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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2026-02-24 compared with 2025-02-25 · 197 added, 154 removed, 816 unchanged (30% of the section changed)

1 unchanged sentence

Interest Rate Risk

Our cash and cash equivalents as of December 31, 2024 and December 31, 2023 consisted of readily available checking and money market funds.

Our cash and cash equivalents as of December 31, 2025 and 2024 consisted of readily available checking and money market funds.

As of December 31, 2025, we also invested in U.S.

Treasury securities, U.S.

government agency

securities, corporate debt, commercial paper and asset-backed securities.

government agency securities, corporate debt, commercial paper and asset-backed securities.

Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S.

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For the years ended December 31, 2025 and 2024, we had interest income of $119.7 million and $110.0 million, respectively.

The following table shows the impact of a hypothetical 10% increase or decrease in interest rates on our net assets as of December 31, 2024 and our net loss for the year then ended:

The following

table shows the impact of a hypothetical 10% increase or decrease in interest rates on our net assets as of December 31, 2025 and our net loss for the year then ended:

Impact on Net Assets as of December 31, 2025

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However, from time to time, we buy Swiss Francs (“CHF”), which is the majority of our foreign currency exposure, at market and hold CHF in our bank accounts.

As of December 31, 2024 and December 31, 2023, we had approximately $25.8 million and $7.6 million of CHF cash and cash equivalents, respectively, held at two financial institutions.

As of December 31, 2025, we had approximately $38.9 million of CHF cash and cash equivalents held at three financial institutions.

As of December 31, 2024, we had approximately $25.8 million of CHF cash and cash equivalents held at two financial institutions.

As of December 31, 2025 and December 31, 2024, we had foreign currency denominated accounts payable and accrued expenses of $129.0 million and $72.4 million, respectively.

14 unchanged sentences

The extent of any future impacts from inflation on our business and our results of operations will be dependent upon how long the elevated inflation levels persist and if the rate of inflation were to accelerate, neither of which we are able to predict.

If elevated levels of inflation were to persist or if the rate of inflation were to further increase, the purchasing power of our cash and cash equivalents may be eroded, our expenses could increase faster than anticipated and we may utilize our capital resources sooner than expected.

If elevated levels of inflation were to persist

or if the rate of inflation were to further increase, the purchasing power of our cash and cash equivalents may be eroded, our expenses could increase faster than anticipated and we may utilize our capital resources sooner than expected.

We do not believe inflation had a material effect on our consolidated results of operations during the periods presented.

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Critical Audit Matter Description

The Company incurs research and development expenses related to the costs of research and development activities, including those performed by Lonza, a contract manufacturing organization under development and manufacturing services agreements, to provide research and development services related to preclinical and clinical-stage vaccine development.

At the end of each period, the Company accrues for costs related to contract manufacturing expenses based on their estimates of the services received for each phase and efforts expended pursuant to quotes and contracts with vendors that conduct research and development on their behalf.

The Company incurs research and development expenses, including those performed by Lonza, a contract manufacturing organization, under development and manufacturing services agreements, to provide research and development services related to preclinical and clinical-stage vaccine development.

At the end of each period, the Company accrues for costs related to manufacturing expenses based on their estimates of the services received for each phase and efforts expended pursuant to quotes and contracts with vendors that conduct research and development on their behalf.

This estimation process involves reviewing open contracts and purchase orders, communicating with Company personnel and third parties to identify services that have been performed on their behalf, and estimating the level of service performed and the associated costs incurred for the services for each phase when the Company has not yet been invoiced or otherwise notified of the actual costs.

We identified the Company’s accrued contract manufacturing expenses as a critical audit matter primarily due to judgments necessary for management to estimate the cost of services provided but not yet invoiced and the significant volume of transactions.

transactions.

The amount of the accrual at period end is based on the terms and conditions per the agreements and is dependent on management’s gathering of information from various sources, including Lonza, regarding the progress of the uninvoiced services at the reporting date.

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We then compared this information to the judgment applied in management’s estimate of the recorded expenses and corresponding accrual.

• We evaluated the completeness of contract stages used by the Company by comparing to the tracker obtained from Lonza, as Lonza is the most significant contract manufacturer.

• We evaluated the completeness of accrued contract manufacturing expenses through subsequent disbursement testing, and by tracing selected contract stages from the tracker obtained from Lonza, the Company’s most significant contract manufacturer, to the contract stages used by the Company.

• For a sample of contract stages, we evaluated the accrued contract manufacturing expenses by:

1 unchanged sentence

◦ Inspecting the development and manufacturing services agreement and related amendments, change orders, statements of work, and agreeing key provisions of the agreements including timeline, budget, and relevant rates, to the Company’s analysis of estimated expenses incurred to date.

◦ Obtaining invoices, if available, for each selection to substantiate when the transaction should have been recorded.

◦ Obtaining invoices, if available, to substantiate when the transaction should have been recorded.

◦ Obtaining cash disbursements to test the accuracy of the accrual.

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Acquired manufacturing rights (Note 7)

— 75,000 22,995

General and administrative 129,369 92,902 60,700

1 unchanged sentence

Loss from operations ( 923,675 ) ( 569,546 ) ( 468,041 )

Other income (expense), net:

Interest expense — — ( 2 )

Other income, net:

Interest income 119,718 109,994 62,907

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Balance — December 31, 2022 79,470,670 $ 82 $ 1,476,018 $ ( 522,126 ) $ — $ ( 361 ) $ 953,613

Issuance of common stock and pre-funded warrants in connection with public follow-on offerings, net of issuance costs of $ 45,814

21,062,500 21 759,160 — — 759,181

Issuance of common stock in connection with at-the-market offering, net of issuance costs of $ 3,107

Issuance of common stock in connection with employee incentive plans

768,218 1 7,653 — — 7,654

Issuance of common stock for Sutro stock payment

Issuance of common stock and pre-funded warrants in connection with public follow-on offering, net of issuance costs of $ 29,952

13,030,000 13 545,289 — — 545,302

Issuance of common stock in connection with employee incentive plans

Issuance of common stock in connection with at-the market offering, net of issuance costs of $ 2,237

2,095,943 2 90,739 — — 90,741

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Stock-based compensation expense — — 48,760 — — 48,760

Other comprehensive loss — — — — ( 120 ) ( 120 )

Other comprehensive income — — — — 540 540

Net loss — — — ( 402,266 ) — ( 402,266 )

Balance — December 31, 2023 95,364,831 98 2,164,583 ( 924,392 ) — 179 1,240,468

Issuance of common stock and pre-funded warrants in connection with public follow-on offerings, net of issuance costs of $ 29,952

Issuance of common stock in connection with employee incentive plans

2,122,953 2 27,142 — — — 27,144

Issuance of common stock in connection with at-the-market offering, net of issuance costs of $ 2,237

Issuance of common stock and pre-funded warrants in connection with follow-on public offerings, net of commissions and offering expenses of $ 117,785

24,782,690 25 2,239,688 — — — 2,239,713

Issuance of common stock in connection with employee incentive plans

Issuance of common stock in connection with at-the-market offering, net of commissions and offering expenses of $ 4,393

2,622,560 3 195,940 — — — 195,943

7 unchanged sentences

Issuance of common stock in connection with employee incentive plans

Issuance of common stock and pre-funded warrants in connection with public follow-on offerings, net of issuance costs of $ 117,785

1,171,266 1 13,004 — — 13,005

Issuance of common stock in connection with at-the-market offering, net of commissions and offering expenses of $ 4,393

Issuance of common stock from underlying pre-funded warrants in connection with follow-on public offerings

4,994,558 5 ( 5 ) — — —

2 unchanged sentences

Stock-based compensation expense — — 138,845 — — 138,845

Other comprehensive loss

— — — — ( 4,052 ) ( 4,052 )

Other comprehensive income — — — — 5,460 5,460

Net loss — — — ( 766,628 ) — ( 766,628 )

12 unchanged sentences

Stock-based compensation expense 138,845 84,822 48,760

Non-cash payments for acquired manufacturing rights — — 7,995

Amortization of operating lease right-of-use assets 8,464 8,842 7,015

1 unchanged sentence

( 14,434 ) ( 38,704 ) ( 34,775 )

Unrealized foreign exchange loss

Unrealized foreign exchange loss (gain) ( 34,768 ) 4,232 —

Changes in operating assets and liabilities:

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Purchases of manufacturing facility build-out and equipment construction-in-progress ( 43,260 ) ( 96,732 ) ( 51,815 )

( 96,732 ) ( 51,815 ) —

Purchases of investments ( 1,211,499 ) ( 3,086,701 ) ( 1,329,896 )

1 unchanged sentence

Sales of investments 174,690 66,959 12,586

Net cash (used in) provided by investing activities ( 2,005,666 ) ( 773,311 ) 74,585

Net cash provided by (used in) investing activities 437,354 ( 2,005,666 ) ( 773,311 )

Cash flows from financing activities:

9 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 2,439 426 ( 6,686 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 9,359 ) ( 436,974 ) 765,672

Net decrease in cash, cash equivalents and restricted cash ( 213,770 ) ( 9,359 ) ( 436,974 )

Cash, cash equivalents and restricted cash, beginning of period 389,195 398,554 835,528

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Purchases of property and equipment recorded in accounts payable and accrued expenses $ 7,538 $ 13,179 $ 8,510

Issuance of common stock for acquired manufacturing rights $ — $ — $ 7,995

The accompanying notes are an integral part of these consolidated financial statements.

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We are a clinical-stage vaccine innovation company engineering high-fidelity vaccines to protect humankind from the consequences of bacterial diseases.

We are developing broad-spectrum conjugate and novel protein vaccines to prevent or treat bacterial infectious diseases.

We are re-engineering the way highly complex vaccines are made through modern synthetic techniques, including advanced chemistry and the XpressCF cell-free protein synthesis platform, exclusively licensed from Sutro Biopharma, Inc.

(“Sutro Biopharma”).

Unlike conventional cell-based approaches, our system for producing difficult-to-make proteins and antigens is intended to accelerate our ability to efficiently create and deliver high-fidelity vaccines with enhanced immunological benefits.

Our primary activities since incorporation have been to perform research and development, undertake preclinical and clinical studies and conduct manufacturing activities in support of our product development efforts;

We are re-engineering the way highly complex vaccines are made through the XpressCF™ cell-free protein synthesis platform.

Unlike conventional cell-based approaches, our system for producing difficult-to-make proteins and antigens is intended to develop and deliver high-fidelity vaccines with enhanced immunological benefits that are beyond the capabilities of conventional approaches.

organize and staff our Company;

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Although we are working to establish secondary sources of supply, we currently source several of our critical raw materials from single-source suppliers.

We also use one contract manufacturing organization (“CMO”), Lonza Ltd.

We currently use a contract manufacturing organization (“CMO”), Lonza Ltd.

(“Lonza”), to handle most of our manufacturing activities for our VAX-31 and VAX-24 programs.

If we were to experience disruptions in raw materials supplied by our suppliers, or in manufacturing activities at Lonza, we may experience significant delays in our product development timelines and may incur substantial costs to secure alternative sources of raw materials or manufacturing.

As another CMO, Patheon Manufacturing Services LLC, part of Thermo Fisher

Scientific (collectively, “Thermo Fisher”) will formulate, fill, inspect, package, label, test, manufacture and supply drug product for our PCV programs.

If we were to experience disruptions in raw materials supplied by our suppliers, or in manufacturing activities at Lonza and/or at Thermo Fisher, we may experience significant delays in our product development timelines and may incur substantial costs to secure alternative sources of raw materials or manufacturing.

The “Risk Factors” section of this Annual Report on Form 10-K describes more details on these risks and other risks and uncertainties that could affect our business and our future.

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and (v) the underlying asset is such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term.

As of December 31, 2024 and 2023, our lease population consisted of real estate operating leases and we did no t have any finance leases.

As of December 31, 2025 and 2024, our lease population consisted of real estate operating leases and we did not have any finance leases.

Operating leases are included in Operating lease right-of-use (“ROU”) assets, Operating lease liabilities — current and Operating lease liabilities — long term in our consolidated balance sheets.

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If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the projected discounted future net cash flows generated by the assets.

There were $ 0 million, $ 0 million and $ 0.2 million of impairments of long-lived assets during the years ended December 31, 2024, 2023 and 2022, respectively.

There were no impairments of long-lived assets during the years ended December 31, 2025, 2024 or 2023.

Research and Development

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We determine the grant-date fair value of stock options with only service conditions using the Black-Scholes option-pricing model.

The fair value of restricted stock and restricted stock unit (“RSU”) awards with only service conditions are determined based on the number of units granted and the closing price of the Company’s common stock as of the grant-date.

The grant-date fair value of awards with only service conditions is recognized as share-based compensation expense on a straight-line basis over the employees’ requisite service period or the non-employees’ vesting period as the services are rendered.

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Foreign Currency Transactions

Transactions denominated in foreign currencies are initially measured in U.S.

dollars using the exchange rate on the date of the transaction.

Foreign currency denominated monetary assets and liabilities are subsequently re-measured at the end of each reporting period using the exchange rate at that date, with the corresponding foreign currency transaction gain or loss recorded in the consolidated statements of operations and consolidated statements of cash flows.

For our international operations, the local currency has been determined to be the functional currency.

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Recently Adopted Accounting Standards

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Updates ("ASU") No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

The ASU requires entities to report incremental information about significant segment expenses included in a segment’s profit or loss measure as well as the name and title of the chief operating decision maker.

The guidance also requires interim disclosures related to reportable segment profit or loss and assets that had previously only been disclosed annually.

We adopted this ASU during the year ended December 31, 2024 on a retrospective basis.

See Note 13, "Segment Reporting " for further details.

In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09—Income Taxes:

Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The new standard is effective for annual periods beginning after December 15, 2024.

We adopted this ASU on a retrospective basis effective with our annual reporting period beginning January 1, 2025.

See Note 12, Income Taxes for additional information.

Recently Issued Accounting Standards Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by us as of the specified effective date.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies and adopted by us as of the specified effective date.

We believe that the impact of recently issued standards that are not yet effective will not have a material impact on our consolidated financial statements and disclosures.

1 unchanged sentence

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”).

The amendments in ASU 2024-04 intends to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion).

This new guidance is effective for us for the annual period beginning after December 15, 2026.

The amendments in ASU 2024-03 intend to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization and depletion).

This new guidance is effective for us for annual periods beginning after December 15, 2026.

We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

The final guidance adds clarifications related to the presentation of rate reconciliation for public business entities and definitions of specific categories in rate reconciliation.

These amendments are effective for public business entities for annual periods beginning after December 15, 2024.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”).

The amendments in ASU 2025-06 intend to modernize the accounting for software costs that are accounted for under Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software (referred to as “internal-use software”).

This new guidance is effective for us for annual periods beginning after December 15, 2027.

We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities.

The amendments in ASU 2025-10 intend to establish authoritative guidance on the accounting for government grants received by business entities.

This guidance is effective for us beginning with our 2029 fiscal year annual reporting period, with early adoption permitted.

We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11 to amend the guidance in “Interim Reporting” (Topic 270).

The update provides clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period.

The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application.

The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years.

We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-12 “Codification Improvements” to address suggestions received from stakeholders on the Accounting Standards Codification ("the Codification") and to make other incremental improvements to U.S.

The update represents changes to the Codification that (i) clarify, (ii) correct errors, or (iii) make minor improvements.

The amendments make the Codification easier to understand and apply.

The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years.

We are currently evaluating the impact of this guidance on our consolidated financial statements and related disclosures.

Fair Value Measurements and Fair Value of Financial Instruments

9 unchanged sentences

Treasury securities

8,983 2 — 8,985

Commercial paper Level 2 36,245 — ( 5 ) 36,240

5 unchanged sentences

government agency securities Level 2 219,854 289 ( 28 ) 220,115

Certificate of Deposit Level 2 20,000 — — 20,000

Total investments 2,263,417 5,372 ( 125 ) 2,268,664

8 unchanged sentences

Money market funds Level 1 73,566 — — 73,566

Treasury securities

8,983 2 — — 8,985

Commercial paper Level 2 244,833 1 ( 38 ) 244,796

8 unchanged sentences

We had no Level 3 securities either as of December 31, 2025 or 2024.

There were no transfers within the hierarchies during the years ended December 31, 2024 and 2023.

As of December 31, 2024 and December 31, 2023, we had investments with a total fair market value of $ 1.5 billion and $ 654.7 million in an unrealized loss position, of which $ 10.5 million and $ 19.1 million, respectively, were in a continuous unrealized loss position for more than 12 months.

The gross unrealized losses of securities that have been in a continuous

unrealized loss position both less than and greater than 12 months was $ 7.2 million as of December 31, 2024 and were not material as of December 31, 2023.

There were no transfers within the hierarchies during the years ended December 31, 2025 or 2024.

As of December 31, 2025 and 2024, we had investments with a total fair market value of $ 0.3 billion and $ 1.5 billion in an unrealized loss position, of which $ 120.2 million and $ 10.5 million, respectively, were in a continuous unrealized loss position for more than 12 months.

The gross unrealized losses of securities that have been in a continuous unrealized loss position were not material at December 31, 2025 or $ 7.2 million at December 31, 2024.

Unrealized losses related to our investments are primarily due to interest rate fluctuations as opposed to credit quality.

We do not intend to sell any of the securities in an unrealized loss position and it is not likely that we would be required to sell these securities before recovery of their amortized cost basis, which may be at maturity.

We did not recognize any credit losses related to our investments during the years ended December 31, 2024 and 2023.

We did not recognize any credit losses related to our investments during the years ended December 31, 2025 or 2024.

The following table presents the contractual maturities of our investments as of December 31, 2025 (in thousands):

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Total $ 2,268,664

Commercial Manufacturing and Supply Agreement

On October 13, 2023, we entered into a pre-commercial services and commercial manufacturing supply agreement with Lonza (the “Commercial Manufacturing and Supply Agreement”).

Pursuant to the Commercial Manufacturing and Supply Agreement, Lonza will (i) construct and build out a dedicated suite (the “Suite”) at Lonza’s facilities in Visp, Switzerland to manufacture certain key components (including drug substance) for our proprietary PCV franchise and any other products or intermediates we may choose (collectively, the “Products”) and (ii) maintain and operate the Suite (utilizing Lonza’s employees) to manufacture the Products as a service provided to us, including conducting related quality control and quality assurance operations.

Commercial Manufacturing and Supply Agreements

On October 13, 2023, we entered into a pre-commercial services and commercial manufacturing supply agreement with Lonza (the “ Lonza Commercial Manufacturing and Supply Agreement”).

Pursuant to the Lonza Commercial Manufacturing and Supply Agreement, Lonza will (i) construct and build out a dedicated suite (the “Suite”) at Lonza’s facilities in Visp, Switzerland to manufacture certain key components (including drug substance) for our proprietary PCV franchise and any other products or intermediates we may choose (collectively, the “Products”) and (ii) maintain and operate the Suite (utilizing Lonza’s employees) to manufacture the Products as a

service provided to us, including conducting related quality control and quality assurance operations.

Lonza will be a preferred, non-exclusive, supplier of the Products to us, and we retain the right to procure the Products from one or more alternate and/or backup manufacturers of the Products (including at our own facilities).

Under the Commercial Manufacturing and Supply Agreement, prior to completion of construction and certification of the Suite for commercial operation, we will contribute to the capital expenditure costs to construct the Suite (and will own certain equipment in the Suite to be purchased or otherwise acquired by us), and will pay Lonza a fixed-rate monthly service fee for Lonza’s pre-commercial services prior to commencement of commercial operations (which monthly service fee amount is subject to increases in subsequent years).

Under the Lonza Commercial Manufacturing and Supply Agreement, prior to completion of construction and certification of the Suite for commercial operation, we will contribute to the capital expenditure costs to construct the Suite (and will own certain equipment in the Suite to be purchased or otherwise acquired by us), and will pay Lonza a fixed-rate monthly service fee for Lonza’s pre-commercial services prior to commencement of commercial operations (which monthly service fee amount is subject to increases in subsequent years).

Following commencement of commercial operations of the Suite to manufacture the Products, we will pay Lonza (i) Suite fees based on allocations of certain of Lonza’s costs to maintain the facility in which the Suite is located and to provide shared services to us and Lonza’s other customers in such facility, (ii) service fees based upon Lonza’s actual full-time equivalent employee (“FTE”) costs to operate the Suite to manufacture the Products, and (iii) certain other pass-through costs, including for raw materials.

In addition, we may be obligated to pay or reimburse Lonza for certain other fees and expenses under the Commercial Manufacturing and Supply Agreement.

In addition, we may be obligated to pay or reimburse Lonza for certain other fees and expenses under the Lonza Commercial Manufacturing and Supply Agreement.

Lonza will be eligible for certain financial bonuses, and subject to certain financial penalties, as incentives for the timely completion of certain scale-up activities, receipt of certain regulatory approvals for the Suite and manufacture of the Products in accordance with our commercial requirements.

Unless earlier terminated, the Commercial Manufacturing and Supply Agreement will remain in effect until December 31, 2038, subject to automatic renewal for up to three additional renewal periods of five years each, unless we elect not to renew (with 24 months advanced notice to Lonza).

Unless earlier terminated, the Lonza Commercial Manufacturing and Supply Agreement will remain in effect until December 31, 2038, subject to automatic renewal for up to three additional renewal periods of five years each, unless we elect not to renew (with 24 months advanced notice to Lonza).

We are permitted to terminate the Commercial Manufacturing and Supply Agreement for convenience or for Lonza’s uncured material breach, in each case subject to certain notice obligations.

Lonza is permitted to terminate the Commercial Manufacturing and Supply Agreement in the event that we commit certain specified material breaches, including uncured failure to pay material and undisputed amounts of money due to Lonza, subject to certain notice obligations.

Lonza is permitted to terminate the Lonza Commercial Manufacturing and Supply Agreement in the event that we commit certain specified material breaches, including uncured failure to pay material and undisputed amounts of money due to Lonza, subject to certain notice obligations.

Either party may terminate the Commercial Manufacturing and Supply Agreement in certain circumstances in the event of the other party’s bankruptcy.

In the event that we terminate the agreement for convenience, or Lonza terminates the agreement in the event that we commit certain specified material breaches, then certain termination consequences may be triggered, including that (i) we would forfeit any outstanding entitlement to credit from Lonza of the Repurposing Fee (as defined below), and (ii) we would be obligated to pay Lonza a termination penalty equal to the greater of (a) CHF 70.0 million, or (b) a prespecified number of months’ FTE fees for the actual FTEs assigned to us as of the date of termination.

Within 30 days of the Effective Date, we paid Lonza a repurposing fee (the “Repurposing Fee”) of CHF 27.0 million that will be credited back to us over a 10-year period starting upon

commencement of commercial production.

In the event of a termination under certain circumstances, Lonza shall be obligated to provide certain wind-down and transition services to us for up to 12 and 24 months, respectively.

As of December 31, 2024, we have incurred an accumulated (i) $ 151.8 million of capital expenditures related to the Vaxcyte owned facility buildout and equipment and (ii) $ 62.5 million of facility buildout expenditures that are owned and controlled by Lonza, including the Repurposing Fee, which have been accounted for as prepaid lease payments and will be recorded as a ROU asset under Accounting Standards Codification ("ASC") 842 when control over the Suite is transferred to us, which we expect to occur when the buildout of the Suite is complete and manufacturing activities commence (see Note 5, “Balance Sheet Details”).

Within 30 days of the Effective Date, we paid Lonza a repurposing fee (the “Repurposing Fee”) of CHF 27.0 million that will be credited back to us over a 10-year period starting upon commencement of commercial production.

In the event of a termination under certain circumstances, Lonza shall be obligated to provide certain wind-down and transition services to us for up to 12 months and 24 months, respectively.

As of December 31, 2025 and 2024, we have incurred $ 217.1 million and $ 151.8 million of capital expenditures related to the Vaxcyte owned facility buildout and equipment, respectively.

In addition, as of December 31, 2025 and 2024, we have incurred $ 118.3 million and $ 62.5 million of facility buildout expenditures that are owned and controlled by Lonza, including the Repurposing Fee, which have been accounted for as prepaid lease payments and will be recorded as a ROU asset under Accounting Standards Codification ("ASC") 842 when control over the Suite is transferred to us, which we expect to occur when the buildout of the Suite is complete and manufacturing activities commence (see Note 5, “Balance Sheet Details”), respectively.

Thermo Fisher Scientific

On September 24, 2025, we entered into a master services agreement with Patheon Manufacturing Services LLC, part of Thermo Fisher Scientific (collectively, “Thermo Fisher”), pursuant to which Thermo Fisher will formulate, fill, inspect, package, label, test, manufacture and supply drug product for us at its facility in Greenville, North Carolina (the "Thermo Fisher Commercial Manufacturing and Supply Agreement").

Pursuant to the Thermo Fisher Commercial Manufacturing and Supply Agreement, we have agreed to order drug product from Thermo Fisher based on certain binding forecast periods and established prices.

In addition, we will also pay Thermo Fisher for technology transfer activities and reimburse Thermo Fisher for certain out-of-pocket capital expenditures under the terms of the agreement.

The Thermo Fisher Commercial Manufacturing and Supply Agreement has an initial term of 15 years and will automatically renew for additional three-year periods unless either party provides notice of non-renewal before the end of the then existing term, subject to completion of ongoing services.

We are permitted to terminate the Thermo Fisher Commercial Manufacturing and Supply Agreement prior to expiration, subject to the payment of applicable termination fees, plus certain capital expenditure commitments.

Balance Sheet Details

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(in thousands)

VAT receivable $ 25,204 $ 2,421

Interest receivable 21,356 20,262

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Other research and development 9,239 24,698

Acquired manufacturing rights (Note 7)

VAT payable 4,706 102

Other accrued expenses 5,312 1,975

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Thereafter, we were obligated to pay an aggregate of approximately $ 1.9 million in rent payments for the remaining nine months of the first year, with a 3 % rent adjustment (not inclusive of rent abatement) every year thereafter.

In November 2024, we amended and restated the Original Lease (the “Amended and Restated Lease”) as a single, unified lease for our Headquarters Facility which includes the existing space under the Original Lease, Assumed Lease Premises (the “Existing Premises”) and expanded space covering additional floors (the “Additional Premises”), which resulted in a lease modification in accordance with ASC 842.

In November 2024, we amended and restated the Original Lease (the “Amended and Restated Lease”) as a single, unified lease for our Headquarters Facility which includes the existing space under the Original Lease and the Assumed Lease Premises (collectively, the “Existing Premises”) and expanded space covering additional floors (the “Additional Premises”), which resulted in a lease modification in accordance with ASC 842.

The Amended and Restated Lease has an initial contractual term of 10 years, contains rent-free periods, scheduled rent increases, lease incentives and the option of two consecutive rights to extend the term for sixty months each.

The effective date of the Amended and Restated Lease was November 15, 2024 which, for the purposes of lease accounting, is the commencement date of the lease of the Existing Premises.

The commencement date of the Additional Premises will be when certain leasehold improvements and specifications are substantially complete, the first of which occurred on February 10, 2025, and the rest of which are estimated to occur between November 2025 and June 2026, for certain office and lab spaces on the additional floors.

The commencement dates of the Additional Premises occur when certain leasehold improvements and specifications are substantially complete, the first, second and third of which occurred on February 10, 2025, November 24, 2025 and December 22, 2025, respectively, and the last of which is estimated to occur in 2026.

Our Amended and Restated Lease expires on February 28, 2035.

In November 2024, we entered into a sublease agreement, for which we are sublessor, for a portion of our Existing Premises.

This sublease has a contractual term of two years , expiring on December 12, 2026, unless earlier terminated,

with two conditional options to extend the term of the sublease for a period of 12 months.

This sublease has a contractual term of two years , expiring on December 31, 2026, unless earlier terminated, with two conditional options to extend the term of the sublease for a period of 12 months each.

The commencement date of this sublease was December 12, 2024.

In July 2024, we entered into a sublease agreement, for which we are subleasee for a new operating lease in the same campus as our corporate headquarters.

In July 2024, we entered into a sublease agreement, for which we are the sublessee for a new operating lease in the same campus as our corporate headquarters.

This sublease has rent-free periods, scheduled rent increases, and a contractual term of two years , expiring on June 30, 2026, unless earlier terminated.

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We have concluded that this agreement contains an embedded lease and will be accounted for in accordance with ASC 842 upon the commencement date.

As of December 31, 2024, the lease had not commenced and, as such, no lease liability or ROU asset was recorded on the consolidated balance sheets and no operating lease expense was recorded on the consolidated statements of operations.

As of December 31, 2025, the lease had not commenced and, as such, no lease liability or ROU asset was recorded on

the consolidated balance sheets and no operating lease expense was recorded on the consolidated statements of operations.

See Note 4, “Commercial Manufacturing and Supply Agreement,” for further details.

Information related to our ROU assets and related lease liabilities was as follows (dollar amounts in thousands):

Cash paid for operating lease liabilities $ 11,511 $ 7,390

Operating lease right-of-use assets $ 72,102 $ 30,997

Operating lease liabilities - current $ 5,891 $ 7,113

Operating lease liabilities - long-term 65,219 22,111

Total lease liabilities $ 71,110 $ 29,224

Information related to assumptions for our calculation of our ROU assets and lease liabilities, and cash paid for operating lease liabilities was as follows (dollar amounts in thousands):

Weighted-average remaining lease term (in years) 9.11 9.60

Weighted-average discount rate 7.2 % 7.2 %

Cash paid for operating lease liabilities $ 12,729 $ 11,511

Maturities of lease liabilities as of December 31, 2025 were as follows:

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The maximum potential amount of future payments we could be required to make under these indemnification agreements is not specified in the agreements;

however, we have directors and officers insurance coverage that reduces our exposure and enables us to recover a portion of any future amounts paid.

however, we have directors and officers insurance coverage that reduces our exposure and enables us to recover a portion

of any future amounts paid.

We have not incurred any material costs as a result of such indemnification and are not currently aware of any indemnification claims.

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In February 2023, we entered into another non-exclusive development and manufacturing services agreement with Lonza effective as of March 1, 2023 (the “2023 Lonza DMSA”).

Pursuant to the 2023 Lonza DMSA, Lonza will perform manufacturing process development and the manufacture of components for VAX-31 and VAX-24, including the polysaccharide antigens, our proprietary eCRM protein carrier and conjugated drug substances.

Pursuant to the 2023 Lonza DMSA, Lonza will perform manufacturing process development and the manufacture of components for our PCV candidates, including the polysaccharide antigens, our proprietary eCRM protein carrier and conjugated drug substances.

Under each of the 2022 Lonza DMSA and 2023 Lonza DMSA (collectively, the “Lonza Agreements”), we pay Lonza agreed-upon fees for their performance of development and manufacturing services and pass-through expenses incurred by Lonza for raw materials, as well as customary procurement and handling fees.

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Business of this Annual Report on Form 10-K.

Commercial Manufacturing and Supply Agreement with Lonza

For details of the Commercial Manufacturing and Supply Agreement with Lonza, see Note 4.

Commercial Manufacturing and Supply Agreements

For details of the Commercial Manufacturing and Supply Agreements with Lonza and Thermo Fisher, see Note 4.

Sutro Option Agreement

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We and Sutro Biopharma agreed to negotiate the terms and conditions of a form definitive agreement to be entered into in the event we exercised the Option, which would include the terms and conditions set forth in an executed term sheet between us (the “Term Sheet”) and such terms that were necessary to give effect to each of the terms and conditions set forth in the Term Sheet (the “Form Definitive Agreement”).

As consideration for the Option and other rights and authorizations granted to us under the Option Agreement, we paid Sutro Biopharma upfront consideration of $ 22.5 million, consisting of (i) $ 10.0 million in cash and $ 7.5 million worth of shares of our common stock (the number of shares calculated based on the arithmetic average of the daily volume weighted average price of our common stock as traded on Nasdaq in the three consecutive trading days immediately prior to the issuance thereof) in December 2022, and (ii) $ 5.0 million on October 2, 2023 within five business days after we and Sutro

Biopharma mutually agreed in writing upon the Form Definitive Agreement on September 28, 2023.

As consideration for the Option and other rights and authorizations granted to us under the Option Agreement, we paid Sutro Biopharma upfront consideration of $ 22.5 million, consisting of (i) $ 10.0 million in cash and $ 7.5 million worth of shares of our common stock (the number of shares calculated based on the arithmetic average of the daily volume weighted average price of our common stock as traded on Nasdaq in the three consecutive trading days immediately prior to the issuance thereof) in December 2022, and (ii) $ 5.0 million in October 2023 within five business days after we and Sutro Biopharma mutually agreed in writing upon the Form Definitive Agreement on September 28, 2023.

The 167,780 shares of common stock issued was recorded at fair value of $ 8.0 million on the date of settlement, December 22, 2022.

On November 21, 2023 (the “Option Exercise Date”), we exercised the Option by submitting written notice thereof to Sutro Biopharma and concurrently paid Sutro Biopharma $ 50.0 million in cash as the first of two installment payments for the Option exercise price, followed by the second and final installment of $ 25.0 million in cash on May 13, 2024.

We determined there was no current alternative future use of the acquired manufacturing rights from the Option Agreement and, as a result, the amounts paid were expensed as incurred.

Upon the occurrence of certain regulatory milestones, we agreed to pay Sutro Biopharma certain additional milestone payments totaling up to $ 60.0 million in cash.

No milestone payments were made in the year ended December 31, 2025.

In the event that we undergo a change of control, certain rights and payments may be accelerated.

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Pursuant to the Manufacturing Rights Agreement, we obtained exclusive rights to independently, or through certain third parties, develop, improve and manufacture cell-free extract for use in connection with our vaccine candidates.

For additional information about the Manufacturing Rights Agreement, see “Manufacturing and Supply— Sutro Biopharma Agreements — Manufacturing Rights Agreement with Sutro Biopharma ” included in Part I, Item 1.

For additional information about the Manufacturing Rights Agreement, see “Manufacturing and Supply— Sutro Biopharma Agreements — Manufacturing Rights Agreement ” included in Part I, Item 1.

Business of this Annual Report on Form 10-K.

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In July 2021, we entered into an Open Market Sales Agreement℠ (the “Original ATM Sales Agreement”) with Jefferies LLC (“Jefferies”) to issue and sell, from time to time at our discretion, shares of our common stock at an aggregate offering price up to $ 150.0 million through Jefferies acting as our sales agent or principal, however, we are not obligated to make any sales of common stock.

As of February 27, 2023, we had sold 4,995,709 shares of our common stock under the Original ATM Sales Agreement at a weighted average price of $ 27.57 per share for aggregate gross proceeds of $ 137.8 million.

On February 27, 2023, we and Jefferies entered into an amendment to the Original ATM Sales Agreement (as amended, the “Amended ATM Sales Agreement”) to offer and sell additional shares of our common stock with an aggregate offering price up to another $ 400.0 million, which is in addition to the $ 150.0 million aggregate offering price under the Original ATM Sales Agreement.

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______________________________________________________________

(1) Includes $ 4.4 million, $ 2.2 million and $ 3.1 million of commissions and offering expenses during the years ended December 31, 2024, 2023 and 2022, respectively.

(1) Includes $ 4.4 million and $ 2.2 million of commissions and offering expenses during the years ended December 31, 2024 and 2023, respectively.

Underwritten Follow-on Public Offerings

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In aggregate, we received $ 545.3 million in net proceeds after deducting issuance costs, and excluding the exercise of any pre-funded warrants.

share and pre-funded warrants to purchase 781,250 shares of our common stock at a price of $ 63.999 per underlying share.

On February 2, 2024, we completed an underwritten public offering of 12,695,312 shares of our common stock, which included the full exercise of the underwriters’ option to purchase an additional 1,757,812 shares, at a price of $ 64.00 per share and pre-funded warrants to purchase 781,250 shares of our common stock at a price of $ 63.999 per underlying share.

Each pre-funded warrant has an exercise price of $ 0.001 per share.

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The pre-funded warrants will not expire until they are fully exercised.

However, we may not effect the exercise of any pre-funded warrants, and a holder will not be entitled to exercise any portion of any pre-funded warrants that, upon giving effect to such exercise, would cause:

However, we may not effect the exercise of any pre-funded warrants, and a holder will not be entitled to exercise any portion of any pre-funded warrants that, upon giving

effect to such exercise, would cause:

(i) the aggregate number of shares of our common stock beneficially owned by such holder (together with affiliates) to exceed 4.99 % or 9.99 % of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as applicable;

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However, any holder of a pre-funded warrant may increase or decrease such percentage to any other percentage not in excess of 19.99 % upon at least 61 days' prior notice for the holder to us.

As of December 31, 2024, no shares underlying the pre-funded warrants had been exercised.

In January 2025, 1,000,000 shares and 2,500,000 shares underlying the pre-funded warrants from the January 2022 and October 2022 offerings were exercised to receive 999,988 shares and 2,499,971 shares of common stock, net of exercise costs, respectively.

In June 2025, 640,705 shares underlying pre-funded warrants from the February 2024 offering were exercised to receive 640,685 shares of common stock, net of exercise costs.

In October 2025, 853,936 shares underlying pre-funded warrants from the February 2024 and September 2024 offerings were exercised to receive 853,914 shares of common stock, net of exercise costs.

As of December 31, 2025, no other shares underlying the pre-funded warrants have been exercised.

Equity Incentive Plans

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Stock Option Activity

In November 2024, we granted 639,710 performance contingent stock options ("PCSOs") with both service and market conditions to certain employees.

The market condition relates to the achievement of a share price threshold that requires the average price of our common stock to be equal to or greater than $ 154.05 for a period of one calendar year.

To the extent that the market conditions are met, one-third of the PCSOs vest on the third, fourth and fifth anniversary date of the grant date, subject to continued service.

The maximum contractual term of our outstanding PCSOs is 10 years from the date of grant.

As of December 31, 2024, the market condition for the PCSOs has not been met.

No PCSOs were granted in the year ended December 31, 2023.

Stock option activity under our 2020 Plan and 2014 Plan, which excludes options to purchase 29,638 shares granted outside of the 2020 Plan and 2014 Plan, for the year ended December 31, 2025 was as follows:

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(in thousands, except share and per share data)

Stock Option Activity Number

Options Weighted-

Share Weighted-

(Years) Aggregate

Options Weighted-

Share Weighted-

(Years) Aggregate

Balances — December 31, 2024 9,366,936 $ 39.40 7.48 $ 406,730 639,710 $ 102.70 9.85 $ —

PCSOs Granted 639,710 $ 102.70 9.85 $ —

Options granted 2,210,148 $ 78.40

Options exercised ( 1,813,828 ) $ 13.97

Options forfeited ( 344,220 ) $ 43.47

Granted 2,451,479 $ 53.39 —

Exercised ( 634,401 ) $ 14.39 —

Forfeited ( 223,213 ) $ 55.91 ( 17,850 ) 102.70

Balances — December 31, 2025 10,960,801 $ 43.64 7.16 $ 130,351 621,860 $ 102.70 8.85 $ —

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Exercisable at December 31, 2025 6,705,775 $ 35.16 6.25 $ 109,070 —

_____________________________________________________

During the years ended December 31, 2025, 2024 and 2023, options to purchase 634,401 , 1,813,828 and 538,888 shares of common stock, respectively, were exercised for cash at a weighted-average price per share of $ 14.39 , $ 13.97 and $ 10.50 , respectively.

The weighted-average grant date fair value of options granted for the years ended December 31, 2024, 2023 and 2022 was $ 49.36 , $ 28.74 and $ 18.88 , respectively.

The intrinsic value of the stock options exercised was $ 35.0 million, $ 130.7 million and $ 21.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The weighted-average grant date fair value of options granted for the years ended December 31, 2025, 2024 and 2023 was $ 32.09 , $ 49.36 and $ 28.74 , respectively.

The total fair value of stock options vested was $ 73.7 million, $ 51.3 million and $ 41.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.

In March 2022, our Board authorized the issuance of RSUs under our 2020 Plan and adopted a form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement (the “RSU Agreement”), which is intended to serve as a standard form agreement for RSU grants issued to employees.

In November 2024, we granted 639,710 performance contingent stock options ("PCSOs") with both service and market conditions to certain employees.

To the extent that the market conditions are met, one-third of the PCSOs vest on the third, fourth and fifth anniversary date of the grant date, subject to continued service.

The maximum contractual term of our outstanding PCSOs is 10 years from the date of grant.

As of December 31, 2025, the market condition for the PCSOs had not been met.

No PCSOs were granted in the year ended December 31, 2025.

Stock Unit Award Activity

In March 2022, our Board authorized the issuance of RSUs under our 2020 Plan and adopted a form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement, which is intended to serve as a standard form agreement for RSU grants issued to employees.

In November 2024, we granted 175,513 shares of performance-based stock units ("PSUs"), which contain service and market conditions to certain employees.

Subject to continuous service requirements, the market condition is measured based on our total shareholder return (“TSR”) relative to the TSR of our peer group comprised in the Nasdaq Biotechnology Index over a period of four years .

RSU and PSU activities for the year ended December 31, 2024 were as follows:

Unvested RSUs Unvested PSUs

No PSUs were granted in the year ended December 31, 2025.

Stock unit award activity for the year ended December 31, 2025 was as follows:

(in thousands, except share and per share data)

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Unvested at December 31, 2025 2,340,589 $ 54.55 1.42 $ 107,995 175,513 $ 151.48 2.85 $ 8,098

Shares Available for Grant

Shares available for grant under our 2020 Plan for the year ended December 31, 2025 were as follows:

Number of Shares

Balances — December 31, 2023 6,065,150

Balance — December 31, 2024 6,275,934

Shares authorized 6,244,651

Shares expired ( 1,176,960 )

Options, PCSOs, RSUs and PSUs granted ( 3,983,498 )

Options and RSUs granted ( 4,251,310 )

Shares forfeited (1)

Shares withheld for taxes 240,845

Balances — December 31, 2024 6,275,934

Balance — December 31, 2025 8,821,691

___________________________________________

¹ As of December 31, 2024, a total of 21,381 shares were forfeited under the 2020 Plan due to net exercises of stock options.

(1) A total of 1,791 shares were forfeited under the 2020 Plan due to net exercises of stock options.

2020 Employee Stock Purchase Plan

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In addition, the number of shares of common stock available for issuance under the 2020 ESPP is automatically increased on the first day of each calendar year during the 10 -year term of the 2020 Plan, beginning with January 1, 2021 and ending with January 1, 2030, by an amount of 1 % of the outstanding number of shares of our common stock on December 31 of the preceding calendar year or such lesser amount as determined by our Board.

Effective January 1, 2026, the number of shares of common stock available under the 2020 ESPP increased by 1,310,588 shares pursuant to the evergreen provision of the 2020 ESPP.

During the years ended December 31, 2025, 2024 and 2023, employees purchased 147,870 , 90,517 and 76,275 shares of common stock through our 2020 ESPP at an average price of $ 27.14 , $ 38.60 and $ 26.71 per share, respectively.

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Stock-based Compensation

The following assumptions were used in the Black-Scholes options pricing model for stock options and ESPP;

and the Monte Carlo simulation model for PCSOs and PSUs to estimate our stock-based compensation expense, respectively.

The following assumptions were used in the Black-Scholes options pricing model for stock options and ESPP shares.

Year Ended December 31,

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4.2 % - 5.4 %

______________________________________________________________

*No PCSOs or PSUs were granted in 2023 and 2022.

No PCSOs or PSUs were granted in the years ended December 31, 2025 or 2023.

The following assumptions were used in the Monte Carlo simulation model for PCSOs and PSUs granted in the year ended December 31, 2024 to estimate our stock-based compensation expense.

Expected volatility 61.6 %

Expected term (in years) 5.9

Risk-free interest rate 4.2 %

Our expected dividend yield is zero as we have not declared and do not anticipate declaring any dividends.

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General and administrative 64,791 42,003 25,485

Total $ 84,822 $ 48,760 $ 23,650

Total stock-based compensation expense $ 138,845 $ 84,822 $ 48,760

As of December 31, 2025, there was $ 301.6 million of unrecognized stock-based compensation expense related to unvested employee and non-employee awards, which is expected to be recognized over a weighted-average period of 2.7 years.

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Our vaccine development program for VAX-GI, a novel preclinical vaccine candidate being developed as a preventative treatment for dysentery and shigellosis, which is caused by Shigella bacteria, is currently funded in part by two grants obtained from the National Institutes of Health (“NIH”) administered by the University of Maryland, Baltimore.

Our first grant from the NIH was awarded in April 2021 and provides for potential funding up to five years totaling approximately

$ 0.5 million.

Our first grant from the NIH was awarded in April 2021 and provides for potential funding up to five years totaling approximately $ 0.5 million.

In June 2023, we received another grant from the NIH that provides for potential funding up to five years totaling approximately $ 4.6 million.

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We are currently working on a discovery program with the University of North Carolina at Chapel Hill and the University of Chicago to develop a vaccine candidate for the prevention of Chlamydia, which is funded in part by a grant from the NIAID that provides potential funding up to five years totaling approximately $ 9.5 million.

As of December 31, 2024, we have not yet received funding under this award.

As of December 31, 2025, we have received and expect to continue to receive funding under this grant.

Income from grants is recognized in the period during which the related specified expenses are incurred, provided that the conditions under which the grants were provided have been met.

We recognized $ 0.5 million, $ 1.0 million and $ 4.8 million of grant income and recorded the amounts in Other income (expense), net in the consolidated statements of operations during the years ended December 31, 2025, 2024 and 2023, respectively.

A grant receivable of $ 0.4 million representing unreimbursed, eligible costs incurred under the agreements was recorded and included in Prepaid expenses and other current assets in the consolidated balance sheets as of December 31, 2024.

There was no such grant receivable balance as of December 31, 2023.

The grant receivable related to unreimbursed, eligible costs incurred under the agreements, recorded within prepaid expenses and other current assets, was not material as of December 31, 2025, and was $ 0.4 million as of December 31, 2024.

Net Loss Per Share

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Total 14,473,488 11,565,329 10,208,636

Our pre-tax book loss was primarily derived from our business operations within the United States.

The Company has not recognized a current or deferred tax expense/(benefit) for federal, state or foreign jurisdictions in the years ending December 31, 2024, 2023 and 2022, respectively, due to tax losses in the various jurisdictions.

A reconciliation of our effective tax rate to the statutory U.S.

federal rate is as follows:

Our loss before income taxes was primarily derived from our business operations within the United States.

The Company has not recognized a current or deferred tax expense/(benefit) for federal, state or foreign jurisdictions in the years ending December 31, 2025, 2024 or 2023, respectively, due to tax losses in the various jurisdictions.

There were no federal, state, local or foreign income taxes paid, net of refunds, for the years ended December 31, 2025, 2024 or 2023.

The differences between income tax expected at the U.S.

federal statutory income tax rate of 21% and the reported income tax rate are summarized as follows:

Year Ended December 31,

2025 % 2024 % 2023 %

Statutory rate 21.0 % 21.0 % 21.0 %

Stock-based compensation 4.1 % 0.5 % 1.5 %

Credits 2.2 % 1.4 % 0.8 %

(In Thousands, Except for Percentages)

Loss from continuing operations

Federal Statutory Tax Rate $ ( 160,792 ) 21.0 % $ ( 97,425 ) 21.0 % $ ( 84,476 ) 21.0 %

State and Local Income Taxes, Net of Federal Income Tax Effect (1)

( 29 ) — % 65 — % 39 — %

Effect of Cross-Border Tax Laws

Global intangible low-taxed income 11,407 ( 1.5 ) % — — % — — %

Research and Development tax credits ( 8,706 ) 1.1 % ( 11,297 ) 2.4 % ( 6,644 ) 1.6 %

Change in Valuation Allowance 139,663 ( 18.2 ) % 108,613 ( 23.4 ) % 87,744 ( 21.8 ) %

Nondeductible/Non-taxable Items

Stock Based Compensation 3,089 ( 0.4 ) % ( 18,483 ) 4.0 % ( 1,668 ) 0.4 %

Section 162(m) Limitation 12,103 ( 1.6 ) % 16,420 ( 3.5 ) % 4,525 ( 1.1 ) %

Other ( 0.5 ) % — % ( 0.2 ) %

Total 0.0 % 0.0 % 0.0 %

3,265 ( 0.4 ) % 2,107 ( 0.5 ) % 480 ( 0.1 ) %

Effective Tax Rate $ — — % $ — — % $ — — %

______________________________________________________________

(1) State taxes in California represented the majority (greater than 50%) of the tax effect within this category.

(2) Other includes immaterial foreign tax effects and immaterial worldwide changes in unrecognized tax benefits in the years ending December 31, 2025, 2024 and 2023.

There was no impact from the changes in tax laws, tax rates or cross-border tax regulations enacted for the years ended December 31, 2025, 2024 or 2023.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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Net operating losses $ 336,106 $ 195,869

Fixed assets — 660

Unrealized gain/loss — 3,465

Accrued and others 6,471 14,637

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Stock compensation 22,800 14,652

Capitalized Interest 732 —

Total deferred tax assets 688,561 468,078

Valuation allowance ( 645,313 ) ( 446,098 )

Net deferred tax asset 43,248 21,980

Deferred tax liabilities:

ROU asset ( 34,674 ) ( 21,524 )

( 1,295 ) ( 456 )

Unrealized gain/loss ( 7,279 ) —

Total deferred tax liabilities ( 43,248 ) ( 21,980 )

Net deferred tax asset 446,098 288,165

Valuation allowance ( 446,098 ) ( 288,165 )

Net deferred taxes $ — $ —

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Federal NOLs arising in tax years beginning after December 31, 2017 have an indefinite carryover period and do not expire.

The Company’s state NOL carryforward generally have a twenty-year carryover period.

Our state NOL carryforwards generally have a 20-year carryover period.

We had no foreign NOL carryforwards at December 31, 2025.

At December 31, 2025, we have research credit carryforwards of $ 40.3 million and $ 12.3 million available to offset future income tax liabilities, if any, for federal and California income tax purposes, respectively.

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To the extent accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction of the provision for income taxes in the period such determination is made.

There were no interest or penalties recognized for the years ended December 31, 2024 and 2023.

There were no interest or penalties recognized for the years ended December 31, 2025 or 2024.

We do not expect our UTBs to change significantly over the next 12 months.

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Additions based on tax positions related to current year 4,316 5,166 2,208

Additions/(deductions) based on tax positions related to prior years

( 88 ) 485 ( 46 )

Additions based on tax positions related to prior years 195 — 485

Reductions based on tax positions related to prior years — ( 88 ) —

Balance at end of year $ 14,036 $ 9,525 $ 4,447

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As of December 31, 2025, there are no unremitted earnings of our foreign subsidiary.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law in the United States, and contains a wide range of tax reform provisions, including extending and modifying certain key Tax Act provisions, such as 100% bonus depreciation and the business interest expense limitation.

Additionally, the OBBBA repealed mandatory capitalization and amortization of domestic R&D expenses, reverting to the immediate expensing of R&D expenditures for tax years beginning in 2025.

The enactment of this legislation did not have a material impact on our consolidated financial statements, effective income tax rate, or cash tax position for the year ended December 31, 2025.

Segment Reporting

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As of December 31, 2025 and 2024, property and equipment based in the United States was $ 39.7 million and $ 40.8 million, respectively.

As of December 31, 2024 and 2023, property and equipment based in Switzerland was $ 157.2 million and nil , respectively.

As of December 31, 2025 and 2024, property and equipment based in Switzerland was $ 217.7 million and $ 157.2 million, respectively.

This following table presents segment operation results for the year ended December 31, 2025, 2024 and 2023:

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Acquired manufacturing rights (Note 7)

— 75,000 22,995

General and administrative

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____________________________________________________________

(1) Research and development - external costs consist primarily of product and clinical development expenses, research and development consumables, lab supplies and equipment, facility, depreciation, professional and consulting services attributed to the research and development departments.

(1) Research and development - external costs consist primarily of product and clinical development, research, facility, depreciation, professional and consulting services expenses attributed to the research and development departments.

(2) Research and development - internal costs consist of internal employee costs including stock-based compensation expenses.

Subsequent Events

In February 2026, we completed an underwritten public offering of 12,650,000 shares of our common stock, which included the full exercise of the underwriters' option to purchase an additional 1,650,000 shares, at a price of $ 50.00 per share.

In aggregate, we received approximately $ 600.2 million in net proceeds after deducting underwriting discounts and commissions and other estimated offering expenses payable by us.

On February 18, 2026, we entered into a Development and Manufacturing Services Agreement with Lonza.

Under the agreement, Lonza will perform manufacturing process development and commercial manufacture and supply of certain key components for our proprietary PCV franchise.

The agreement has an initial term through December 31, 2038, with options for additional renewal periods.

Under the terms of the agreement, if we elect to terminate the agreement for convenience prior to the expiration of the initial term or any committed renewal period, we will be obligated to pay Lonza the greater of a fixed dollar amount or an amount based on certain cancellation fees specified in the agreement.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk