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Item 1A. Risk Factors

2026-10-13 compared with 2026-07-09 · 174 added, 106 removed, 1503 unchanged (16% of the section changed)

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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 $264.5 million for the fiscal year ended November 30, 2025, and $176.7 million for the six months ended May 31, 2026.

As of May 31, 2026, we had an accumulated deficit of $1.2 billion.

Our net loss was $264.5 million for the fiscal year ended November 30, 2025, and while we had net income of $373.1 million for the nine months ended August 31, 2026, we have historically incurred significant losses and expect to incur losses in the future over at least the next several years.

As of August 31, 2026, we had an accumulated deficit of $630.1 million.

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.

We are in the early stages of development of our drug candidates.

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

We expect to continue to incur significant expenses and increasing operating losses for at least the next several years.

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 and Phase 2 clinical trials;

Our drug candidates are in various stages of development.

Our lead drug candidates include bexobrutideg (NX-5948), which is in Phase 3 clinical development, and NX-1607, which is in the earlier stages of clinical development.

We expect to continue to incur significant expenses and to experience increasing operating losses for at least the next several years.

We anticipate that our operating expenses and capital expenditure requirements will increase substantially as we continue to advance our drug candidates and prepare for potential commercialization, including if and as we:

• increase enrollment in and further develop our drug candidates through clinical trials;

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

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• add operational, financial and management information systems and personnel to support our research, product development and future commercialization efforts and support our operations as a public company.

Our expenses could increase beyond our expectations if we are required by the U.S.

Our expenses could also increase beyond our expectations if we are required by the U.S.

Food and Drug Administration (FDA), the European Medicines Agency (EMA) or other regulatory authorities to perform trials in addition to those we currently expect, or if there are any delays in establishing appropriate manufacturing arrangements for or in completing our planned clinical trials or the development of any of our 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, zelebrudomide and NX-1607.

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

Our lead drug candidates include bexobrutideg, which is in Phase 3 clinical development, and NX-1607, which is in the earlier stages of clinical development.

We cannot predict whether and when any of our drug candidates will be ready for commercialization.

We may never succeed in these activities and, even if we do, may never generate revenues that are significant enough to achieve profitability.

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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 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.

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we conduct our clinical trials of bexobrutideg and NX-1607;

pursue any future development of our other drug candidates;

grow our pipeline of drug candidates;

expand the breadth of our DEL-AI platform;

continue our research and development activities;

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.

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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 $443.5 million as of May 31, 2026.

We had cash, cash equivalents and marketable securities of $1.1 billion as of August 31, 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 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 progress, costs and results of our clinical trials for bexobrutideg, including clinical trials conducted in collaboration with Roche, as well as our clinical trials for 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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(Pfizer)) and F.

Hoffmann-La Roche Ltd (Roche) and any other collaborations we may establish;

Hoffmann-La Roche Ltd and Genentech, Inc.

(together, Roche) and any other collaborations we may establish;

• the costs, timing and outcome of regulatory review of our drug candidates;

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Our limited operating history may make it difficult to evaluate the success of our business to date and to assess our future viability.

We commenced operations in 2009, and our operations to date have been limited to organizing and staffing our company, business planning, raising capital, conducting discovery and research activities, filing patent applications, identifying potential drug candidates, undertaking preclinical studies, establishing arrangements with third parties for the manufacture of initial quantities of our drug candidates and conducting early-stage clinical trials.

Our lead drug candidates are in the early stages of clinical development and their risk of failure is high.

Our lead drug candidates are in various stages of clinical development and their risk of failure remains high.

We have not yet demonstrated our ability to successfully:

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Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history.

In addition, as an early-stage business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors.

We will need to transition at some point from a company with a research and development focus to a company capable of supporting commercial activities.

We may not be successful in such a transition.

In addition, as we continue to develop and advance our programs, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors.

Furthermore, we are in the process of transitioning from a company with a research and development focus to a company capable of supporting commercial activities.

We may be unable to manage these expenses and other challenges or successfully complete this transition.

We expect our financial condition and results of operations to continue to fluctuate significantly from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control.

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Risks Related to the Discovery and Development of Our Drug Candidates

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.

If we are unable to advance our drug candidates through clinical development or to obtain regulatory approval for them, or to secure an adequate reimbursement price for them, or to commercialize them 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, 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.

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

Our lead drug candidates are in various stages of clinical development:

bexobrutideg is in late-stage clinical development and is being evaluated in the ongoing Phase 3 DAYBreak CLL-306 trial, while NX-1607 is in the earlier stages of clinical development.

The risk of failure for our current lead drug candidates remains 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 our clinical trials, including our first Phase 3 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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• obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our drug candidates as well as obtaining relevant exclusivity extensions (due to the conduct of pediatric studies);

• making arrangements with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our drug candidates;

• making arrangements and successfully scaling up manufacturing with third-party manufacturers, or establishing manufacturing capabilities, for both clinical and commercial supplies of our drug candidates;

• achieving desirable therapeutic properties for our drug candidates’ intended indications;

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Moreover, if we do not receive regulatory approvals, we may not be able to continue our operations.

In addition, we filed for and received an Innovation Passport designation for NX-1607 in the United Kingdom (UK) in February 2022.

The Innovation Passport is the mandated entry point to the Innovative Licensing and Access Pathway (ILAP) in the UK to facilitate approval of and market access to an innovative medicine.

Grant of the Innovation Passport paves the way for enhanced engagement with key stakeholders such as the Medicines and Healthcare products Regulatory Agency (MHRA), health technology agencies in the UK such as the National Institute for Health and Care Excellence (NICE), the Scottish Medicines Consortium and NHS England.

However, although the goal of ILAP and the Innovation Passport is to reduce the time to market and enable earlier patient access, they do not accelerate the conduct of clinical trials or mean that the regulatory requirements are less stringent, nor do they ensure that any NX-1607 marketing authorization application (MAA) will be approved or that any approval will be granted within any particular timeframe, nor that an adequate reimbursement price will be obtained.

Despite receiving an Innovation Passport designation, we may decide to delay or forego the commercialization of NX-1607 in the UK or the development may otherwise not proceed.

One of our approaches to the discovery and development of drug candidates based on our targeted protein degradation platform is unproven, which makes it difficult to predict the time, cost of development and likelihood of successfully developing any products.

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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 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.

Bexobrutideg degrades BTK with mutations that confer resistance to currently marketed BTK inhibitors, and we believe that preliminary data from our ongoing clinical trials of bexobrutideg 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.

We are in the early stages of clinical development of bexobrutideg and zelebrudomide and we currently have limited safety data of bexobrutideg and zelebrudomide in humans.

Although some of our drug candidates have produced observable results in animal studies, these drug candidates may not demonstrate the same chemical and pharmacological properties in humans, and may interact with human biological systems in unforeseen, ineffective or harmful ways.

As such, there may be adverse effects from treatment with any of our current or future drug candidates that we cannot predict at this time.

We currently have evolving safety data for bexobrutideg and limited safety data for our other drug candidates in humans.

Although some of our drug candidates have produced observable safety findings in animal studies, these findings may not translate to the clinical setting.

Similarly, the chemical and pharmacological properties that we have observed in animal or early clinical stage trials may not translate to later stage trials.

As such, we are unable to predict the full safety and efficacy profiles of our current drug candidates at this time.

Additionally, the regulatory approval process for novel drug candidates such as ours can be more expensive and take longer than for other, better-known or extensively-studied drug candidates.

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We may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug candidates.

Our lead drug candidates are in the early stages of clinical development and their risk of failure is high.

Our lead drug candidates are in various stages of clinical development and their risk of failure remains high.

We are unable to predict when or if any of our drug candidates will prove effective or safe in humans or will receive marketing approval.

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Second- and third-line therapies are administered to patients when prior therapy was ineffective.

Our current and planned clinical trials for our drug candidates bexobrutideg, zelebrudomide and NX-1607 are and will be with patients who have received one or more prior treatments.

Our current and planned clinical trials for our drug candidates bexobrutideg and NX-1607 are and will be conducted with patients who have received one or more prior treatments.

Subsequently, for those drug candidates that prove to be sufficiently beneficial, if any, we may seek approval potentially as a first-line therapy, but any drug candidates we develop, even if approved, may not be approved for first-line therapy, and, prior to any such approvals, we may have to conduct additional clinical trials.

If serious adverse events, undesirable side effects or unexpected characteristics are identified during the development of any drug candidates we may develop, we may need to abandon or limit our further clinical development of those drug candidates.

We have recently begun to evaluate our lead drug candidates in human clinical trials, and there have been very few clinical trials to date involving small molecule drug candidates designed to control cellular protein levels through targeted protein degradation.

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, 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.

Unforeseen side effects from our drug candidates could arise at any time during preclinical or clinical development.

A potential risk in any protein degradation product is that healthy proteins or proteins not targeted for degradation will be degraded or that the degradation of the targeted protein in itself could cause adverse events, undesirable side effects or unexpected characteristics.

Serious adverse events, undesirable side effects or unexpected characteristics could arise at any time during preclinical or clinical development of our drug candidates.

Many drug candidates that showed promise in early-stage testing for treating cancer or other diseases later have been found to cause side effects that prevented further clinical development of the drug candidates or limited their competitiveness in the market.

A potential risk in any protein degradation product is that healthy proteins or proteins not targeted for degradation will be degraded or that the degradation of the targeted protein itself could cause adverse events, undesirable side effects or unexpected characteristics.

It is possible that healthy proteins or proteins not targeted for degradation could be degraded by our drug candidates in any of our current or future preclinical studies or clinical trials.

There also is the potential risk of delayed adverse events following treatment with our drug candidates.

To date, relatively few clinical trials have studied small molecule drug candidates designed to control cellular protein levels through targeted protein degradation, and clinical experience with small molecule CBL-B inhibitors remains limited.

We have not completed clinical trials for any of our drug candidates.

Human safety data for bexobrutideg continue to evolve, while human safety data for NX-1607 remain limited.

Accordingly, we cannot predict whether any drug candidate we develop will prove safe in humans.

There can be no assurance that bexobrutideg, NX-1607 or any future drug candidate will not cause serious adverse events or undesirable side effects or have unexpected characteristics that could require us to delay, limit or abandon further development of that drug candidate.

As our Phase 3 clinical trial for bexobrutideg generates additional safety data across a larger and potentially more varied patient population, it may reveal safety or tolerability concerns, adverse effects in particular subgroups, effects associated with unintended degradation of non-target proteins, or interactions with other medications that were not observed in earlier studies.

Such findings could delay or prevent approval, result in a more limited label or otherwise harm the commercial prospects of bexobrutideg.

As future clinical trials of NX-1607 generate additional safety data across larger or more varied patient populations, they may reveal adverse events that were not observed in earlier studies.

Because NX-1607 inhibits CBL-B, a negative regulator of T-cell activation, these adverse events could include excessive immune activation, potentially resulting in hypercytokinemia, commonly referred to as cytokine storm, a severe immune reaction characterized by excessive cytokine release.

Such findings could delay or prevent approval, result in a more limited label or otherwise harm the commercial prospects of NX-1607.

If any drug candidates we develop are associated with serious adverse events or undesirable side effects, or have characteristics that are unexpected, including in preclinical studies, we may need to abandon their development or limit development to certain uses or subpopulations in which the adverse events, undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective, any of which would have a material adverse effect on our business, financial condition, results of operations and prospects.

For example, increased bleeding risk and cardiac arrhythmia such as atrial fibrillation have been reported side effects of approved BTK inhibitors.

Furthermore, NX-1607 could activate the immune response to unsafe levels and may have the potential to induce hypercytokinemia, or cytokine storm, which is the overstimulation of immune cells and subsequent overproduction of their activating compounds.

Many drug candidates that initially showed promise in early-stage testing for treating cancer or other diseases later have been found to cause side effects that prevented further clinical development of the drug candidates or limited their competitiveness in the market.

The results of preclinical studies and early-stage clinical trials may not be predictive of future results.

Initial success in clinical trials may not be indicative of results obtained in later-stage trials or when these trials are completed.

The results of preclinical studies may not be predictive of the results of clinical trials, and the results of any early-stage clinical trials we commence may not be predictive of the results of the later-stage clinical trials or when these trials are completed.

The results of preclinical studies may not be predictive of the results of clinical trials, and the results of any early-stage clinical trials may not be predictive of the results of later-stage clinical trials or when such trials are completed.

In addition, initial success in clinical trials may not be indicative of results obtained when such trials are completed.

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.

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.

In particular, the small number of patients in our planned and completed early clinical trials may make the results of these trials less predictive of the outcomes of later clinical trials, including our Phase 3 trial for bexobrutideg.

The results of our initial clinical trials for bexobrutideg 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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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, 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.

In particular, we and Roche are currently conducting clinical trials for bexobrutideg, including the ongoing Phase 3 DAYBreak CLL-306 trial, which enrolled its first patient in August 2026, and we are currently conducting Phase 1 clinical trials for NX-1607.

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

Therefore, our ability to identify and enroll eligible patients for our bexobrutideg, zelebrudomide and NX-1607 clinical trials may be limited or may result in slower enrollment than we anticipate.

Therefore, our ability to identify and enroll eligible patients for our bexobrutideg and NX-1607 clinical trials may be limited or may result in slower enrollment than we anticipate.

In addition, some of our competitors have ongoing clinical trials for drug candidates that treat the same indications as our drug candidates, and patients who otherwise would be eligible for our planned clinical trials instead may enroll in clinical trials of our competitors’ drug candidates.

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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.

Our earlier-stage pipeline assets, which have generated limited clinical data and face a longer and less certain path to potential commercialization than bexobrutideg, may receive proportionately less management attention and investment as we prioritize bexobrutideg-related activities under the Roche collaboration.

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.

Our spending on current and future research and development programs and drug candidates for specific indications may not yield any commercially viable products.

For example, after evaluating zelebrudomide (NX-2127) in a Phase 1 clinical trial, we decided to discontinue its further development to focus our resources on other programs in our wholly owned oncology portfolio.

In addition, our spending on current and future research and development programs and drug candidates for specific indications may not yield any commercially viable products.

If we do not accurately evaluate the commercial potential or target market for a particular drug candidate, we may relinquish valuable rights to that drug candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such drug candidate.

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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, 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.

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Supreme Court issued an opinion in Loper Bright Enterprises v.

Raimondo 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 has and 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.

Raimondo 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 has had a significant impact on how lower courts evaluate challenges to agency interpretations of law, including those by the Department of Health and Human Services (HHS), the Centers for Medicare & Medicaid Services (CMS) and the FDA and other agencies with significant oversight of the biopharmaceutical industry.

This 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.

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For example, certain of these changes could impose additional limitations on the rates we will be able to charge for our future products or the amounts of reimbursement available for our future products from governmental agencies or third-party payors.

Risks Related to Dependence on Third Parties

We expect to depend on collaborations with third parties for the research, development and commercialization of certain of the drug candidates we may develop.

Risks Related to Our Strategic Collaborations

We depend, and expect to continue to depend, on collaborations with third parties for the research, development and commercialization of our current and future drug candidates.

If any such collaborations are not successful, we may not be able to capitalize on the market potential of those drug candidates.

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(now a part of Pfizer);

and in June 2026 we entered into a collaboration with Roche which will become effective upon the expiration or termination of the applicable waiting period under the Hart-Scott-Roding Antitrust Improvements Act of 1976, as amended, and the expiration, termination or resolution of all other required waiting periods, clearance decision or outstanding inquiries under antitrust laws.

and in June 2026 we entered into a collaboration with Roche.

The foregoing collaborations require us to conduct certain research, development, manufacturing, co-promotion or other activities.

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• Collaborators may not pursue development and commercialization of any drug candidates we may develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition or business combination that diverts resources or creates competing priorities.

• Gilead and Sanofi have broad option rights to select up to five targets each, and Pfizer has option rights to multiple targets, for exclusive targeted protein degrader development, so long as not excluded by us under the terms of each collaboration, and may select targets we are considering but have not taken sufficient action to exclude under each collaboration.

• Collaborators may hold option, license or other exclusive rights that limit our ability to pursue certain targets, programs or opportunities independently or with third parties.

For example, Gilead and Sanofi each have broad exclusivity rights to targets for which they have exercised their option rights, and they will obtain such rights to any additional targets for which they exercise their option rights.

Pfizer has option rights to multiple targets for exclusive targeted protein degrader development.

In addition, Roche has an exclusive option right, during a specified option period, to expand its license to include one additional BTK degrader to the extent one is developed by us.

The Roche collaboration also restricts our ability to develop or commercialize certain other BTK degrader programs in specified indications and may limit our ability to acquire, retain or pursue competing programs through acquisitions, licenses or other strategic transactions.

• Collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a drug candidate, repeat or conduct new clinical trials or require a new formulation of a drug candidate for clinical testing.

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If we license rights to any drug candidates we or our collaborators may develop, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture.

The Roche Collaboration Agreement is subject to closing conditions and may not close when expected or at all, and we may fail to realize all of the anticipated benefits.

In June 2026, we entered into the Roche Collaboration Agreement for the co-development and co-commercialization of bexobrutideg.

The closing of the Roche Collaboration Agreement is subject to customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the expiration, termination or resolution of all other required waiting periods, clearance decisions or outstanding inquiries under antitrust laws.

While we expect the Roche Collaboration Agreement to become effective in the third fiscal quarter of 2026, we cannot provide assurance that the collaboration will close when expected or at all.

A number of factors, including regulatory or governmental action, litigation, and macroeconomic or market conditions, may prevent, delay or otherwise materially and adversely affect the ability of the parties to complete the collaboration.

The failure to receive any required antitrust approvals in a timely manner could delay or prevent the closing of the Roche Collaboration Agreement.

If the closing of the Roche Collaboration Agreement is delayed, receipt of the $700 million upfront payment would be delayed, and if the closing does not occur, we would not receive the upfront payment or realize the other potential benefits of the collaboration, including payments of up to $2.3 billion in potential total payments, including the upfront payment.

In addition, the failure to close the Roche Collaboration Agreement may materially and adversely affect the market price of our common stock and could harm our reputation, business and operations if customers, investors or other parties react negatively to the failed transaction.

Furthermore, if the Roche Collaboration Agreement does not close, we may need to seek alternative sources of capital or collaboration partners to advance the development and commercialization of bexobrutideg, which may not be available on favorable terms, or at all, and may distract management’s attention and resources from other business activities.

We depend substantially on our collaboration with Roche for the development and commercialization of bexobrutideg.

The collaboration requires significant financial and operational commitments, limits our control over the program and may not produce anticipated benefits.

Under our global collaboration, we and Roche are jointly developing and will be jointly commercializing bexobrutideg in the United States, and Roche will be commercializing bexobrutideg outside the United States.

We are responsible for 40% of development costs under the global development plan, subject to specified exceptions.

We will also share equally in U.S.

commercialization profits and losses.

We are also required to support technology and manufacturing transfers to Roche and assist Roche with certain regulatory activities, including by making relevant personnel and contractors available.

The scope and cost of the collaboration, including these transfer and assistance obligations, may exceed our expectations.

These commitments will require substantial financial and operational resources, and significant personnel and management attention.

As a result, they may reduce our capacity to pursue other programs and strategic opportunities.

Because bexobrutideg is our lead drug candidate, our future prospects depend substantially on the success of the Roche collaboration.

Under Roche’s exclusive worldwide license, which also applies to us and our affiliates, we may develop, manufacture, commercialize or otherwise exploit bexobrutideg, or products comprising or containing bexobrutideg, only under the Roche collaboration.

As a result, our ability to realize value from bexobrutideg depends on the success of the Roche collaboration and its economic terms.

Although the collaboration’s joint governance mechanisms provide for equal representation by us and Roche, Roche has decision-making authority over certain matters within the joint steering committee’s authority, subject to specified limitations and our consent rights.

Roche also has primary responsibility for certain regulatory, manufacturing, supply, pricing, distribution and commercialization activities.

These governance arrangements and allocations of responsibility may limit our ability to influence the development and commercialization of bexobrutideg.

To perform our anticipated U.S.

co-promotion responsibilities under the Roche Collaboration Agreement, we will need to recruit, train and retain qualified commercial personnel and establish supporting sales, marketing, compliance, information technology and operational systems.

The parties must negotiate a separate co-promotion agreement containing a mechanism for reassigning responsibilities if we cannot perform our allocated activities.

Any assumption or reassignment of our responsibilities could reduce our participation in commercialization and the economic benefits we receive from the collaboration.

In addition, the late-stage development of bexobrutideg and our activities under the collaboration are expected to require significant investment to prepare for potential commercialization, including in commercial infrastructure, medical affairs, market access, manufacturing scale-up and commercial-supply readiness.

We expect to incur or bear a significant portion of these expenditures before bexobrutideg receives marketing approval or generates revenue from product sales.

If marketing approval is delayed or not obtained, or if a commercial launch is delayed or does not occur, some of these investments may not be recoverable.

The economic benefits we may receive under the Roche collaboration depend on contingent milestone and royalty payments and our share of U.S.

Even if bexobrutideg is approved and commercialized, the development costs and U.S.

losses we bear may exceed the payments and profits we receive.

The Roche Collaboration Agreement may be terminated in whole or in part under specified circumstances.

Any termination could result in the loss of Roche’s resources and capabilities and could require us to seek alternative arrangements or assume substantial additional responsibilities and costs if we continue the development or commercialization of bexobrutideg.

We may be unable to replace Roche’s capabilities or transition affected activities on acceptable terms, on a timely basis or at all.

Consequently, we may need to delay, limit or discontinue the development or commercialization of bexobrutideg, which could materially adversely affect our business, financial condition, results of operations and prospects.

We may seek to establish additional collaborations.

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If we do not have sufficient funds, we may not be able to further develop our drug candidates or bring them to market and generate revenue from product sales, which could have an adverse effect on our business, financial condition, results of operations and prospects.

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 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.

Risks Related to Dependence on Third Parties

We and our collaborators 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 and our collaborators rely on third-party contract research organizations (CROs) to conduct clinical trial programs for bexobrutideg, including trials conducted under our collaboration with Roche, 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 due to a CRO’s failure to perform.

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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.

We rely on third-party contract manufacturing organizations (CMOs) for the manufacture of both drug substance and finished drug product for our drug candidates for preclinical and clinical testing and expect to continue to do so for any future clinical trials and commercialization.

We and our collaborators rely on third-party contract manufacturing organizations (CMOs) for the manufacture of both drug substance and finished drug product for our drug candidates for preclinical and clinical testing and expect to continue to do so for any future clinical trials and commercialization.

This reliance on third parties may increase the risk that we will not have sufficient quantities of our drug candidates or products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

We do not own or operate, and currently have no plans to establish, any manufacturing facilities.

We rely on and expect to continue to rely on third-party contract manufacturing organizations (CMOs) for both drug substance and finished drug product.

We and our collaborators rely on and expect to continue to rely on third-party contract manufacturing organizations (CMOs) for both drug substance and finished drug product.

This reliance on CMOs, particularly where one CMO is the sole source of the drug substance or finished drug product, may increase the risk that we will not have sufficient quantities of our drug candidates or products or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

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Our CMOs may be unable to successfully scale-up manufacturing of our drug candidates in sufficient quality and quantity, which would delay or prevent us from developing our drug candidates and commercializing approved products, if any.

In order to conduct clinical trials of our drug candidates, we will need to manufacture our drug candidates in large quantities.

Quality issues may arise during scale-up activities.

In order to conduct clinical trials of our drug candidates and prepare for potential commercial launch, we or our collaborators will need to manufacture or arrange for the manufacture of our drug candidates in large quantities.

Quality issues may arise during scale-up activities, including difficulties achieving process reproducibility and lot consistency, cost overruns and delays in obtaining raw materials.

Our reliance on a limited number of CMOs, the complexity of drug manufacturing and the difficulty of scaling up a manufacturing process could cause the delay of clinical trials, regulatory submissions, required approvals or commercialization of our drug candidates, cause us to incur higher costs and prevent us from commercializing our drug candidates successfully.

Furthermore, if our CMOs fail to deliver the required commercial quality and quantities of materials on a timely basis and at commercially reasonable prices, and we are unable to secure one or more replacement CMOs capable of production in a timely manner at a substantially equivalent cost, then testing and clinical trials of that drug candidate may be delayed or infeasible, and regulatory approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.

We may also need to build launch inventory before the level of potential demand is known and qualify backup sources for clinical and commercial supply, which may involve significant cost and delay.

Furthermore, if our CMOs fail to deliver the required commercial quality and quantities of materials on a timely basis and at commercially reasonable prices, or if we are unable to qualify or secure one or more replacement CMOs capable of production in a timely manner at a substantially equivalent cost, then testing and clinical trials of that drug candidate may be delayed or infeasible, and regulatory approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.

For example, as bexobrutideg advances through late-stage development, scaling up manufacturing and preparing for commercial-supply readiness may require successful process and analytical validation, stability studies, comparability or bridging work, and technology transfer.

Delays or failures in these activities, or in demonstrating that manufacturing processes and facilities meet applicable regulatory requirements and inspection standards, could delay clinical development, regulatory submissions or commercial launch.

Risks Related to the Commercialization of Our Drug Candidates

We are in the process of transitioning from a research and development-focused company to a company that must also plan for and support commercial activities, and we may not manage this transition successfully.

We have historically operated as a research and development-focused organization.

With the initiation of the Phase 3 DAYBreak CLL-306 registrational trial for bexobrutideg and the closing of our global co-development and co-commercialization collaboration with Roche, we are now in the early stages of planning and building the organizational capabilities, infrastructure and processes needed to support the potential commercialization of bexobrutideg and our other drug candidates, including medical affairs, market access, commercial operations, distribution, compliance and sales and marketing functions.

This transition requires us to simultaneously manage multiple complex workstreams, including large-scale clinical trial execution, regulatory preparation, manufacturing scale-up, commercial planning and the development of co-promotion capabilities under the Roche collaboration, while continuing to advance our earlier-stage pipeline.

We have limited experience managing a transition of this nature and scope.

The organizational, operational and cultural changes required to evolve from a research-focused company to one capable of supporting both late-stage development and commercial activities are substantial and may strain our management, financial and operational resources.

Among other things, we will need to hire and retain personnel with commercial, regulatory, manufacturing and compliance expertise that we have not previously required at scale;

implement new or upgraded information technology, financial, compliance and quality systems;

build or contract for commercial supply, distribution and logistics capabilities;

and develop and execute market access, pricing, reimbursement and launch strategies, in some cases well in advance of any marketing approval.

Many of these investments and activities must be initiated before we know whether or when bexobrutideg or any other drug candidate will receive marketing approval, and some may not be recoverable if approval is delayed or not obtained.

If we are unable to successfully manage this transition, or if the transition diverts management attention and resources from our clinical development programs or other business activities, our business, financial condition, results of operations and prospects could be materially and adversely affected.

Even if any of our drug candidates receive marketing approval, a drug candidate may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.

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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 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.

For example, recruiting and training a sales force is expensive and time-consuming and could delay any product launch.

If the commercial launch of a drug candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have incurred these commercialization expenses prematurely or unnecessarily.

These efforts may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel.

We intend to build our own focused, specialized sales and marketing organization to support our co-promotion obligations in the United States with respect to bexobrutideg under our collaboration with Roche and may do so with respect to the commercialization in the United States of other 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 and other pre-launch commercial infrastructure.

For example, recruiting and training a sales force and establishing medical affairs, market access, distribution, supply, systems and other commercial support capabilities are expensive and time-consuming and could require investments before marketing approval or delay any product launch.

If marketing approval or the commercial launch of a drug candidate for which we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have incurred these commercialization expenses prematurely or unnecessarily, and some of our investments may not be recoverable.

These efforts may be costly, and our investment would be lost if we cannot retain, redeploy or reposition the relevant personnel or infrastructure.

Factors that may inhibit our efforts to commercialize our products on our own include:

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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 and zelebrudomide drug candidates.

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

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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Even if we believe the data collected from clinical trials of our drug candidates are promising, such data may not be sufficient to support approval by the FDA.

For example, even if the DAYBreak CLL-306 trial meets its primary endpoint, the results may nevertheless be insufficient to support marketing approval, and regulators may require another adequate and well-controlled trial, confirmatory evidence, different or additional endpoints, or other clinical or nonclinical testing before approving bexobrutideg.

In addition, the Phase 3 DAYBreak CLL-306 trial is designed to evaluate the potential superiority of bexobrutideg versus pirtobrutinib, the current standard of care for patients with relapsed/refractory CLL/SLL who have previously received a covalent BTK inhibitor.

Superiority trials are inherently more difficult to achieve their primary endpoints than non-inferiority trials because they require statistically significant evidence that the investigational drug performs better than the comparator, not merely that it is comparable.

The trial is expected to enroll approximately 620 patients, and enrollment and conduct of a global registrational study of this size involve substantial logistical complexity.

If bexobrutideg does not demonstrate superiority to pirtobrutinib on the dual primary endpoints of objective response rate and progression free survival, the trial could fail to support regulatory submissions even if bexobrutideg shows meaningful clinical activity, which could have a material adverse effect on the development timeline and commercial prospects for bexobrutideg and on our business.

In addition, even if we were to obtain approval, regulatory authorities may approve any of our drug candidates for fewer or more limited indications than we request, or they may impose significant limitations in the form of narrow indications, warnings or a risk evaluation and mitigation strategy (REMS).

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Any of the foregoing scenarios could materially harm the commercial prospects for our drug candidates.

We have received Fast Track designation for bexobrutideg (NX-5948) and may seek Fast Track designation for other drug candidates in the future.

We have received Fast Track designation for bexobrutideg and may seek Fast Track designation for other drug candidates in the future.

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.

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Even if Priority Review is granted for one of our drug candidates, the FDA does not always meet its six-month goal date for Priority Review, and the review process may be extended if the FDA requests additional information or clarification.

We received an Innovation Passport designation for NX-1607 under the original Innovative Licensing and Access Pathway (ILAP), but NX-1607 did not qualify for participation in the relaunched ILAP.

The legacy designation may not expedite development or lead to marketing authorization, favorable reimbursement or successful commercialization.

In February 2022, we applied for and received an Innovation Passport designation for NX-1607 in the United Kingdom under the original Innovative Licensing and Access Pathway.

The Innovation Passport was the mandatory entry point to the original ILAP, a pre-market pathway designed to facilitate the development, regulatory review and market access of innovative medicines in the UK.

The original ILAP provided a framework for coordinated engagement among medicine developers, the Medicines and Healthcare products Regulatory Agency, UK health technology assessment bodies and the National Health Service.

This engagement could include product-specific guidance concerning clinical development, regulatory requirements, evidence generation, health technology assessment and potential patient access.

In 2025, UK authorities substantially revised and relaunched the ILAP with new eligibility and selection criteria and a revised package of support.

NX-1607 did not qualify for an Innovation Passport under the relaunched ILAP and remains under the legacy ILAP program.

As a result, NX-1607 may not be eligible for or receive the enhanced services, prioritized scheduling, NHS engagement, operational planning support and other benefits available under the relaunched ILAP.

Although the original ILAP is intended to reduce the time to patient access for innovative medicines, neither our legacy designation nor our participation in the legacy ILAP assures faster clinical development or regulatory review, marketing authorization within any particular timeframe or at all, favorable reimbursement or pricing, or successful commercialization.

Participation does not eliminate the need to satisfy applicable requirements for marketing authorization or UK health technology assessment evidentiary standards for reimbursement and market access.

We may not receive or fully realize the anticipated benefits of NX-1607’s legacy designation.

We may also delay or discontinue the development or commercialization of NX-1607 in the UK.

We may seek Innovation Passport designations under the relaunched ILAP for our other drug candidates, but we may not qualify for or receive those designations or realize their anticipated benefits.

We may submit an NDA for our drug candidates under the Accelerated Approval pathway.

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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 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.

We, as a company, have limited experience in filing for and obtaining regulatory approval to initiate clinical trials, 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.

Our inexperience may result in failure to or delays in obtaining the required regulatory approvals to initiate clinical trials, to successfully complete clinical trials and to obtain marketing approval for our drug candidates.

Our inexperience may result in failures or delays in obtaining the regulatory approvals required to initiate clinical trials, to prepare, submit or prosecute an NDA or comparable foreign regulatory submission, to successfully complete clinical trials and to obtain marketing approval for our drug candidates.

If we are unable to obtain regulatory and marketing approval for our drug candidates or experience significant delays in our efforts to do so, our business could be substantially harmed.

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We or our collaborators 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.

For example, because DAYBreak CLL-306 is a global trial, delays or deficiencies in trial execution at foreign sites, or the inability of the FDA or other regulatory authorities to accept or validate data generated at those sites, could require additional studies and delay or prevent approval of bexobrutideg in one or more jurisdictions.

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

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We, any contract manufacturers we may engage in the future, our collaborators and their contract manufacturers also will be subject to other regulatory requirements, including submissions of safety and other post-marketing information and reports, registration and listing requirements, requirements regarding the distribution of samples to clinicians, recordkeeping, and costly post-marketing studies or clinical trials and surveillance to monitor the safety or efficacy of the product, such as the requirement to implement a REMS.

We have received Orphan Drug Designation for bexobrutideg (NX-5948) and may seek Orphan Drug Designation for other drug candidates in the future.

We have received Orphan Drug Designation for bexobrutideg and may seek Orphan Drug Designation for other drug candidates in the future.

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.

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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, such drug candidates may fail to obtain regulatory data protection or an extension to existing regulatory data protection.

Where an applicant for a marketing authorization submits a full dossier containing its own pharmaceutical, preclinical tests and clinical trials data, and where the application does not fall within the “global marketing authorization” of an existing medicinal product, the applicant is entitled to eight years of regulatory data protection upon grant of the marketing authorization (the period starts to run from the first marketing authorization in the EU and EEA).

Where an applicant for a marketing authorization submits a full dossier containing its own pharmaceutical, preclinical tests and clinical trial data, and where the application does not fall within the “global marketing authorization” of an existing medicinal product, the applicant is entitled to eight years of regulatory data protection upon grant of the marketing authorization (the period starts to run from the first marketing authorization in the EU and EEA).

During this period, applicants for approval of generics or biosimilars cannot rely on data contained in the marketing authorization dossier submitted for the already authorized, or reference, medicinal product to support their application.

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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).

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 in the EU, or in the MHRA in the UK, 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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FDA-regulated industries, such as ours, face uncertainty with regard to the regulatory environment we will face as we proceed with research and development, and possibly in future commercialization.

Some of these efforts have manifested to date in the form of FDA reductions in workforce or other personnel measures that could impact the FDA’s ability to hire and retain key personnel, which could result in delays or limitations on our ability to obtain guidance from the FDA on our product candidates in development and obtain the requisite regulatory approvals in the future.

Moreover, additional changes to budget and staffing of other governmental agencies, including but not limited to those within the Department of Health and Human Services (HHS), could affect development activities such as enrollment and conduct of clinical trials.

Some of these efforts have manifested to date in the form of reductions in the FDA’s workforce or other personnel measures that could impact the FDA’s ability to hire and retain key personnel, which could result in delays or limitations on our ability to obtain guidance from the FDA on our product candidates in development and obtain the requisite regulatory approvals in the future.

Moreover, additional changes to budget and staffing of other governmental agencies, including but not limited to those within the HHS, could affect development activities such as enrollment and conduct of clinical trials.

There remains general uncertainty regarding future activities.

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congressional inquiries and proposed and enacted state and federal legislation and regulations designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient support programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products.

Most notably, the Inflation Reduction Act (IRA), which was signed into law on August 16, 2022, allows Medicare to 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 & Medicaid Services (CMS);

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

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We will need to grow our organization, and we may experience difficulties in managing this growth, which could disrupt our operations.

As our development and commercialization plans and strategies develop, and as we continue our transition into operating as a public company, we expect to expand our employee base for managerial, operational, financial and other resources.

As our development and commercialization plans and strategies develop, we expect to expand our employee base for managerial, operational, financial and other resources.

In addition, we have limited experience in product development.

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.

We filed our first IND in December 2020 and we initiated our first Phase 3 clinical trial in August 2026.

As we advance bexobrutideg through Phase 3 and prepare for its potential co-commercialization with Roche, we may need to hire additional personnel and implement, integrate or upgrade operational, financial, management information and commercial systems, controls and processes.

These efforts may involve significant integration and other transition costs and may divert management time and attention from other business activities.

Additionally, as our other 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.

In the future, we expect to have to manage additional relationships with collaborators or partners, suppliers and other organizations.

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In addition, the prevalent use of mobile devices and remote work applications that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information or other intellectual property or unauthorized access to personal information.

More capable general-purpose AI models released by major providers that are or may soon become widely accessible to developers and end users have amplified, and will continue to amplify, the capabilities of attackers, enabling more targeted and convincing phishing and social engineering campaigns, automated identification and exploitation of software vulnerabilities, the generation of novel malware and attack vectors, prompt injection attacks, automated reconnaissance, and the ability to conduct attacks at greater speed and scale than previously possible.

Increasingly capable AI models that are or may soon become widely accessible to developers and end users have amplified, and will continue to amplify, the capabilities of attackers, including by enabling more targeted and convincing phishing and social engineering campaigns, automated identification and exploitation of software vulnerabilities, the generation of novel malware and attack vectors, prompt injection attacks, automated reconnaissance, and the ability to conduct attacks at greater speed and scale than previously possible.

Additionally, AI-enhanced threats may be more difficult to detect using traditional security measures and may require us to invest in additional defensive capabilities.

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There is a risk that we could be impacted by a cybersecurity incident that results in loss or unauthorized disclosure of this proprietary and sensitive information, potentially resulting in harm to our reputation and financial losses.

Depending on the nature of the information compromised, in the event of a data breach or other unauthorized access to our customer data, we may also have obligations to notify customers and regulators about the incident, and we may need to provide some form of remedy, such as a subscription to credit monitoring services, pay significant fines to one or more regulators, or pay compensation in connection with a class-action settlement.

Such breach notification laws continue to evolve and may be inconsistent from one jurisdiction to another.

In the United States, the SEC has adopted rules for mandatory disclosure of cybersecurity incidents suffered by public companies, as well as cybersecurity governance and risk management.

In the United States, the SEC has adopted rules for mandatory disclosure of material cybersecurity incidents suffered by public companies, as well as cybersecurity governance and risk management.

Complying with these obligations could cause us to incur substantial costs and could increase negative publicity surrounding any incident that compromises customer data.

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On December 10, 2020, HHS issued proposed revisions to the HIPAA Privacy Rule aimed at reducing regulatory burdens that may exist in discouraging coordination of care, including creating an exception to the minimum necessary standard for healthcare coordination, and other proposals to increase patient access to their health information, among other changes.

Moreover, on December 27, 2024, HHS issued proposed revisions to the HIPAA Security Rule aimed at strengthening required cybersecurity protections for protected health information While a final rule has not yet been issued for either proposed rule, if adopted, these proposed changes may change standards for the processing, securing and sharing of health information in the industry, and impose additional risks and costs.

Moreover, on December 27, 2024, HHS issued proposed revisions to the HIPAA Security Rule aimed at strengthening required cybersecurity protections for protected health information.

While a final rule has not yet been issued for either proposed rule, if adopted, these proposed changes may change standards for the processing, securing and sharing of health information in the industry, and impose additional risks and costs.

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.

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

Washington state passed the My Health My Data Act, which took effect on March 31, 2024, and is focused on the collection of consumer health data.

For example, Washington state passed the My Health My Data Act, which took effect on March 31, 2024, and is focused on the collection of consumer health data.

The My Health My Data Act has a broader scope than HIPAA and includes a private right of action—depending on whether this law applies to us, there may be substantial regulatory action and litigation associated with this act.

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market and could increase our compliance costs and adversely affect our business.

Compliance with evolving privacy legislation and regulation adds complexity and may require investment in additional resources for compliance programs, thus potentially result in additional costs and expense of resources to maintain compliance.

Compliance with evolving privacy legislation and regulation adds complexity and may require investment in additional resources for compliance programs, thus potentially resulting in additional costs and requiring additional resources to maintain compliance.

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

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However, our competitors and other third parties may incorporate AI into their operations and processes more quickly or more successfully than we do, which could impair our ability to compete effectively and adversely affect our results of operations.

Additionally, if the output that AI applications assist in producing are or are alleged to be inaccurate, deficient, or biased, our business, financial condition, and results of operations may be adversely affected.

Additionally, if the output that AI applications assist in producing is or is alleged to be inaccurate, deficient, or biased, our business, financial condition, and results of operations may be adversely affected.

Furthermore, the integration of third-party AI models with our operations relies on certain safeguards implemented by the third-party developers of the underlying AI models, including those related to the accuracy, bias, and other variables of the data, and these safeguards may be insufficient.

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Our net loss and other results of operations will be affected by numerous factors, including:

• variations in the level of expense related to the ongoing development of our drug candidates, DEL-AI platform, or future development programs;

• variations in the level of expense related to the ongoing development of our drug candidates, DEL-AI platform, future development programs or commercialization readiness;

• results of preclinical studies and clinical trials, or the addition or termination of clinical trials or funding support by us or by existing or future collaborators or licensing partners;

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• strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy;

• if any of our drug candidates receives regulatory approval, the terms of such approval and market acceptance and demand for such drug candidates;

• if any of our drug candidates receive regulatory approval, the terms of such approval and market acceptance and demand for such drug candidates;

• regulatory developments affecting our drug candidates or those of our competitors;

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• the success of competitive products or technologies;

• the success of our or our collaborators’ commercialization efforts;

• introductions and announcements of new products by us, our collaboration partners, or our competitors, and the timing of these introductions or announcements;

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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 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, subscription 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.

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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 May 31, 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 May 31, 2026.

As of August 31, 2026, we have issued pre-funded warrants to purchase a total of 8,315,020 shares of our common stock, of which 2,869,440 were outstanding as of August 31, 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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The reporting on our assessment of the effectiveness of our internal control over financial reporting needs to include disclosure of any material weaknesses identified in our internal control over financial reporting.

Moreover, based on the market value of our common stock held by non-affiliates as of May 31, 2025, we will continue to be considered a large accelerated filer under SEC rules for the fiscal year ending November 30, 2026, and, as a result, our independent registered public accounting firm will be required to audit the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act (Section 404(b)).

Moreover, based on the market value of our common stock held by non-affiliates as of May 31, 2026, we will continue to be a large accelerated filer under SEC rules for the fiscal year ending November 30, 2027, and, as a result, our independent registered public accounting firm will be required to audit the effectiveness of our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act (Section 404(b)).

Compliance with Section 404(b) will result in increased costs, expenses, and management resources.

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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