What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-06 · 119 added, 92 removed, 291 unchanged (42% of the section changed)

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uncertainty and disruption in the global economy and financial markets due to a number of factors, including but not limited to geopolitical instability, high interest rates, and changes in trade policies, including tariffs or other trade restrictions or the threat of such actions and retaliatory actions;

a prolonged shutdown of the U.S.

federal government;

and other factors .

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(i) inflammatory and immunomodulatory (“I&I”) diseases and (ii) hematology and blood disorders.

Two novel peptides derived from our proprietary discovery technology platform, icotrokinra and rusfertide, are currently in advanced Phase 3 clinical development, with one New Drug Application (“NDA”) submitted to the FDA in July 2025 and a second NDA filing expected in the fourth quarter of 2025.

Icotrokinra is a first-in-class investigational targeted oral peptide that selectively blocks the Interleukin-23 receptor (“IL-23R”) and is licensed to J&J Innovative Medicines (“JNJ”), formerly Janssen Biotech, Inc.

Following icotrokinra’s joint discovery by us and JNJ scientists pursuant to our IL-23R collaboration, we were primarily responsible for the development of icotrokinra through Phase 1, with JNJ assuming responsibility for development in Phase 2 and beyond.

In July 2025, an NDA was submitted by JNJ seeking the first approval of icotrokinra for the treatment of adults and pediatric patients 12 years of age or older with moderate-to-severe plaques psoriasis.

Two novel peptides derived from our proprietary discovery technology platform, icotrokinra and rusfertide, are currently in advanced Phase 3 clinical development with one New Drug Application (“NDA”) submitted to the FDA in July 2025 and a second NDA filing expected by the end of 2025.

Icotrokinra is a first-in-class investigational targeted oral peptide that selectively blocks the Interleukin-23 receptor (“IL-23R”) and is licensed to Janssen Biotech, Inc., a Johnson & Johnson company (“JNJ”), Following icotrokinra’s joint discovery by us and JNJ scientists pursuant to our IL-23R collaboration, we were primarily responsible for the development of icotrokinra through Phase 1, with JNJ assuming responsibility for development in Phase 2 and beyond.

In September 2025, JNJ submitted a Marketing Authorisation Application (“MAA”) to the European Medicines Agency (“EMA”) for first approval of icotrokinra in adults and pediatric patients 12 years of age or older with moderate-to-severe plaque psoriasis.

Rusfertide, a first-in-class investigational injectable mimetic of the natural hormone hepcidin, is currently in Phase 3 development for the treatment of the rare blood disorder polycythemia vera (“PV”).

Rusfertide is being co-developed and will be co-commercialized with Takeda Pharmaceuticals, Inc.

(“Takeda”), with the Company remaining primarily responsible for clinical development activities through a potential NDA filing in the fourth quarter of 2025.

We also have a number of pre-clinical stage drug discovery programs addressing biologically and commercially validated targets, including IL-17 oral peptide antagonist PN-881, obesity triple agonist peptide PN-477, and oral hepcidin.

(“Takeda”), with the Company remaining primarily responsible for clinical development activities through a potential NDA filing by the end of 2025.

In August 2025, rusfertide was granted Breakthrough Therapy designation by the FDA for the treatment of erythrocytosis in patients with PV.

We also have a number of drug discovery and development programs addressing biologically and commercially validated targets, including IL-17 oral peptide antagonist PN-881, obesity triple agonist peptide PN-477, and oral hepcidin.

In October 2025, the first human subject was dosed in our Phase 1 PN-881 clinical trial.

Our Product Pipeline and Expected Key Milestones

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ICONIC Program

JNJ’s NDA submission to the FDA in July 2025 included data from four pivotal Phase 3 trials conducted as part of the ICONIC clinical development program, including ICONIC-LEAD (ClinicalTrials.gov identifier NCT06095115), ICONIC-TOTAL (NCT06095102), ICONIC-ADVANCE 1 (NCT06143878) and ICONIC-ADVANCE 2 (NCT06220604).

JNJ’s NDA submission to the FDA and MAA submission to the EMA in the third quarter of 2025 included data from four pivotal Phase 3 trials conducted as part of the ICONIC clinical development program, including ICONIC-LEAD (ClinicalTrials.gov identifier NCT06095115), ICONIC-TOTAL (NCT06095102), ICONIC-ADVANCE 1 (NCT06143878) and ICONIC-ADVANCE 2 (NCT06220604).

Treatment with icotrokinra met all primary and co-primary endpoints across the development program among adults and pediatric patients 12 years of age and older with moderate-to-severe plaque psoriasis, demonstrating significant skin clearance and a favorable safety profile in a once-daily pill.

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● Data from the Phase 3 ICONIC-TOTAL trial, presented at the 2025 Society for Investigative Dermatology (“SID”) Annual Meeting in May 2025, which highlighted the potential of icotrokinra as a treatment for patients with difficult-to-treat scalp and genital psoriasis.

● Results from the Phase 3 ICONIC-ADVANCE 1 & ICONIC-ADVANCE 2 trials that further reinforced the overall efficacy profile of icotrokinra, which met co-primary endpoints of IGA 0/1 and PASI 90 versus placebo at Week 16.

● Results from the Phase 3 ICONIC-ADVANCE 1 and ICONIC-ADVANCE 2 trials that further reinforced the overall efficacy profile of icotrokinra, which met co-primary endpoints of IGA 0/1 and PASI 90 versus placebo at Week 16.

Icotrokinra also met all key secondary endpoints at Weeks 16 and 24 that measured superiority to deucravacitinib in patients with moderate-to-severe plaque psoriasis.

Comprehensive results are being prepared for presentation at a future medical meeting.

● Long-term data from the ICONIC development program, including at least 52 weeks of treatment for ICONIC-LEAD and ICONIC-TOTAL, and the results from a randomized withdrawal analysis evaluating the durability of response, are being prepared for presentation at a future medical meeting.

In September 2025, new data from the ICONIC-ADVANCE 1 and 2 trials was presented at the 2025 European Academy of Dermatology and Venereology (“EADV”) Congress.

Additionally, new long-term 52-week data from the ICONIC-LEAD trial was presented as a late-breaking abstract at EADV.

In October 2025, new long-term 52-week data from the ICONIC-TOTAL trial was presented at the 2025 Fall Clinical Dermatology Conference.

The data show icotrokinra demonstrated high and durable rates of site-specific psoriasis clearance affecting high-impact and difficult-to-treat areas of the body.

In November 2025, publications of ICONIC-LEAD data through Week 24 and ICONIC-TOTAL data through Week 16 were published in the New England Journal of Medicine and the NEJM Evidence, respectively.

Ongoing Phase 3 clinical trials in the ICONIC program include the following:

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Icotrokinra was well tolerated with the proportions of participants reporting one or more adverse events being similar between the icotrokinra dose groups and the placebo group.

Comprehensive results from the ANTHEM-UC trial are being prepared for presentation at upcoming medical congresses by JNJ.

Additional clinical studies of icotrokinra in UC and Crohn’s disease are planned.

At Week 12, patients treated with 400 mg of icotrokinra once daily achieved a clinical response rate of 63.5% versus 27% for placebo (p<0.001), while patients treated with 200 mg and 100 mg of icotrokinra once daily achieved 58.1% and 54.7% response rates, respectively.

Across multiple secondary endpoints, in the 400 mg icotrokinra group, significantly greater proportions of patients achieved clinical remission, symptomatic remission, and endoscopic improvement at Week 12 compared to placebo.

Both the 200 mg and 100 mg once-daily dosing groups also showed meaningful improvements in these secondary endpoints relative to placebo.

All icotrokinra doses demonstrated higher rates of symptomatic remission compared to placebo as early as Week 4.

Based on results from the ANTHEM-UC trial, the following clinical trials have been initiated:

● ICONIC-UC (NCT07196748) – An 882-patient randomized, controlled, open-label Phase 3 trial in adolescents to evaluate the efficacy and safety of induction and maintenance therapy with icotrokinra in moderately-to-severely active UC;

● ICONIC-CD (NCT07196722) – A 1,092-patient randomized, controlled Phase 2b/3 trial to evaluate the efficacy and safety of icotrokinra in moderately-to-severely active Crohn’s disease.

In October 2025, Week 28 results from the ANTHEM-UC trial were announced at United European Gastroenterology Week (“UEGW”) 2025.

Icotrokinra demonstrated clinically meaningful outcomes at Week 28 with 31.7% of patients achieving clinical remission and 38.1% showing endoscopic improvement versus placebo.

In addition, Week 12 results from the ANTHEM-UC trial were also announced at UEGW 2025.

JNJ License and Collaboration Agreement

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We earned the $165.0 million milestone payment described above during the fourth quarter of 2024.

We have earned a total of $337.5 million in non-refundable payments from JNJ from inception in 2017 through June 30, 2025.

We have earned a total of $337.5 million in non-refundable payments from JNJ from inception in 2017 through September 30, 2025.

We are eligible to receive up to $630.0 million in future development and sales milestone payments, inclusive of the following potential upcoming milestones:

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PN-881 targets three IL-17 dimers (IL-17 AA, AF and FF), which may offer potential treatment options for plaque psoriasis, psoriatic arthritis, h idradenitis suppurativa and spondyloarthritis.

Pre-clinical data for PN-881 was presented at the SID Annual Meeting in May 2025.

Investigational New Drug (“IND”), or foreign equivalent, enabling studies are ongoing, and we expect to initiate a PN-881 Phase 1 study in the fourth quarter of 2025.

Pre-clinical data for PN-881 was presented at the SID Annual Meeting in May 2025 and the EADV Annual Congress in September 2025.

In October 2025, the first human subject was dosed in our Phase 1 trial (NCT07153146) of PN-881 evaluating its safety, tolerability, pharmacokinetics and pharmacodynamics in healthy adults.

Results of the PN-881 Phase 1 study are expected to inform the design and dosing in a subsequent dose-ranging psoriasis trial.

Rapid expansion into other IL-17 mediated diseases is expected based on results observed in psoriasis studies.

We believe an IL-17 antagonist peptide like PN-881 may offer an attractive therapeutic option as an oral targeted therapy for patients, with broad opportunity for multiple indications in addition to psoriasis.

Rusfertide is currently in Phase 3 development for the treatment of PV.

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The trial enrolled patients across North and South America, Europe, Asia and Australia.

In March 2025, we announced positive top-line data for the trial’s 32-week primary efficacy endpoint, potentially leading to an NDA filing in the fourth quarter of 2025.

In March 2025, we announced positive top-line data for the trial’s 32-week primary efficacy endpoint, potentially leading to an NDA filing by the end of 2025.

In June 2025, an abstract titled “Results From VERIFY, a Phase 3, Double-Blind, Placebo (PBO)-Controlled Study of Rusfertide for Treatment of Polycythemia Vera” was presented at the Plenary Session at the 2025 American Society of Clinical Oncology Annual Meeting.

The VERIFY study met its primary endpoint, which was the proportion of patients achieving a clinical response, defined as the absence of phlebotomy eligibility during study Weeks 20-32.

Study results demonstrated 76.9% of patients treated with rusfertide plus the current standard of care achieved a clinical response, compared to 32.9% in

the placebo plus the current standard of care group (p<0.0001).

Study results demonstrated that 76.9% of patients treated with rusfertide plus the current standard of care achieved a clinical response, compared to 32.9% in the placebo plus the current standard of care group (p<0.0001).

The response observed in the rusfertide arm was consistent across subgroups, regardless of risk status or type of concurrent cytoreductive therapy.

In addition, all key secondary endpoints met statistical significance in favor of the rusfertide arm compared to the placebo arm in the VERIFY study, as follows:

● The mean number of phlebotomies was 0.5 phlebotomies per patient for those treated with rusfertide plus the current standard of care compared to 1.8 phlebotomies per patient for those treated with placebo plus the current standard of care during Weeks 0-32 (p<0.0001).

current standard of care during Weeks 0-32 (p<0.0001).

Only 27% of patients treated with rusfertide plus the current standard of care required phlebotomy between Weeks 0-32, compared to 78% of patients who received placebo plus the current standard of care.

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THRIVE (NCT06033586), our Phase 2 long-term open-label extension trial for REVIVE Phase 2 trial patients on years three through five of treatment, remains ongoing.

In August 2025, the FDA granted Breakthrough Therapy designation to rusfertide for the treatment of erythrocytosis in patients with PV.

Rusfertide had previously received Orphan Drug and Fast Track designations from the FDA in 2020.

Breakthrough Therapy designation is a process designed to expedite the development and review of drugs that are intended to treat serious conditions where preliminary clinical evidence indicates potential for substantial improvement over existing therapies.

Clinical data on rusfertide in PV, including data from the VERIFY trial, are the focus of four presentations planned at the 67 th Annual American Society of Hematology (“ASH”) Annual Meeting in December 2025.

This includes an oral presentation of the durability of response and safety results through Week 52 from the VERIFY trial.

Takeda Collaboration Agreement

In January 2024, we entered into a worldwide license and collaboration agreement for rusfertide with Takeda (the “Takeda Collaboration Agreement”).

In March 2025, we and Takeda agreed, pursuant to the provisions of the Takeda Collaboration Agreement, as amended, that Takeda would assume responsibility for leading and implementing the regulatory strategy and associated activities for the preparation of an NDA related to rusfertide in PV, which is expected to be submitted to the FDA in the fourth quarter of 2025.

We are primarily responsible for the clinical development of rusfertide through a potential NDA filing.

Under the terms of the agreement, we received a one-time, non-refundable upfront payment of $300.0 million in April 2024, and the achievement of a $25.0 million milestone was deemed probable in March 2025 following positive topline results from the Phase 3 VERIFY trial of rusfertide in PV.

Under the terms of the agreement, we received a one-time, non-refundable upfront payment of $300.0 million in April 2024 and a $25.0 million milestone payment in September 2025 upon completion of the VERIFY clinical study report.

We are eligible to receive additional worldwide development, regulatory and commercial milestone payments for rusfertide of up to $305.0 million.

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Overall, we believe PN-477 has the right balance of potency, oral and in-vivo stability, and pharmacokinetic properties to enable parallel development both as a once-daily oral and once-weekly injectable treatment options.

IND-enabling studies of PN-477 are underway and the initiation of Phase 1 clinical studies is anticipated in the second quarter of 2026.

IND-enabling studies of PN-477 are underway and the initiation of Phase 1 clinical studies in PN-477(subcutaneous) and PN-477(oral) are anticipated by mid-2026 and in the second half of 2026, respectively.

Discovery Platform

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Our discovery pipeline has strategically focused on (i) I&I diseases, (ii) hematology and blood disorders and (iii) metabolic diseases, including obesity.

We have a pre-clinical stage program to identify an orally administered hepcidin mimetic or ferroportin inhibitor, which we believe to be complementary to the injectable rusfertide for offering the best treatment options for PV and other potential erythropoietic and iron imbalance disorders, and we expect to nominate a development candidate in the fourth quarter of 2025.

Tax Legislation

On July 4, 2025, the One Big Beautiful Bill (“OBBB”) Act, which includes comprehensive U.S.

On July 4, 2025, the One Big Beautiful Bill Act, which includes comprehensive U.S.

corporate tax legislation, was enacted.

The legislation includes the extension and modification of provisions originally introduced under the Tax Cuts and Jobs Act of 2017 and the introduction of new provisions.

Key provisions include the restoration of bonus depreciation allowances, changes to the limitations on deductibility of business interest expense, and the

reintroduction of immediate expensing of U.S.

Key provisions include the restoration of bonus depreciation allowances, changes to the limitations on deductibility of business interest expense, and the reintroduction of immediate expensing of U.S.

research and development costs.

The impact of the tax law changes on current and deferred taxes is reported in continuing operations in the interim period that includes the enactment date.

The Company is currently evaluating the potential impact, if any, of the new legislation on its consolidated financial statements.

The impact of tax law changes on current and deferred taxes is reported in continuing operations in the interim period that includes the enactment date.

We are currently evaluating the potential impact, if any, of the new legislation on our consolidated financial statements.

Risks and Uncertainties

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“Risk Factors” herein.

We have incurred cumulative net losses from inception through June 30, 2025 of $386.9 million.

We have incurred cumulative net losses from inception through September 30, 2025 of $426.3 million.

Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

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Actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies during the six months ended June 30, 2025, as compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our Annual Report for the year ended December 31, 2024 filed with the SEC on February 21, 2025.

There have been no material changes to our critical accounting policies during the nine months ended September 30, 2025, as compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our Annual Report for the year ended December 31, 2024 filed with the SEC on February 21, 2025.

Components of Our Results of Operations

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We recognize all research and development costs as they are incurred unless there is an alternative future use in other research and development projects or otherwise.

Non-refundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when payment has been made.

Non-refundable advance

payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when payment has been made.

In instances where we enter into agreements with third parties to provide research and development services to us, costs are expensed as services are performed.

Amounts due under such arrangements may be either fixed fee or fee for service and

may include upfront payments, monthly payments, and payments upon the completion of milestones or the receipt of deliverables.

Amounts due under such arrangements may be either fixed fee or fee for service and may include upfront payments, monthly payments, and payments upon the completion of milestones or the receipt of deliverables.

Research and development expenses consist primarily of the following:

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We recognize the amounts related to our Australian research and development refundable tax offset that are not subject to refund provisions as a reduction in research and development expenses.

The research and development tax offsets are recognized when there is reasonable assurance that the offset will be received, the relevant expenditure has been incurred, and the amount of the consideration can be reliably measured.

We evaluate our eligibility under the tax offset program as of each balance sheet date and make accruals and related adjustments based on the most current and relevant data available.

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We may never succeed in achieving marketing approval for our product candidates regardless of our costs and efforts.

The probability of success of our product candidates may be affected by numerous factors, including pre-clinical data, clinical data, competition, manufacturing capability, our cost of goods to be sold, our ability to receive, and the timing of, regulatory approvals, market conditions, and our ability to successfully commercialize our products if they are approved for marketing.

they are approved for marketing.

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 be able to generate revenue from the commercialization and sale of any of our product candidates.

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Personnel costs consist of salaries, benefits and stock-based compensation.

Allocated costs consist of expenses for rent and maintenance of facilities, information technology, depreciation and amortization expense and other administrative supplies.

Allocated costs consist of expenses for rent and maintenance of facilities, information technology, depreciation and amortization expenses and other administrative supplies.

We expect to continue to incur expenses to support our continued operations as a public company, including expenses related to compliance with the rules and regulations of the SEC and those of the national securities exchange on which our securities are traded, insurance expenses, investor relations expenses, audit fees, professional services and general overhead and administrative costs.

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Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

Comparison of the Three Months Ended September 30, 2025 and 2024

Three Months Ended

September 30,

(Dollars in thousands)

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Other income, net

Loss before income tax expense (benefit)

Income tax expense (benefit)

Loss before income tax benefit

Income tax benefit

*Percentage not meaningful.

(1) Includes $6.3 million and $5.1 million of non-cash stock-based compensation expense for the three months ended June 30, 2025 and 2024, respectively.

(2) Includes $4.6 million and $3.8 million of non-cash stock-based compensation expense for the three months ended June 30, 2025 and 2024, respectively.

(1) Includes $6.0 million and $5.2 million of non-cash stock-based compensation expense for the three months ended September 30, 2025 and 2024, respectively.

(2) Includes $4.6 million and $5.0 million of non-cash stock-based compensation expense for the three months ended September 30, 2025 and 2024, respectively.

License and Collaboration Revenue

License and collaboration revenue for the three months ended June 30, 2025 of $5.5 million related to the Takeda Collaboration Agreement was comprised of (i) $5.0 million related to the initial transaction price for development services provided by us during the period based on the cost-based input method and (ii) $0.5 million related to the proportional recognition of the $25.0 million milestone deemed probable of being achieved due to the Phase 3 VERIFY trial meeting its primary endpoint.

License and collaboration revenue for the three months ended June 30, 2024 of $4.2 million related to the Takeda Collaboration Agreement was comprised of $4.2 million allocated to development services provided by us during the period based on the cost-based input method.

License and collaboration revenue was $4.7 million for the three months ended September 30, 2025 and 2024 and was comprised of development services provided by us to Takeda during these periods based on the cost-based input method.

We do not have any commercialized products, and our revenue is derived from licensing and collaboration agreements.

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Three Months Ended

September 30,

(Dollars in thousands)

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Total research and development expenses

Research and development expenses increased $3.5 million, or 10%, from $33.5 million for the three months ended June 30, 2024 to $37.0 million for the three months ended June 30, 2025.

The increase was primarily due to an increase of $4.5 million in pre-clinical and drug discovery research program expenses, including costs related to recently nominated development candidates PN-881, our IL-17 oral peptide antagonist, and PN-477, our obesity triple agonist peptide, partially offset by a decrease of $1.0 million in rusfertide expenses related to our Phase 3 VERIFY trial.

We had 100 and 97 full-time equivalent research and development employees as of June 30, 2025 and 2024, respectively.

Research and development personnel-related expenses for the three months ended June 30, 2025 increased by $0.9 million as compared to the three months ended June 30, 2024 and included an increase of $1.2 million in stock-based compensation expense, partially offset by a decrease of $0.3 million in personnel-related expenses.

Research and development expenses increased $4.0 million, or 11%, from $36.0 million for the three months ended September 30, 2024 to $40.0 million for the three months ended September 30, 2025.

The increase was primarily due to an increase of $8.8 million in pre-clinical and drug discovery research program expenses, including costs related to recently nominated development candidates PN-881, our IL-17 oral peptide antagonist, and PN-477, our obesity triple agonist peptide, partially offset by a decrease of $4.8 million in rusfertide expenses due to primary completion of our Phase 3 VERIFY trial during the first quarter of 2025.

We had 99 and 98 full-time equivalent research and development employees as of September 30, 2025 and 2024, respectively.

Research and development personnel-related expenses for the three months ended September 30, 2025 increased by $1.4 million as compared to the three months ended September 30, 2024 and included increases of $0.8 million in stock-based compensation expense and $0.6 million in other personnel-related expenses.

General and Administrative Expenses

General and administrative expenses increased $1.1 million, or 12%, from $9.4 million for the three months ended June 30, 2024 to $10.5 million for the three months ended June 30, 2025.

This increase was primarily due to an increase in personnel-related expenses, including stock-based compensation expense.

We had 30 and 28 full-time equivalent general and administrative employees as of June 30, 2025 and 2024, respectively.

Income Tax Expense (Benefit)

Income tax expense was $0.2 million and income tax benefit was $0.7 million for the three months ended June 30, 2025 and 2024, respectively.

Income tax expense for the three months ended June 30, 2025 consisted of adjustments to estimated taxes paid during the period.

Income tax benefit for the three months ended June 30, 2024 was a result of our net loss position for the period.

The effective tax rate was 0% and 2.16% for the three months ended June 30, 2025 and 2024, respectively.

Comparison of the Six Months Ended June 30, 2025 and 2024

Six Months Ended

General and administrative expenses increased $1.0 million, or 10%, from $10.2 million for the three months ended September 30, 2024 to $11.1 million for the three months ended September 30, 2025.

This increase was primarily due to increases in professional services expenses.

We had 29 and 28 full-time equivalent general and administrative employees as of September 30, 2025 and 2024, respectively.

Interest Income

Interest income decreased by $0.6 million, or 8%, from $7.7 million for the three months ended September 30, 2024 to $7.1 million for the three months ended September 30, 2025.

This decrease was primarily due to lower invested balances in the current year period.

Income Tax Benefit

No income tax was recognized for the three months ended September 30, 2025.

Income tax benefit was $0.4 million for the three months ended September 30, 2024 and was a result of our net loss position for the period.

The effective tax rate was 1.25% for the three months ended September 30, 2024.

Comparison of the Nine Months Ended September 30, 2025 and 2024

Nine Months Ended

September 30,

(Dollars in thousands)

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Net (loss) income

(1) Includes $14.3 million and $10.4 million of non-cash stock-based compensation expense for the six months ended June 30, 2025 and 2024, respectively.

(2) Includes $10.4 million and $7.9 million of non-cash stock-based compensation expense for the six months ended June 30, 2025 and 2024, respectively.

(1) Includes $20.3 million and $15.6 million of non-cash stock-based compensation expense for the nine months ended September 30, 2025 and 2024, respectively.

(2) Includes $15.0 million and $12.9 million of non-cash stock-based compensation expense for the nine months ended September 30, 2025 and 2024, respectively.

License and Collaboration Revenue

License and collaboration revenue for the six months ended June 30, 2025 of $33.9 million related to the Takeda Collaboration Agreement was comprised of (i) $23.4 million related to the proportional recognition of the $25.0 million milestone deemed probable of being achieved due to the Phase 3 VERIFY trial of rusfertide in PV meeting its primary endpoint and (ii) $10.5 million related to the initial transaction price for development services provided by us during the period based on the cost-based input method.

License and collaboration revenue for the six months ended June 30, 2024 of $259.1 million included (i) $254.1 million of the $300.0 million upfront cash payment allocated to the delivery of the rusfertide license to Takeda upon effectiveness of the Takeda Collaboration Agreement in March 2024, and (ii) $5.0 million allocated to development services provided by us during the period based on the cost-based input method.

The remaining $40.9 million was recorded as deferred revenue to be recognized over time as we satisfy our performance obligation to complete the ongoing Phase 3 VERIFY trial.

License and collaboration revenue for the nine months ended September 30, 2025 of $38.6 million related to the Takeda Collaboration Agreement and was comprised of (i) $21.3 million representing a portion of the $25.0 million milestone payment received in September 2025 that was allocated to the rusfertide license delivery performance obligation under the agreement and (ii) $17.3 million for development services provided by us during the period based on the cost-based input method.

As of September 30, 2025, the remaining $17.0 million in deferred revenue will be recognized through the conclusion of the development services performance obligation.

License and collaboration revenue for the nine months ended September 30, 2024 of $263.8 million included (i) $254.1 million of the $300.0 million upfront cash payment allocated to the delivery of the rusfertide license to Takeda upon effectiveness of the Takeda Collaboration Agreement in March 2024, and (ii) $9.7 million allocated to development services provided by us during the period based on the cost-based input method.

The remaining $36.2 million was recorded as deferred revenue as of September 30, 2024 to be recognized over time as we satisfy our performance obligation to complete the ongoing Phase 3 VERIFY trial.

Our revenue for the year ended December 31, 2024 was significantly higher than in prior years due to the partial recognition of an upfront payment of $300.0 million upon execution of the Takeda Collaboration Agreement and the achievement of a $165.0 million milestone pursuant to the terms of the amended JNJ License and Collaboration Agreement.

Our revenue for the year ended December 31, 2025 is expected to be comprised of (i) the proportionate recognition of the $30.6 million recorded in deferred revenue as of December 31, 2024 and (ii) the recognition of additional milestones achieved during the year, which are expected to be substantially lower than in 2024.

Our revenue for the year ended December 31, 2025 is expected to be comprised of (i) proportional recognition of the $30.6 million recorded in deferred revenue as of December 31, 2024 and (ii) the recognition of additional milestones achieved during the year, which are expected to be substantially lower than in 2024.

Accordingly, revenue in 2025 is expected to reduce significantly, which will also impact our net income.

Research and Development Expenses

Six Months Ended

Nine Months Ended

September 30,

(Dollars in thousands)

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Total research and development expenses

Research and development expenses increased $5.7 million, or 8%, from $67.3 million for the six months ended June 30, 2024 to $72.9 million for the six months ended June 30, 2025.

The increase was primarily due to an increase of $9.8 million in pre-clinical and drug discovery research program expenses, including costs related to our recently nominated development candidates PN-881, our IL-17 oral peptide antagonist, and PN-477, our obesity triple agonist peptide, partially offset by a decrease of $4.1 million in rusfertide expenses related to our Phase 3 VERIFY trial.

We had 100 and 97 full-time equivalent research and development employees as of June 30, 2025 and 2024, respectively.

Research and development personnel-related expenses for the six months ended June 30, 2025 increased by $3.2 million as compared to the six months ended June 30, 2024, primarily driven by an increase in stock-based compensation expense related to annual refresher awards granted in January 2025 and recognition of expense related to performance stock units (“PSUs”).

Research and development expenses increased $9.7 million, or 9%, from $103.2 million for the nine months ended September 30, 2024 to $112.9 million for the nine months ended September 30, 2025.

The increase was primarily due to an increase of $18.6 million in pre-clinical and drug discovery research program expenses, including costs related to our recently nominated development candidates PN-881, our IL-17 oral peptide antagonist, and PN-477, our obesity triple agonist peptide, partially offset by a decrease of $8.9 million in rusfertide expenses due to primary completion of our Phase 3 VERIFY trial during the first quarter of 2025.

We had 99 and 98 full-time equivalent research and development employees as of September 30, 2025 and 2024, respectively.

Research and development personnel-related expenses for the nine months ended September 30, 2025 increased by $4.6 million as compared to the nine months ended September 30, 2024, primarily driven by an increase in stock-based compensation expense related to annual refresher awards granted in January 2025 and recognition of expense related to performance stock units (“PSUs”).

General and Administrative Expenses

General and administrative expenses decreased $2.1 million, or 8%, from $24.4 million for the six months ended June 30, 2024 to $22.3 million for the six months ended June 30, 2025.

This decrease was primarily due to $4.6 million in one-time advisory and legal fees incurred during the six months ended June 30, 2024 related to the Takeda Collaboration Agreement, partially offset by a $2.5 million increase in stock-based compensation expense related to annual refresher awards granted in January 2025 and recognition of expense related to PSUs.

We had 30 and 28 full-time equivalent general and administrative employees as of June 30, 2025 and 2024, respectively.

General and administrative expenses decreased $1.1 million, or 3%, from $34.5 million for the nine months ended September 30, 2024 to $33.4 million for the nine months ended September 30, 2025.

This decrease was primarily due to $4.6 million in one-time advisory and legal fees incurred during the nine months ended September 30, 2024 related to the Takeda Collaboration Agreement, partially offset by a $2.1 million increase in stock-based compensation expense related to annual refresher awards granted in January 2025 and recognition of expense related to PSUs and an increase of $2.0 million in professional services expenses.

We had 29 and 28 full-time equivalent general and administrative employees as of September 30, 2025 and 2024, respectively.

Interest Income

Interest income increased by $3.2 million, or 27%, from $11.8 million for the six months ended June 30, 2024 to $15.0 million for the six months ended June 30, 2025.

Interest income increased by $2.6 million, or 13%, from $19.5 million for the nine months ended September 30, 2024 to $22.0 million for the nine months ended September 30, 2025.

This increase was primarily due to higher invested balances, including milestone payments received from our collaboration partners.

Income Tax Expense

Income tax expense was $0.2 million and $2.7 million for the six months ended June 30, 2025 and 2024, respectively.

Income tax expense for the six months ended June 30, 2025 consisted of adjustments to estimated taxes paid during the period.

Income tax expense for the six months ended June 30, 2024 was a result of taxable income from the recognition of revenue in connection with the Takeda Collaboration Agreement.

The effective tax rate was 0% and 1.48% for the six months ended June 30, 2025 and 2024, respectively.

Income tax expense was $0.2 million and $2.2 million for the nine months ended September 30, 2025 and 2024, respectively.

Income tax expense for the nine months ended September 30, 2025 consisted of adjustments to estimated taxes paid during the period.

Income tax expense for the nine months ended September 30, 2024 was a result of taxable income from the recognition of revenue in connection with the Takeda Collaboration Agreement.

The effective tax rate 1.53% for the nine months ended September 30, 2024.

Liquidity and Capital Resources

Sources of Liquidity

We had $673.0 million and $559.2 million in cash, cash equivalents and marketable securities as of June 30, 2025 and December 31, 2024, respectively.

We had $678.8 million and $559.2 million in cash, cash equivalents and marketable securities as of September 30, 2025 and December 31, 2024, respectively.

Historically, we have funded our operations primarily from net proceeds from the sale of shares of our common stock and the receipt of payments under collaboration agreements.

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We earned the $165.0 million milestone payment described above during the fourth quarter of 2024, which we received in January 2025.

We have received a total of $337.5 million in non-refundable payments from JNJ from the inception of the JNJ License and Collaboration Agreement in 2017 through June 30, 2025.

We have received a total of $337.5 million in non-refundable payments from JNJ from the inception of the JNJ License and Collaboration Agreement in 2017 through September 30, 2025.

We have also received payments for services provided under the collaboration agreement, and we have made in-kind payment reimbursements to JNJ for certain costs they have incurred pursuant to the cost-sharing terms of the agreement.

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In March 2024, we earned a $300.0 million one-time, non-refundable upfront payment from Takeda upon the closing of the Takeda Collaboration Agreement, which we received in April 2024.

In March 2025, the achievement of a $25.0 million milestone was deemed probable based upon positive topline results for the Phase 3 VERIFY trial for rusfertide in PV.

This milestone is payable upon the completion of the VERIFY clinical study report.

In March 2025, the achievement of a $25.0 million milestone was deemed probable based upon positive topline results for the Phase 3 VERIFY trial for rusfertide in PV and payment was received in September 2025.

Pursuant to the Takeda Collaboration Agreement, we may be eligible to receive additional clinical development, regulatory and sales milestones, if and when achieved.

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Capital Requirements

As of June 30, 2025, we had $673.0 million in cash, cash equivalents and marketable securities and an accumulated deficit of $386.9 million.

Our capital expenditures were $1.4 million for both the six months ended June 30, 2025 and the year ended December 31, 2024.

As of September 30, 2025, we had $678.8 million in cash, cash equivalents and marketable securities and an accumulated deficit of $426.3 million.

Our capital expenditures were $1.4 million for both the nine months ended September 30, 2025 and the year ended December 31, 2024.

Our primary uses of cash are to fund our operating expenses, including our research and development expenditures and general and administrative costs.

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We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability, high interest rates, and changes in trade policies, including tariffs or other restrictions or the threat of such actions and retaliatory actions, among other factors.

future recession or market correction, including those due to significant geopolitical or macroeconomic events, could materially affect our business and our access to credit and financial markets.

A future recession or market correction, including those due to significant geopolitical or macroeconomic events, could materially affect our business and our access to credit and financial markets.

Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies.

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The following table summarizes our cash flows for the periods indicated:

Six Months Ended

Nine Months Ended

September 30,

Condensed Consolidated Statements of Cash Flows Data:

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Cash Provided by Operating Activities

Cash provided by operating activities for the six months ended June 30, 2025 was $96.6 million and consisted primarily of a net change of $120.8 million in operating assets and liabilities and $24.7 million of stock-based compensation expense, partially offset by a net loss of $46.4 million during the period.

The change in net operating assets and liabilities was driven primarily by a $165.0 million milestone payment received under the JNJ License and Collaboration Agreement, partially offset by the recognition of a $22.3 million contract asset related to the Takeda Collaboration Agreement, a $10.5 million change in deferred revenue, a $8.4 million change in accrued expenses and other payables and a $2.7 million change in income taxes payable.

The $144.6 million decrease in cash provided by operating activities during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily due to the receipt of a $300.0 million upfront payment upon the effectiveness of the Takeda Collaboration Agreement in 2024, partially offset by the receipt of a $165.0 million milestone payment in 2025.

Cash provided by operating activities for the nine months ended September 30, 2025 was $94.6 million and consisted primarily of a net change of $148.9 million in operating assets and liabilities and $35.3 million of stock-based compensation expense, partially offset by a net loss of $85.8 million during the period.

The $118.7 million decrease in cash provided by operating activities during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was primarily due to the receipt of a $300.0 million upfront payment upon the effectiveness of the Takeda Collaboration Agreement in 2024, partially offset by receipt of the $165.0 million milestone payment from JNJ and the $25.0 million milestone payment from Takeda in 2025.

Cash Used in Investing Activities

Cash used in investing activities for the six months ended June 30, 2025 was $39.6 million and consisted primarily of purchases of marketable securities of $281.2 million and purchases of property and equipment of $1.4 million, partially offset by proceeds from maturities and sales of marketable securities of $243.0 million.

The $42.5 million decrease in cash used in investing activities for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily related to investments made with a portion of the proceeds from the $300.0 million upfront payment received from Takeda in April 2024.

Cash used in investing activities for the nine months ended September 30, 2025 was $98.1 million and consisted primarily of purchases of marketable securities of $442.3 million and purchases of property and equipment of $1.4 million, partially offset by proceeds from maturities and sales of marketable securities of $345.6 million.

The $192.6 million decrease in cash used in investing activities for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was primarily related to investments made with a portion of the proceeds from the $300.0 million upfront payment received from Takeda in April 2024.

Purchases of property and equipment were primarily related to laboratory equipment and furniture and fixtures.

Cash Provided by Financing Activities

Cash provided by financing activities for the six months ended June 30, 2025 was $14.4 million and consisted of net cash proceeds of $14.8 million from the issuance of common stock upon exercises of stock options and purchases of stock under our employee stock purchase plan (“ESPP”), partially offset by $0.5 million in tax withholding payments related to the net settlement of restricted stock units.

The $4.6 million increase in cash provided by financing activities for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily due to a $4.5 million increase in proceeds from the issuance of common stock upon exercise of options and purchases of common stock under the ESPP.

Cash provided by financing activities for the nine months ended September 30, 2025 was $20.0 million and consisted of net cash proceeds of $20.5 million from the issuance of common stock upon exercises of stock options and purchases of stock under our employee stock purchase plan (“ESPP”), partially offset by $0.5 million in tax withholding

payments related to the net settlement of restricted stock units.

The $1.8 million decrease in cash provided by financing activities for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, was primarily due to a $1.9 million decrease in proceeds from the issuance of common stock upon exercise of options and purchases of common stock under the ESPP.

Contractual Obligations and Other Commitments

During the six months ended June 30, 2025, there were no material changes to our material cash requirements, including commitments for capital expenditures, described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 21, 2025.

During the nine months ended September 30, 2025, there were no material changes to our material cash requirements, including commitments for capital expenditures, described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 21, 2025.

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