would reduce the provision for income taxes.

Conversely, in the event that all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period when such determination is made.

We recognize uncertain income tax positions at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority.

An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.

Changes in recognition or measurement are reflected in the period in which judgment occurs.

Our policy is to recognize interest and penalties related to the underpayment of income taxes as a component of the provision for income tax.

We expect that our general and administrative expenses will continue to increase significantly in the foreseeable future as additional administrative personnel and services are required to manage these functions associated with being a public company and as our pipeline of therapeutic candidates expands.

Total other income, net

Total other income, net, primarily consists of interest income earned on our cash, cash equivalents and marketable securities and interest expense recognized on the loan and security agreement, or the Hercules Loan Agreement, with certain lenders and Hercules Capital, Inc.

We expect total other income, net to increase as a result of additional interest income on the proceeds received from the initial term loan of $40.0 million under the Hercules Loan Agreement and the estimated net proceeds of approximately $144.7 million from the underwritten registered offering completed in April 2026, which is expected to be partially offset by interest expense recognized on the Hercules Loan Agreement.

However, other income, net may vary each reporting period depending on our average cash deposits, money market fund and other investment balances during the period, prevailing market interest rates and the amount of interest expense incurred under the Hercules Loan Agreement.

Results of operations

Comparisons of the three and nine months ended September 30, 2025 and 2024

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Comparisons of the three months ended March 31, 2026 and 2025

Three Months Ended March 31,

(in thousands)

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Total operating expenses

(Loss) income from operations

Loss from operations

Other income (expense):

Interest and other income, net

Change in fair value of convertible promissory notes

(Loss) income before income tax benefit (expense)

Income tax benefit (expense)

Net (loss) income

Interest expense

Total other income, net

License revenue

We recognized no license revenue for the three and nine months ended September 30, 2025.

We recognized $2.5 million and $167.5 million of license revenue for the three and nine months ended September 30, 2024, respectively.

License revenue recognized in 2024 primarily related to the License Agreement with Shionogi, wherein we received an upfront payment of $150.0 million in exchange for the transfer of the license, know-how, and materials related to the research, development, manufacture and commercialization of MZE001 and certain other small molecule compounds modulating glycogen synthase 1.

License revenue recognized in 2024 also included amounts related to the exclusive license agreement with Trace Neuroscience, Inc., or Trace, wherein we received an upfront payment of $15.0 million in exchange for the transfer of the license, know-how, and materials related to the research, development, manufacture and commercialization of a discovery research program targeting UNC13A for the treatment of amyotrophic lateral sclerosis, or ALS, and $2.5 million related to the exclusive license agreement with Neurocrine Biosciences, Inc., or Neurocrine, for the transfer of the license, know-how and materials related to a discovery research program targeting ATXN2.

We recognized $20.0 million in license revenue for the three months ended March 31, 2026.

We recognized no license revenue for the three months ended March 31, 2025.

License revenue recognized in 2026 was related to achievement of a clinical development milestone upon dosing of the first patient in Shionogi's Phase 2 study of MZE001 in patients with Pompe disease under the License Agreement with Shionogi.

Research and development expenses

Research and development expenses were $25.2 million and $19.9 million for the three months ended September 30, 2025 and 2024, respectively.

The increase of $5.3 million between the comparative three month periods was primarily due to an increase of $3.1 million in personnel-related costs due to an increase in headcount, an increase of $1.9 million in clinical trial expenses based on the progression of our Phase 2 clinical trial for MZE829 that was initiated in November 2024.

The increase also reflects higher costs for outside research and development services of $0.3 million to support our research programs.

Research and development expenses were $80.9 million and $61.3 million for the nine months ended September 30, 2025 and 2024, respectively.

The increase of $19.6 million between the comparative nine month periods was primarily due to an increase of $7.8 million in clinical trial expenses and an increase of $1.7 million in manufacturing expenses based on the progression of our Phase 2 clinical trial for MZE829 and our Phase 1 clinical trial for MZE782.

The increase also reflects higher personnel-related costs of $7.3 million due to an increase in headcount and higher costs for outside research and development services of $2.1 million to support our research programs.

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Research and development expenses were $34.1 million and $27.6 million for the three months ended March 31, 2026 and 2025, respectively.

The increase of $6.6 million between the comparative three month periods was primarily due to an increase of $3.6 million in personnel-related costs due to an increase in headcount and higher non-cash stock-based compensation expense, an increase of $1.9 million in clinical trial expenses based on the progression of our Phase 2 clinical trial for MZE829 in AMKD and start-up activities for our planned Phase 2 clinical trial for MZE782 in PKU, and higher costs for outside research and development services of $0.9 million to support our research programs.

Three Months Ended March 31,

(in thousands)

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General and administrative expenses

General and administrative expenses were $7.8 million and $6.9 million for the three months ended September 30, 2025 and 2024, respectively.

The increase of $0.9 million between the comparative three month periods was primarily due to an increase of $0.7 million in personnel-related costs due to an increase in headcount and higher facilities and other costs of $0.3 million.

General and administrative expenses were $24.0 million and $18.9 million for the nine months ended September 30, 2025 and 2024, respectively.

The increase of $5.1 million between the comparative nine month periods was primarily due to an increase of $3.1 million in personnel-related costs due to an increase in headcount, higher facilities and other costs of $1.0 million, and higher costs for professional service fees of $0.7 million.

Interest and other income, net

Interest and other income, net was $2.9 million and $8.3 million for the three and nine months ended September 30, 2025, respectively.

Interest and other income, net was $1.8 million and $3.1 million for the three and nine months ended September 30, 2024, respectively.

The increase of $1.0 million and $5.2 million between the comparative three and nine months periods, respectively, primarily reflects an increase in interest income as a result of higher cash, cash equivalent, and marketable securities balances held during the three and nine months ended September 30, 2025 from the proceeds received from the private placement of our Series D Preferred Stock completed in November 2024, the initial public offering completed in February 2025 and the Private Placement completed in September 2025.

Change in fair value of convertible promissory notes

The convertible promissory notes issued from December 2023 through April 2024 contained automatic conversion features that triggered upon a qualified preferred stock financing or a qualified public offering.

We elected to apply the fair value option to the convertible promissory notes issued.

As such, the convertible promissory notes were recorded at fair value at each reporting period with changes in fair value recognized in the condensed statements of operations and comprehensive (loss) income.

The change in fair value of the convertible promissory notes resulted in a net loss of $2.6 million and $7.2 million for the three and nine months ended September 30, 2024, respectively.

The convertible promissory notes converted into Series D-1 Preferred Stock in November 2024 in connection with the private placement of our Series D Preferred Stock, which was a qualified preferred stock financing pursuant to the terms of the convertible promissory notes.

No convertible promissory notes were outstanding as of December 31, 2024.

Income tax benefit (expense)

Income tax benefit (expense) was zero for the three and nine months ended September 30, 2025 compared to an income tax benefit of $0.3 million and an income tax expense of $1.4 million for the three and nine months ended September 30, 2024, respectively.

The amounts recognized in the comparative periods in 2024 were primarily due to the net income generated as a result of the recognition of license revenue under our license agreement with Shionogi, resulting in taxable income to the Company, as compared to the net loss incurred during the three and nine months ended September 30, 2025.

General and administrative expenses were $12.4 million and $7.8 million for the three months ended March 31, 2026 and 2025, respectively.

The increase of $4.6 million between the comparative three month periods was primarily due to an increase of $3.3 million in personnel-related costs due to an increase in headcount and higher non-cash stock-based compensation expense, higher costs for professional services of $0.8 million and higher facilities and other costs of $0.3 million.

Total other income, net

Total other income, net was $2.3 million and $2.6 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease of $0.3 million between the comparative three months periods primarily reflects interest expense recognized on the Hercules Loan Agreement, partially offset by an increase in interest income as a result of higher cash, cash equivalent, and marketable securities balances held during the three months ended March 31, 2026 resulting from the net proceeds received from the securities purchase agreement we entered into in September 2025 and proceeds from the initial term loan funded under the Hercules Loan Agreement in February 2026.

Liquidity and capital resources

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We anticipate that we will continue to incur net losses for the foreseeable future.

To date, we have financed our operations primarily through private placements of redeemable convertible preferred stock, one-time, nonrefundable upfront payments made to us in connection with our entry into license agreements, private placements of convertible promissory notes, and most recently, through an initial public offering of our common stock.

As of September 30, 2025, we had cash, cash equivalents and marketable securities of $383.9 million and an accumulated deficit of $455.0 million.

In February 2025, we completed our initial public offering, pursuant to which we issued and sold an aggregate of 8,750,000 shares of our common stock at an initial public offering price of $16.00 per share, resulting in net proceeds of approximately $127.8 million, after deducting underwriting discounts, commissions and other offering expenses paid by us in 2025.

In September 2025, we completed the Private Placement, pursuant to which we issued and sold an aggregate of 4,000,002 shares of our common stock at a purchase price of $16.25 per share and Pre-Funded Warrants to purchase up to an aggregate of 5,231,090 shares of our common stock at a purchase price of $16.249 per Pre-Funded Warrant, resulting in net proceeds of approximately $141.3 million, after deducting placement fees and other offering expenses payable by the Company of approximately $8.7 million.

The Pre-Funded Warrants have an exercise price of $0.001 per share, are immediately exercisable and do not expire.

As of September 30, 2025, none of the Pre-Funded Warrants have been exercised.

To date, we have financed our operations primarily through sales of our equity and convertible promissory notes, debt financing, as well as one-time, nonrefundable upfront licensing payments.

As of March 31, 2026, we had cash, cash equivalents and marketable securities of $362.9 million and an accumulated deficit of $513.8 million.

In February 2026, we entered into an Open Market Sale Agreement with Jefferies LLC, serving as sales agent, with respect to an at-the-market offering program pursuant to which we may elect to issue and sell shares of our common stock having an aggregate offering price of up to $200.0 million, or the 2026 Sale Agreement, in such quantities and on such minimum price terms as we set from time to time through our sales agent.

We have agreed to pay our sales agent an aggregate commission equal to up to 3.0% of the gross proceeds of the sales under the agreement.

To date, no sales of common stock have occurred under the 2026 Sale Agreement.

Additionally, in February 2026, we entered into the Hercules Loan Agreement which provides for a senior secured term loan facility in an aggregate principal amount of up to $200.0 million.

An initial term loan of $40.0 million was funded under the Hercules Loan Agreement and an aggregate of $160.0 million in additional term loans commitments will be available to us through February 2031, so long as we satisfy certain conditions precedent.

The final tranche of $50.0 million is subject to approval by the lenders’ investment committee.

The facility has a maturity date of February 1, 2031, and may be prepaid at any time, subject to prepayment premiums.

This senior secured term facility will accrue interest at an annual rate determined by reference to the Prime Rate as reported in the Wall Street Journal, with interest rate floors that range from 7.95% to 9.25% depending on the tranche.

Accrued interest is payable on the first business day of each month until (a) February 2030 or (b) if certain performance and financing milestones are satisfied, the maturity date.

In connection with the Hercules Loan Agreement, we terminated an existing loan and security agreement with another bank that provided us with a line of credit of up to $50.0 million.

We did not draw down any funds from this terminated debt facility.

See Note 10, Loan and security agreements, of this Quarterly Report on Form 10-Q for further discussion of the Hercules Loan Agreement.

In April 2026, we completed an underwritten registered offering pursuant to which we issued and sold an aggregate of 5,540,000 shares of our common stock at $23.50 per share and pre-funded warrants to purchase 850,000 shares of our common stock at $23.499 per pre-funded warrant, which represents the per share offering price for the shares of common stock less a $0.001 per share exercise price for each pre-funded warrant, resulting in estimated net proceeds of approximately $144.7 million, after deducting underwriting discounts and commissions and estimated offering expenses, or the Underwritten Registered Offering.

See Note 13, Subsequent events, of this Quarterly Report on Form 10-Q for further discussion of the Underwritten Registered Offering.

Based on our current operating plan, we believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least one year from the date of this Quarterly Report on Form 10-Q.

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If we raise additional capital through debt financing, we may be subject to covenants that restrict our operations including limitations on our ability to incur liens or additional debt, pay dividends, repurchase our common stock, make certain investments, and engage in certain merger, consolidation or asset sale transactions.

Any debt financing or additional equity that we raise may contain terms that are not favorable to us or our stockholders.

Any debt financing that we raise or additional equity that we issue may contain terms that are not favorable to us or our stockholders.

If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our proprietary technology, future revenue streams, research programs or therapeutic candidates, including granting licenses to our proprietary technologies, on terms that may not be favorable to us.

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The lease terminates in November 2030 and provides for one option to extend the lease term for an additional period of eight years.

We have entered into consortium agreements with the University of Helsinki and Queen Mary University to access genomic information from patient samples and genetic and paired clinical data.

As of September 30, 2025, we are obligated to pay $4.6 million under these agreements through the year ended December 31, 2027.

We have entered into consortium agreements with the University of Helsinki to access genomic information from patient samples and genetic and paired clinical data.

As of March 31, 2026, we are obligated to pay $3.8 million under these agreements through the year ended December 31, 2027.

We are obligated to make principal loan payments, interest payments and pay an end of term charge under the Hercules Loan Agreement.

See Note 10, Loan and security agreements, of this Quarterly Report on Form 10-Q for further discussion of the Hercules Loan Agreement.

We enter into contracts in the normal course of business with third-party contract organizations for preclinical trials, non-clinical trials and testing, and other services and products for operating purposes.

These contracts generally provide for termination following a certain period after notice.

Comparisons of the nine months ended September 30, 2025 and 2024

Comparisons of the three months ended March 31, 2026 and 2025

The following table sets forth the primary sources and uses of cash, cash equivalents, and restricted cash for the periods presented below:

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

Net cash (used in) provided by operating activities

Net cash used in investing activities

Net cash used in operating activities

Net cash provided by (used in) investing activities

Net cash provided by financing activities

Net increase in cash, cash equivalents and restricted cash

Net cash (used in) provided by operating activities

Net cash used in operating activities was $84.2 million for the nine months ended September 30, 2025 and net cash provided by operating activities was $98.4 million for the nine months ended September 30, 2024.

The net cash used in operating activities for the nine months ended September 30, 2025 was primarily due to our net loss of $96.6 million combined with a net change in our operating assets and liabilities of $2.0 million, offset by $14.3 million in non-cash charges such as depreciation, stock-based compensation, lease expense and accretion of discounts on marketable securities.

The net cash provided by operating activities for the nine months ended September 30, 2024 was primarily due to our net income of $81.8 million, combined with $19.2 million in non-cash charges such as depreciation, stock-based compensation, lease expense and the change in fair value of the convertible promissory notes, offset by a net change in our operating assets and liabilities of $2.6 million.

Net cash used in investing activities

Net cash used in investing activities was $67.6 million for the nine months ended September 30, 2025, which related to purchases of marketable securities of $66.8 million and purchases of property and equipment of $0.8 million.

Net cash used in investing activities was $0.5 million for the nine months ended September 30, 2024, which related to purchases of property and equipment.

Net cash used in operating activities

Net cash used in operating activities was $39.1 million and $29.5 million for the three months ended March 31, 2026 and 2025, respectively.

The net cash used in operating activities for the three months ended March 31, 2026 was primarily due to our net loss of $24.2 million combined with a net change in our operating assets and liabilities of $23.7 million, offset by $8.8 million in non-cash charges such as depreciation, stock-based compensation, lease expense and amortization of debt discount and debt issuance costs.

The net cash used in operating activities for the three months ended March 31, 2025 was primarily due to our net loss of $32.8 million, combined with a net change in our operating assets and liabilities of $1.4 million, offset by $4.7 million in non-cash charges such as depreciation, stock-based compensation and lease expense.

Net cash provided by (used in) investing activities

Net cash provided by investing activities was $6.3 million for the three months ended March 31, 2026, which consisted of maturities of marketable securities of $30.0 million, offset by purchases of marketable securities of $23.6 million and purchases of property and equipment of $0.1 million.

Net cash used in investing activities for the three months ended March 31, 2025 was $0.3 million, which consisted of purchases of property and equipment.

Net cash provided by financing activities

For the nine months ended September 30, 2025, net cash provided by financing activities was $271.7 million, which consisted of net proceeds of $127.8 million from the issuance of common stock pursuant to our initial public offering, $141.7 million of net proceeds from the issuance of common stock and Pre-Funded Warrants in the Private Placement, $2.1 million from the exercise of stock option awards, net of repurchases and $0.6 million from the issuance of common stock under the 2025 Employee Stock Purchase Plan, partially offset by the payment of $0.5 million for the success fee under the loan and security agreement.

For the nine months ended September 30, 2024, net cash provided by financing activities was $22.6 million, which consisted of net proceeds from the issuance of convertible promissory notes of $24.5 million and $0.7 million from the exercise of stock option awards, net of repurchases, partially offset by the payment of $2.6 million for deferred offering costs.

Net cash provided by financing activities for the three months ended March 31, 2026 was $42.4 million, which consisted of net proceeds of $38.5 million from the Hercules Loan Agreement and $4.1 million from the exercise of stock option awards, partially offset by the payment of $0.2 million for deferred offering costs related to the Underwritten Registered Offering completed in April 2026.

For the three months ended March 31, 2025, net cash provided by financing activities was $127.4 million, which consisted of net proceeds of $127.8 million from the issuance of common stock pursuant to our initial public offering and $0.1 million from the exercise of stock option awards, offset by the payment of $0.5 million for the success fee under the loan and security agreement with Banc of California.

Critical accounting policies, significant judgments and use of estimates

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We described the accounting policies that we believe involve a significant level of estimation and uncertainty, which could have a material impact on our financial condition or results of operations and are therefore deemed critical accounting policies, in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March, 25, 2026.

There have been no significant changes in our critical accounting policies and estimates during the nine months ended September 30, 2025.

There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2026.

Our condensed financial statements have been prepared in accordance with U.S.

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Recent accounting pronouncements

See Note 2 on Summary of significant accounting policies to our unaudited condensed financial statements included in Part 1 - Item 1, “Financial Statements,” of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our business.

See Note 2, Summary of significant accounting policies, to our unaudited condensed financial statements included in Part 1, Item 1, “Financial Statements (Unaudited),” of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our business.

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