What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-11 compared with 2026-05-12 · 66 added, 54 removed, 190 unchanged (39% of the section changed)

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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.

Our most advanced program, MZE829, is an oral, small molecule, dual-mechanism 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.

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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.

We plan to continue enrollment in the Phase 2 trial and anticipate reporting additional data from this trial in late 2026 or early 2027.

In addition, we plan to initiate a pivotal trial of MZE829 in the first half of 2027, subject to regulatory feedback.

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 the treatment of 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.

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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.

In August 2026, we announced that the Phase 2 proof-of-concept trial of MZE782 in patients with PKU has initiated and we anticipate reporting topline data from this trial in 2027.

We plan to initiate a Phase 2 proof-of-concept trial of MZE782 in patients with CKD in the first half of 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.

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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.

During the three and six months ended June 30, 2026, we incurred a net loss of $44.7 million and $68.9 million, respectively.

During the three and six months ended June 30, 2025, we incurred a net loss of $33.7 million and $66.5 million, respectively.

As of June 30, 2026, we had an accumulated deficit of $558.5 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 March 31, 2026, we had cash, cash equivalents and marketable securities of $362.9 million.

As of June 30, 2026, we had cash, cash equivalents and marketable securities of $494.9 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.

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

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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 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.

As of June 30, 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.

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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.

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 development 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.

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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 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.

As of June 30, 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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• professional service fees for consulting and related services;

• facility costs, depreciation, and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and other supplies.

We recognize research and development expenses as they are incurred.

Nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities are capitalized and expensed as the goods are delivered or the related services are performed.

We have not historically disclosed our direct costs between our clinical programs and our preclinical programs.

Additionally, our internal costs, employees and infrastructure are not directly tied to any one program and are deployed across multiple programs.

As such, we do not track indirect costs on a specific program basis.

• facility costs, depreciation, and other expenses, which include expenses for rent and maintenance of facilities.

We recognize research and development expenses as incurred.

Nonrefundable advance payments for goods or services to be used in future research and development activities are capitalized and expensed as the related goods are received or services are performed.

Direct external research and development costs are recorded to the specific programs they support.

Internal research and development costs, including personnel, facility and laboratory supplies, are utilized across multiple research and development programs and are therefore not directly attributable to any single program.

At this time, we cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete the development of, and obtain regulatory approval for, MZE829, MZE782 and any of our other potential therapeutic candidates.

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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.

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 net proceeds of approximately $144.6 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 months ended March 31, 2026 and 2025

Three Months Ended March 31,

Comparisons of the three and six months ended June 30, 2026 and 2025

Three Months Ended

Six Months Ended

(in thousands)

License revenue

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License revenue

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.

We recognized no license revenue for the three months ended June 30, 2026 and $20.0 million in license revenue for the six months ended June 30, 2026.

We recognized no license revenue for the three and six months ended June 30, 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 $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,

Research and development expenses were $34.9 million and $28.1 million for the three months ended June 30, 2026 and 2025, respectively.

The increase of $6.8 million between the comparative three month periods was primarily due to an increase of $4.3 million in personnel-related costs due to an increase in headcount and higher non-cash stock-based compensation expense, an increase of $3.2 million related to progression of our clinical development of the MZE829 program and an increase of $0.9 million related to our discovery research and other programs, partially offset by a $1.4 million decrease related to the MZE782 program primarily due to higher costs incurred in 2025 for the Phase 1 clinical trial in healthy adult volunteers that completed in 2025.

Research and development expenses were $69.1 million and $55.7 million for the six months ended June 30, 2026 and 2025, respectively.

The increase of $13.4 million between the comparative six month periods was primarily due to an increase of $7.9 million in personnel-related costs due to an increase in headcount and higher non-cash stock-based compensation expense, an increase of $5.7 million related to progression of our clinical development of the MZE829 program and an increase of $0.9 million related to our discovery research and other programs, partially offset by a $0.5 million decrease related to the MZE782 program primarily due to higher costs incurred in 2025 for the Phase 1 clinical trial in healthy adult volunteers that completed in 2025 and a $0.6 million decrease in lab supplies and other costs.

Three Months Ended

Six Months Ended

(in thousands)

Personnel-related costs

Clinical trial expenses

Outside research and development services

Manufacturing expenses

Facilities, depreciation and other expenses

(in thousands)

Direct external research and development expenses by program:

Discovery research and other programs

Internal research and development expenses:

Personnel-related

Facilities, lab supplies and other

Total research and development expenses

General and administrative expenses

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.

General and administrative expenses were $13.1 million and $8.4 million for the three months ended June 30, 2026 and 2025, respectively.

The increase of $4.7 million between the comparative three month periods was primarily due to an increase in personnel-related costs due to an increase in headcount and higher non-cash stock-based compensation expense.

General and administrative expenses were $25.5 million and $16.2 million for the six months ended June 30, 2026 and 2025, respectively.

The increase of $9.3 million between the comparative six month periods was primarily due to an increase of $8.0 million in personnel-related costs due to an increase in headcount and higher non-cash stock-based compensation expense and an increase of $0.7 million for professional services.

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.

Total other income, net was $3.3 million and $2.8 million for the three months ended June 30, 2026 and 2025, respectively.

The increase of $0.5 million between the comparative three months periods primarily reflects an increase in interest income as a result of higher cash, cash equivalent, and marketable securities balances held during the three months ended June 30, 2026 resulting from the net proceeds received from the underwritten registered offering completed in April 2026 and proceeds from the initial term loan funded under the Hercules Loan Agreement in February 2026, partially offset by interest expense recognized on the Hercules Loan Agreement.

Total other income, net was $5.7 million and $5.4 million for the six months ended June 30, 2026 and 2025, respectively.

The increase of $0.3 million between the comparative six months periods primarily reflects an increase in interest income as a result of higher cash, cash equivalent, and marketable securities balances held during the six months ended June 30, 2026 resulting from the net proceeds received from the underwritten registered offering completed in April 2026 and proceeds from the initial term loan funded under the Hercules Loan Agreement in February 2026, partially offset by interest expense recognized on the Hercules Loan Agreement.

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 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.

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 payments we received pursuant to the license agreements we entered into with several biotechnology companies in 2024, including the exclusive license agreement with Shionogi.

As of June 30, 2026, we had cash, cash equivalents and marketable securities of $494.9 million and an accumulated deficit of $558.5 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.

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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.

The Hercules Term Loan Facility provides for payment of interest only until (a) 48 months after the Closing Date or (b) if certain performance and financing milestones are satisfied, 60 months after the Closing Date.

Accrued interest on the Term Loans is payable on the first business day of each month.

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.

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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.

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 a purchase price of $23.50 per share and pre-funded warrants to purchase up to an aggregate of 850,000 shares of our common stock, or the 2026 Pre-Funded Warrants, at a purchase price of $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 net proceeds of approximately $144.6 million, after deducting underwriting discounts and commissions and estimated offering expenses, or the Underwritten Registered Offering.

See Note 6, Capital structure, 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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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.

As of June 30, 2026, we are obligated to pay $3.5 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.

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

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

Comparisons of the six months ended June 30, 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:

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

Net cash used in operating activities

Net cash provided by (used in) investing activities

Net cash used in investing activities

Net cash provided by financing activities

1 unchanged sentence

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 used in operating activities was $54.2 million and $59.6 million for the six months ended June 30, 2026 and 2025, respectively.

The net cash used in operating activities for the six months ended June 30, 2026 was primarily due to our net loss of $68.9 million combined with a net change in our operating assets and liabilities of $4.6 million, offset by $19.3 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 six months ended June 30, 2025 was primarily due to our net loss of $66.5 million combined with a net change in our operating assets and liabilities of $2.5 million, offset by $9.4 million in non-cash charges such as depreciation, stock-based compensation and lease expense.

Net cash used in investing activities

Net cash used in investing activities was $122.2 million and $0.7 million for the six months ended June 30, 2026 and 2025.

The net cash used in investing activities for the six months ended June 30, 2026 consisted of purchases of marketable securities of $186.0 million and purchases of property and equipment of $0.2 million, offset by maturities of marketable securities of $64.0 million.

Net cash used in investing activities for the six months ended June 30, 2025 consisted of purchases of property and equipment of $0.7 million.

Net cash provided by financing activities

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.

Net cash provided by financing activities for the six months ended June 30, 2026 was $189.8 million, which consisted of net proceeds of approximately $144.6 million from the issuance of common stock and 2026 Pre-Funded Warrants pursuant to the Underwritten Registered Offering, net proceeds of $38.5 million from the Hercules Loan Agreement, $5.8 million from the exercise of stock option awards and $1.0 million from the issuance of common stock under the 2025 Employee Stock Purchase Plan.

For the six months ended June 30, 2025, net cash provided by financing activities was $128.0 million, which consisted of net proceeds of approximately $127.8 million from the issuance of common stock pursuant to our initial public offering, $0.6 million from the issuance of common stock under the 2025 Employee Stock Purchase Plan 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 three months ended March 31, 2026.

There have been no significant changes in our critical accounting policies and estimates during the six months ended June 30, 2026.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis