Item 7. Management’s Discussion and Analysis
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those contained in or implied by any forward-looking statements. Factors that could cause or contribute to these differences include those under “Risk Factors” included in Part I, Item 1A and under “Special Note Regarding Forward-Looking Statements” or in other parts of this Annual Report on Form 10-K.
Overview
We are a late-stage biopharmaceutical company whose mission is to improve patient care in populations with cardiometabolic diseases where currently approved therapies have not been adequate or well tolerated. We seek to fill a significant unmet need for a safe, well tolerated and convenient LDL-C lowering therapy. In multiple Phase 3 trials, we have investigated obicetrapib, an oral, low-dose, once-daily, highly selective CETP inhibitor, alone or as an FDC with ezetimibe, as preferred LDL-C lowering therapies to be used as an adjunct to statin therapy for patients at risk of CVD with elevated LDL-C, for whom existing therapies are not sufficiently effective or well tolerated. Additionally, we believe that CETP inhibition may also play a role in other indications by potentially mitigating the risk of developing diseases such as Alzheimer’s disease.
Obicetrapib, is a next-generation, oral, low-dose, highly selective CETP inhibitor that we are developing to potentially overcome the limitations of current LDL-C lowering treatments. We believe that obicetrapib has the potential to be a once-daily oral CETP inhibitor for lowering LDL-C, if approved. In each of our Phase 3 clinical trials, BROADWAY and BROOKLYN, evaluating obicetrapib as an adjunct to high-intensity statin therapy, obicetrapib met its primary and secondary endpoints, with statistically significant reductions in LDL-C observed. In our Phase 3 TANDEM clinical trial, evaluating obicetrapib in combination with ezetimibe as an adjunct to high-intensity statin therapy, obicetrapib in combination with ezetimibe met its primary and secondary endpoints, with statistically significant reductions in LDL-C observed. In five of our Phase 2 clinical trials, TULIP, ROSE, OCEAN, ROSE2 and our Japan Phase 2b clinical trial, evaluating obicetrapib as a monotherapy or a combination therapy with ezetimibe 10 mg, we observed statistically significant LDL-C lowering. In each of these trials, side effects were similar in frequency and severity to placebo including muscle-related side effects and drug-related TESAEs. We have observed obicetrapib to be well tolerated in an aggregate of over 3,500 patients with dyslipidemia in our clinical trials to date. Furthermore, we believe that obicetrapib’s oral delivery, demonstrated activity at low doses, chemical properties and tolerability make it well-suited for combination approaches.
Lowering of LDL-C, has been associated with MACE benefit in trials of LDL-C lowering drugs, including the REVEAL trial with the CETP inhibitor, anacetrapib. In our Phase 3 BROADWAY clinical trial, we observed a 21% reduction in the exploratory MACE endpoint (coronary heart disease death, non-fatal myocardial infarction, non-fatal stroke and coronary revascularization) and we are performing a Phase 3 CVOT, PREVAIL, to reconfirm this relationship.
Obicetrapib has shown to not only reduce LDL-C but also several additional biomarkers associated with MACE. To date, obicetrapib has shown reductions in non-HDL-C, ApoB, and sdLDL-P. In our clinical trials, we have also observed reductions in Lp(a), which is believed to be an independent MACE risk factor, along with reductions in total LDL particles and more specifically small LDL particles, which are believed to be more atherogenic particles.
CVD is a leading cause of death worldwide. ASCVD is primarily caused by atherosclerosis, which involves the build-up of fatty material within the inner walls of the arteries. Atherosclerosis is the primary cause of heart attacks, strokes and peripheral vascular disease. One of the most important risk factors for ASCVD is hypercholesterolemia, which refers to elevated LDL-C levels within the body, commonly known as high cholesterol.
A significant proportion of patients with high cholesterol do not achieve acceptable LDL-C levels using statin therapy alone. We estimate that in the United States there are approximately 30 million patients that are not at their risk-based LDL-C goals despite treatment with lipid lowering therapy, including approximately 13 million with ASCVD. Existing non-statin treatment options have been largely unable to address the needs of patients with high cholesterol due to limited efficacy, an inconvenient injectable administration route and, in the past, market access restrictions. It is estimated that over 75% of ASCVD and HeFH outpatients prefer oral drugs to injectable therapies.
Our goal is to develop and commercialize an LDL-C lowering monotherapy and an FDC therapy, which offers the advantage of a single, low dose, once-daily oral pill, and fulfills the significant unmet need for an effective and convenient LDL-C lowering therapy. If we obtain marketing approval, we intend to commercialize obicetrapib for patients with ASCVD and/or HeFH and elevated levels of LDL-C despite being treated with currently available optimal lipid lowering therapy.
We have partnered with Menarini, providing them with the exclusive rights to commercialize obicetrapib 10 mg, either as a sole active ingredient product or in an FDC with ezetimibe, in the Menarini Territory, if approved. In August 2025, the EMA accepted for review the MAAs submitted by Menarini for obicetrapib 10 mg monotherapy and the FDC of 10 mg obicetrapib plus 10 mg ezetimibe for the treatment of primary hypercholesterolemia, including heterozygous familial and non-familial or mixed dyslipidemia. Subsequently, MAAs were also submitted to regulators in the UK and Switzerland and accepted for review. The submissions are supported by data from the BROADWAY,
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BROOKLYN, and TANDEM pivotal Phase 3 trials. We anticipate that Menarini will receive decisions on the MAAs from each of the regulators in the second half of 2026. If the MAAs are approved, Menarini will be required to use commercially reasonable efforts to commercialize obicetrapib in the Menarini Territory.
Our current plan is to pursue development and, subject to the receipt of marketing approval, commercialization of obicetrapib in the United States ourselves, and to consider additional partners for jurisdictions outside of the United States and Europe, including in Japan and China. In addition to our partnership with Menarini, we may in the future utilize a variety of types of collaboration, license, monetization, distribution and other arrangements with other third parties relating to the development or commercialization, once approved, of obicetrapib or future product candidates or indications. We are also regularly evaluating the potential acquisition or license of new product candidates.
In addition to our cardiometabolic program, we are exploring the potential application of CETP inhibition in other indications, including Alzheimer’s disease. Based on the lipid-modifying effects of CETP inhibition observed in our clinical trials for obicetrapib to date, we have conducted preclinical and early clinical evaluations of obicetrapib in this area. We initiated a Phase 2a clinical trial in patients with early Alzheimer’s disease to evaluate the pharmacodynamic and pharmacokinetic effects, safety and tolerability of obicetrapib, and announced initial data from this trial in September 2023. In July 2025, we announced data from the prespecified Alzheimer’s disease biomarker analysis in our BROADWAY clinical trial. Based on these results, we expect to initiate a new clinical trial evaluating obicetrapib in patients with early Alzheimer’s disease in 2026.
As of December 31, 2025, we had cash, cash equivalents and marketable securities of $728.9 million as compared to $834.2 million as of December 31, 2024.
Components of our Results of Operations
Revenue
To date, we have not generated significant revenue from the sale of pharmaceutical products. Our revenue has been primarily derived from our license agreement with Menarini. Two performance obligations for the Menarini License were identified at contract inception, comprising a license to use the Company's intellectual property (the "license performance obligation") and a promise to continue the development activities for the licensed compound (the "R&D performance obligation"). Pursuant to the Menarini License, we received a non-refundable, non-creditable upfront amount of $120.9 million (€115.0 million) from Menarini on July 7, 2022, of which $98.6 million (€93.5 million) was attributed to the license performance obligation and recognized as revenue upon the execution of the Menarini License on June 23, 2022. The remaining $22.3 million (€21.5 million) was attributed to the R&D performance obligation and initially recognized as deferred revenue. As of December 31, 2025, the R&D performance obligation had been deemed to be completely satisfied and all deferred revenue related to such performance obligation was recognized.
Additionally, in partial contribution to our costs of development of the Licensed Products, Menarini may pay us €27.5 million, payable in two equal annual installments. Due to the scientific uncertainties around the commercialization of the Licensed Products based on the success of clinical trials, which is out of our control, the fixed €27.5 million was considered constrained at contract execution and is not initially recognized within the transaction price until it becomes highly probable of no significant revenue reversal. As of December 31, 2025, both annual development cost contributions had been recognized within the transaction price.
Under the Menarini License, we are also entitled to receive certain cost sharing payments, sales-based royalties and payments based upon the achievement of defined development, regulatory and commercial milestones linked to the enhanced value of the license performance obligation. These milestones are contingent payments and represent variable considerations that are not initially recognized within the transaction price, due to the scientific uncertainties around the commercialization of the Licensed Products based on the success of clinical trials. Our ability to receive and generate revenue from these payments is dependent upon a number of factors, including our ability to successfully complete the development of and obtain regulatory approval for obicetrapib within the Menarini Territory. The uncertainty of achieving these milestones significantly impacts our ability to generate revenue. At the end of each reporting period, we assess the probability of significant reversals for any amounts that become likely to be realized prior to recognizing the variable consideration associated with these payments within the transaction price.
In addition, we entered into the Menarini Supply Agreement to provide commercial supply of obicetrapib monotherapy and obicetrapib and ezetimibe fixed-dose combination finished products in bulk tablet form (the “Drug Products”) for distribution by Menarini in specified European territories.
We recognize revenue from the sale of Drug Products, and from the sale of active pharmaceutical ingredients to Menarini for the manufacturer of such tablets. Our product supply revenue is recognized at a point in time when the performance obligation is satisfied by transferring control of the promised goods or services to the customer and it is probable that we will collect the consideration to which we are entitled. In accordance with the terms of the Menarini Supply Agreement, control of the product is transferred upon the conveyance of title, which occurs when the product is made available to Menarini. The transaction price is contractually fixed at a markup of the actual cost of goods sold. Due to the cost-based nature of the agreement, the pricing structure includes a variable component which is measured using the expected value method. At each reporting period end, we update our estimate of the transaction price using actual cost data and forecasted expenses. We state revenues net of any taxes collected from customers that are required to be remitted to various government agencies.
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Any revenue generated from potential future collaborations or product sales may vary due to the many uncertainties in the development of obicetrapib and other factors.
Research and Development Expenses
Research and development expenses are recognized as an expense when incurred and are typically made up of costs from our clinical and preclinical activities, drug development and manufacturing costs, and costs for CROs and investigative sites. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data provided by vendors of their actual costs incurred. At each balance sheet date, we estimate the level of services provided by vendors and the associated expenditure incurred for the services performed.
All such costs are for the purpose of advancing our product candidates to successfully complete clinical development, attain regulatory approval and, if approved, commercialize our product candidates. Much of our current focus in our ongoing trials is on patient recruitment and retention and data cleaning. Research and development expenses consist of the following:
• clinical expenses primarily incurred by CROs assisting with our sponsored clinical trials and including clinical investigator costs, patient enrollments and costs of clinical sites;
• manufacturing expenses arising from investments in commercial manufacturing capabilities and API and drug product development as performed by our CMOs;
• costs associated with obtaining potential regulatory approval of our product candidates, including preparation and submission of filings, ongoing monitoring and compliance with comments and recommendations provided by regulatory authorities, and regulatory-related advisory fees;
• contracted personnel and employment costs attributed to research and development efforts, which includes management fees, salaries, share-based compensation expenses, bonus plans and payments to contractors who work for us for a fixed number of hours per week or per month;
• preclinical and nonclinical research and development expenses of our product candidates; and
• other clinical costs such as clinical trial insurance and other consultancy fees.
We expect our research and development expenses to be significant as we advance our product candidates through clinical trials and pursue regulatory approval. The process of conducting the necessary clinical trials to obtain regulatory approval is costly and time-consuming. Clinical trials generally become larger and more costly to conduct as they advance into later stages and, in the future, we will be required to make estimates for expense accruals related to clinical trial expenses. 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 our product candidates. See the section titled “ Risk Factors—Risks Related to Our Product Development, Regulatory Approval and Commercialization ” for more information regarding the risks associated with clinical development.
Selling, General and Administrative Expenses
We recognize selling, general and administrative expenses on the accrual basis when incurred. These expenses mainly relate to consultant fees, employee costs, legal costs, marketing and communication, intellectual property costs due to increased efforts to drug patent development and protection globally, and general overhead costs.
Due to the general growth of the organization associated with administering ongoing and planned clinical trials and our focus on commercial preparedness, we expect that our selling, general and administrative expenses may increase. We will incur increased accounting, audit, legal, regulatory, compliance, director and officer insurance costs as well as investor and public relations expenses associated with being a public company. Additionally, if and when a regulatory approval of a product candidate appears likely, we anticipate an increase in payroll and expenses as a result of our preparation for commercial operations.
Interest Income
Interest income is recognized using the effective interest rate method. Interest income for the year ended December 31, 2025 is related to interest earned on cash, cash equivalents and marketable securities.
Net Foreign Exchange Gain/Loss
Our exchange gain/loss relates mainly to cash balances denominated in foreign currencies, but also to transactions denominated in foreign currencies. Our foreign currency exposure is mainly related to the Euro. As of December 31, 2025, our net exposure to foreign currency risk was $95.6 million compared to $108.6 million as of December 31, 2024, mainly related to the Euro.
Income Tax
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We have a history of losses and therefore have de minimis amounts of corporate tax. We expect to continue incurring losses as we continue to invest in our clinical and preclinical development programs. Consequently, any deferred tax assets are fully offset by a valuation allowance on our balance sheet.
Results of Operations
Comparison of the Years Ended December 31, 2025 and December 31, 2024
The following table summarizes our consolidated statements of operations for the periods indicated:
For the year ended December 31,
(In thousands of USD)
2025
2024
Change
Revenue
22,503
45,563
(23,060
)
Operating Expenses:
Research and development expenses
141,832
151,406
(9,574
)
Selling, general and administrative expenses
106,354
70,446
35,908
Total operating expenses
248,186
221,852
26,334
Operating Loss
(225,683
)
(176,289
)
(49,394
)
Other income (expense):
Interest income
27,592
16,881
10,711
Fair value change - earnout
3,992
(37,010
)
41,002
Fair value change - warrants
(22,775
)
(38,583
)
15,808
Foreign exchange gains/(losses)
13,055
(6,598
)
19,653
Loss before tax
(203,819
)
(241,599
)
37,780
Income tax expense (benefit)
—
(1
)
1
Loss for the year
(203,819
)
(241,598
)
37,779
Revenue
Revenue decreased by $23.1 million, or 50.6%, to $22.5 million for the year ended December 31, 2025 compared to $45.6 million for the year ended December 31, 2024. This decrease was largely due to the recognition of $27.3 million of revenue from the Menarini License related to a clinical development milestone which was earned in the year ended December 31, 2024 while there were no clinical milestones earned in the year ended December 31, 2025. The decrease in revenue related to clinical development milestones pursuant to the Menarini License was partially offset by an increase in the amount of revenue recognized in the current period related to the development cost contributions under the Menarini License.
Research and Development Expenses
Research and development expenses decreased by $9.6 million, or 6.3%, to $141.8 million for the year ended December 31, 2025 compared to $151.4 million for the year ended December 31, 2024. This was primarily driven by:
• a $30.5 million decrease in clinical expenses mainly due to the completion of several Phase 3 clinical trials in the second half of 2024 and cost phasing in ongoing clinical trials;
partially offset by:
• an $8.3 million increase in non-clinical expenses due to greater activity related to pipeline expansion and product lifecycle management;
• a $6.1 million increase in manufacturing expense driven by investments in commercial manufacturing capabilities;
• a $5.0 million increase in personnel expenses primarily driven by an increase in share-based compensation expense; and
• a $1.5 million increase in regulatory expenses primarily driven by the preparation and planned submission of regulatory applications for obicetrapib.
The following table summarizes our research and development expenses for the periods indicated:
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For the year ended December 31,
(In thousands of USD)
2025
2024
Change
Clinical expenses
75,396
105,904
(30,508
)
Non-clinical expenses
10,117
1,859
8,258
Personnel expenses
29,031
24,019
5,012
Manufacturing costs
23,290
17,188
6,102
Regulatory expenses
3,686
2,186
1,500
Other research and development costs
312
250
62
Total research and development expenses
141,832
151,406
(9,574
)
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $36.0 million, or 51.0%, to $106.4 million for the year ended December 31, 2025 compared to $70.4 million for the year ended December 31, 2024. This was primarily driven by:
• a $28.2 million increase in personnel expenses related to selling, general and administrative expenses, of which our share-based compensation arrangements account for $19.5 million. The remainder is largely due to increased recruitment and employment costs for individuals involved with administrative and commercial preparedness activities to support the growth of the organization;
• a $5.1 million increase in marketing and communication expenses related to startup costs as we began to build capabilities to support our planned commercial launch of obicetrapib, if approved; and
• a $1.5 million increase in costs related to our intellectual property primarily driven by worldwide patent filings.
Interest Income
Interest income increased by $10.7 million, to $27.6 million for the year ended December 31, 2025 compared to $16.9 million for the year ended December 31, 2024. This increase was primarily driven by greater cash balances and investments in marketable securities during the year ended December 31, 2025 as compared to cash balances during the year ended December 31, 2024.
Fair Value Change - Earnout
Fair value change - earnout was a gain of $4.0 million for the year ended December 31, 2025 compared to a loss of $37.0 million for the year ended December 31, 2024. The earnout liability was settled in March 2025.
Fair Value Change - Warrants
Fair value change - warrants was a loss of $22.8 million for the year ended December 31, 2025 compared to a loss of $38.6 million for the year ended December 31, 2024. The change is primarily driven by changes in the market price during the period for the Warrants, which trade under the symbol "NAMSW."
Foreign Exchange Gains/(Losses)
Net foreign exchange gains/(losses) were a gain of $13.1 million for the year ended December 31, 2025 compared to a loss of $6.6 million for the year ended December 31, 2024. This change was largely driven by movements in the exchange rate for Euros which is our primary foreign currency exposure.
Loss for the Year
Loss for the year decreased by $37.8 million, to $203.8 million for the year ended December 31, 2025 compared to $241.6 million for the year ended December 31, 2024. The individual components of the change are described above.
Comparison of the Years Ended December 31, 2024 and December 31, 2023
Please refer to the section titled “Management 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 for a comparative discussion of our fiscal years ended December 31, 2024 and December 31, 2023.
Liquidity and Capital Resources
We are a clinical-stage biopharmaceutical company and, since inception, we have incurred significant operating losses and expect to continue to do so for the foreseeable future. Since inception, we have not generated significant product revenues or net positive cash flows from operating activities. We do not expect to receive significant product revenues or achieve net positive cash flows from operating activities until we successfully develop a product candidate, obtain regulatory approval, and successfully commercialize it.
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To date, we have devoted substantially all of our resources to organizing and staffing our company, business planning, raising capital, undertaking preclinical studies and conducting clinical trials of obicetrapib. As a result, we are not yet profitable and have incurred losses in each annual period since our inception. As of December 31, 2025, we had an accumulated loss of $762.4 million. We expect to continue to incur significant losses for the foreseeable future. We anticipate that our expenses will relate primarily to, and increase substantially as a result of:
• the progress and costs of our discovery, preclinical and non-clinical development;
• the progress and costs of our clinical trials, including costs related to clinical sites, clinical investigators and CROs that are assisting with our sponsored clinical trials, and other research and development activities;
• the costs and timing of obtaining regulatory approval, including the expenses of filing NDAs and MAAs, and the related expenses involved in validating our manufacturing processes;
• the costs associated with any future investigator-sponsored preclinical studies and clinical trials;
• the costs of filing, prosecuting, defending and enforcing any patent applications, claims, patents and other intellectual property rights;
• the costs and timing of obtaining sufficient quantities of our product candidates for clinical trials by establishing production capacities through contracts with CMOs;
• the terms and timing of any collaborative, licensing and other arrangements that we may establish;
• compensation expenses associated with increased headcount;
• the costs of preparing for launch and commercialization of our product candidates; and
• the costs of operating as a public company in the United States.
We may encounter unforeseen expenses, difficulties, complications, delays and other factors that may adversely affect our business. The magnitude of our future net losses will depend on the rate of future growth of our expenses combined with our ability to generate revenue. Our prior losses and expected future losses have had and will continue to have an adverse effect on our shareholders’ equity and working capital unless and until eliminated by revenue generation and growth.
We have historically funded our operations primarily through private placements and public offerings of shares, the sale of convertible notes, proceeds from the Menarini License and the proceeds from the Business Combination. As of December 31, 2025, we had cash, cash equivalents and marketable securities of $728.9 million which management believes is sufficient to fund operating activities for at least the twelve-month period following the issuance of the consolidated financial statements accompanying this Annual Report. Until we can generate substantial revenue, if ever, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings, convertible loans, warrants, collaborations, or other means. We may consider raising additional capital to take advantage of favorable market conditions or for other strategic considerations even if we have sufficient funds for planned operations. In addition to our partnership with Menarini, we may in the future utilize a variety of types of collaboration, license, monetization, distribution and other arrangements with other third parties relating to the development or commercialization, once approved, of obicetrapib or future product candidates or indications. If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, future revenue streams or research programs or grant licenses on terms that may not be favorable to us. If we raise additional capital through public or privately placed equity offerings of securities, the terms of these securities or offerings may include liquidation or other preferences that adversely affect our other shareholders’ rights. To the extent that we raise additional funds by issuing and selling equity or equity-linked securities, shareholders will experience dilution. If we raise additional capital through debt financing, we would likely be subject to fixed payment obligations and may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, licensing or selling assets, making capital expenditures or declaring dividends. Capital may become difficult or impossible to obtain due to poor market or other conditions outside of our control. If we are unable to raise sufficient additional funds on favorable terms as and when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials. We may also be required to sell or license to others any of our potential future product candidates that we would prefer to develop and commercialize ourselves. See the section titled “ Risk Factors ” for additional detail regarding these risks.
We plan to utilize our existing cash and other financial assets on hand primarily to fund our research and development initiatives to continue or commence clinical trials and seek regulatory approval for obicetrapib. We also expect to make capital expenditures to support our anticipated growth. Cash in excess of immediate requirements is invested in accordance with our investment policy which has the primary purpose of capital preservation and liquidity. We are also continually evaluating the potential acquisition or license of new product candidates.
Sources of Liquidity
Menarini License and Menarini Supply Agreement
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On June 23, 2022, we entered into the Menarini License, pursuant to which we granted Menarini an exclusive, royalty-bearing, sublicensable license under certain of our intellectual property and our regulatory documentation to undertake post approval development activities and commercialize the Licensed Products, for any use in the Menarini Territory. Pursuant to the Menarini License, Menarini made a non-refundable, non-creditable upfront payment to us of €115 million. Menarini has also committed to providing us €27.5 million in funding for the research and development activities related to the Licensed Products over two years, of which €13.8 million has been received to date, together with bearing 50% of any development costs incurred in respect of the pediatric population in the Menarini Territory. We are also eligible to receive up to €863 million upon the achievement of various clinical, regulatory and commercial milestones, €30 million of which has been received to date. If obicetrapib is approved, and successfully commercialized by Menarini, we will be entitled to tiered royalties ranging from the low double-digits to the mid-twenties as a percentage of net sales in the Menarini Territory, with royalty step-downs in the event of generic entrance or in respect of required third-party intellectual property payments. See the section titled “ Business—Commercial ” for a full description of the Menarini License.
As of December 31, 2025, we have received a total of €30 million in milestone payments from Menarini, none of which was received in the year ended December 31, 2025.
On August 12, 2025, we entered into a supply agreement with Menarini pursuant to which we will supply Menarini with the Drug Products. We will initially be Menarini’s exclusive supplier of the Drug Products and fulfill purchase orders based on periodic volume forecasts that Menarini is required to provide, a portion of which will be binding. The price to be paid by Menarini will be based on a specified mark-up to our “cost of goods sold” for the supplied Drug Products (as determined in accordance with the supply agreement), subject to periodic adjustments.
December 2024 Follow-on Offering
On December 13, 2024, we completed an underwritten public offering (the “December 2024 Offering”) of 14,667,347 Ordinary Shares at a public offering price of $24.50 per Ordinary Share and, in lieu of Ordinary Shares to certain investors, Pre-Funded Warrants to purchase 4,882,653 Ordinary Shares at a public offering price of $24.4999 per Pre-Funded Warrant, which represents the per share public offering price for the Ordinary Shares, less the $0.0001 per share exercise price for each such Pre-Funded Warrant. Of the 14,667,347 Ordinary Shares issued and sold in the December 2024 Offering, 2,550,000 Ordinary Shares were issued and sold pursuant to the exercise of the underwriters’ option to purchase additional Ordinary Shares at the public offering price per share. The net proceeds to the Company from the December 2024 Offering were $453.4 million after deducting underwriting discounts and commissions and offering expenses payable by the Company.
February 2024 Follow-on Offering
On February 16, 2024, we completed an underwritten public offering (the “February 2024 Offering”) of 5,871,909 Ordinary Shares at a public offering price of $19.00 per Ordinary Share and, in lieu of Ordinary Shares to certain investors, Pre-Funded Warrants to purchase 4,736,841 Ordinary Shares at a public offering price of $18.9999 per Pre-Funded Warrant, which represents the per share public offering price for the Ordinary Shares less the $0.0001 per share exercise price for each such Pre-Funded Warrant. Of the 5,871,909 Ordinary Shares issued and sold in the February 2024 Offering, 1,383,750 Ordinary Shares were issued and sold pursuant to the exercise of the underwriters’ option to purchase additional Ordinary Shares at the public offering price per share. The net proceeds to the Company from the February 2024 Offering were $190.0 million after deducting underwriting discounts and commissions and offering expenses payable by the Company.
At-the-Market Offering
On August 9, 2024, we entered into an amended and restated sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“TD Cowen”), pursuant to which we may issue and sell from time to time up to $250 million of our Ordinary Shares through or to TD Cowen as our sales agent or acting as principal in any method deemed to be an “at the market offering.” TD Cowen will receive a commission of up to 3.0% of the gross proceeds of any Ordinary Shares sold pursuant to the Sales Agreement. During the year ended December 31, 2025, we did not sell any Ordinary Shares pursuant to the Sales Agreement.
Warrants
In the year ended December 31, 2025, 142,477 Warrants were exercised at an exercise price of $11.50 per Ordinary Share, generating gross proceeds of $1.6 million. As of December 31, 2025, we had another 2,490,104 outstanding Warrants to purchase 2,490,104 Ordinary Shares, exercisable at an exercise price of $11.50 per share, which will expire on November 23, 2027, at 5:00 p.m., Eastern Standard Time. Based on the exercise price of the Warrants, we may receive up to $28.6 million, assuming the exercise of all Warrants outstanding as of December 31, 2025. The exercise of the Warrants, and any proceeds we may receive from their exercise, are highly dependent on the price of our Ordinary Shares and the spread between the exercise price of the Warrant and the price of an Ordinary Share at the time of exercise. For example, to the extent that the trading price of the Ordinary Shares exceeds $11.50 per share, it is more likely that holders of our Warrants will exercise their Warrants. If the trading price of the Ordinary Shares is less than $11.50 per share, it is unlikely that such holders will exercise their Warrants. The exercise price of the Warrants has at times exceeded the market price of the Ordinary Shares. To the extent that the price of our Ordinary Shares is below $11.50, we believe that the Warrant holders will be unlikely to cash exercise their warrants, resulting in little to no cash proceeds to us. There can be no assurance that our Warrants will be in the money prior to their expiration and, as such, certain
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unexercised Warrants may expire worthless. As such, it is possible that we may never generate any additional cash proceeds from the exercise of our Warrants. We have not included, and do not intend to include, any potential cash proceeds from the exercise of our Warrants in our short-term or long-term liquidity projections. We will continue to evaluate the probability that the Warrants are exercised over the life of our Warrants and the merit of including potential cash proceeds from the exercise thereof in our liquidity projections.
Cash Flows
The following is a summary of cash flows for the years ended December 31, 2025, 2024 and 2023:
For the year
ended December 31,
(In thousands of USD)
2025
2024
2023
Net cash used in operating activities
(147,783
)
(158,564
)
(141,218
)
Net cash used in investing activities
(174,916
)
(62,848
)
(24
)
Net cash provided by financing activities
29,520
659,507
8,912
Foreign exchange differences
12,759
(6,802
)
5,052
Cash, cash equivalents and restricted cash at the beginning of the year
771,743
340,450
467,728
Cash, cash equivalents and restricted cash at the end of the year
491,323
771,743
340,450
Net Cash Flows Used In Operating Activities
Net cash used in operating activities decreased by $10.8 million from $158.6 million in 2024 to $147.8 million in 2025. This change was primarily driven by:
• a $24.8 million favorable change in total adjustments for changes in working capital from a net unfavorable adjustment of $32.7 million in 2024 to a net unfavorable adjustment of $7.9 million in 2025; and
• a $37.8 million decrease in net loss for the year;
partially offset by:
• a $51.7 million unfavorable change in total non-cash adjustments to reconcile loss for the year to net cash flows from a net favorable adjustment of $115.7 million in 2024 to a net favorable adjustment of $64.0 million in 2025.
Net Cash Flows Used In Investing Activities
Net cash flows used in investing activities increased by $112.1 million from $62.8 million in 2024 to $174.9 million in 2025. This change was primarily due to cash flows related to investments in marketable securities. In 2024, purchases of marketable securities totaled $62.2 million, compared to purchases of marketable securities of $296.7 million, partially offset by $122.1 million of maturities of marketable securities during 2025.
Net Cash Flows Provided By Financing Activities
Net cash flows provided by financing activities decreased by $630.0 million from $659.5 million in 2024 to $29.5 million in 2025. This change was primarily related to the receipt of net proceeds totaling $645.0 million from the February 2024 Offering and the December 2024 Offering in the prior year and a $12.1 million decrease in proceeds from the exercise of warrants, partially offset by a $27.7 million increase in proceeds received from the exercise of options.
Operating Capital and Capital Expenditure Requirements
Third-Party Service Agreements
We have entered into a variety of agreements and financial commitments in the normal course of business with CROs, CMOs, and other third parties for preclinical and clinical development and manufacturing services. The terms generally provide us with the option to cancel, reschedule and adjust our requirements based on our business needs, prior to the delivery of goods or performance of services. Payments due upon cancellation generally consist only of payments for services provided or expenses incurred, including non-cancelable obligations of our service providers, up to the date of cancellation. However, some of our service providers also charge cancellation fees upon cancellation. The amount and timing of such payments are not known, but at December 31, 2025 they are estimated to be a maximum of $25.2 million due within one year and $13.9 million due in more than one year. As of December 31, 2025, we had cash, cash equivalents and marketable securities of $728.9 million, which is sufficient to fund these obligations.
Leases
We are party to a services agreement (the "Naarden Lease") pursuant to which an affiliate of Forbion leased us office space; an office lease agreement with Renaissance Aventura LLC, dated May 24, 2021, as amended April 9, 2024 (as amended, the “Miami Lease”); and an
100
office sublease agreement with GR8 People, Inc., dated April 2, 2024 (the “Yardley Lease”). Under the Naarden Lease, we are obligated to pay €40 thousand per year in rent. The Naarden Lease will continue until terminated by either us or the landlord. Pursuant to the Miami Lease, we are required to pay annual rent ranging from $75 thousand to $82 thousand, increasing from the low end of the range to the higher end of the range for each year of the lease. The Miami Lease will expire by its terms on October 31, 2027, unless terminated earlier by either party pursuant to the terms of the Miami Lease. Pursuant to the Yardley Lease, we are required to pay annual rent ranging from $189 thousand to $194 thousand, increasing from the low end of the range to the higher end of the range for each year of the lease. The Yardley Lease will expire by its terms on April 3, 2026, unless terminated earlier by either party pursuant to the terms of the Yardley Lease.
Menarini License
We will be responsible for the development and commercialization costs related to Licensed Products other than those in the Menarini Territory. In addition, under specified conditions of the agreement, we agreed to bear 50% of certain development costs incurred by the other party in the development of the Licensed Products in the Menarini Territory. Please see “ Business—Marketing and Sales ” above for a description of the Menarini License.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. Prior to 2023, we prepared our financial statements in accordance with the IFRS as permitted in the United States based on our qualification as a foreign private issuer under the rules and regulations of the SEC. In connection with the loss of our status as a foreign private issuer effective on January 1, 2024, we, as a domestic filer, prepared our financial statements in accordance with U.S. GAAP. The transition was made retrospectively for all periods from our inception.
The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. We based our estimates on historical experience, known trends and other market-specific or other relevant factors that we believe to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. If actual results differ from our estimates, or to the extent these estimates are adjusted in future periods, our results of operations could either benefit from, or be adversely affected by, any such change in estimate.
See Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for a summary of significant accounting policies and the effect on our consolidated financial statements.