What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-04 compared with 2026-05-13 · 134 added, 86 removed, 210 unchanged (51% of the section changed)

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We have developed a proprietary electroporation device, UltraPorator, designed to further streamline and ensure the rapid and cost-effective manufacturing of UltraCAR-T therapies.

Our commercial product, Papzimeos™ (zopapogene imadenovec-drba, PRGN-2012), is the first and only US Food and Drug Administration (“FDA”) approved therapy for the treatment of adults with recurrent respiratory papillomatosis (“RRP”).

Our commercial product, Papzimeos (zopapogene imadenovec-drba, PRGN-2012), is the first and only U.S.

Food and Drug Administration (“FDA”) approved therapy for the treatment of adults with recurrent respiratory papillomatosis (“RRP”).

RRP is a rare, debilitating, and potentially life-threatening disease caused by chronic human papillomavirus (HPV) 6 or HPV 11 infection, which results in recurrent benign tumors in the respiratory tract.

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51% (18 out of 35) of study patients achieved Complete Response, requiring no surgeries in the 12 months after treatment with Papzimeos.

These Complete Responses remained durable for over 12 months.

Complete responses have been durable after Papzimeos treatment with median follow-up of 36 months as of a September 19, 2025 data cutoff.

Complete Responses remained durable for over 12 months.

Fifteen out of 18 (83%) complete responders demonstrated ongoing complete responses after their Papzimeos treatment for at least 36 months with median follow-up of 36 months (range:

36 to 51 months) as of the April 30, 2026 data cutoff.

Following the FDA approval, we launched Papzimeos in the United States as the first and only FDA approved treatment for adults with RRP.

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Papzimeos had been granted Breakthrough Therapy Designation and Orphan Drug designation for the treatment of RRP by the FDA.

In addition, zopapogene imadenovec-drba has received Orphan Drug Designation for the Treatment of RRP from the European Commission as well.

We submitted a Marketing Authorization Application (“MAA”) for zopapogene imadenovec-drba for the treatment of adults with RRP to the European Medicines Agency (“EMA”).

In May 2026, the FDA granted a seven-year period of orphan drug exclusivity for Papzimeos for the treatment of adults with RRP through August 14, 2032.

In addition, zopapogene imadenovec has received Orphan Drug Designation for the Treatment of RRP from the European Commission as well.

We submitted a Marketing Authorization Application (“MAA”) for zopapogene imadenovec for the treatment of adults with RRP to the European Medicines Agency (“EMA”).

The MAA has been validated by the EMA and is currently under review.

PRGN-2009, an investigational non-replicating adenoviral vector-based immunotherapy, based on our AdenoVerse platform, is designed to activate the immune system to recognize and target human papillomavirus-positive, or HPV+, solid tumors.

PRGN-2009 leverages our UltraVector and AdenoVerse platforms to optimize HPV type 16 ("HPV 16") and HPV type 18 ("HPV 18"), antigen designed for delivery via a proprietary gorilla adenovector with a large genetic payload capacity and the ability for repeat administrations.

PRGN-2009 leverages our UltraVector and AdenoVerse platforms to optimize HPV type 16 and HPV type 18, antigen designed for delivery via a proprietary gorilla adenovector with a large genetic payload capacity and the ability for repeat administrations.

Guided by our bioinformatics analysis and in silico protein engineering, PRGN-2009 encodes for a novel, multi-epitope antigen design to target HPV16 and HPV18 infected cells and potentially differentiates from the competition.

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Through our UltraCAR-T therapeutics platform, we are able to precision-engineer UltraCAR-T cells to produce a homogeneous cell product that simultaneously expresses antigen-specific chimeric antigen receptor, or CAR, kill switch, and our proprietary membrane-bound interleukin-15, or mbIL15, genes in any genetically modified UltraCAR-T cell.

Our decentralized and rapid proprietary manufacturing process allows us to manufacture UltraCAR-T cells overnight at a medical center's current good manufacturing practices facility ("cGMP") and reinfuse the patient the following day after gene transfer.

Our decentralized and rapid proprietary manufacturing process allows us to manufacture UltraCAR-T cells overnight at a medical center's current good manufacturing practices facility and reinfuse the patient the following day after gene transfer.

This process improves upon current approaches to CAR-T manufacturing, which require extensive ex vivo expansion following viral vector transduction to achieve clinically relevant cell numbers that we believe can result in the exhaustion of CAR-T cells prior to their administration, limiting their potential for persistence in patients.

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In 2024, the Company completed the shutdown of ActoBio's operations.

ActoBio’s lead asset, AG019, is a disease modifying antigen-specific, investigational immunotherapy for the prevention, delay, or reversal of type 1 diabetes mellitus, or T1D.

We have completed a Phase 1b/2a clinical trial of AG019 in patients with early-onset T1D.

In connection with the shutdown of ActioBio's operations, ActoBio's portfolio of intellectual property is now available for prospective transactions.

In connection with the shutdown of ActoBio's operations, ActoBio's portfolio of intellectual property became available for prospective transactions.

Precigen Exemplar

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Financial overview

We have incurred significant losses since our inception.

We may continue to incur losses in the foreseeable future, and we may never achieve or maintain profitability.

Our historical collaboration and licensing revenues were generated under a business model from which we have transitioned.

We may enter into strategic transactions for individual platforms or programs in the future from which we may generate new collaboration and licensing revenues.

We continue to generate product and service revenues through our Exemplar subsidiary and from commercial sales of Papzimeos, our FDA‑approved immunotherapy for RRP (for which we began to recognize revenue in the fourth quarter of 2025).

Products currently in our clinical pipeline will require regulatory approval and/or commercial scale-up before they may commence significant product sales and operating profits.

As we continue our efforts to focus our business and generate additional capital, we may be willing to enter into transactions involving one or both of our reporting units for which we have goodwill and/or intangible assets.

These efforts could result in us identifying impairment indicators or recording impairment charges in future periods.

In addition, market changes and changes in judgments, assumptions, and estimates that we have made in assessing the fair value of goodwill could cause us to consider some portion or all of certain assets to become impaired.

In the second quarter of 2026, we achieved profitability from continuing operations for the first time since our strategic transformation into a healthcare company in 2020, marking a pivotal milestone in our evolution.

Prior to this quarter, we have incurred significant losses since our inception.

Although we have recently generated income, our long-term transition to sustained profitability will depend on the continued successful commercialization of Papzimeos and the potential commercialization of other product candidates to achieve sufficient revenues to support the Company's cost structure.

Products currently in our clinical pipeline will require regulatory approval and/or commercial scale-up before they may commence significant product sales and operating profits, if any.

We may also enter into strategic transactions for individual platforms or programs in the future from which we may generate collaboration and licensing revenues.

Sources of revenue

During the fourth quarter of 2025, we commenced commercial sales of Papzimeos, our FDA-approved immunotherapy for RRP.

Revenues generated from Papzimeos during 2025 were limited, primarily due to the timing of the product’s commercial

launch late in the year.

Looking ahead, we expect that the majority of our future revenues will be derived from sales of Papzimeos as we continue to expand our commercial activities and market presence.

As we transition to a commercial‑stage company, our future revenues will increasingly depend on our ability to successfully commercialize Papzimeos, advance our proprietary programs, and bring additional products enabled by our technology platforms to market.

Revenues generated from Papzimeos during 2025 were limited, primarily due to the timing of the product’s commercial launch late in the year.

Looking ahead, we expect that the majority of our future revenues for the foreseeable future will be derived from sales of Papzimeos as we continue to expand our commercial activities and market presence.

As we continue to transition to a commercial‑stage company, our future revenues will increasingly depend on our ability to successfully commercialize Papzimeos, advance our proprietary programs, and bring additional products enabled by our technology platforms to market.

In addition, Exemplar generates product and service revenues through the development and sale of genetically engineered miniature swine models.

We recognize revenue when control of the promised product or service is transferred to the customer.

In 2025, revenues generated by Exemplar became less significant to the Company, and we expect this significance to greatly diminish into the future.

In 2025, revenues generated by Exemplar became less significant to us, and we expect this significance to greatly diminish into the future.

We do not anticipate that we will be recognizing material collaboration revenue in the near term, except in cases of future strategic transactions involving our platforms or programs.

Should new collaboration agreements or strategic transactions be executed, revenue could be positively impacted.

Should new collaboration agreements or strategic transactions be executed, revenue could be impacted.

Accordingly, there can be no assurance as to the timing, magnitude, and predictability of revenues, if any, to which we might be entitled.

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Cost of products and services consists of manufacturing costs, transportation and freight-in, and indirect overhead costs (including salary and benefits related and stock-based compensation expenses) associated with the commercial manufacturing and distribution of Papzimeos, and costs related to our Exemplar business, which includes primarily labor, supplies, feed used in production, and facility charges.

Approximately $1.0 of our cost of products and services for the three months ended March 31, 2026 relates to our Exemplar business.

For the three months ended March 31, 2026, the cost of products and services includes the costs of Papzimeos sales.

Approximately $1.1 million and $2.1 million of our cost of products and services for the three and six months ended June 30, 2026, respectively, relates to our Exemplar business.

Cost of products and services may also include periodic costs related to certain manufacturing services, including costs related to excess or obsolete inventory, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances.

For the three and six months ended June 30, 2026, the cost of products and services includes the costs of Papzimeos sales.

Prior to August 14, 2025, regulatory approval and subsequent commercialization of Papzimeos and thus the possibility of future economic benefits from Papzimeos sales were not considered probable and inventory-related costs were expensed as incurred.

As such, the inventory recognized on the condensed consolidated balance sheet s as of March 31, 2026 does not include any costs incurred prior to August 14, 2025, which is referred to as pre-launch inventory.

In addition, the cost of products related to Papzimeos on the condensed consolidated statements of operations for the three months ended March 31, 2026 is comprised of the sale of pre-launch inventory, which only includes costs incurred subsequent to August 14, 2025, and includes certain period costs incurred during the three months ended March 31, 2026 that were not absorbed into inventory.

As of March 31, 2026, the amount of future estimated net revenues represented by existing physical pre-launch inventories is approximately $63 million based on our current pricing assumptions and projected demand for our recently approved commercial product.

Due to the fact that commercialization began in late 2025, these estimates are inherently subject to significant uncertainty.

The Company expects that it will finish selling all of the pre-launch inventories in 2026.

As such, the inventory recognized on the condensed consolidated balance sheet s as of June 30, 2026 does not include any costs incurred prior to August 14, 2025, which is referred to as pre-launch inventory.

In addition, the cost of products related to Papzimeos on the condensed consolidated statements of operations for the three and six months ended June 30, 2026 is comprised of the sale of pre-launch inventory, which only includes costs incurred subsequent to August 14, 2025, and includes certain period costs incurred during the three and six months ended June 30, 2026 that were not absorbed into inventory.

As of June 30, 2026, the amount of future estimated net revenues represented by existing physical pre-launch inventories is approximately $9 million based on our current pricing assumptions and projected demand for our recently approved commercial product.

We expect that we will finish selling all of the pre-launch inventories in the third quarter of 2026.

Projected sales derived from pre-launch inventories depend on several factors that could materially impact actual realized results, including the timing and scale of product adoption within our target patient population, and payer coverage.

As a result, the cost of products sold related to Papzimeos will initially reflect a lower average per unit cost of materials (excluding period costs that are expensed as incurred), as pre-launch inventory is utilized for commercial production and sold to customers.

As pre-launch inventory continues to absorb costs through the manufacturing process, we expect the current gross margins (exclusive of period costs expensed as incurred) will gradually decrease as pre-launch inventory is sold and will stabilize between high 80 percentages and low 90 percentages when pre-launch inventories are expected to be completely sold based on current forecasts, which include significant risks given that Papzimeos is the first therapy available to patients with RRP.

Based on current forecasts, which include significant risks given that Papzimeos is the first therapy available to patients with RRP, we expect that gross margins will stabilize between high 80 percentages and low 90 percentages when pre-launch inventories are completely sold.

Research and development expenses

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Our research and development expenses primarily relate to either costs incurred to expand or otherwise improve our technologies or the costs incurred to develop our own products and services, including regulatory costs.

Prior to August 2024, the Company was progressing preclinical and clinical programs that targeted urgent and intractable diseases in our core therapeutic areas of immuno-oncology, autoimmune disorders, and infectious diseases, including PRGN-3005, PRGN-3006, PRGN-3007, PRGN-2009, PRGN-2012 (now Papzimeos) and AG019.

As noted above in the Overview section, as part of the strategic prioritization of our pipeline announced in August 2024, we paused enrollment in the PRGN-3005 and PRGN-3007 clinical trials, and ceased further development of AG019.

We continue to advance PRGN-2009, and we have completed enrollment in the Phase 1b clinical trial of PRGN-3006 in AML.

Following the FDA approval of Papzimeos in August 2025, we no longer expect to record research and development expenses related to PRGN-2012 for adults.

Future costs associated with this product for adults are expected to be classified as costs of products or capitalized as inventory.

We have initiated an open-label clinical trial to evaluate safety, vector shedding, and retreatment efficacy of zopapogene imadenovec-drba in adults with RRP.

We have initiated an open-label clinical trial to evaluate safety, vector shedding, and retreatment efficacy of zopapogene imadenovec-drba in adults

Additionally, we plan to initiate a clinical trial to evaluate safety and efficacy of zopapogene imadenovec-drba in pediatric RRP patients.

Costs incurred with respect to both of these trials will be recorded as research and development expenses in the period for which they are incurred.

We continue to advance PRGN-2009, and we have completed enrollment in the Phase 1b clinical trial of PRGN-3006 in AML.

Costs incurred with respect to each of these trials will be recorded as research and development expenses in the period for which they are incurred.

Exemplar's research and development activities relate to new and improved pig research models, and those costs are not significant.

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A significant portion of our R&D spending supports the development, optimization, and operation of our core therapeutic platforms and shared technologies rather than any single drug candidate.

Management evaluates R&D activities and makes resource allocation decisions based on the nature of the underlying expenses, which align with how our R&D operations are structured and managed.The table below presents R&D expenses by nature of cost for the periods presented.

Three Months Ended March 31,

Management evaluates R&D activities and makes resource allocation decisions based on the nature of the underlying expenses, which align with how our R&D operations are structured and managed.

The table below presents R&D expenses by nature of cost for the periods presented.

Three Months Ended

June 30, Six Months Ended

2026 2025 2026 2025

External development expense:

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In addition to the strategic prioritization in 2024, the amount of research and development expenses may be impacted by, among other things, the number and nature of our own proprietary programs.

Research and development expenses may also

increase as a result of in-licensing of technologies or ongoing research and development operations that we might assume through mergers and acquisitions.

Research and development expenses may also increase as a result of in-licensing of technologies or ongoing research and development operations that we might assume through mergers and acquisitions.

Selling, general and administrative expenses

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Other significant SG&A expenses include rent and utilities, insurance, accounting, external commercialization costs, legal services (including the cost of settling any claims and lawsuits), and expenses associated with obtaining and maintaining our intellectual property.

In addition, although not significant, shipping and handling costs on outgoing shipments to customers are recorded as incurred in SG&A and were approximately $395 and $0 for the three months ended March 31, 2026 and 2025, respectively.

In addition, although not significant, shipping and handling costs on outgoing shipments to customers are recorded as incurred in SG&A and were approximately $813 and $0 for the three months ended June 30, 2026 and 2025, respectively, and $1,208 and $0 for the six months ended June 30, 2026 and 2025, respectively.

Advertising costs are expensed as incurred and included in selling, general and administrative expenses.

Advertising expense was approximately $747 and $76 for the three months ended June 30, 2026 and 2025, respectively, and $857 and $77 for the six months ended June 30, 2026 and 2025, respectively.

SG&A expenses may fluctuate in the future depending on the scaling of our corporate functions required to support our corporate initiatives, the strategic prioritization, the build-up of our commercialization efforts and the outcomes of legal claims and assessments against us.

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Results of operations

Comparison of the three months ended March 31, 2026 and the three months ended March 31, 2025

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025, together with the changes in those items in dollars and as a percentage (dollars are in $000s):

Comparison of the three months ended June 30, 2026 and the three months ended June 30, 2025

The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025, together with the changes in those items in dollars and as a percentage (dollars are in $000s):

Three Months Ended

March 31, Dollar

June 30, Dollar

Change Percent

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Selling, general and administrative 22,249 16,133 6,116 37.9 %

Impairment of goodwill — 3,907 (3,907) (100.0) %

Total operating expenses 32,336 32,620 (284) (0.9) %

Operating loss (5,994) (22,596) 16,602 (73.5) %

Operating income (loss) 22,642 (31,764) 54,406 171.3 %

Total other expense, net (2,571) 5,125 (7,696) (150.2) %

Net loss $ (7,929) $ (54,153) $ 46,224 (85.4) %

Income (loss) before income taxes 20,071 (26,639) 46,710 175.3 %

Income tax expense — (3) 3 (100.0) %

Net income (loss) $ 20,071 $ (26,642) $ 46,713 175.3 %

Total revenues

Total revenues increased by $21.9 million, or >200%, compared to the three months ended March 31, 2025.The significant increase in total revenues for the three months ended March 31, 2026, was primarily due to the ramp up of commercial sales of Papzimeos following its FDA approval in August 2025.

Revenues related to the sale of Papzimeos for the three months ended March 31, 2026 was $21.6 million.

No Papzimeos sales were recorded for the three months ended March 31, 2025, as the product had not yet been approved or launched.

Total revenues increased by $54.1 million, or >200%, compared to the three months ended June 30, 2025.

The significant increase in total revenues for the three months ended June 30, 2026, was primarily due to the recording of commercial sales of Papzimeos following its FDA approval in August 2025.

Revenues related to the sale of Papzimeos for the three months ended June 30, 2026 were $53.1 million.

No Papzimeos sales were recorded for the three months ended June 30, 2025, as the product had not yet been approved or launched.

Cost of product and services

Cost of product and services increased $1.5 million, or 132.6%, compared to the three months ended March 31, 2025 almost entirely due to the ramp up of commercial sales of Papzimeos following its FDA approval in August 2025.

Cost of products and services increased by $1.7 million, or 156.9%, compared to the three months ended June 30, 2025 almost entirely due to costs related to the recording of commercial sales of Papzimeos following its FDA approval in August 2025.

Prior to regulatory approval, costs associated with the production of Papzimeos were expensed as research and development in accordance with our accounting policy.

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Research and development expenses

R&D expenses decreased by $4.8 million, or 46.2%, compared to the three months ended March 31, 2025, primarily due to the change in the accounting treatment of Papzimeos manufacturing costs.

R&D expenses decreased by $4.2 million, or 36.6%, compared to the three months ended June 30, 2025, primarily due to the change in the accounting treatment of Papzimeos manufacturing costs.

Prior to the FDA approval of Papzimeos in August 2025, costs associated with the manufacturing of Papzimeos were expensed as R&D, as regulatory approval and the probability of future economic benefit had not yet been established.

Following the FDA approval and the commencement of commercial sales, these production costs are no longer expensed as research and development, but are capitalized as inventory on the balance sheet and recognized as cost of product and services as the product is sold.

We expect that R&D expenses will increase as the year progresses as we further develop PRGN-2009 and increase our research efforts.

We expect that R&D expenses will increase as the year progresses.

Selling, general and administrative expenses

SG&A expenses increased by $8.7 million, or 70.3%, compared to the three months ended March 31, 2025.

SG&A expenses increased by $6.1 million, or 37.9%, compared to the three months ended June 30, 2025.

This increase was primarily driven by commercial activities related to Papzimeos following its FDA approval in August 2025.

The higher expenses reflect increased costs to support commercialization, expanded marketing and promotional activities to drive product awareness and adoption, and increased personnel costs, including stock compensation expense.

Impairment of Goodwill and other noncurrent assets

In the three months ended June 30, 2025, we recorded $3.9 million in impairment related to our Exemplar reporting unit with no comparable charge in the second quarter of 2026.

Total other expense, net

Total other expense, net decreased by $29.6 million, or 93.9%, compared to the three months ended March 31, 2025 .

This change was primarily attributable to the absence of a $32.5 million charge related to the increase in the fair value of warrant liabilities that was recorded in the prior-year period.

The prior-year increase in warrant liabilities was mainly driven by a rise in Precigen’s stock price and, to a lesser extent, by an increase in the liability for additional warrants expected to be issued as paid-in-kind dividends on the Company’s Series A Preferred Stock.

The remaining change (an increase in other expense) primarily relates to an increase of $2.9 million in interest expenses related to long-term debt that was entered into in the third quarter of 2025.

Total other expense, net was $2.6 million for the three months ended June 30, 2026 compared to other income, net of $5.1 million for the three months ended June 30, 2025, a change of $7.7 million, or 150.2%, compared to the three months ended June 30, 2025.

This change was primarily attributable to the absence of a $4.5 million gain related to the decrease in the fair value of warrant liabilities that was recorded in the prior-year period.

The prior-year increase in warrant liabilities was mainly driven by a rise in Precigen’s stock price and, to a lesser extent, by an increase in the liability for additional warrants that were expected at that point to be issued as paid-in-kind dividends on the Company’s Series A Preferred Stock.

The remaining change primarily relates to an increase of $3.0 million in interest expense related to long-term debt that was entered into in the third quarter of 2025.

Comparison of the six months ended June 30, 2026 and the six months ended June 30, 2025

The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025 (dollars in thousands):

Six Months Ended

June 30, Dollar

Change Percent

Product revenues $ 75,090 $ 244 $ 74,846 >200%

Service revenues $ 3,140 $ 1,953 1,187 60.8 %

Total revenues 78,230 2,197 76,033 >200%

Operating expenses

Cost of product and services 5,364 2,192 3,172 144.7 %

Research and development 12,920 21,966 (9,046) (41.2) %

Selling, general and administrative 43,298 28,492 14,806 52.0 %

Impairment of goodwill — 3,907 (3,907) (100.0) %

Total operating expenses 61,582 56,557 5,025 8.9 %

Operating income (loss) 16,648 (54,360) 71,008 130.6 %

Total other expense, net (4,506) (26,432) 21,926 (83.0) %

Income (loss) before income taxes 12,142 (80,792) 92,934 115.0 %

Income tax benefit (expense)

— (3) 3 (100.0) %

Net income (loss) $ 12,142 $ (80,795) $ 92,937 115.0 %

Total revenues

Total revenues increased by $76.0 million, or >200%, compared to the six months ended June 30, 2025.

The significant increase in total revenues for the six months ended June 30, 2026, was primarily due to the recording of commercial sales of Papzimeos following its FDA approval in August 2025.

Revenues related to the sale of Papzimeos for the six months ended June 30, 2026 were $74.7 million.

No Papzimeos sales were recorded for the six months ended June 30, 2025, as the product had not yet been approved or launched.

Cost of product and services

Cost of products and services increased by $3.2 million, or 144.7%, compared to the six months ended June 30, 2025 almost entirely due to costs related to the recording of commercial sales of Papzimeos following its FDA approval in August 2025.

Prior to regulatory approval, costs associated with the production of Papzimeos were expensed as research and development in accordance with our accounting policy.

Upon FDA approval and the commencement of commercial sales, these costs are now capitalized as inventory and recognized in cost of product and services as product is sold.

Research and development expenses

R&D expenses decreased by $9.0 million, or 41.2%, compared to the six months ended June 30, 2025, primarily due to the change in the accounting treatment of Papzimeos manufacturing costs.

We expect that R&D expenses will increase as the year progresses.

Selling, general and administrative expenses

SG&A expenses increased by $14.8 million, or 52.0%, compared to the six months ended June 30, 2025.

This increase was primarily driven by commercial activities related to Papzimeos following its FDA approval in August 2025.

Impairment of Goodwill and other noncurrent assets

In the six months ended June 30, 2025, we recorded $3.9 million in impairment related to our Exemplar reporting unit with no comparable charge in the six months ended June 30, 2026.

Total other expense, net

Total other expense, net decreased by $21.9 million, or 83.0%, compared to the six months ended June 30, 2025.

This decrease was primarily attributable to the absence of a $28.0 million charge related to the increase in the fair value of warrant liabilities that was recorded in the prior-year period.

The prior-year increase in warrant liabilities was mainly driven by a rise in Precigen’s stock price and, to a lesser extent, by an increase in the liability for additional warrants that were expected at that point to be issued as paid-in-kind dividends on the Company’s Series A Preferred Stock.

The remaining change (an increase in other expense) primarily relates to an increase of $5.9 million in interest expense related to long-term debt that was entered into in the third quarter of 2025.

Liquidity and capital resources

Sources of liquidity

We have incurred losses since our inception, and as of March 31, 2026, we had an accumulated deficit of $2.3 billion.

From our inception through March 31, 2026, we have funded our operations principally with proceeds received from private and public equity and debt offerings, cash received from our collaborators, cash received through sales of businesses, and through product and service sales made directly to customers.

As of March 31, 2026, we had cash and cash equivalents of $7.5 million and investments of $49.3 million.

Cash in excess of immediate requirements is typically invested primarily in money market funds, certificate of deposits and U.S.

Prior to this quarter, we have incurred significant losses since our inception, and had an accumulated deficit of $2.3 billion as of June 30, 2026.

From inception through June 30, 2026, we have funded our operations principally with proceeds received from private and public equity and debt offerings, cash received from our collaborators, cash received through sales of businesses, and through product and service sales made directly to customers.

As of June 30, 2026, we had cash and cash equivalents of $16.3 million and investments of $22.4 million.

Cash in excess of immediate requirements is typically invested primarily in money market funds, certificates of deposit and U.S.

government debt securities in order to maintain liquidity and preserve capital.

In August 2024, we closed a public offering of 39,878,939 shares of our common stock, resulting in net proceeds to us of $30.9 million, after deducting underwriting discounts, fees, and an estimate of other offering expenses.

In December 2024, we issued 79,000 shares of 8.00% Series A Convertible Perpetual Preferred Stock with an initial liquidation preference and stated value of $1,000 per share, together with warrants to purchase 52,666,669 shares of common stock for net proceeds of approximately $78.5 million, after deducting offering expenses.

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The Company received net proceeds of $92,818 after deducting fees and expenses of $7,182.

See "Notes to the Condensed

Consolidated Financial Statements - Note 9" appearing elsewhere in this Report for further discussion on this loan agreement.

See "Notes to the Condensed Consolidated Financial Statements - Note 9" appearing elsewhere in this Report for further discussion on this loan agreement.

The following table sets forth the significant sources and uses of cash for the periods set forth below:

Three Months Ended

Six Months Ended

(In thousands)

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Cash flows from operating activities:

During the three months ended March 31, 2026, our net loss was $7.9 million, which includes the following significant noncash expenses and benefits totaling $4.5 million:

(i) $3.0 million of stock-based compensation expense, (ii) $1.1 million of depreciation and amortization expense, and (iii) $0.5 million of shares issued as payment for services.

In addition, changes in operating assets and liabilities used $40.5 million of cash for operating activities.

During the three months ended March 31, 2025, our net loss was $54.2 million, which includes the following significant noncash expenses and benefits totaling $35.6 million:

(i) $32.5 million of unrealized appreciation in the fair value of warrant liabilities, (ii) $2.7 million of stock-based compensation expense, (iii) $0.6 million of depreciation and amortization expense, and (iv) $0.5 million of shares issued as payment for services, partially offset by non-cash benefits of $0.7 million due to amortization of discounts on investments.

During the six months ended June 30, 2026, our net income was $12.1 million, which includes the following significant noncash expenses and benefits totaling $9.4 million:

(i) $6.6 million of stock-based compensation expense, (ii) $2.2 million of depreciation and amortization expense, (iii) $0.7 million of accretion of debt discount, (iv) $0.5 million of shares issued as payment for services, partially offset by (v) $0.6 million of amortization of discounts on investments.

In addition, changes in operating assets and liabilities used $83.2 million of cash for operating activities, driven primarily by increases in accounts receivable and inventory in connection with the commercial launch and ramp-up of Papzimeos sales.

Our customer payment terms on sales of Papzimeos are 127 days, driving the significant increase in accounts receivables.

During the six months ended June 30, 2025, our net loss was $80.8 million, which includes the following significant noncash expenses and benefits totaling $36.8 million:

(i) $28.0 million of unrealized appreciation in the fair value of warrant liabilities, (ii) $3.9 million impairment of goodwill, (iii) $4.3 million of stock-based compensation expense, (iv) $1.3 million of depreciation and amortization expense, and (v) $0.5 million of shares issued as payment for services, partially offset by non-cash benefits of $1.2 million due to amortization of discounts on investments.

In addition, changes in operating assets and liabilities provided $8.6 million of cash for operating activities.

Cash flows from investing activities:

During the three months ended March 31, 2026, we received $21.2 million of cash from sales and maturities of investments, net of purchases, and purchased $0.3 million of property, plant and equipment, primarily related to our manufacturing facility.

During the three months ended March 31, 2025, we received $5.8 million of cash, from sales and maturities of investments, net of purchases, and purchased $0.6 million of property, plant and equipment, primarily related to the build-out of our manufacturing facility.

During the six months ended June 30, 2026, we received $48.3 million of cash from sales and maturities of investments, net of purchases, and purchased $0.7 million of property, plant and equipment, primarily related to our manufacturing facility.

During the six months ended June 30, 2025, we received $23.6 million of cash, from sales and maturities of investments, net of purchases, and purchased $1.6 million of property, plant and equipment, primarily related to the build-out of our manufacturing facility.

Cash flows from financing activities:

During the three months ended March 31, 2026, we received $0.3 million of cash from the exercise of stock options and paid $0.1 million to taxing authorities in connection with the vesting of performance stock units.

In the three months ended March 31, 2025, we paid $0.4 million in issuance costs related to a prior year equity issuance and $0.5 million to taxing authorities in connection with the vesting of performance stock units.

We received $0.2 million from the exercise of stock options.

During the six months ended June 30, 2026, we received $1.6 million of cash from the exercise of stock options and paid $1.5 million to taxing authorities in connection with the vesting of performance stock units.

During the six months ended June 30, 2025, we paid $0.4 million in issuance costs related to a prior year equity issuance, $0.5 million related to the prior year preferred stock issuance cost, and $1.8 million to taxing authorities related to vesting of equity awards, and received $0.2 million from the exercise of stock options.

Future capital requirements

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Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.

If we raise additional funds through strategic transactions, collaborations, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates, or to grant licenses on terms that may not be favorable to us.

If we raise additional funds through strategic transactions, collaborations, or licensing

arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, or product candidates, or to grant licenses on terms that may not be favorable to us.

We are subject to a number of risks similar to those of other companies launching their first commercial product as well as conducting high-risk, early-stage research and development of product candidates.

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Our success is dependent upon our ability to continue to raise additional capital, including the collection of accounts receivable in order to fund ongoing research and development, obtain regulatory approval of our products, successfully commercialize our products, generate revenue, meet our obligations, and, ultimately, attain profitable operations.

Our condensed consolidated financial statements as of March 31, 2026 have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

Based on current projections, management believes that its existing cash, cash equivalents and short and long-term investments, combined with anticipated collection of potential revenue from the commercialization of Papzimeos, will enable us to continue our operations for at least one year from the date of this filing.

Our condensed consolidated financial statements as of June 30, 2026 have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

Based on current projections, management believes that its existing cash, cash equivalents and short and long-term investments, combined with anticipated collection of accounts receivables from the commercialization of Papzimeos (including future sales), will enable us to continue our operations for at least one year from the date of this filing.

We are subject to all of the risks inherent in the development of new products (including manufacturing and commercialization of Papzimeos), and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.

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Contractual obligations and commitments

The following table summarizes our significant contractual obligations and commitments from continuing operations as of March 31, 2026 and the effects such obligations are expected to have on our liquidity and cash flows in future periods:

The following table summarizes our significant contractual obligations and commitments from continuing operations as of June 30, 2026 and the effects such obligations are expected to have on our liquidity and cash flows in future periods:

Total Less Than 1 Year 1 - 3 Years 3 - 5 Years More Than 5 Years

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Total $ 140,797 $ 12,045 $ 60,193 $ 68,559 $ —

(*) Interest is calculated using static annual rate of 10.25%, although our long-term debt carries a variable interest rate (see Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 9" appearing elsewhere in this Quarterly Report).

In addition to the obligations in the table above, as of March 31, 2026, we are party to license agreements with various third parties that contain future milestones and royalty payment obligations related to development milestones and/or commercial sales of products that incorporate or use their technologies.

(*) Interest is calculated using a static annual rate of 10.25%, although our long-term debt carries a variable interest rate (see "Notes to the Condensed Consolidated Financial Statements (Unaudited) - Note 9" appearing elsewhere in this Quarterly Report).

In addition to the obligations in the table above, as of June 30, 2026, we are party to license agreements with various third parties that contain future milestones and royalty payment obligations related to development milestones and/or commercial sales of products that incorporate or use their technologies.

Because these agreements are generally subject to termination by us or are dependent on certain conditions precedent within our control, no amounts are included in the tables above.

As of March 31, 2026, we also had research and development commitments with third parties totaling $5.0 million that had not yet been incurred.

As of June 30, 2026, we also had research and development commitments with third parties totaling $5.4 million that had not yet been incurred.

Off-balance sheet arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis