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Item 1A. Risk Factors

2026-04-08 compared with 2025-10-09 · 126 added, 136 removed, 1469 unchanged (15% of the section changed)

Investing in our common stock involves a high degree of risk.

Before making your decision to invest in shares of our common stock, you should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Quarterly Report on Form 10-Q, including our condensed financial statements and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We cannot assure you that any of the events described below will not occur.

Before making your decision to invest in shares of our common stock, you should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Quarterly Report on Form 10-Q, including our condensed financial statements and related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect us and our securities in the future.

References to past events are provided by way of example only and are not intended to be a complete listing of such events or a representation as to whether or not such factors or similar events have occurred in the past or their likelihood of occurring in the future.

We cannot assure you that any of the events described below will not occur.

The risks and uncertainties described below are not the only ones we face.

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We expect to incur losses over at least the next several years and may never achieve or maintain profitability.

Our net loss was $ 193.6 million for the fiscal year ended November 30, 2024, and $186.2 million for the nine months ended August 31, 2025.

As of August 31, 2025, we had an accumulated deficit of $925.0 million.

Our net loss was $264.5 million for the fiscal year ended November 30, 2025, and $87.2 million for the three months ended February 28, 2026.

As of February 28, 2026, we had an accumulated deficit of $1.1 billion.

To date, we have not generated any revenue from product sales and have financed our operations primarily through our collaborations and sales of our equity interests.

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We anticipate that our operating expenses and capital expenditure requirements will increase substantially if and as we:

• increase enrollment in and further develop our drug candidates bexobrutideg, zelebrudomide and NX-1607 through Phase 1 clinical trials;

• increase enrollment in and further develop our drug candidates bexobrutideg, zelebrudomide and NX-1607 through Phase 1 and Phase 2 clinical trials;

• submit investigational new drug applications (INDs) and initiate clinical trials of our other drug candidates;

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We have never generated revenue from product sales and may never be profitable.

We are in the early stages of clinical development of our lead drug candidates bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607.

We are in the early stages of clinical development of our lead drug candidates bexobrutideg, zelebrudomide and NX-1607.

We expect that it will be many years, if ever, before we have a drug candidate ready for commercialization.

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If we are unable to raise capital when needed, we may be required to delay, limit, reduce or terminate our research or product development programs or future commercialization efforts.

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we conduct our Phase 1 clinical trials of bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607 and any future development of our drug candidates, grow our pipeline of drug candidates, expand the breadth of our DEL-AI platform, continue research and development and initiate additional clinical trials of and potentially seek marketing approval for our lead programs and other drug candidates.

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we conduct our Phase 1 and Phase 2 clinical trials of bexobrutideg, zelebrudomide and NX-1607 and any future development of our drug candidates, grow our pipeline of drug candidates, expand the breadth of our DEL-AI platform, continue research and development and initiate additional clinical trials of and potentially seek marketing approval for our lead programs and other drug candidates.

In addition, if we obtain marketing approval for any of our drug candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, reimbursement and sales and distribution.

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

Furthermore, we expect to continue to incur additional costs associated with operating as a public company.

Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations.

If we are unable to raise capital when needed or on attractive terms, we may be required to delay, limit, reduce or terminate our research, product development programs or any future commercialization efforts or grant rights to develop and market drug candidates that we otherwise would prefer to develop and market ourselves.

We had cash, cash equivalents and marketable securities of $428.8 million as of August 31, 2025.

We had cash, cash equivalents and marketable securities of $540.7 million as of February 28, 2026.

We believe that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months.

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Our future capital requirements will depend on many factors, including:

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

• the progress, costs and results of our Phase 1 and Phase 2 clinical trials for bexobrutideg, our Phase 1 clinical trials for 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;

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Our lead drug candidates, bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607, are in the early stages of clinical development.

If we are unable to advance our drug candidates through clinical development, develop, obtain regulatory approval for and commercialize our drug candidates or experience significant delays in doing so, our business may be materially harmed.

If we are unable to advance our drug candidates through clinical development or are unable to obtain regulatory approval for and commercialize our drug candidates or experience significant delays in doing so, our business may be materially harmed.

We are early in our development efforts.

Our lead drug candidates, bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607, are in the early stages of clinical development and their risk of failure is high.

We have invested substantially all of our efforts and financial resources in building our DEL-AI platform, in the identification and preclinical development of our current drug candidates and in the preparation for and initiation of Phase 1 clinical trials for our lead drug candidates, as well as the preparation to advance bexobrutideg into a Phase 2 clinical trial, anticipated in 2025.

Our lead drug candidates, bexobrutideg, zelebrudomide and NX-1607, are in the early stages of clinical development and their risk of failure is high.

We have invested substantially all of our efforts and financial resources in building our DEL-AI platform, in the identification and preclinical development of our current drug candidates, in the preparation for and initiation of Phase 1 clinical trials for our lead drug candidates and in the preparation for and initiation of the DAYBreak Phase 2 clinical trial evaluating bexobrutideg.

Our ability to generate revenue from product sales, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of one or more of our drug candidates.

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Further, certain patients have shown inherent (primary) resistance to approved BTK inhibitors and other patients have developed acquired (secondary) resistance to these inhibitors.

Both bexobrutideg (NX-5948) and zelebrudomide (NX-2127) degrade BTK with mutations that confer resistance to currently marketed BTK inhibitors, and we believe that preliminary data from our ongoing Phase 1 trials of bexobrutideg and zelebrudomide may provide evidence of clinical benefit to patients with such resistance mutations.

Both bexobrutideg and zelebrudomide degrade BTK with mutations that confer resistance to currently marketed BTK inhibitors, and we believe that preliminary data from our ongoing Phase 1 and Phase 2 trials of bexobrutideg and our Phase 1 trial of zelebrudomide may provide evidence of clinical benefit to patients with such resistance mutations.

However, any inherent primary or acquired secondary resistance to our BTK degraders in patients would prevent or diminish their clinical benefit.

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We may experience numerous unforeseen events during, or as a result of, clinical trials, that could delay or prevent our ability to receive marketing approval or commercialize our drug candidates, including:

• we may experience delays in corresponding with the FDA or a foreign regulatory authority regarding regulatory issues;

• we may experience delays in reaching, or may fail to reach, a consensus with regulators on trial design;

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It is impossible to predict when or if any drug candidates we may develop will prove safe in humans.

There is a limited safety data set for the effects of bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607 in animals and we only recently have begun to test the safety of our drug candidates in humans.

There is a limited safety data set for the effects of bexobrutideg, zelebrudomide and NX-1607 in humans.

There can be no assurance that our current drug candidates or any future drug candidate will not cause undesirable side effects.

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In particular, the small number of patients in our planned early clinical trials may make the results of these trials less predictive of the outcomes of later clinical trials.

For example, even if successful, the results of our initial clinical trials for bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607 may not be predictive of the results of further clinical trials of these drug candidates or any of our other drug candidates.

The results of our initial clinical trials for bexobrutideg, zelebrudomide and NX-1607 may not be predictive of the results of further clinical trials of these drug candidates or any of our other drug candidates.

Moreover, preclinical and clinical data often are susceptible to varying interpretations and analyses, and many companies that have believed their drug candidates performed satisfactorily in preclinical studies and clinical trials nonetheless have failed to obtain marketing approval of their products.

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Interim top-line and preliminary data from our planned clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publish interim top-line or preliminary data from our planned clinical trials.

Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.

We have published and may continue to publish interim top-line or preliminary data from our current and planned clinical trials.

Interim data from clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.

Preliminary or top-line data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.

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We may not be able to initiate or continue clinical trials for our drug candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or similar regulatory authorities outside of the United States.

In particular, we are currently conducting Phase 1 clinical trials for each of our lead drug candidates, bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607, and we expect to initiate a Phase 2 clinical trial of bexobrutideg in 2025.

In particular, we are currently conducting Phase 1 clinical trials for each of our lead drug candidates, bexobrutideg, zelebrudomide and NX-1607, and a Phase 2 clinical trial for bexobrutideg, and we expect to initiate a Phase 3 clinical trial for bexobrutideg in 2026.

We cannot predict how difficult it will be to enroll patients for these trials.

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Because we have limited financial and managerial resources, we focus on research programs and drug candidates that we identify for specific indications.

As a result, we may forego or delay pursuit of opportunities with other drug candidates or for other indications that later prove to have greater commercial potential.

As a result, we may forgo or delay pursuit of opportunities with other drug candidates or for other indications that later prove to have greater commercial potential.

Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.

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If we or any of our third-party manufacturers encounter such difficulties, our ability to provide supply of our current or future drug candidates for clinical trials, our ability to obtain marketing approval or our ability to provide supply of our drug candidates for patients, if approved, could be delayed or stopped.

For example, in October 2023, following our communication to the FDA of our intention to transition to an improved manufacturing process for zelebrudomide (NX-2127), the FDA placed a partial clinical hold on our ongoing Phase 1 clinical trial evaluating zelebrudomide.

For example, in October 2023, following our communication to the FDA of our intention to transition to an improved manufacturing process for zelebrudomide, the FDA placed a partial clinical hold on our ongoing Phase 1 clinical trial evaluating zelebrudomide.

We actively engaged in discussions with FDA as part of our efforts to lift the partial clinical hold, and in March 2024, the FDA lifted the partial clinical hold.

There can be no assurance that we can address any issues resulting in any partial or full clinical hold in a timely manner or at all, and we may incur additional expenses in connection with our efforts to address a partial or full clinical hold or advance our clinical programs.

We may not be successful in our efforts to identify or discover additional potential drug candidates.

We may not be successful in our efforts to identify or discover additional potential drug candidates, or in further efforts to expand the breadth of our DEL-AI platform.

A key element of our strategy is to apply our DEL-AI platform to address a broad array of targets and new therapeutic areas.

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If we are unable to identify suitable drug candidates for preclinical and clinical development, we will not be able to obtain revenues from the sale of products in future periods, which likely would result in significant harm to our financial position and adversely impact our stock price.

We may not be successful in our efforts to expand the breadth of our DEL-AI platform.

A key element of our strategy is to expand the capabilities of our DEL-AI platform and leverage our platform to discover, develop and potentially commercialize additional drug candidates beyond our current portfolio to target diseases in a wide range of organ systems and tissues and treat various disease states.

We also intend to expand the capabilities of our DEL-AI platform and leverage our platform to discover, develop and potentially commercialize additional drug candidates beyond our current portfolio to target diseases in a wide range of organ systems and tissues and treat various disease states.

These enhancements require substantial technical, financial and human resources, and may not result in the discovery or development of additional drug candidates or therapies.

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Supreme Court issued an opinion holding that courts reviewing agency action pursuant to the Administrative Procedure Act (APA) “must exercise their independent judgment” and “may not defer to an agency interpretation of the law simply because a statute is ambiguous.” The decision will have a significant impact on how lower courts evaluate challenges to agency interpretations of law, including those by the FDA and other agencies with significant oversight of the biopharmaceutical industry.

The new framework is likely to increase both the frequency of such challenges and their odds of success by eliminating one way in which the government previously prevailed in such cases.

As a result, significant regulatory policies will be subject to increased litigation and judicial scrutiny.

The new framework may result in an increase in both the frequency of such challenges and their odds of success by eliminating one way in which the government previously prevailed in such cases.

As a result, significant regulatory policies may be subject to increased litigation and judicial scrutiny.

Any resulting changes in regulation may result in unexpected delays, increased costs, or other negative impacts on our business that are difficult to predict but could have a material adverse effect on our business and financial condition.

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We rely on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for completing such trials.

We rely on third-party contract research organizations (CROs) to conduct our Phase 1 clinical trial programs for bexobrutideg (NX-5948), zelebrudomide (NX-2127) and NX-1607 and we will rely on third-party CROs to conduct any clinical trials for other drug candidates.

We rely on third-party contract research organizations (CROs) to conduct our clinical trial programs for bexobrutideg, zelebrudomide and NX-1607 and we will rely on third-party CROs to conduct any clinical trials for other drug candidates.

Agreements with these CROs might terminate for a variety of reasons, including for such CRO’s failure to perform.

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For example, we will remain responsible for ensuring that each of our clinical trials is conducted in accordance with the general investigational plan and protocols in the applicable IND.

Moreover, the FDA and other foreign regulators such as the EMA and the MHRA require compliance with good clinical practice standards, commonly referred to as GCPs, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.

Moreover, the FDA and other foreign regulators such as the EMA and the MHRA require compliance with good clinical practice standards (GCPs), for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.

If these CROs do not successfully carry out their contractual duties, meet expected deadlines or conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain, or may be delayed in obtaining, marketing approvals for our drug candidates and will not be able to, or may be delayed in our efforts to, successfully commercialize our drug candidates.

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Any unfavorable government policies on international trade, such as export controls, capital controls or tariffs, new legislation or regulations, renegotiation of existing trade agreements, or any retaliatory trade actions due to recent or future trade tension, may impede, delay, limit, or increase the cost of manufacturing our therapeutic candidates.

For example, in April 2025, the United States announced extensive tariffs on goods imported from China, where certain of our third-party manufacturers are located.

For example, the United States has imposed tariffs on non-U.S.

goods, including those imported from China, where certain of our third-party manufacturers and suppliers are located.

While we believe we currently have sufficient inventory for clinical use and do not anticipate any near-term impact to our clinical programs, we expect these tariffs may increase the cost of our product supply in the future.

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To achieve commercial success for any product for which we obtain marketing approval, we will need to establish sales, marketing and distribution capabilities, either by ourselves or through collaboration or other arrangements with third parties.

We currently expect that we may build our own focused, specialized sales and marketing organization to support the commercialization in the United States of drug candidates for which we receive marketing approval and which can be commercialized with such capabilities.

We may build our own focused, specialized sales and marketing organization to support the commercialization in the United States of drug candidates for which we receive marketing approval and which can be commercialized with such capabilities.

There are risks involved with establishing our own sales and marketing capabilities.

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For example, we are aware of a patent owned by a third party with a claim that covers many potential targeted protein degraders.

This patent may be alleged to cover one or more of our targeted protein degrader drug candidates, including our bexobrutideg (NX-5948) and zelebrudomide (NX-2127) drug candidates.

This patent may be alleged to cover one or more of our targeted protein degrader drug candidates, including our bexobrutideg and zelebrudomide drug candidates.

While we believe that we have valid defenses against any assertion of such patent against us, such defenses may be unsuccessful.

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Further, we do not know which processes we will use for commercial manufacture of our future products, or which technologies owned or controlled by third parties may prove important or essential to those processes.

Many companies have filed, and continue to file, patent applications related to novel protein degradation therapies that target disease-causing proteins and many companies have filed and continue to file patent applications related to ACT.

Many companies have filed, and continue to file, patent applications related to novel protein degradation therapies that target disease-causing proteins.

Some of these patent applications have already been allowed or issued and others may issue in the future.

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Fast Track designation may not lead to faster development or regulatory review or approval process, and it does not increase the likelihood that our drug candidates will receive marketing approval.

In January 2024, the FDA granted Fast Track designation for bexobrutideg (NX-5948) in the United States for the treatment of adult patients with relapsed or refractory CLL or small lymphocytic lymphoma after at least two lines of therapy, including a BTK inhibitory and a B-cell lymphoma 2 inhibitor, and in December 2024, the FDA granted Fast Track designation for bexobrutideg in the United States for the treatment of adult patients with relapsed or refractory Waldenström macroglobulinemia after at least two lines of therapy, including a BTK inhibitor.

In January 2024, the FDA granted Fast Track designation for bexobrutideg in the United States for the treatment of adult patients with relapsed or refractory CLL or small lymphocytic lymphoma after at least two lines of therapy, including a BTK inhibitory and a B-cell lymphoma 2 inhibitor, and in December 2024, the FDA granted Fast Track designation for bexobrutideg in the United States for the treatment of adult patients with relapsed or refractory Waldenström macroglobulinemia after at least two lines of therapy, including a BTK inhibitor.

As part of our business strategy, we may also seek Fast Track designation for other of our drug candidates.

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Any delay in obtaining, or inability to obtain, approval through the Accelerated Approval Program, or any issues in maintaining approval granted under the Accelerated Approval Program, would delay or prevent commercialization of our products, and would materially adversely affect our business, financial condition, results of operations and prospects.

We, as a company, have limited experience in filing for and obtaining regulatory approval to initiate a clinical trial, and we do not have experience completing any clinical trials, including large-scale, pivotal clinical trials or in manufacturing or in quality assurance in order to market a new drug in the United States or in any other jurisdiction.

As a company, we have limited experience in filing for or obtaining regulatory approval to initiate clinical trials, we do not have experience completing any clinical trials, including large-scale, pivotal clinical trials and we rely on third parties to conduct our clinical trials.

We, as a company, have limited experience in filing for and obtaining regulatory approval to initiate a clinical trial, and we do not have experience completing any pivotal clinical trials or in manufacturing or in quality assurance in order to market a new drug in the United States or in any other jurisdiction.

As a company, we have limited experience in filing for or obtaining regulatory approval to initiate clinical trials, we do not have experience completing any pivotal clinical trials and we rely on third parties to conduct our clinical trials.

We also do not have experience in manufacturing or in quality assurance in order to market a new drug and expect to rely on CROs or other third-party consultants or vendors to assist us in this process.

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We may not be able to file for marketing approvals and may not receive necessary approvals to commercialize our products in any jurisdiction, which would materially impair our ability to generate revenue.

The UK’s exit from the EU continues to create political and economic uncertainty, particularly in the UK and the EU.

The UK is now being treated as a “third country” by the EU.

Due to the UK’s exit from the EU, the UK is now being treated as a “third country” by the EU.

Although UK legislation has retained existing EU law, new UK legislation is being drafted and the UK has not retained new EU law, including the Clinical Trials Regulation (EU) No 536/2014.

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The regulatory framework for medicines that existed before the end of the transition period has also effectively been preserved in UK domestic legislation as “retained EU law.” By retaining a snapshot of EU legislation at its core, the UK has prevented substantial divergence in the regulation of medicines (although divergence has appeared in some areas).

However, some changes to the UK legislation have been immediately necessary, including the implementation of the Northern Ireland Protocol (NIP), pursuant to which, the EU pharmaceutical legal framework acquis continues to apply in Northern Ireland (subject to periodic consent of the Northern Ireland Legislative Assembly), and only products compliant with EU law can be placed in the Northern Ireland market—adding an extra layer of regulatory complexity.

As a result, companies now need to comply with a separate UK regulatory legal framework in order to commercialize medicinal products in Great Britain (namely, England, Wales and Scotland, as EU law continues to apply in Northern Ireland).

The UK government has attempted to renegotiate fundamental aspects of the NIP so this is an unpredictable area for companies in the near future.

Failed attempts to renegotiate the NIP have led to media reports of the UK potentially triggering Article 16 of the NIP, a safeguarding measure, that may be engaged unilaterally if the application of the NIP leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade.

The UK government has introduced the Northern Ireland Protocol Bill which, if enacted into law, would enable the government to unilaterally disapply parts of the NIP which may lead to changes to the regulatory environment in Northern Ireland, and may trigger retaliatory measures against the UK by the EU.

The UK government reached a new agreement with the EU, the “Windsor Framework,” which aims to amend the NIP.

According to the Windsor Framework, medicinal products intended for the UK market including Northern Ireland will be authorized by the MHRA and will bear a “UK only” label.

This means that medicinal products placed on the market in Northern Ireland will no longer need to be compliant with EU law.

These new measures will be implemented beginning January 1, 2025.

The UK government reached a new agreement with the EU, the “Windsor Framework,” which amended the Northern Ireland Protocol, pursuant to which, the EU pharmaceutical legal framework acquis continued to apply to Northern Ireland.

According to the Windsor Framework, medicinal products intended for the UK market including Northern Ireland will be authorized by the MHRA and must bear a “UK only” label.

This means that medicinal products placed on the market in Northern Ireland no longer need to be compliant with EU law.

These new measures were implemented beginning January 1, 2025.

The TCA allows for future deviation from the current regulatory framework, and it is not known if and/or when any deviations may occur, which may have an impact on development, manufacture, marketing authorization, commercial sales and distribution of pharmaceutical products.

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Consequently, it is possible that our clinical trials, or those of any future collaborator, may indicate an apparent positive effect of a drug candidate that is greater than the actual positive effect, if any, or alternatively fail to identify undesirable side effects.

If one or more of our drug candidates receives marketing approval and we, or others, discover that the drug is less effective than previously believed or causes undesirable side effects that were not previously identified, a number of potentially significant negative consequences could result, including:

If one or more of our drug candidates receives marketing approval and we, or others, later discover that the drug is less effective than previously believed, or causes undesirable side effects that were not previously identified, or if issues with the manufacturing process or manufacturers arise, or if we fail to comply with regulatory requirements, a number of potentially significant negative consequences could result, including:

• regulatory authorities may withdraw their approval of the drug or seize the drug;

• we, or any future collaborators, may be required to recall the drug, change the way the drug is administered or conduct additional clinical trials;

• additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the particular drug;

• we may be subject to fines, injunctions or the imposition of civil or criminal penalties;

• regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;

• we, or any future collaborators, may be required to recall the drug, change the way the drug is administered, conduct post-marketing studies or additional clinical trials, or withdraw the drug from the market;

• additional restrictions may be imposed on the marketing, manufacturing processes, distribution, import or export, or use of the particular drug;

• we may be subject to litigation, fines, restitution, disgorgement of profits or revenues, injunctions or the imposition of civil or criminal penalties;

• we may receive warning letters or untitled letters from regulatory authorities;

• regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication, or impose other restrictions or warnings on the labeling or marketing of the drug;

• we, or any future collaborators, may be required to create a Medication Guide outlining the risks of the previously unidentified side effects for distribution to patients;

• regulatory authorities may refuse to approve pending applications or supplements to approved applications that we submit;

• any ongoing clinical trials may be suspended;

• we, or any future collaborators, could be sued and held liable for harm caused to patients;

• relationships with any potential collaborators may be damaged;

• the drug may become less competitive in the marketplace;

• we may receive unfavorable press coverage;

• our reputation may suffer.

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Violations of the FDCA and other statutes, including the False Claims Act, relating to the promotion and advertising of prescription drugs may lead to investigations and enforcement actions alleging violations of federal and state healthcare fraud and abuse laws, as well as state consumer protection laws.

The FDA has increased scrutiny of product claims and, in 2025, issued a significant number of enforcement actions to companies.

Other jurisdictions, including European countries, have similar provisions which may lead to investigations and enforcement actions by national authorities.

In addition, later discovery of previously unknown side effects or other problems with our products or their manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may yield various results, including:

• restrictions on such products, manufacturers or manufacturing processes;

• restrictions and warnings on the labeling or marketing of a product;

• restrictions on product distribution or use;

• requirements to conduct post-marketing studies or clinical trials;

• warning letters or untitled letters;

• withdrawal of the products from the market;

• refusal to approve pending applications or supplements to approved applications that we submit;

• recall of products;

• fines, restitution or disgorgement of profits or revenues;

• suspension or withdrawal of marketing approvals;

• suspension of any ongoing clinical trials;

• damage to relationships with any potential collaborators;

• unfavorable press coverage and damage to our reputation;

• refusal to permit the import or export of our products;

• product seizure;

• injunctions or the imposition of civil or criminal penalties;

• litigation involving patients using our products.

Non-compliance with EU and UK requirements regarding safety monitoring or pharmacovigilance, and with requirements related to the development of products for the pediatric population (as explained further under “—If any of our drug candidates are not considered to be a new active substance or are deemed to fall within the “global marketing authorization” of an existing medicinal product or if pediatric studies are not adequately completed, this may result in lack of regulatory data protection or failure to obtain an extension to existing regulatory data protection,” below), also can result in significant financial penalties, and non-compliance with pediatric requirements may prevent regulatory approvals from being granted.

Non-compliance with EU and UK requirements regarding safety monitoring or pharmacovigilance, or with requirements related to the development of products for the pediatric population (as explained further under “—If any of our drug candidates are not considered to be a new active substance or are deemed to fall within the “global marketing authorization” of an existing medicinal product or if pediatric studies are not adequately completed, this may result in lack of regulatory data protection or failure to obtain an extension to existing regulatory data protection,” below), also can result in significant financial penalties, and non-compliance with pediatric requirements may prevent regulatory approvals from being granted.

Similarly, failure to comply with the EU and UK’s requirements regarding the protection of personal information can lead to significant penalties and sanctions.

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If we decide to seek Orphan Drug Designation or other designations from regulators for any of our other or future drug candidates, we may be unsuccessful or may be unable to maintain the benefits associated with these designations, including the potential for supplemental market exclusivity associated with an Orphan Drug Designation.

In March 2025, the FDA granted Orphan Drug Designation to bexobrutideg (NX-5948) for the treatment of Waldenström macroglobulinemia, and in June 2025, the EMA granted Orphan Drug Designation to bexobrutideg for the treatment of adult patients with lymphoplasmacytic lymphoma, of which Waldenström macroglobulinemia is the most common subtype.

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

As part of our business strategy, we may also seek Orphan Drug Designation or other designations from regulators for other of our current or future drug candidates.

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In addition, although we may seek Orphan Drug Designation for other drug candidates, we may never receive these designations.

In order to obtain orphan designation in the EEA (the UK has a similar legislation), the product must fulfill certain criteria.

Under Article 3 of Regulation (EC) 141/2000, a medicinal product may be designated as an orphan medicinal product if it meets the following criteria:

Under the current EU general pharmaceutical legislative framework, in order to obtain orphan designation in the EEA (the UK has a similar legislation), the product must fulfill certain criteria:

(1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition;

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and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU or if such a method exists, the product will be of significant benefit to those affected by the condition, as defined in Regulation (EC) 847/2000.

Products receiving orphan designation in the EU may receive 10 years of orphan market exclusivity (which can be further extended by two years if pediatric studies have been conducted in accordance with an agreed pediatric investigational plan).

Applications must first satisfy the orphan designation criteria and apply for orphan designation before making the application for marketing authorization.

The applicant must then successfully maintain the orphan designation at the time of the MAA in order to qualify for 10 years of orphan market exclusivity.

During this 10-year period, the competent authorities of the EU Member States and European Commission may not accept applications or grant marketing authorization for other similar medicinal products for the same orphan therapeutic indication.

The protection afforded by orphan market exclusivity in the EU may, in some circumstances, be circumvented by competitor products which are demonstrated not to be “similar” or which are authorized for different therapeutic indications.

There may be a risk that products may be prescribed “off-label” for the orphan therapeutic indication by healthcare professions in some EU Member States.

There are also three exceptions to the orphan market exclusivity principle.

Marketing authorization may be granted to a similar medicinal product for the same orphan therapeutic indication if:

• the second applicant can establish in its application that its medicinal product, although similar to the orphan medicinal product already authorized, is safer, more effective or otherwise clinically superior;

• the holder of the marketing authorization for the original orphan medicinal product consents to a second orphan medicinal product application;

• the holder of the marketing authorization for the original orphan medicinal product cannot supply sufficient quantities of orphan medicinal product.

An orphan product can also obtain an additional two years of orphan market exclusivity in the EU if the MAA contains the results of all pediatric studies conducted in accordance with and agreed pediatric investigation plan.

The 10-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation;

for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity.

The UK’s regulatory legal framework provides for similar periods of protection (namely regulatory data protection, marketing protection and market exclusivity).

It is important to note that the regulatory protection afforded to medicinal products such as data exclusivity, marketing protection, market exclusivity for orphan indications and pediatric extension are currently under review at the EU level.

It is expected that the protection currently afforded in the EU will be reduced in the years to come.

On April 26, 2023, the European Commission adopted a proposal for a new Directive and a new Regulation.

If enacted into law, this proposal will revise and replace the existing general pharmaceutical legislation and will affect the existing period of regulatory protections afforded to medicinal products.

The proposal is now undergoing the legislative process and the text of the initial proposal is likely to be amended by the European Parliament and the European Council.

It is, however, important to note that under the new EU pharmaceutical reform package (the EU Pharma Package), which is expected to be fully implemented by the end of 2028, the orphan designation criteria will be amended to eliminate the alternative criterion based on insufficient return on investment, which has not been used in practice.

The regulatory protections afforded to medicinal products, including data exclusivity, market protection, market exclusivity for orphan indications and pediatric extensions, are also currently being revised as part of the EU pharmaceutical reform package (the EU Pharma Package).

The EU Council and the European Parliament agreed on the final compromise texts of the proposed Regulation and Directive on March 6, 2026.

The legislation is undergoing further procedural steps prior to formal adoption by both institutions, and it is not expected that these aspects will change materially prior to adoption.

The revised periods of regulatory protection are reflected in the agreed compromise texts.

Under the proposed new framework, orphan medicinal products would benefit from a baseline period of 9 years of market exclusivity, which may be increased to 11 years for products qualifying as “breakthrough” orphan medicines.

In each case, this exclusivity period may be further extended by up to two additional one-year periods for new orphan indications.

While the legislation does not yet clearly define the criteria for “breakthrough” designation, the concept is expected to capture medicines addressing unmet medical needs.

In addition, the new framework would retain the existing six-month supplementary protection certificate (SPC) extension as a pediatric reward for the completion of studies in accordance with an agreed pediatric investigation plan (PIP).

The compromise texts also introduce changes to the general regulatory exclusivity regime.

Non-orphan medicinal products would benefit from a baseline period of eight years of regulatory data protection (RDP) and one year of market protection, with the possibility of up to two additional one-year extensions in specified circumstances.

However, these periods of protection may be reduced or lost if the marketing authorization holder fails to comply with a Member State request to launch the product in that Member State, or fails to ensure continuous and sufficient supply of the product to meet patient needs within the required timeframe.

The adopted acts are expected to enter into force in 2026, followed by a 24-month transition period.

Accordingly, the new legislation is expected to become fully applicable by the end of 2028.

Products for which a marketing authorization application is submitted before the entry into force of the new legislation are expected to continue to benefit from the existing regulatory protection regime.

The revised protection periods would apply only to products for which marketing authorization applications are submitted after the new legislation becomes fully applicable.

If the FDA or comparable foreign regulatory authorities approve generic versions of any of our drug candidates that receive marketing approval, or such authorities do not grant our drug candidates appropriate periods of data or market exclusivity before approving generic versions of our drug candidates, the sales of our drug candidates could be adversely affected.

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However, even if a compound is considered to be a new active substance and the innovator is able to gain the period of regulatory data protection and marketing protection, provided that no other IP or regulatory exclusivities applied, another unrelated company could also apply for a marketing authorization and market another competing medicinal product for the same therapeutic indication if such company obtained its own marketing authorization based on a separate MAA based on a full self-standing scientific data package supporting the application.

The period of regulatory data protection and marketing protection applies in the UK (running from the date of the first authorization in Great Britain).

In the EU, pursuant to Regulation 1901/2006, and in the UK pursuant to the Human Medicines Regulations 2012 (as amended), MAAs must include pediatric data based on pediatric investigation plans agreed with the EMA if the MAA concerns (i) a new active substance, or (ii) a new indication, pharmacological form, or route of administration (where the product is protected by an SPC or a patent qualifying for an SPC).

The period of regulatory data protection and marketing protection applies in the UK (running from the date of the first UK marketing authorization).

Currently, in the EU pursuant to Regulation 1901/2006, and in the UK pursuant to the Human Medicines Regulations 2012 (as amended), MAAs must include pediatric data based on pediatric investigation plans agreed with the EMA if the MAA concerns (i) a new active substance or (ii) a new indication, pharmacological form, or route of administration (where the product is protected by an SPC or a patent qualifying for an SPC).

Applicants may obtain waivers or deferrals to these requirements in certain circumstances (for example a waiver may be obtained if the condition only occurs in adult populations).

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For example, where MAAs include the results of all studies conducted in compliance with an agreed pediatric investigation plan, the holder of the patent or SPC may be entitled to a six-month extension to the SPC.

Additionally, the European Commission’s new proposed legislation, if implemented, will also affect the current EU legal framework of pediatric medicines.

Additionally, the European Commission’s new proposed legislation, if or when it is implemented, will also affect the current EU legal framework of pediatric medicines.

The EU Pharma Package, as reflected in the compromise texts agreed between the EU Council and the European Parliament on March 6, 2026, would substantially revise the current pediatric framework by integrating it into the broader pharmaceutical legislation.

While the six-month SPC extension would be retained, the additional two-year extension of orphan market exclusivity for pediatric indications would be removed.

The revised framework would also narrow the availability of waivers, introduce a new “initial PIP” mechanism in specified circumstances, and limit deferrals to a maximum duration of five years.

In addition, it would require that medicinal products authorized for a pediatric indication be placed on the market in all Member States where other indications of the same product have been authorized.

These changes would apply only once the new legislation becomes fully applicable, which is currently expected to occur at the end of 2028, following entry into force expected at the end of 2026 and a 24-month transition period.

Our operations and relationships with actual and potential customers, providers and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to penalties including criminal sanctions, civil penalties, exclusions from government programs, contractual damages and reputational harm, and could diminish our future profits and earnings.

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If any legislation, executive orders, or lapses in agency funding impose constraints on the FDA’s ability to engage in oversight and implementation activities in the normal course, our business may be negatively impacted.

Similar consequences would also result in the event of another significant shutdown of the federal government.

For example, in 2025, the U.S.

government was on the verge of a shutdown and has previously shut down several times, and certain regulatory agencies, such as the FDA, had to furlough critical employees and stop critical activities.

If a prolonged government shutdown occurs, or if geopolitical or global health concerns prevent the FDA from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Federal government shutdowns pose comparable risks.

government has experienced several shutdowns, including in 2025, during which regulatory agencies such as the FDA have furloughed critical employees and suspended critical activities.

A prolonged government shutdown, or geopolitical or global health concerns that prevent the FDA from conducting regular inspections, reviews, or other regulatory activities, could significantly impact the FDA’s ability to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Such disruptions could delay the development of our product candidates or prevent us from obtaining timely regulatory approvals.

Further, future government shutdowns or delays could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

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beginning in 2026, establish a “maximum fair price” for a fixed number of pharmaceutical and biological products covered under Medicare Parts B and D following a price negotiation process with the Centers for Medicare and Medicaid Services (CMS);

and, beginning in 2023, penalize drug companies that raise prices for products covered under Medicare Parts B and D faster than inflation, among other reforms.

Since its enactment, CMS has taken steps to implement various drug pricing provisions of the IRA.

This includes, without limitation, releasing the negotiated maximum prices, which will be effective in 2026, for the first ten drugs that were subject to the IRA’s negotiation process, releasing quarterly lists of Medicare Part B products that are subject to adjusted coinsurance rates based on the inflationary rebate provisions of the IRA, and announcing a list of fifteen additional drugs that will be subject to price negotiations during 2025.

and, as of 2023, penalize drug companies that raise prices for products covered under Medicare Parts B and D faster than inflation, among other reforms.

CMS has and continues to take steps to implement the IRA, including negotiating and publishing “maximum fair prices” for drugs selected under the IRA’s price negotiation framework and releasing quarterly lists of Medicare Part B products and annual lists of Medicare Part D products that are subject to adjusted coinsurance rates based on the inflationary rebate provisions of the IRA.

Additionally, when originally enacted, the IRA explicitly excluded from price negotiation orphan drugs designated for only one rare disease or condition and for which the only active approved indication is for such disease or condition.

However, the One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025, amended the applicable statute to broaden the orphan drug exclusion such that products with more than one orphan designation and more than one approved indication will remain exempt from price negotiation, so long as each approved indication is for a rare disease or condition.

The OBBBA also postpones the start of price negotiation requirements for drugs and biologics with orphan designations until the product receives approval for a non-orphan indication.

It is unclear how future regulatory actions to implement the IRA, as well as the outcome of pending litigation against the IRA, may affect our products and future profitability, and we cannot predict the likelihood, nature, or extent of other health reform initiatives that may arise from future legislation or administrative actions.

Moreover, the results of the 2024 Presidential and Congressional elections, and potential subsequent developments, increase the uncertainty related to the healthcare regulatory environment.

Notably, recent actions taken by the Trump Administration have indicated that reducing prescription drug prices is a priority.

For example, President Trump has signed multiple executive orders addressing prescription drug pricing and access, including:

on April 15, 2025, outlining several actions the Secretary of the Department of HHS must take to optimize healthcare regulations that will provide access to prescription drugs at lower costs;

on May 5, 2025, aiming to promote domestic production of critical medicines;

and on May 12, 2025, aiming to establish a “most favored nation” drug pricing policy that would tie U.S.

Moreover, recent healthcare regulatory developments indicate that prescription drug price reduction remains a key policy objective for the current presidential administration.

The current presidential administration has also signaled its intent to pursue additional healthcare reform measures, including those aimed at reducing prescription drug prices, through various means, including presidential executive orders and agency action.

These efforts include, among other things, proposals to establish a “most favored nation” drug pricing policy that would tie U.S.

drug prices to the prices paid for drugs in other countries.

Further, the current administration has suggested that it may impose tariffs on pharmaceuticals.

It remains to be seen how these drug pricing initiatives will affect the broader pharmaceutical industry .

In addition, on June 28, 2024, the U.S.

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These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing.

Another emerging trend at the state level is the establishment of prescription drug affordability boards, some of which will prospectively permit certain states to establish upper payment limits for drugs that the state has determined to be “high-cost.” Prescription drug affordability boards in several states, including Colorado, Maryland, Oregon, and Washington, have begun identifying products for affordability reviews and issuing information requests to manufacturers to determine whether upper payment limits may be justified.

Legislative and regulatory proposals have also been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.

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Furthermore, in some European countries, the authorities conduct an HTA to assess the cost-effectiveness of the product (in the UK that HTA assessment is conducted by the National Institute for Health and Care Excellence), which may significantly impact effective access to the market.

As of January 12, 2025, EU Health Technology Regulation No.

2021/2282 became applicable in respect of new oncology medicines.

Regulation No.

2021/2282 imposes a new procedure, a joint clinical assessment at a centralized level, as a mandatory step for the assessment of the pricing and reimbursement of medicinal products by national authorities.

It requires companies applying for products in scope to make relevant submissions for the joint clinical assessment, in line with a number of prespecified criteria.

If reimbursement of our drugs is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be materially harmed.

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The Executive Order directs federal agencies to implement policies that would align U.S.

prescription drug prices with the lowest prices paid by other comparable nations and mandates the Secretary of HHS to communicate most-favored-nation (MFN) price targets to pharmaceutical manufacturers and, if significant progress is not achieved, to propose rulemaking to impose MFN pricing across federal healthcare programs and potentially the private market.

While the full scope and implementation timeline remain uncertain, this policy introduces significant risks to our future pricing strategies, revenue, and profitability in the U.S.

prescription drug prices with the lowest prices paid by other comparable nations and mandates the Secretary of HHS to communicate “most-favored-nation” price targets to pharmaceutical manufacturers and, if significant progress is not achieved, to propose rulemaking to impose “most-favored nation” pricing across federal healthcare programs and potentially the private market.

For additional information, see the risk factor above titled “Current and future legislation may increase the difficulty and cost for us, and any collaborators, to obtain marketing approval of and commercialize our drug candidates and affect the prices we, or they, may obtain.” This policy may introduce significant risks to our future pricing strategies, revenue, and profitability in the U.S.

Additionally, the Executive Order instructs the Department of Commerce and the U.S.

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In addition, we have limited experience in product development.

We filed our first IND in December 2020 and currently have three drug candidates in ongoing Phase 1 trials, and expect to advance our drug candidate bexobrutideg (NX-5948) to a Phase 2 clinical trial in 2025.

We filed our first IND in December 2020, we currently have three drug candidates in ongoing Phase 1 trials, and we initiated a Phase 2 clinical trial for bexobrutideg in October 2025.

As our drug candidates enter and advance through preclinical studies and clinical trials, we will need to expand our development, regulatory and manufacturing capabilities or contract with other organizations to provide these capabilities for us.

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The HHS has enforcement discretion for HIPAA, and any enforcement activity can result in financial liability and reputational harm, and responses to such enforcement activity can consume significant internal resources.

On April 22, 2024, HHS issued a Final Rule, the HIPAA Privacy Rule to Support Reproductive Health Care Privacy, which is intended to strengthen the HIPPA Privacy Rule by prohibiting the disclosure of protected health information related to lawful reproductive healthcare in certain circumstances.

On April 22, 2024, HHS issued a Final Rule, the HIPAA Privacy Rule to Support Reproductive Health Care Privacy, which is intended to strengthen the HIPAA Privacy Rule by prohibiting the disclosure of protected health information related to lawful reproductive healthcare in certain circumstances.

The Federal Trade Commission (FTC) has authority under Section 5 of the FTC Act to regulate unfair or deceptive practices, and has used this authority to initiate enforcement actions against companies that implement inadequate controls around privacy and information security in violation of their externally facing policies.

The FTC, as well as state attorneys general, have taken enforcement action against companies that do not abide by their representations to consumers regarding electronic security and privacy, including with respect to health information.

In addition, states have shown an increased interest in regulating the processing of personal information in general and specifically in the privacy of health data.

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In the EU, the EU GDPR governs the collection, use, disclosure, transfer, or other processing of personal data.

The UK has implemented the EU GDPR as the UK GDPR which sits alongside the UK Data Protection Act 2018 (the UK GDPR together with the EU GDPR, the GDPR).

The GDPR imposes compliance obligations on controllers (and in more limited cases, on processors), including (among others) granting certain privacy rights to individuals to control how companies collect, use, disclose, retain and otherwise process their personal data as well as specific requirements for obtaining valid consent where consent is the legal basis for processing, requirements around accountability and transparency, the obligation to consider data protection when any new products or services are developed, the obligation to appoint data protection officers in certain circumstances, the obligation to notify relevant data protection supervisory authorities of notifiable personal data breaches without undue delay (and no later than 72 hours) after becoming aware of the personal data breach, and the requirement to provide more detailed notices for clinical trial subjects and investigators.

The UK has implemented the EU GDPR as the UK GDPR, which sits alongside the UK Data Protection Act 2018;

the UK Data Protection Act 2018 has been amended by the UK Data (Use and Access) Act 2025, which implements certain changes in relation to the UK GDPR and reforms the use of personal and non-personal data (the UK GDPR together with the EU GDPR, the GDPR).

The GDPR imposes compliance obligations on controllers (and in more limited cases, on processors), including (among others) granting certain privacy rights to individuals to control how companies collect, use, disclose, retain and otherwise process their personal data as well as specific requirements for obtaining valid consent where consent is the legal basis for processing, requirements around accountability and transparency, the obligation to consider data protection when any new products or services are developed, the obligation to appoint data protection officers in certain circumstances, the obligation to notify (i) relevant data protection supervisory authorities of personal data breaches without undue delay (and no later than 72 hours) after becoming aware of the personal data breach, unless the personal data breach is unlikely to result in a risk to the data subjects’ rights and freedoms;

and (ii) affected individuals, where the personal data breach is likely to result in a high risk to their rights and freedoms, whereas processors are required to notify the controller without undue delay after becoming aware of a personal data breach, and the requirement to provide more detailed notices for clinical trial subjects and investigators.

In addition, the EU GDPR prohibits the international transfer of personal data originating in the EEA (including, from clinical trial sites and other third parties (e.g., CROs)) to jurisdictions that the European Commission does not recognize as having ‘adequate’ data protection laws, unless a data transfer mechanism has been put in place or a derogation under the EU GDPR can be relied upon.

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national security safeguards and redress.

Under the UK GDPR, companies not established in the UK but who process personal data in relation to the offering of goods or services to individuals in the UK, or to the monitoring of their behavior will be subject to the UK GDPR—the requirements of which at this time are largely aligned with those under the EU GDPR.

The European Commission has adopted an adequacy decision in favor of the UK, enabling data transfers from EU Member States to the UK without additional safeguards.

However, the UK adequacy decision will automatically expire in December 2025 unless the European Commission reassesses and further renews/extends that decision, and remains under review by the European Commission during this period.

Under the UK GDPR, companies not established in the UK but who process personal data in relation to the offering of goods or services to individuals in the UK, or to the monitoring of the behavior of individuals in the UK, will be subject to the UK GDPR.

On December 19, 2025, the European Commission adopted its most recent adequacy decision in favor of the UK, enabling data transfers from EU Member States to the UK without additional safeguards until December 27, 2031.

The UK GDPR also imposes similar restrictions on transfers of personal data from the UK to jurisdictions that the UK Government does not consider adequate, including the United States.

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data bridge (i.e., a UK equivalent of the Adequacy Decision) and adopted UK regulations to implement the UK-U.S.

Personal data may now be transferred from the UK under the UK-U.S.

Personal data may be transferred from the UK under the UK-U.S.

data bridge through the UK extension to the DPF to organizations self-certified under the UK extension to the DPF.

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AI also presents emerging ethical issues and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability.

Legislation and regulations governing the development and use of AI has been passed or is under consideration in the United States at the state and local level, as well as internationally.

Legislation and regulations governing the development and use of AI have been passed or are under consideration in the United States at the state and local level, as well as internationally.

As a result, the ability to use artificial intelligence and machine learning may be constrained by current or future laws, regulatory or self-regulatory requirements.

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We cannot predict the impact of foreign currency fluctuations, and foreign currency fluctuations in the future may adversely affect our business, financial condition, results of operations and prospects.

Our current operations are in the San Francisco Bay Area, and we or the third parties upon whom we depend may be adversely affected by earthquakes or other natural disasters as to which our business continuity and disaster recovery plans may not be adequate to protect us.

Our current operations are located in our facilities in San Francisco, California.

Our current operations are in the San Francisco Bay Area and The Woodlands, Texas, and we or the third parties upon whom we depend may be adversely affected by earthquakes or other natural disasters as to which our business continuity and disaster recovery plans may not be adequate to protect us.

Our current operations are located in our facilities in the San Francisco Bay Area in California and in The Woodlands, Texas.

Any unplanned event, such as earthquake, flood, fire, explosion, extreme weather condition, medical epidemic, power shortage, telecommunication failure or other natural or man-made accident or incident that results in our being unable to fully utilize our facilities, or the manufacturing facilities of our third-party contract manufacturers, may have a material and adverse effect on our ability to operate our business, particularly on a daily basis, and have significant negative consequences on our financial and operating conditions.

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We may choose to raise additional capital in the future, depending on market conditions, strategic considerations and operational requirements.

For example, in March 2021, we sold an additional 5,175,000 shares of our common stock in a follow-on public offering;

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;

and in April 2024, we sold an additional 11,916,667 shares of our common stock and pre-funded warrants to purchase an aggregate of 1,500,100 shares of our common stock in a public offering.

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

For example, in April 2024, we sold an additional 11,916,667 shares of our common stock and pre-funded warrants to purchase an aggregate of 1,500,100 shares of our common stock in a public offering and in October 2025, we sold an additional 24,485,799 shares of our common stock in a registered direct offering.

The pre-funded warrants sold in April 2024 are immediately exercisable, have an exercise price of $0.001 and may be exercised at any time after the date of issuance.

In addition, we currently have on file with the SEC an automatic shelf registration statement on Form S-3 which allows us to offer and sell our registered common stock, preferred stock, debt securities, warrants, subscriptions rights and or units from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale.

In August 2021, we entered into an Equity Distribution Agreement with Piper Sandler & Co.

(Piper Sandler), which was amended in July 2024 and again in October 2024 (as amended, the Second Amended Equity Distribution Agreement), pursuant to which, from time to time, we may offer and sell through Piper Sandler up to $300.0 million of the common stock registered under the shelf registration statement pursuant to one or more “at the market” offerings.

From time to time, we have issued and sold shares of common stock pursuant to this agreement and as of the date of this filing, we have $204.6 million of common stock remaining available for sale under the Second Amended Equity Distribution Agreement.

Sales of our common stock under the Second Amended Equity Distribution Agreement with Piper Sandler could be subject to business, economic or competitive uncertainties and contingencies, many of which may be beyond our control, and which could cause actual results from the sale of our common stock to differ materially from expectations.

(Piper Sandler), which was amended in July 2024, in October 2024, and in March 2026 (as amended, the Third Amended Equity Distribution Agreement), pursuant to which, from time to time, we may offer and sell through Piper Sandler up to $413.65 million of the common stock registered under the shelf registration statement pursuant to one or more “at the market” offerings.

From time to time, we have issued and sold shares of common stock pursuant to this agreement and as of the date of this filing, we have $300.0 million of common stock remaining available for sale under the Third Amended Equity Distribution Agreement.

Sales of our common stock under the Third Amended Equity Distribution Agreement with Piper Sandler could be subject to business, economic or competitive uncertainties and contingencies, many of which may be beyond our control, and which could cause actual results from the sale of our common stock to differ materially from expectations.

To the extent additional capital is raised through the sale and issuance of shares or other securities convertible into shares, the ownership interest of our stockholders will be diluted.

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however, any exercise would increase the number of shares eligible for future resale in the public market and result in substantial dilution to our stockholders.

As of August 31, 2025, we have issued pre-funded warrants to purchase a total of 8,315,020 shares of our common stock, of which 7,577,909 were outstanding as of August 31, 2025.

As of February 28, 2026, we have issued pre-funded warrants to purchase a total of 8,315,020 shares of our common stock, of which 7,577,909 were outstanding as of February 28, 2026.

Each pre-funded warrant is exercisable for $0.001 per share of common stock underlying such pre-funded warrant, which may be paid by way of a cashless exercise, meaning that the holder may not pay a cash purchase price upon exercise, but instead would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the pre-funded warrant.

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Alternatively, if a court were to find the choice of forum provision contained in our restated certificate of incorporation and/or amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition.

We will continue to incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices.

We incur significant costs as a result of operating as a public company, and our management is required to devote substantial time to compliance initiatives and corporate governance practices.

As a public company, we incur significant legal, accounting and other expenses.

We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other applicable securities rules and regulations which impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.

We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of Nasdaq and other applicable securities rules and regulations which impose various requirements on public companies, including maintenance of effective disclosure and financial controls and corporate governance practices.

Compliance with these rules and regulations may strain our financial and management systems, internal controls, and employees.

For example, the Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations and the disclosure requirements under the Exchange Act are subject to change from time to time.

Complying with these new disclosure obligations once applicable to our company, or any or any additional new disclosure requirements that may apply to us in the future, could cause us to incur substantial costs and could increase negative publicity surrounding any incident that we are required to disclose.

Complying with these disclosure obligations or any new disclosure requirements that may apply to us in the future, could cause us to incur substantial costs and could increase negative publicity surrounding any incident that we are required to disclose.

Any failure or perceived failure by us to comply with these obligations may also subject us to enforcement action or litigation, any of which could harm our business.

Therefore, as a result of being a public company, our management and other personnel are required to devote a substantial amount of time to these compliance initiatives.

Moreover, these rules and regulations have increased our legal and financial compliance costs and have made some activities more time-consuming and costly.

Moreover, these rules and regulations result in high legal and financial compliance costs and have made some activities time-consuming and costly.

We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements.

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For example, we previously identified material weaknesses in our internal control over financial reporting for the fiscal year ended November 30, 2021, related to controls over segregation of duties in our journal entry and account reconciliation processes, and certain information technology general controls.

The material weaknesses identified did not result in any misstatement of our financial statements and during the year ended November 30, 2022, the material weaknesses was remediated.

The material weaknesses identified did not result in any misstatement of our financial statements and during the year ended November 30, 2022, the material weaknesses were remediated.

However, we cannot assure you that the measures we have taken to date, and actions we may take in the future, will prevent or avoid potential future material weaknesses.

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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 1A. Risk Factors