Item 7. Management’s Discussion and Analysis
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis is intended to provide material information around events and uncertainties known to management relevant to an assessment of the financial condition and results of operations of the Company and should therefore be read in conjunction with our audited Financial Statements and the accompanying Notes to Financial Statements and other disclosures included in this Annual Report on Form 10-K (including the disclosures under Part I, Item 1A. Risk Factors) where other material events and uncertainties not otherwise discussed below are disclosed. Certain amounts and percentages herein may not sum or recalculate due to rounding.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate we have conducted exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
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Overview
We are a clinical-stage biopharmaceutical company focused on discovering and developing integrin-based therapeutics. Our lead program is focused on the development of treatments for solid tumors by inhibiting integrin-mediated activation of transforming growth factor-β (TGF-β). We have applied our deep understanding of integrin biology, along with our medicinal chemistry and translational medicine expertise to develop a proprietary drug discovery platform that we believe has broad applicability across multiple areas of disease.
Our wholly owned lead product candidate, PLN-101095, is an oral, small molecule, dual selective inhibitor of αvβ8 and αvβ1 integrins in development for the treatment of solid tumors. In 2025, we announced positive data from a Phase 1 open-label dose-escalation trial of PLN-101095 as monotherapy and in combination with the immunotherapy pembrolizumab in patients with solid tumors that are resistant to immune checkpoint inhibitors. We also continue to explore the full potential of our drug discovery platform consisting of a proprietary library of over 15,000 integrin binding molecules, focusing on integrin-based target-mediated drug delivery.
Fourth Quarter and Recent Developments
Oncology Program
• Data from the Phase 1 trial of PLN-101095 showed deep and durable ongoing responses. In December, the Company announced positive data showing that, in a heavily pretreated patient population, PLN-101095 demonstrated anti-tumor activity in combination with pembrolizumab , an FDA-approved ICI. Four responders were observed consisting of one confirmed complete response and three partial responses (two confirmed, one unconfirmed) out of the 10 secondary ICI refractory patients. These clinical responses were observed in patients with cholangiocarcinoma, melanoma, head and neck squamous cell carcinoma and non-small cell lung cancer (NSCLC). Notably, all responding patients showed large increases in plasma interferon gamma (IFN-γ) after 14 days of monotherapy with PLN-101095 prior to the addition of pembrolizumab . No non-responders showed meaningful increases in plasma IFN- γ. PLN-101095 was generally well tolerated across all doses tested. IFN-γ is known to play a multifaceted role in modulating anti-tumor immunity, with increased tumor expression levels having previously been linked with better outcomes from immune checkpoint blockade.
• Accelerated development plan of PLN-101095 underway with initiation of Phase 1b indication expansion trial.
Based on the encouraging response data and supportive IFN- γ biomarker data from the Phase 1 trial, the Company is advancing an accelerated clinical development plan of PLN-101095 and has initiated a Phase 1b indication expansion trial. The Phase 1b open-label, single dose trial will enroll three cohorts of patients including NSCLC, clear cell renal cell carcinoma and tumors with high tumor mutational burden. Tumor selection was based on data from the Phase 1 trial, as well as strong mechanistic rationale for integrin inhibition. Patients will be treated for 14 days with PLN-101095 dosed at 1,000 mg twice daily as monotherapy, after which pembrolizumab will be added as combination therapy. Study start activities for this trial are underway with first patient enrollment anticipated in second quarter. Interim data is expected in 2027.
• PLN-101095 Phase 1 data accepted for presentation at AACR Annual Meeting 2026. Data from the Phase 1 trial of PLN-101095 will be the subject of a poster presentation and an oral presentation as part of the Clinical Trials Minisymposium at the upcoming American Association of Cancer Research (AACR) conference to be held April 17-22, 2026, in San Diego, California.
Integrin-Targeted Delivery Platform
• Utilizing cell-specific integrin receptors, Pliant has developed a platform to deliver drug payloads, including siRNAs, to selective tissue types. Current programs are focused on delivering siRNAs to skeletal muscle cells and other tissues. The Company believes this integrin-targeting delivery platform has the potential for broad applicability across multiple disease areas utilizing a variety of drug payloads.
Corporate Highlights
• Appointment of Minnie Kuo as Chief Operating Officer. Ms. Kuo joined Pliant in September 2023 as Chief Development Officer, bringing more than 20 years of multinational clinical development experience across various therapeutic areas. In this expanded role, Ms. Kuo bridges Pliant’s science and operations with oversight of clinical operations, early development, program management, regulatory affairs and compliance.
• INTEGRIS-PSC results published in the Journal of Hepatology . The manuscript, “Phase II INTEGRIS-PSC trial of bexotegrast, an αvβ6 and αvβ1 integrin inhibitor, in primary sclerosing cholangitis”, appears in the January 2026 issue of the Journal of Hepatology .
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Since inception, we have had significant operating losses. Our net loss was $149.3 million, and $210.3 million for the years ended December 31, 2025, and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $859.4 million and cash, cash equivalents, restricted cash and short-term investments of $192.4 million. We expect to continue to incur net losses for the foreseeable future as we:
• perform research and development activities to identify and develop product candidates;
• advance product candidates into and through clinical development;
• require the manufacture of supplies to support research and development, preclinical studies and clinical trials;
• seek regulatory approvals for any product candidates that successfully complete clinical trials;
• maintain, expand and protect our intellectual property portfolio; and
• invest in or in-license other technologies or product candidates.
Financial Operations Overview
Operating Expenses
Research and Development
Our research and development expenses consist of expenses incurred in connection with the development of our product candidates. Research and development expenses include:
• employee-related expenses, which include salaries, benefits and stock-based compensation for our research and development personnel;
• expenses incurred under agreements with third-party contract organizations for pre-clinical studies, clinical trials and consultants that conduct research and development activities on our behalf;
• costs associated with the manufacture of supplies to support research and development, preclinical studies and clinical trials;
• depreciation of laboratory equipment and costs of equipment and supplies;
• facilities expenses, which include expenses for rent and other facility related costs; and
• other expenses and other allocations associated with research and development
The following table summarizes our research and development expenses for the years ended December 31, 2025, and 2024 (in thousands):
Year Ended December 31,
2025 2024
Employee-related expenses $ 41,534 $ 49,597
Outside and consulting services for preclinical studies and research and development activities by third party contract organizations 9,953 16,529
Clinical trials expenses 41,387 80,596
Depreciation of lab equipment and costs of equipment and supplies 4,273 6,717
Facilities expenses 6,409 7,776
Other expenses and other allocations 5,601 8,095
Total research and development expenses $ 109,157 $ 169,310
We expense all research and development costs in the periods in which they are incurred. We do not allocate our internal costs by product candidates or by preclinical programs as these are in early stages of clinical trials or development, and any such allocation would involve significant estimates and judgments and, accordingly, would be imprecise. Where appropriate, we allocate our third-party research and development expense by product candidate or preclinical program. These expenses primarily relate to outside consultants, clinical research organizations, and contract manufacturing organizations. When we refer to the research and development expenses associated with a specific product candidate or preclinical program, these refer exclusively to the allocated third-party expenses associated with that product candidate.
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Due to the discontinuation of development of bexotegrast in IPF, we expect research and development expenses to decrease on an annual basis in 2026 as we have re-prioritized our development of product candidates that are in earlier, less capital-intensive stages of development, and to grow thereafter commensurate with the stage and status of PLN-101095 and other development efforts. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming, and the successful development of our product candidates is highly uncertain. As a result, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate revenue from the commercialization and sale of any of our product candidates.
General and Administrative
Our general and administrative expenses consist primarily of salaries, benefits and stock-based compensation for our general and administrative personnel, allocated facilities costs, insurance and other expenses for outside professional services, including legal, marketing, investor relations, human resource and accounting services. Due to the restructuring activities of 2025, we expect general and administrative expenses to decrease on an annual basis in 2026 and to remain relatively consistent thereafter. In addition, if we obtain regulatory approval for any of our product candidates and do not enter into a third-party commercialization collaboration, we expect to incur significant expenses related to building a sales and marketing team to support product sales, marketing and distribution activities.
Interest and Other Income (Expense), net
Our interest and other income (expense), net consists of interest, accretion income and amortization expense on cash, cash equivalents and short-term investments, and realized gains and losses on short-term investments.
Interest Expense
Interest expense was derived from term loans executed under the Oxford Loan Agreement that we entered into in May 2022 and amended in March 2024 (the "Amended Loan Agreement"). Outstanding term loans pursuant to the Amended Loan Agreement were extinguished in October 2025 and through the date of extinguishment, borrowings incurred an interest rate per annum equal to 1-month term Secured Overnight Financing Rate (SOFR) plus 5.25%.
Loss on Extinguishment of Debt
In October 2025, we completed a voluntary prepayment of the Amended Loan Agreement for $32.4 million, representing all outstanding principal, accrued and unpaid interest, fees, costs and expenses. The amount by which the pre-payment required to extinguish our obligation exceeded the values recorded to the balance sheet on the extinguishment date is recognized as a loss in the statement of operations.
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Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024
(In thousands, except percentages) Year Ended December 31,
2025 2024 $ Change % Change
Operating expenses:
Research and development $ (109,157) $ (169,310) $ 60,153 (35.5) %
General and administrative (47,216) (59,055) 11,839 (20.0) %
Total operating expenses (156,373) (228,365) 71,992 (31.5) %
Loss from operations (156,373) (228,365) 71,992 (31.5) %
Interest and other income (expense), net 11,416 21,085 (9,669) (45.9) %
Interest expense (2,559) (3,024) 465 (15.4 %)
Loss on extinguishment of debt (Note 7) (1,828) — (1,828) 100.0 %
Net loss $ (149,344) $ (210,304) $ 60,960 (29.0) %
Research and Development Expenses
The following table summarizes the results of our research and development expenses for the years ended December 31, 2025 and 2024 (in thousands):
2025 2024
Program-specific external expenses:
Bexotegrast - clinical trial and outside service third party contracting costs $ 42,410 $ 86,365
Other pipeline programs - clinical trial and outside service third party contracting costs 8,930 10,760
Total program-specific external expenses 51,340 97,125
Unallocated internal expenses
Employee-related expenses 41,534 49,597
Depreciation of lab equipment and costs of equipment and supplies 4,273 6,717
Facilities expenses 6,409 7,776
Other expenses and allocations 5,601 8,095
Total unallocated internal expenses 57,817 72,185
Total research and development expenses $ 109,157 $ 169,310
The decrease in research and development expenses of $60.2 million was primarily due to:
• $44.0 million decrease driven by our decision to discontinue development of bexotegrast in IPF and the related termination of BEACON-IPF, a Phase 2b/3 trial in IPF.
• $1.8 million decrease from other pipeline programs;
• $8.1 million decrease in employee-related costs, including stock-based compensation, due to decreased headcount following our 2025 restructuring plans; and
• $3.9 million decrease in facilities and other allocated expenses, driven by our restructuring plans and general cost containment efforts following our strategic realignment of operations initiated in May 2025.
General and Administrative Expenses
General and administrative expenses decreased by $11.8 million primarily due to personnel related expenses, including stock-based compensation, driven by our 2025 restructuring plans implemented during the year.
Interest and Other Income (Expense), Net
Interest and other income (expense), net decreased $9.7 million due to lower average investment balances in 2025 compared to 2024 due to continued funding of operating activities.
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Interest Expense
Interest expense decreased $0.5 million due to the extinguishment of term loans in October 2025.
Loss on Extinguishment of Debt
Loss on extinguishment of debt increased $1.8 million resulting from our decision to extinguish all term loans outstanding pursuant to the Amended Loan Agreement executed March 11, 2024.
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Liquidity and Capital Resources
Overview
As of December 31, 2025, we had cash, cash equivalents, restricted cash and short-term investments of $192.4 million. Our cash, cash equivalents, and short-term investments consist of money market funds, U.S. Treasury securities, U.S. Government Agency securities and highly rated, investment-grade corporate debt securities.
In March 2024, we entered into an Amended Loan Agreement with Oxford Finance LLC (or the “Lender” or “Oxford”) which upsized our existing Term Loan facility to a total size of $150.0 million of non-dilutive capital. Pursuant to the Amended Loan Agreement, we drew term loans of $30.0 million, inclusive of $10.0 million in principal amount previously outstanding under the Oxford Loan Agreement. The agreement allowed for additional borrowing contingent upon the continued development of bexotegrast in IPF and/or at the sole discretion of Oxford. Following our decision to discontinue development of bexotegrast in IPF, we decided to complete a voluntary prepayment of our Amended Loan Agreement with Oxford in October, 2025, for $32.4 million, representing all outstanding principal, accrued and unpaid interest, fees, costs and expenses. Upon prepayment, all obligations, covenants, debts and liabilities under the Amended Loan Agreement were satisfied and discharged in full. See Note 7 to the Notes to our financial statements of this Report for more information.
During the third quarter of 2021, we entered into a Controlled Equity Offering SM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co., as sales agent, pursuant to which we may issue and sell shares of common stock in an "at-the-market" offering. In March 2023, we filed a prospectus registering the offer and sale of up to $150.0 million of shares of common stock from time to time pursuant to the Sales Agreement. We have not issued any shares pursuant to any at-the-market offerings, including pursuant to the Sales Agreement, but may do so at a future date after filing a new prospectus for the Sales Agreement.
We believe that our existing capital resources will be sufficient to fund our anticipated operating expenses and capital expenditure requirements for the next 12 months and beyond. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Further, our operating plan may change, and we may need additional funds to meet operational needs and capital requirements for product development and commercialization sooner than planned.
Our operations have been financed primarily through the issuance and sale of common stock and convertible preferred stock and our prior collaboration with Novartis.
Funding Requirements
Our primary use of cash is to fund operating expenses, primarily research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.
Our future funding requirements will depend on many factors, including the following:
• the initiation, progress, timing, costs and results of preclinical studies and clinical trials for our product candidates;
• the clinical development plans we establish for these product candidates;
• the timelines of our clinical trials and the overall costs to conduct and complete the clinical trials, which may be impacted by health epidemics and pandemics, such as COVID-19;
• the number and characteristics of product candidates that we develop;
• the outcome, timing and cost of meeting regulatory requirements established by the U.S. Food and Drug Administration, or FDA, and other comparable foreign regulatory authorities including but not limited to the European Medicines Agency (EMA) and the U.K. Medicines and Healthcare products Regulatory Agency (MHRA);
• whether we enter into any collaboration agreements and the terms of any such agreements;
• the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
• the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us or our product candidates;
• the effect of competing technological and market developments;
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• the cost and timing of completion of commercial-scale outsourced manufacturing activities;
• the cost and timing of achieving favorable pricing and reimbursement agreements with the pricing authorities in each market of interest, including of securing a positive recommendation after undergoing a health technology assessment by health technology authorities;
• the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own; and
• the cost of operating as a public company.
Further, our operating plan may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials and other research and development expenditures. If we need to raise additional capital to fund our operations, funding may not be available to us on acceptable terms, or at all. In addition, the discontinuation of our development of bexotegrast in IPF may intensify the risk that we will be unable to access capital on favorable terms, or at all, as and when needed. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of or suspend one or more of our preclinical studies, clinical trials, research and development programs or commercialization efforts. We may seek to raise any necessary additional capital through a combination of public or private equity offerings, debt financings, collaborations and other licensing arrangements. If we raise additional capital through debt financing, we may be subject to 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 capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, future revenue streams or research programs or grant licenses on terms that may not be favorable to us.
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Cash Flows
The following summarizes our cash flows for the periods indicated (in thousands):
Year Ended December 31,
2025 2024
Net cash used in operating activities $ (128,336) $ (155,503)
Net cash provided by investing activities 134,290 140,340
Net cash (used in) provided by financing activities (31,697) 23,117
Net (decrease) increase in cash, cash equivalents and restricted cash $ (25,743) $ 7,954
Cash Used in Operating Activities
Net cash used in operating activities decreased due to an overall decrease in the volume of operations following our decision to discontinue development of bexotegrast in IPF and the related termination of our phase 2b/3 trial, BEACON-IPF.
Cash Provided by (Used in) Investing Activities
Net cash provided by investing activities decreased over the same period of prior year as maturities of marketable securities exceeded related purchases during the twelve months ended December 31, 2025 to a greater extent than exhibited in the twelve months ended December 31, 2024.
Cash (Used in) Provided by Financing Activities
Net cash used in financing activities increased by $54.8 million primarily due to our voluntary prepayment of the Amended Loan Agreement coupled with the lack of financing inflows from term loans compared to the twelve months ended December 31, 2024 associated with the Amended Loan Agreement.
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Off-Balance Sheet Arrangements
During the periods presented, we did not have, nor do we currently have, any off-balance sheet arrangements or holdings in any variable interest entities other than the operating lease commitments described in Note 15 to our financial statements appearing elsewhere in this Annual Report.
Material Cash Requirements
At December 31, 2025, we have a non-cancelable operating lease for office and laboratory space, which expires March 31, 2031. Refer to Note 14 and Note 15 to our financial statements appearing elsewhere in this Annual Report for a discussion of material obligations and commitments.
We enter into contracts in the normal course of business with third-party contract organizations for clinical trials, non-clinical studies and testing, manufacturing and other services and products. These contracts generally provide for termination following a certain period after notice and therefore we believe that our cancellable obligations under these agreements are not material.
Critical Accounting Polices and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are described in more detail in Note 2 to our financial statements appearing elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Accrued and Prepaid Research and Development Expenses
We record accrued expenses for estimated costs of our research and development activities which include the conduct of clinical studies and preclinical studies by third-party service providers. We record the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and include these costs in accrued liabilities in the balance sheets and within research and development expenses in the statements of operations and comprehensive loss. These costs are a significant component of our research and development expenses. We record accrued expenses for these costs based on factors such as estimates of the work completed and in accordance with agreements established with these third-party service providers. Any payments made in advance of services provided are recorded as prepaid assets, which are expensed as the contracted services are performed.
We estimate the amount of work completed through review of detailed budgets and timelines included in our contracts and agreements, and update these estimates with information obtained from third-party service providers and internal personnel on a quarterly basis. We make significant judgments and estimates in determining the accrued and/or prepaid balance in each reporting period. As actual costs become known, we adjust our estimates. Our accrued expenses and prepaid research and development expenses are dependent, in part, upon the receipt of timely and accurate reporting from contract research organizations, other third-party service providers and internal research and development personnel. If we under estimate or over-estimate the level of services performed or the costs of these services, our accrued expenses could differ from our estimates. For the periods presented, we have experienced no material differences between our accrued expenses and actual expenses.
Recent Accounting Pronouncements
The information set forth under Note 2 to the financial statements under the caption “Recently Issued Accounting Pronouncements” is incorporated herein by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
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