OnKure Therapeutics, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our audited financial statements and the related notes for the years ended December 31, 2025 and 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2025, and subsequent filings. Unless otherwise indicated, all references in this Quarterly Report on Form 10-Q to “OnKure,” the “Company,” “we,” “our,” “us,” or similar terms refer to OnKure Therapeutics, Inc. Overview We are a clinical-stage biopharmaceutical company focused on the discovery and development of precision medicines that target biologically validated drivers of vascular anomalies and cancers that are underserved by available therapies. Using a structure- and computational chemistry-driven drug design platform, we are committed to improving clinical outcomes for patients by building a pipeline of small molecule drugs designed to selectively target specific mutations thought to be key drivers of cancer and vascular anomalies. By improving selectivity for the oncogenic and mutated form of these cancer-driver proteins, we aim to discover and develop drugs with improved safety and efficacy by sparing toxicity that arises from non-selective inhibition of the non-mutated (or wild-type) version of the protein. We work under the belief that inhibiting target proteins with specific mutations instead of wild-type variants should enable precise patient selection that will, in turn, improve the probability of clinical success. We designed our current product candidates utilizing disciplined medicinal chemistry, x-ray crystallography, and computational chemistry to inhibit specified mutated versions of PI3K α , a key mediator in cancer growth signaling. Next-Generation PI3K α Pan-Mutant Programs Our portfolio includes two next-generation PI3Kα pan-mutant programs, OKI-345 in breast cancer and OKI-355 in vascular anomalies. These candidates are designed to selectively inhibit mutant PI3Kα while sparing wildtype PI3Kα, potentially enabling a wider therapeutic index and avoidance of class-limiting toxicities. High and sustained target coverage across all hotspot PI3Kα mutations can support the potential for deep and durable responses in breast cancer, both as monotherapy and in combination regimens. The PI3Kα pan-mutant candidates are designed to have minimal drug-drug interaction potential, supporting broad combinability with current standards of care. We plan to submit an Investigational New Drug (“IND”) application to the U.S. Food and Drug Administration for each of OKI-345 and OKI-355 in the first half of 2027. PIKture-01 Trial and OKI-219 Update The PIKture-01 trial is a global, multi-center, dose-escalation, first-in-human Phase 1a/1b study evaluating the safety, tolerability, pharmacokinetics, pharmacodynamics, and efficacy of OKI-219 as monotherapy and in combination with other anti-cancer drugs for the treatment of HR+ and HER2+ advanced breast cancer. As of March 26, 2026, the PIKture-01 trial has completed enrollment in single-agent OKI-219 dose escalation (n=38) and OKI-219 + fulvestrant dose escalation (n=33). Phase 2 dose evaluation in the OKI-219 + tucatinib and trastuzumab triplet and the OKI-219 + ribociclib and fulvestrant triplets will be completed in 2026. Given the progress of our PI3Kα pan-mutant inhibitors, we do not plan to pursue further clinical development of OKI-219 independently. Merger On October 4, 2024, we completed the Merger. Refer to Note 1 “Organization and Business” to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding the Merger. Macroeconomic and Geopolitical Considerations Our business and operations may be negatively affected by macroeconomic, geopolitical, and regulatory developments, including inflation, instability in the banking and financial services sector, tightening of the credit markets, international conflicts, cybersecurity, tariffs, sanctions, export controls, government policy positions, and changes in regulatory agencies with oversight of our operations. These developments could affect our supply chain, manufacturing processes, regulatory compliance costs, regulatory approval timelines, and cross-border operations. 21 Further, it is possible that U.S. and non-U.S. government policy changes and related uncertainty about policy changes could increase market volatility and our operating expenses. The extent, severity, and duration of the impacts of these events and conditions on our business cannot be predicted and may not be fully reflected in our results of operations until future periods. If economic uncertainty continues or increases, or if the global economy worsens, our business, financial condition, and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events and conditions on our business, financial condition, and operating results, see the section titled “Risk Factors” included in this Quarterly Report. Financial Overview Since our inception, our operations have primarily focused on raising capital, establishing and protecting our intellectual property portfolio, organizing and staffing our company, business planning, and conducting preclinical and clinical development of and manufacturing development for our product candidates. We do not have any product candidates approved for sale, have not generated any revenue from product sales, and do not expect to generate revenues from the commercial sale of any products for the foreseeable future, if ever. Since our inception, we have incurred significant operating losses. Our net losses were $15.2 million and $59.5 million for the three months ended March 31, 2026 and the year ended December 31, 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $229.4 million and cash and cash equivalents of $192.1 million. We have funded our operations primarily through private placements of our common stock and preferred stock and the issuance of convertible debt. As of March 31, 2026, we believe our cash resources are sufficient to fund our planned operations for at least the next 12 months from the date of issuance of our unaudited condensed consolidated financial statements for the quarter ended March 31, 2026. Components of Our Results of Operations Operating Expenses Research and Development Expenses Research and development expenses primarily relate to expenses incurred in connection with the discovery and development of our product candidates. Research and development expenses include: • employee-related expenses, including salaries, severance, retention, benefits, insurance, and share-based compensation expense; • expenses incurred under agreements with CROs, which are investigative sites that conduct our clinical trials, other clinical trial-related vendors, and clinical consultants; • the costs of acquiring, developing, and manufacturing and testing clinical and preclinical materials, including costs incurred under agreements with CMOs; • costs associated with non-clinical activities and regulatory operations; and • facilities, depreciation, market research, and other expenses, which include allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and laboratory supplies. We make non-refundable advance payments for goods and services that will be used in future research and development activities. These payments are recorded as expenses in the period in which we receive or take ownership of the goods or when the services are performed. At any one time, we are working on multiple research or drug discovery programs and internal resources. Employees and infrastructure are not directly tied to any one program and are typically deployed across multiple programs; therefore, we do not track these research and development expenses on a program-specific basis. Conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time-consuming. As we initiate new clinical trials, our research and development expenses may increase. Product 22 candidates in later stages of development generally have higher development costs than those in earlier stages. As a result, we expect that our research and development expenses will increase substantially over the next several years as we advance product candidates through preclinical studies into and through clinical trials, continue to discover and develop additional product candidates, undertake activities to expand, maintain, protect, and enforce our intellectual property portfolio, and hire additional research and development personnel. Successful development of product candidates is highly uncertain and may not result in approved products. The probability of success for each product candidate may be affected by numerous factors, including clinical data, preclinical data, competition, manufacturability, and commercial viability. Completion dates and completion costs can vary significantly for each product candidate and are difficult to predict. We anticipate that we will make determinations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to our ability to enter strategic alliances with respect to each program or product candidate, the scientific and clinical success of each product candidate, and ongoing assessments as to each product candidate’s commercial potential. We will need to raise additional capital and may seek strategic alliances in the future to advance our various programs. General and Administrative General and administrative expenses consist primarily of salaries, bonuses and related benefits, share-based compensation, and severance and retention benefits related to our executive, finance, and administrative functions, professional fees for auditing, tax, consulting, and legal services, as well as insurance, board of director compensation, consulting, and other administrative expenses. We recognize general and administrative expenses in the periods in which they are incurred. We expect that our general and administrative expenses will increase over the next several years as we hire additional personnel to support the growth of our business. In addition, we will incur significant additional expenses associated with being a public company, including expenses related to accounting, audit, legal, regulatory, public company reporting and compliance, director and officer insurance, investor and public relations, and other administrative and professional services. Other Income Interest Income Interest income primarily consists of interest income generated from our cash equivalents in interest-bearing money market accounts. Results of Operations Comparison of the three months ended March 31, 2026 and 2025 The following table summarizes our results of operations for the periods indicated: Three Months Ended March 31, 2026 2025 $ Change (in thousands) Operating expenses: Research and development $ 11,707 $ 13,012 $ (1,305 ) General and administrative 3,908 3,988 (80 ) Total operating expenses 15,615 17,000 (1,385 ) Loss from operations (15,615 ) (17,000 ) 1,385 Other income: Interest income 458 1,075 (617 ) Total other income and (expense) 458 1,075 (617 ) Net loss and comprehensive loss $ (15,157 ) $ (15,925 ) $ 768 23 Research and Development Expenses Research and development expenses were $11.7 million for the three months ended March 31, 2026 compared to $13.0 million for the three months ended March 31, 2025. The decrease of approximately $1.3 million was primarily due to $1.8 million of decreased outsourced research and development, partially offset by an increase of $0.7 million clinical trial costs. We expect research and development expenses in 2026 to be higher than 2025 due to continued efforts to advance our programs. General and Administrative Expenses General and administrative expenses were $3.9 million for the three months ended March 31, 2026 compared to $4.0 million for the three months ended March 31, 2025. The decrease of approximately $0.1 million was primarily due to a $0.3 million decrease in legal and filing fee costs. This decrease was partially offset by a $0.2 million increase personnel-related costs, including share-based compensation. We expect general and administrative expenses in 2026 to be higher than 2025. Other Income Other income was $0.5 million for the three months ended March 31, 2026 compared to $1.1 million for the three months ended March 31, 2025. The change was primarily due to a decrease in interest income due to a decrease in cash and cash equivalents available to invest during the quarter ended March 31, 2026 as compared to the quarter ended March 31, 2025. We expect other income in 2026 to be higher than 2025 with higher average available cash to invest during 2026 given the 2026 Private Placement that closed March 31, 2026. Liquidity and Capital Resources Since inception, we have not generated any revenue from product sales and have incurred significant operating losses and negative cash flows from our operations. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance the development of our product candidates. We expect that our research and development and general and administrative costs will continue to increase significantly, including in connection with initiating and conducting clinical trials and manufacturing our product candidates to support such clinical trials and commercialization and providing general and administrative support for our operations. As a result, we will need additional capital to fund our operations, which we may seek to obtain from equity or debt financings, collaborations, licensing arrangements or other sources. In March 2026, we completed the 2026 Private Placement for aggregate gross proceeds of approximately $150.0 million, before deducting placement agent fees and offering expenses. Pursuant to the 2026 PIPE Purchase Agreement, we agreed to use the proceeds from the 2026 Private Placement for research and development expenses for our vascular anomalies and breast cancer programs, excluding OKI-219, and for working capital and other general corporate purposes. In November 2025, we filed the Registration Statement, which registered an aggregate of up to $200 million of securities that may be issued and sold from time to time, including initially up to an aggregate offering price of $16.0 million of Common Stock (which is included in the $200 million aggregate offering price set forth in the base prospectus) that may be issued and sold pursuant to the ATM Sales Agreement. As of March 31, 2026, no shares have been sold under the ATM Sales Agreement. We have funded our operations primarily through private placements of equity and convertible debt. Based on our current operating plan, we believe that our existing cash and cash equivalents will be sufficient to fund our 24 planned operations for at least the next 12 months from the date of issuance of our unaudited condensed consolidated financial statements for the quarter ended March 31, 2026. Funding Requirements Our primary uses of cash to date have been to fund our research and development activities, including with respect to our PI3Kα and other programs, business planning, establishing and maintaining our intellectual property portfolio, hiring personnel, raising capital, and providing general and administrative support for these activities. We have never generated any revenue from product sales and do not expect to generate any meaningful product revenue unless and until we obtain regulatory approval for our product candidates, and management does not know when, or if, that will occur. Until we can generate significant revenue from product sales, if ever, we will continue to require substantial additional capital to develop our product candidates and fund operations for the foreseeable future. We are subject to all the risks inherent in the development of new biopharmaceutical products, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may harm our business. In order to complete the development of our product candidates and to build the sales, marketing, and distribution infrastructure that we believe will be necessary to commercialize product candidates, if approved, we will require substantial additional capital. Accordingly, until such time that we can generate a sufficient amount of revenue from product sales or other sources, we expect to seek to raise any necessary additional capital through equity financings, debt financings, or other capital sources, which could include income from collaborations, partnerships, licensing, or other strategic arrangements with third parties. To the extent that we raise additional capital through equity financings or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, including restricting our operations and limiting our ability to incur liens, issue additional debt, pay dividends, repurchase our own common stock, make certain investments, or engage in merger, consolidation, licensing or asset sale transactions. If we raise capital through collaborations, partnerships, or other similar arrangements with third parties, we may be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We may be unable to raise additional capital from these sources on favorable terms, or at all. Our ability to secure capital is dependent upon a number of factors, including our success in developing our product candidates and our ability to access the capital markets. The failure to obtain sufficient capital on acceptable terms when needed could have a material adverse effect on our business, results of operations, or financial condition, including requiring us to delay, reduce, or curtail our research, product development, or future commercialization efforts. We may also be required to license rights to product candidates at an earlier stage of development or on less favorable terms than we would otherwise choose. We cannot provide assurance that we will ever generate positive cash flow from operating activities. Our future funding requirements will depend on many factors, including: • the scope, timing, progress, results, and costs of researching and developing OKI-219, OKI-345 and OKI-355 and conducting preclinical studies and clinical trials; • the scope, timing, progress, results and costs of researching and developing other product candidates that we may pursue; • the costs, timing, and outcome of regulatory review of our product candidates; • the costs of future activities, including product sales, medical affairs, marketing, manufacturing, and distribution for our product candidates for which we receive marketing approval; • the costs of manufacturing commercial-grade products and producing sufficient inventory to support commercial launch; • the revenue, if any, received from commercial sales of our products, should our product candidates receive marketing approval; 25 • the cost and timing of attracting, hiring, and retaining skilled personnel to support our operations and continued growth; • the costs of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending intellectual property-related claims; • our ability to establish, maintain, and derive value from collaborations, partnerships, or other marketing, distribution, licensing, or other strategic arrangements with third parties on favorable terms, if at all; • the extent to which we acquire or in-licenses other product candidates and technologies, if any; and • the costs associated with operating as a public company. A change in the outcome of any of these or other factors with respect to the development of OKI-219, OKI-345 and OKI-355 or any of our future product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we may need additional capital to meet the capital requirements associated with such operating plans. Cash Flows The following table summarizes our cash flows for the periods indicated, in thousands: Three Months Ended March 31, 2026 2025 (in thousands) Net cash provided by (used in): Operating activities $ (12,938 ) $ (14,005 ) Investing activities (5 ) (18 ) Financing activities 145,999 (77 ) Net increase (decrease) in cash and cash equivalents $ 133,056 $ (14,100 ) Cash Flows from Operating Activities Cash used in operating activities during the three months ended March 31, 2026 was $12.9 million. This consisted primarily of a net loss of $15.2 million, a net decrease in operating assets and liabilities of $0.8 million, offset by non-cash share-based compensation of $2.8 million. Cash used in operating activities during the three months ended March 31, 2025 was $14.0 million. This consisted primarily of a net loss of $15.9 million, a net decrease in operating assets and liabilities of $1.0 million, offset by non-cash share-based compensation of $2.7 million. Cash Flows from Investing Activities Cash used in investing activities was $5 thousand and $18 thousand for three months ended March 31, 2026 and 2025, respectively, and related to purchase of property and equipment. Cash Flows from Financing Activities Cash provided by financing activities during the three months ended March 31, 2026 was $146.0 million and related to proceeds from the sale of Common Stock and pre-funded warrants in connection with the 2026 Private Placement. Cash used in financing activities during the three months ended March 31, 2025 was $77 thousand and related to payment of issuance costs from the Concurrent Financing and reverse recapitalization transaction costs in connection with the Merger. 26 Material Cash Requirements The discussion below summarizes our significant contractual obligations and commitments as of March 31, 2026. Leases . See Note 4 of Notes to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding our leases, including the future operating lease minimum payments. Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions. Our critical accounting policies are described in our audited financial statements and the related notes for the years ended December 31, 2025 and 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2025, and the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q. During the three months ended March 31, 2026, there were no material changes to our critical accounting policies from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2025. Recent Accounting Pronouncements See Note 2 of Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our condensed consolidated financial statements. Item 3. Quantitative and Qualitative Disclosures About Market Risk We are a smaller reporting company, as defined by Rule 12b-2 under the Exchange Act and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item.