What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-07-09 compared with 2025-04-08 · 86 added, 63 removed, 266 unchanged (36% of the section changed)

15 unchanged sentences

Targeted Protein Degradation

Our portfolio of targeted protein degraders of BTK, a B‑cell signaling protein, comprises bexobrutideg (NX‑5948), an investigational, orally bioavailable degrader of BTK for the treatment of relapsed or refractory B-cell malignancies and potentially autoimmune diseases, and NX‑2127, an investigational orally bioavailable degrader of BTK that also degrades cereblon neosubstrates IKZF1 (Ikaros) and IKZF3 (Aiolos) for the treatment of relapsed or refractory B‑cell malignancies.

Our portfolio of targeted protein degraders of BTK, a B‑cell signaling protein, comprises bexobrutideg (NX‑5948), an investigational, orally bioavailable degrader of BTK for the treatment of relapsed or refractory B-cell malignancies and potentially autoimmune diseases, and zelebrudomide (NX‑2127), an investigational orally bioavailable degrader of BTK that also degrades cereblon neosubstrates IKZF1 (Ikaros) and IKZF3 (Aiolos) for the treatment of relapsed or refractory B‑cell malignancies.

Bexobrutideg (NX-5948):

3 unchanged sentences

Food and Drug Administration (FDA) granted Fast Track designation for bexobrutideg for the treatment of adult patients with relapsed or refractory chronic lymphocytic leukemia (CLL) or small lymphocytic lymphoma (SLL) after at least two lines of therapy, including a BTK inhibitor (BTKi) and a B-cell lymphoma 2 (BCL2) inhibitor.

In November 2024, the European Medicines Agency granted PRIME designation for bexobrutideg in CLL or SLL after at least a BTKi and a BCL-2 inhibitor.

In November 2024, the European Medicines Agency (EMA) granted PRIME designation for bexobrutideg in CLL or SLL after at least a BTKi and a BCL-2 inhibitor.

In December 2024, the FDA granted Fast Track designation for bexobrutideg for the treatment of adult patients with Waldenström macroglobulinemia (WM) after at least two lines of therapy, including a BTKi.

In March 2025, the FDA granted Orphan Drug Designation to bexobrutideg for the treatment of adult patients with WM.

We are currently conducting a Phase 1a/1b dose-escalation and cohort expansion study of NX-2127 in patients with relapsed or refractory B-cell malignancies.

In March 2025, the FDA granted Orphan Drug Designation to bexobrutideg for the treatment of adult patients with WM, and in June 2025, the EMA granted Orphan Drug Designation to bexobrutideg for the treatment of adult patients with lymphoplasmacytic lymphoma, of which WM is the most common subtype.

Zelebrudomide (NX‑2127):

We are currently conducting a Phase 1a/1b dose-escalation and cohort expansion study of zelebrudomide in patients with relapsed or refractory B-cell malignancies.

We have initiated Phase 1b expansion cohorts for patients with relapsed CLL, diffuse large B-cell lymphoma and mantle cell lymphoma.

In March 2024, the FDA lifted the partial clinical hold on the U.S.

Phase 1a/1b study evaluating NX-2127 in adults with relapsed/refractory B-cell malignancies.

Phase 1a/1b study evaluating zelebrudomide in adults with relapsed/refractory B-cell malignancies.

In August 2024, we reinitiated enrollment with a new chirally controlled drug product, which is being evaluated in a dose escalation study within the Phase 1a/b trial.

10 unchanged sentences

These collaborations allow us to further advance our future pipeline with multiple currently identified targets included in these collaborations.

In aggregate, we have received $440.0 million in non-dilutive financing from our collaborators to date and as of February 28, 2025, we are eligible to receive up to $7.1 billion in potential future fees and milestone payments, as well as royalties on future product sales.

In aggregate, we have received $482.0 million in non-dilutive financing from our collaborators to date and as of May 31, 2025, we are eligible to receive up to $6.1 billion in potential future fees and milestone payments, as well as royalties on future product sales.

We retain certain options for co-development, co-commercialization and profit sharing in the United States for multiple drug candidates, pursuant to these collaborations.

21 unchanged sentences

Upon signing the Gilead Agreement, Gilead paid us an upfront payment of $45.0 million, plus $3.0 million in additional fees.

In addition, from the signing of the Gilead Agreement to February 28, 2025, we have received payments of $47.0 million for research milestones and additional payments, $20.0 million for a license option exercise payment and $15.0 million in research term extension fees.

As of February 28, 2025, we are eligible to receive up to approximately $1.8 billion in total additional payments based on certain additional fees, payments and the successful completion of certain preclinical, clinical, development and sales milestones.

In addition, from the signing of the Gilead Agreement to May 31, 2025, we have received payments of $47.0 million for research milestones and additional payments, $20.0 million for a license option exercise payment, $15.0 million in research term extension fees and $5.0 million for a clinical milestone payment.

As of May 31, 2025, we are eligible to receive up to approximately $1.8 billion in total additional payments based on certain additional fees, payments and the successful completion of certain preclinical, clinical, development and sales milestones.

We also are eligible to receive mid-single digit to low tens percentage tiered royalties on annual net sales from any commercial products directed to the optioned collaboration targets, subject to certain reductions and excluding sales in the United States of any products for which we exercise our option to co-develop and co-promote, for which the parties share profits and losses evenly.

Subject to earlier expiration in certain circumstances, the Gilead Agreement expires on a licensed product-by-licensed product and country-by-country basis upon the later of (1) the expiration of the last to expire patent with a valid claim covering the applicable licensed product in the applicable country, (2) the expiration of any regulatory exclusivity for the applicable licensed product in the applicable country or (3) ten years after the first commercial sale of the applicable licensed product in the applicable country covered by the Gilead Agreement, provided that the term for any profit-shared licensed product in the United States will expire upon the expiration or termination of the applicable profit-share term as set forth in an applicable profit-share agreement to be negotiated upon our exercise of our option to co-develop and co-promote such licensed product.

We recognized collaboration revenue from the Gilead Agreement of $1.7 million and $4.6 million during the three months ended February 28, 2025 and February 29, 2024, respectively.

As of February 28, 2025 and November 30, 2024, there was $9.3 million and $11.0 million, respectively, of deferred revenue related to payments received by us under the Gilead Agreement.

We recognized collaboration revenue from the Gilead Agreement of $1.6 million and $3.3 million during the three and six months ended May 31, 2025, respectively, and $4.9 million and $9.5 million during the three and six months ended May 31, 2024, respectively.

As of May 31, 2025 and November 30, 2024, there was $7.6 million and $11.0 million, respectively, of deferred revenue related to payments received by us under the Gilead Agreement.

In December 2019, we entered into a strategic collaboration with Genzyme Corporation, a subsidiary of Sanofi, which became effective in January 2020 (as subsequently expanded and amended, the Sanofi Agreement), to discover, develop and commercialize a pipeline of targeted protein degradation drugs for patients with challenging diseases in multiple therapeutic areas using our DEL-AI platform to identify small molecules designed to induce degradation of three specified initial drug targets.

10 unchanged sentences

The collaboration excludes our current internal protein degradation programs for which we retain all rights, and also excludes our future internal programs, provided that we distinguished future programs as excluded from the scope of the collaboration.

In March 2025, Sanofi exercised its right to exclusively license one target (the First Sanofi License Extension), the first development candidate resulting from the Sanofi Agreement.

This right did not represent a material right at contract inception, since it was not offered for free or at a discount.

Pursuant to the Sanofi Agreement, we received a license extension fee payment of $15.0 million in March 2025 for the First Sanofi License Extension.

In May 2025, Sanofi exercised its right to exclusively license a second target (the Second Sanofi License Extension, and together with the First Sanofi License Extension, the Sanofi License Extensions), the second development candidate resulting from the Sanofi Agreement.

This right also did not represent a material right at contract inception, since it was not offered for free or at a discount.

Pursuant to the Sanofi Agreement, we received a license extension fee payment of $15.0 million in June 2025 for the Second Sanofi License Extension.

The license to the functional intellectual property and all goods and services related to both the First Sanofi License Extension and the Second Sanofi License Extension were transferred during the second quarter of fiscal year 2025.

For drug targets that are subject to the collaboration, we have primary responsibility for conducting preclinical research activities (including target validation, drug discovery, identification or synthesis) in accordance with the applicable research plan agreed to by the parties and established on a target-by-target basis.

8 unchanged sentences

Subsequently, in January 2021, Sanofi paid us an additional $22.0 million to exercise its option to expand the number of targets beyond the initial targets included in the collaboration.

In addition, from the signing of the Sanofi Agreement to February 28, 2025, we have received payments of $13.0 million for research milestones.

As of February 28, 2025, we are eligible to receive up to approximately $1.9 billion in total additional payments based on certain additional fees, payments and the successful completion of certain research development, regulatory and sales milestones.

In addition, from the signing of the Sanofi Agreement to May 31, 2025, we have received payments of $16.0 million for research milestones and $15.0 million for a license extension fee.

As of May 31, 2025, we are eligible to receive up to approximately $949.0 million in total additional payments based on successful completion of certain research development, regulatory and sales milestones.

We are also eligible to receive mid-single digit to low teen percentage tiered royalties on annual net sales of any commercial products that may result from the collaboration, subject to certain reductions and excluding sales in the United States of any products for which we exercise our option to co-develop and co-promote, for which the parties share profits and losses evenly.

Subject to earlier expiration in certain circumstances, the Sanofi Agreement expires on a licensed product-by-licensed product or profit-shared licensed product-by-profit-shared licensed product basis and country-by-country basis upon on the later of (1) the expiration of the last-to-expire patent with a valid claim covering the applicable licensed product in the applicable country, (2) the expiration of any regulatory exclusivity for the applicable licensed product in the applicable country or (3) ten years after the first commercial sale of the applicable licensed product in the applicable country covered by the Sanofi Agreement.

We recognized collaboration revenue from the Sanofi Agreement of $12.8 million and $8.3 million during the three months ended February 28, 2025 and February 29, 2024, respectively.

As of February 28, 2025, there was a net contract asset of $3.6 million compared to a deferred revenue of $9.1 million as of November 30, 2024.

We recognized collaboration revenue from the Sanofi Agreement of $3.4 million and $16.1 million during the three and six months ended May 31, 2025, respectively, and $2.0 million and $10.3 million during the three and six months ended May 31, 2024, respectively.

We also recognized $30.0 million in license revenue pursuant to the Sanofi License Extensions during the three and six months ended May 31, 2025.

As of May 31, 2025 and November 30, 2024, there was $19.0 million and zero, respectively, of accounts receivable related to billed amounts receivable by us under the Sanofi Agreement.

As of May 31, 2025 and November 30, 2024, there was zero and $9.1 million, respectively, of deferred revenue related to payments received by us under the Sanofi Agreement.

In September 2023, we entered into a strategic collaboration with Seagen Inc.

8 unchanged sentences

Under the terms of the Pfizer Agreement, we received an upfront payment of $60.0 million.

In addition, from the signing of the Pfizer Agreement to February 28, 2025, we have received a payment of $10.0 million for research milestones.

In addition, from the signing of the Pfizer Agreement to May 31, 2025, we have received a payment of $10.0 million for research milestones.

We are eligible to receive up to approximately $3.4 billion in contingent payments based on specified research, development, regulatory and commercial milestones across multiple programs.

1 unchanged sentence

Subject to the exceptions described in the Pfizer Agreement, the Pfizer Agreement expires upon the first to occur of (1) the expiration of the last-to-expire option exercise period under the Pfizer Agreement if no such option has been exercised prior to such expiration and (2) the expiration of the last-to-expire royalty term under the Pfizer Agreement.

We recognized collaboration revenue from the Pfizer Agreement of $4.0 million and $3.7 million during the three months ended February 28, 2025 and February 29, 2024, respectively.

As of February 28, 2025 and November 30, 2024, there was $45.5 million and $44.5 million, respectively, of deferred revenue related to payments received by us under the Pfizer Agreement.

We recognized collaboration revenue from the Pfizer Agreement of $4.0 million and $8.0 million during the three and six months ended May 31, 2025, respectively, and $5.2 million and $8.9 million during the three and six months ended May 31, 2024, respectively.

As of May 31, 2025 and November 30, 2024, there was $41.5 million and $44.5 million, respectively, of deferred revenue related to payments received by us under the Pfizer Agreement.

Financial Overview

3 unchanged sentences

Since inception, we have generally incurred significant losses and negative cash flows from operations.

During the three months ended February 28, 2025 and February 29, 2024, we incurred net losses of $56.4 million and $41.5 million, respectively.

As of February 28, 2025, we had an accumulated deficit of $795.1 million.

During the six months ended May 31, 2025 and 2024, we incurred net losses of $99.8 million and $86.1 million, respectively.

As of May 31, 2025, we had an accumulated deficit of $838.6 million.

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

11 unchanged sentences

and the execution of any additional collaboration, licensing or similar arrangements, and the timing of payments we may make or receive under such arrangements.

As of February 28, 2025, we had $549.7 million in cash, cash equivalents and marketable securities.

As of May 31, 2025, we had $485.8 million in cash, cash equivalents and marketable securities.

We expect that our existing cash, cash equivalents and marketable securities are sufficient to fund our operations for at least the next 12 months.

3 unchanged sentences

In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans.

Impact of Current Global Business, Political and Macroeconomic Conditions

Uncertainty in the global business, political and macroeconomic environments present significant risks to our business.

We are subject to continuing risks and uncertainties, including increasing financial market volatility and uncertainty, inflation, interest rate fluctuations, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, instability in the global banking system, cybersecurity events, the impact of war or military conflict, including regional conflicts around the world, and public health pandemics.

Impact of Current Business, Political and Macroeconomic Conditions

Uncertainty in the business, political and macroeconomic environments present significant risks to our business.

We are subject to continuing risks and uncertainties, including increasing financial market volatility and uncertainty, inflation, interest rate fluctuations, changing tariff policies and trade restrictions, uncertainty with respect to the federal budget and debt ceiling and potential government shutdowns related thereto, instability in the global banking system, cybersecurity events, the impact of war or military conflict, including regional conflicts around the world, and public health pandemics.

We closely monitor the impact of these factors on all aspects of our business, including the impacts on our clinical trial patients, employees, partner, suppliers, and vendors.

The ultimate impact of global economic conditions on our business remains highly uncertain and will depend on future developments and factors that continue to evolve.

The ultimate impact of global and domestic economic conditions on our business remains highly uncertain and will depend on future developments and factors that continue to evolve.

Most of these developments and factors are outside of our control and could exist for an extended period of time.

12 unchanged sentences

We expect that any collaboration revenue we generate from our current collaboration and license agreements, and from any future collaboration partners, will fluctuate in the future as a result of the timing and amount of upfront, milestones and other collaboration agreement payments and other factors.

License Revenue

Our license revenue consists of payments from the Sanofi License Extensions.

Research and Development Expenses

14 unchanged sentences

With respect to internal costs, several of our departments support multiple product candidate research and development programs, and therefore the costs cannot be allocated to a particular product candidate or development program.

Our research and development expenses for the three months ended February 28, 2025, and February 29, 2024, are summarized as follows (in thousands):

Three Months Ended Change

February 28, 2025 February 29, 2024

Our research and development expenses are summarized as follows (in thousands):

Three Months Ended

May 31, Change Six Months Ended

May 31, Change

2025 2024 2025 2024

External clinical development expenses:

Bexobrutideg (NX-5948) $ 18,558 $ 6,863 $ 11,695 34,278 11,941 22,337

NX-2127 1,106 1,299 (193)

Zelebrudomide (NX-2127) 1,559 1,133 426 2,665 2,432 233

NX-1607 2,332 1,313 1,019 4,292 3,071 1,221

24 unchanged sentences

Our critical accounting policies and more significant areas involving management’s judgments and estimates used in preparation of our condensed financial statements are discussed in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024.

There have been no significant changes to these policies for the three months ended February 28, 2025.

There have been no significant changes to these policies for the three and six months ended May 31, 2025.

Recent Accounting Pronouncements

1 unchanged sentence

Results of Operations

Comparison of the three months ended February 28, 2025 and February 29, 2024

Comparison of the three and six months ended May 31, 2025 and 2024

Our results of operations are summarized as follows (in thousands):

Three Months Ended Change

February 28, 2025 February 29, 2024

Three Months Ended

May 31, Change Six Months Ended

May 31, Change

2025 2024 2025 2024

Collaboration revenue $ 14,056 $ 12,092 $ 1,964 $ 32,509 $ 28,677 $ 3,832

License revenue 30,000 — 30,000 30,000 — 30,000

Total revenue 44,056 12,092 31,964 62,509 28,677 33,832

10 unchanged sentences

Our collaboration revenue is summarized as follows (in thousands):

Three Months Ended Change

February 28, 2025 February 29, 2024

Three Months Ended

May 31, Change Six Months Ended

May 31, Change

2025 2024 2025 2024

Gilead $ 6,643 $ 4,862 $ 1,781 $ 8,349 $ 9,478 $ (1,129)

2 unchanged sentences

Total collaboration revenue $ 14,056 $ 12,092 $ 1,964 $ 32,509 $ 28,677 $ 3,832

Our collaboration revenue increased by $1.9 million during the three months ended February 28, 2025, compared to the three months ended February 29, 2024, primarily due to increased revenue from our collaboration with Sanofi due to the achievement of research milestones and increased effort resulting in a higher percentage of completion of performance obligation under our collaboration with Pfizer in the current period.

The increase in collaboration revenue was offset by the decrease in revenue from our collaboration with Gilead as we concluded the initial research term for certain drug targets.

Our collaboration revenue increased by $2.0 million during the three months ended May 31, 2025, compared to the three months ended May 31, 2024, primarily due to increased revenue from our collaboration with Gilead due to the achievement of a clinical milestone and increased revenue from our collaboration with Sanofi due to the achievement of research milestones.

The increase in collaboration revenue was partially offset by the decrease in revenue from our collaboration with Pfizer due to a lower percentage of completion of performance obligations in the current period.

Our collaboration revenue increased by $3.8 million during the six months ended May 31, 2025, compared to the six months ended May 31, 2024, primarily due to increased revenue from our collaboration with Sanofi due to the achievement of research milestones.

The increase in collaboration revenue was partially offset by the decrease in revenue from our collaboration with Gilead as we concluded the initial research term for certain drug targets.

License Revenue

Our license revenue was $30.0 million for the three and six months ended May 31, 2025 and is related to the Sanofi License Extensions.

There was no license revenue for the three and six months ended May 31, 2024.

Research and Development Expenses

Our research and development expenses increased by $19.7 million during the three months ended February 28, 2025, compared to the three months ended February 29, 2024.

There was an increase in clinical, contract manufacturing and consulting costs as we continued to accelerate the enrollment of patients in the ongoing clinical trials of bexobrutideg (NX-5948) and prepare for the initiation of pivotal trials, and an increase in contract research costs to support our ongoing collaborations.

There was an increase in compensation and related personnel costs and non-cash stock-based compensation expense due to an increase in headcount.

Our research and development expenses increased by $29.2 million and $48.8 million during the three and six months ended May 31, 2025, compared to the three and six months ended May 31, 2024, respectively.

For all periods presented, there was an increase in clinical, contract manufacturing and consulting costs as we continued to accelerate the enrollment of patients in the ongoing clinical trials of bexobrutideg (NX-5948) and prepare for the initiation of pivotal trials, and an increase in contract research costs to support our ongoing collaborations.

There was also an increase in compensation and related personnel costs and non-cash stock-based compensation expense due to an increase in headcount.

General and Administrative Expenses

Our general and administrative expenses decreased by $0.1 million during the three months ended February 28, 2025, compared to the three months ended February 29, 2024.

There was a decrease in legal fees and local taxes related to the Pfizer upfront payment offset by an increase in costs related to investor relations and other professional services.

Our general and administrative expenses increased by $2.6 million and $2.4 million during the three and six months ended May 31, 2025, compared to the three and six months ended May 31, 2024, respectively.

For all periods presented, there was an increase in compensation and related personnel costs due to an increase in headcount and an increase in consulting costs.

Liquidity and Capital Resources

23 unchanged sentences

In November 2024, we issued and sold 3,634,393 shares of common stock under the Second Amended Equity Distribution Agreement at $26.25 per share for total net proceeds of $93.6 million after deducting offering commissions and expenses paid by us (the November 2024 ATM Financing).

As of February 28, 2025, we had $204.6 million of common stock remaining available for sale under the Second Amended Equity Distribution Agreement.

As of May 31, 2025, we had $204.6 million of common stock remaining available for sale under the Second Amended Equity Distribution Agreement.

In July 2022, we entered into separate securities purchase agreements with certain purchasers to issue and sell pre‑funded warrants to purchase an aggregate of 6,814,920 shares of our common stock in registered direct offerings (RDOs) at a price of $13.939 per pre-funded warrant (the 2022 Pre-Funded Warrants).

Net proceeds from the RDOs were $94.8 million, after deducting offering expenses of $0.2 million.

As of February 28, 2025, a total of 6,097,560 of the 2022 Pre-Funded Warrants remained available for exercise.

As of May 31, 2025, a total of 6,097,560 of the 2022 Pre-Funded Warrants remained available for exercise.

In April 2024, we completed an underwritten public offering (the 2024 Public Offering) and issued (a) 11,916,667 shares of common stock, which included 1,750,000 shares issued upon the exercise in full by our underwriters of their option to purchase additional shares of common stock, at a public offering price of $15.00 per share, and (b) pre-funded warrants to purchase 1,500,100 shares of our common stock (the 2024 Pre-Funded Warrants) at a public offering price of $14.999 per pre-funded warrant, which represents the per share public offering price for the common stock less a $0.001 per share exercise price for each pre-funded warrant.

The net proceeds from this offering were approximately $188.7 million, after deducting underwriting discounts and commissions and offering expenses.

As of February 28, 2025, a total of 1,480,349 of the 2024 Pre-Funded Warrants remained available for exercise.

As of May 31, 2025, a total of 1,480,349 of the 2024 Pre-Funded Warrants remained available for exercise.

All issued pre-funded warrants were immediately exercisable, have an exercise price of $0.001 and may be exercised at any time after the date of issuance.

2 unchanged sentences

Funding Requirements

As of February 28, 2025, our operations have primarily been funded through the net proceeds from equity offerings of $1.1 billion and proceeds from collaborations of $440.0 million.

As of May 31, 2025, our operations have primarily been funded through the net proceeds from equity offerings of $1.1 billion and proceeds from collaborations of $463.0 million.

We do not have any products approved for sale, and we have not generated any revenue from product sales.

As of February 28, 2025, we had $549.7 million in cash, cash equivalents and marketable securities.

We expect that our existing cash, cash equivalents and marketable securities are sufficient to meet our cash requirements and continue operating activities, including the clinical trials of our drug candidates bexobrutideg (NX-5948), NX-2127 and NX-1607 and the expansion of our intellectual property portfolio and infrastructure, for at least the next 12 months.

As of May 31, 2025, we had $485.8 million in cash, cash equivalents and marketable securities.

We expect that our existing cash, cash equivalents and marketable securities are sufficient to meet our cash requirements and continue operating activities, including the clinical trials of our drug candidates bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607 and the expansion of our intellectual property portfolio and infrastructure, for at least the next 12 months.

We will need substantial additional funding to support our continuing operations and pursue our long-term business plan.

2 unchanged sentences

In the long term, our ability to support our working capital and capital expenditure requirements will depend on many factors, including the following:

• the progress, costs and results of our ongoing Phase 1 clinical trials for our lead drug candidates bexobrutideg, NX-2127 and NX-1607, and any future clinical development of such drug candidates;

• the progress, costs and results of our ongoing Phase 1 clinical trials for our lead drug candidates bexobrutideg, zelebrudomide and NX-1607, and any future clinical development of such drug candidates;

• the scope, progress, costs and results of preclinical and clinical development for our other drug candidates and development programs;

12 unchanged sentences

Our contractual obligations mostly consist of our operating lease obligations for facilities in San Francisco, California, The Woodlands, Texas and Brisbane, California.

Our total operating lease commitments as of February 28, 2025, were approximately $36.3 million, of which $6.8 million is expected to be paid within the next 12 months.

Our total operating lease commitments as of May 31, 2025, were approximately $78.7 million, of which $6.1 million is expected to be paid within the next 12 months.

In addition, we enter into agreements in the normal course of business with contract research organizations for clinical trials and with vendors for preclinical studies and other services and products for operating purposes, which are generally cancelable upon written notice.

1 unchanged sentence

Our cash flows are summarized as follows (in thousands):

Three Months Ended

February 28, 2025 February 29, 2024

Six Months Ended

Cash used in operating activities $ (124,248) $ (81,656)

Cash provided by investing activities 25,533 35,513

Cash provided by (used in) investing activities 97,032 (95,557)

Cash provided by financing activities 1,479 239,376

Net decrease in cash, cash equivalents and restricted cash $ (34,081) $ (4,814)

Net (decrease) increase in cash, cash equivalents and restricted cash $ (25,737) $ 62,163

Operating activities

Net cash used in operating activities was $61.1 million for the three months ended February 28, 2025 and consisted of a net loss of $56.4 million and an increase in net assets of $14.0 million, offset by non-cash adjustments of $9.3 million.

The increase in net assets consisted of a decrease in deferred revenue of $9.8 million as we increased effort in our programs and recognized revenue, a decrease in operating lease liabilities of $1.7 million due to lease payments made during the period, a decrease in accounts payable of $3.2 million from payments to vendors, an increase in prepaid and other assets of $6.3 million primarily due to the recognition of expenses for prepaid services, offset by an increase in accrued expenses and other liabilities of $6.9 million primarily due to the accrual of compensation and other related personnel costs and costs related to our clinical trials.

Net cash used in operating activities was $124.2 million for the six months ended May 31, 2025, and consisted of a net loss of $99.8 million and an increase in net assets of $46.5 million, offset by non-cash adjustments of $22.1 million.

The increase in net assets consisted of a decrease in deferred revenue of $15.5 million as we increased effort in our programs and recognized revenue, a decrease in operating lease liabilities of $3.1 million due to lease payments made during the period, a decrease in accounts payable of $5.9 million from payments to vendors, an increase in accounts receivable of $19.0 million related to the Second Sanofi License Extension and a milestone under the Sanofi Agreement, and an increase in prepaid and other assets of $3.0 million primarily due to the recognition of expenses for prepaid services.

Non-cash adjustments primarily consisted of stock-based compensation expenses of $19.1 million, depreciation and amortization expenses of $4.6 million and amortization of operating lease right-of-use (ROU) assets of $4.6 million, offset by net accretion of discount on marketable securities of $6.3 million.

Net cash used in operating activities was $42.0 million for the three months ended February 29, 2024 and consisted of a net loss of $41.5 million and an increase in net assets of $10.2 million, offset by non-cash adjustments of $9.8 million.

The increase in net assets consisted of a decrease in deferred revenue of $12.6 million, which included an increase in contract assets of $2.0 million related to the achievement of a milestone under the Sanofi Agreement, as we increased effort in our programs and recognized revenue, a decrease in operating lease liabilities of $1.5 million due to lease payments made during the period and a decrease in accounts payable of $0.9 million from payments to vendors, offset by an increase in accrued expenses and other liabilities of $3.6 million primarily due to the accrual of compensation and other related personnel costs and a decrease in prepaid and other assets of $1.2 million primarily due to the recognition of expenses for prepaid services.

Non-cash adjustments primarily consisted of stock-based compensation expenses of $7.8 million, depreciation and amortization expenses of $2.0 million, amortization of operating lease ROU assets of $1.8 million and net accretion of discount on marketable securities of $1.9 million.

Net cash used in operating activities was $81.7 million for the six months ended May 31, 2024, and consisted of a net loss of $86.1 million and an increase in net assets of $16.1 million, offset by non-cash adjustments of $20.6 million.

The increase in net assets consisted of a decrease in deferred revenue of $7.7 million, which included an increase in contract assets of $5.0 million related to the achievement of a milestone under the Pfizer Agreement, as we increased effort in our programs and recognized revenue, a decrease in accounts payable of $3.5 million from payments to vendors, a decrease in accrued expenses and other liabilities of $3.2 million primarily due to the payment of compensation and other related personnel costs and a decrease in operating lease liabilities of $3.1 million due to lease payments made during the period, offset by a decrease in prepaid and other assets of $1.3 million primarily due to the recognition of expenses for prepaid services.

Non-cash adjustments primarily consisted of stock-based compensation expenses of $16.7 million, depreciation and amortization expenses of $4.4 million and amortization of operating lease ROU assets of $3.6 million, offset by net accretion of discount on marketable securities of $4.1 million.

Investing activities

Net cash provided by investing activities was $25.5 million for the three months ended February 28, 2025 and primarily consisted of the maturity of marketable securities of $139.2 million, offset by the purchase of marketable securities of $110.2 million and the purchase of property and equipment of $3.5 million.

Net cash provided by investing activities was $35.5 million for the three months ended February 29, 2024 and consisted of the maturity of marketable securities of $93.2 million, offset by the purchase of marketable securities of $54.8 million and the purchase of property and equipment of $2.9 million.

Net cash provided by investing activities was $97.0 million for the six months ended May 31, 2025, and primarily consisted of the maturity of marketable securities of $281.5 million, offset by the purchase of marketable securities of $178.4 million and the purchase of property and equipment of $6.2 million.

Net cash used in investing activities was $95.6 million for the six months ended May 31, 2024, and primarily consisted of the purchase of marketable securities of $279.9 million, offset by the maturity of marketable securities of $189.2 million.

Financing activities

Net cash provided by financing activities was $1.5 million for the three months ended February 28, 2025 and consisted primarily of proceeds from the issuance of common stock under our Employee Stock Purchase Plan (ESPP).

Net cash provided by financing activities was $1.6 million for the three months ended February 29, 2024 and consisted primarily of proceeds from the issuance of common stock under our ESPP.

Net cash provided by financing activities was $1.5 million for the six months ended May 31, 2025, and consisted primarily of proceeds from the issuance of common stock under our Employee Stock Purchase Plan.

Net cash provided by financing activities was $239.4 million for the six months ended May 31, 2024, and consisted primarily of net proceeds from our 2024 Public Offering and the May 2024 ATM Financing.

Quantitative and Qualitative Disclosures About Market Risk

Our market risks, as of February 28, 2025, have not changed materially from those discussed in “Item 7A.

Our market risks, as of May 31, 2025, have not changed materially from those discussed in “Item 7A.

Quantitative and Qualitative Disclosures About Market Risk” of Part II of our Annual Report on Form 10-K for the year ended November 30, 2024, filed with the SEC on January 28, 2025.

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