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Item 7. Management’s Discussion and Analysis

2026-02-25 compared with 2025-02-21 · 141 added, 185 removed, 162 unchanged (67% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are a discovery through late-stage development biopharmaceutical company focused on peptide therapeutics.

Our clinical programs fall into two broad categories of diseases:

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

Two novel peptides derived from our proprietary discovery technology platform, rusfertide and icotrokinra (formerly known as JNJ-2113), are currently in advanced Phase 3 clinical development, with New Drug Application (“NDA”) submissions to the U.S.

Food and Drug Administration (“FDA”) potentially in 2025.

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

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

(“Takeda”) and the Company remains primarily responsible for development through NDA filing.

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.

We also have a number of pre-clinical stage oral drug discovery programs to address clinically and commercially validated targets, including IL-17 oral peptide antagonist PN-881, an oral metabolic/obesity peptide program, and an oral hepcidin mimetic/ferroportin blocker program.

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

VERIFY (ClinicalTrials.gov identifier NCT05210790) is a global double-blind, placebo-controlled Phase 3 clinical trial of rusfertide in PV for approximately 250 patients.

The trial evaluates the efficacy, symptom burden and safety of once-weekly, subcutaneously self-administered rusfertide in patients with uncontrolled hematocrit who are phlebotomy dependent despite standard of care treatment.

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

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

Our rusfertide Phase 2 clinical trials include the following:

● REVIVE (NCT04057040) – A Phase 2 proof of concept (“POC”) trial, was initiated in the fourth quarter of 2019.

We completed enrollment of patients in the first quarter of 2022 and 70 patients were enrolled through the end of the randomized withdrawal portion of the trial, which was completed during the first quarter of 2023 and is continuing in an ongoing open-label extension (“OLE”);

● THRIVE (NCT06033586) – A Phase 2 long-term OLE for REVIVE patients on years three through five of treatment;

● PACIFIC (NCT04767802) – Another Phase 2 trial for rusfertide for patients diagnosed with PV and with routinely elevated hematocrit levels (>48%), was initiated during the first quarter of 2021, and the 52-week trial was completed during the second quarter of 2023.

Final results from the REVIVE trial presented at the American Society of Hematology (“ASH”) 2024 Annual Meeting in December 2024 showed that 54% of patients with PV experienced more than 2.5 years of durable hematocrit control (<45%), decreased phlebotomy use, long-term tolerability and improvements in patient-reported outcomes.

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

We are primarily responsible for the 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 we are eligible to receive additional worldwide development, regulatory and commercial milestone payments for rusfertide of up to $330.0 million, inclusive of the following potential upcoming milestones:

● $25.0 million upon successful achievement of the primary endpoint in the Phase 3 VERIFY trial for rusfertide in PV;

● $50.0 million upon FDA approval of an NDA for rusfertide in PV (or $75.0 million if we exercise our full right to opt-out of the 50:50 U.S.

profit and loss sharing arrangement).

We are also eligible to receive tiered royalties from 10% to 17% on ex-U.S.

net sales of rusfertide and other specified second-generation injectable hepcidin memetic compounds (the “Licensed Products”).

We and Takeda will also share equally in profits and losses (50% to us and 50% to Takeda) of the Licensed Products in the United States, if approved.

See Note 3 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further details related to the agreement, including our right to opt-out of the 50:50 U.S.

We are an integrated discovery and development company with a validated technology platform.

Our programs fall into three broad therapeutic areas:

(i) inflammation and immunology (“I&I”), (ii) hematology and (iii) metabolic diseases.

Our aim is to develop medicines for biologically and commercially validated targets which demonstrate a strong differentiation compared to existing therapies.

Our Development Products and Discovery Programs

Icotyde™ (icotrokinra)

Icotyde™ (icotrokinra) is a first-in-class investigational targeted oral peptide that selectively blocks the Interleukin-23 receptor (“IL-23R”), which underpins the inflammatory response in psoriasis and offers potential in other IL-23-mediated diseases.

Icotyde is licensed to Janssen Biotech, Inc., a Johnson & Johnson company (“JNJ”), under a license and collaboration agreement initially entered into in 2017.

Following Icotyde’s joint discovery by Protagonist and JNJ scientists, pursuant to the license and collaboration agreement, we were primarily responsible for the development of Icotyde through Phase 1, with JNJ assuming responsibility for development in Phase 2 and beyond.

In July 2025 and September 2025, respectively, JNJ submitted a New Drug Application (“NDA”) to the U.S.

Food and Drug Administration (“FDA”) and an application to the European Medicines Agency (“EMA”) seeking the first approval of Icotyde for the treatment of adults and pediatric patients 12 years of age and older with moderate-to-severe plaque psoriasis.

JNJ has disclosed that it expects to launch Icotyde in the United States in 2026, subject to regulatory approval.

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

We discovered rusfertide, advanced it into Phase 3 development, and in early 2024 entered into a co-development and co-commercialization arrangement with Takeda Pharmaceuticals, Inc.

(“Takeda”) under a license and collaboration agreement entered into in January 2024.

We remained primarily responsible for clinical development activities through rusfertide’s NDA filing for the treatment of erythrocytosis in patients with PV, which we and Takeda submitted in December 2025.

Rusfertide has also received Orphan Drug status, Fast Track designation and, in August 2025, Breakthrough Therapy designation (“BTD”).

BTD is a process designed to expedite the development and review of drugs that are intended to treat a serious condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapies.

BTD also provides eligibility for priority NDA review, and Orphan Drug status qualifies sponsors for various incentives, including the potential for extended market exclusivity.

Takeda has disclosed that it expects to launch rusfertide in the second half of 2026, subject to regulatory approval.

IL-17 Program

We are developing PN-881, a potential best-in-class oral peptide IL-17 antagonist, for the treatment of immune-mediated skin diseases.

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

In October 2025, the first human subject was dosed in our Phase 1 trial of PN-881 (ClinicalTrials.gov identifier NCT07153146) 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.

We expect to complete the Phase 1 study in mid-2026 and initiate a Phase 2 study of PN-881 in psoriasis by the end of 2026.

Obesity Program

In June 2025, we nominated PN-477, a potential best-in-class novel triple GLP-1, GIP and GCG receptor agonist peptide with oral (“PN-477o”) and subcutaneous (“PN-477sc”) routes of administration, as a development candidate for the treatment of obesity.

We designed PN-477 to offer an optimal combination of total body weight loss, improved gastrointestinal tolerability and fat to lean mass ratio, with the dosing convenience of a once-daily oral agent and the added optionality of a once-weekly subcutaneous administration.

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

In December 2025, we nominated development candidate PN-458, a potential best-in-class novel dual GLP-1 and GIP receptor agonist peptide, as a development candidate for the treatment of obesity, with optionality for both an oral (“PN-458o”) and subcutaneous (“PN-458sc”) formulation.

IND-enabling studies for PN-458o and PN-458sc are ongoing.

Oral Hepcidin Program

In December 2025, we nominated development candidate PN-8047, an orally administered hepcidin functional mimetic small molecule, which we believe may be complementary to the injectable rusfertide for offering the best treatment options for PV.

IND-enabling studies for PN-8047 are ongoing.

Other Programs

We also have a number of pre-clinical stage drug discovery programs addressing biologically and commercially validated targets, including an oral IL-4R alpha antagonist for the treatment of atopic dermatitis and moderate-to-severe asthma, and amylinR-based oral and subcutaneous mono- and poly-agonists for the treatment of obesity.

Significant Cash Resources

We ended fiscal 2025 with cash, cash equivalents and marketable securities of approximately $646.0 million, as compared to cash, cash equivalents and marketable securities of approximately $559.2 million as of December 31, 2024.

In 2026 and beyond, we are eligible to receive significant milestone, royalty and other payments from our collaborations with JNJ and Takeda, as described below.

The receipt of future royalties and commercial milestones is contingent upon the relevant products receiving FDA approval and achieving a successful commercial launch.

Collaboration Agreements

JNJ License and Collaboration Agreement

We and JNJ are parties to a license and collaboration agreement related to the development and commercialization of Icotyde.

We entered into the agreement in July 2017, and amended it in May 2019, July 2021 and November 2024 (as amended, the “JNJ License and Collaboration Agreement”).

Pursuant to the JNJ License and Collaboration Agreement, we were primarily responsible for the discovery, IND-enabling studies and the initial Phase 1 study for Icotyde, and JNJ is primarily responsible for conducting all further development.

We have earned a total of $337.5 million in milestone payments from JNJ under the agreement, including a $165.0 million milestone payment earned in the fourth quarter of 2024.

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

We will also receive upward tiering royalties on net worldwide Icotyde product sales at percentages ranging from 6% to 10%.

Our weighted average royalty rate on the first $4.0 billion in annual net sales is 7.25%, and the rate on net sales over $4.0 billion is 10%.

See Note 3 to the Consolidated Financial Statements included elsewhere in this Annual Report for additional information.

Takeda Collaboration Agreement

In January 2024, we entered into a worldwide license and collaboration agreement for rusfertide with Takeda (the “Takeda Collaboration Agreement”) related to rusfertide (and specified second-generation injectable hepcidin mimetic compounds developed and commercialized under the agreement that are not currently in development).

In December 2025, Takeda submitted an NDA to the FDA for rusfertide in PV.

We were primarily responsible for the clinical development of rusfertide through NDA filing and remain primarily responsible for the conduct of ongoing rusfertide long-term extension studies.

Under the terms of the agreement, we received an upfront payment of $300.0 million in April 2024 and a $25.0 million milestone payment in September 2025 upon completion of the Phase 3 VERIFY clinical trial (NCT05210790) report.

Under the Takeda Collaboration Agreement, we and Takeda share equally in profits and losses (50% to us and 50% to Takeda) associated with rusfertide in the United States.

We also will receive tiered royalties ranging from 10% to 17% on ex-U.S.

net sales of rusfertide.

However, we have the right under the Takeda Collaboration Agreement to opt-out of the U.S.

profit and loss sharing arrangement.

Our IL-23R antagonist compound icotrokinra, licensed to J&J, is an orally delivered drug that is designed to block biological pathways currently targeted by marketed injectable antibody drugs.

Our orally stable peptide approach may offer a targeted therapeutic approach for gastrointestinal and systemic compartments as needed.

We believe that, compared to antibody drugs, icotrokinra has the potential to provide clinical improvement in an oral medication with increased convenience and compliance and the opportunity for the earlier introduction of targeted oral therapy.

JNJ has initiated the following icotrokinra trials:

● ICONIC-LEAD (NCT06095115) – A 684-patient randomized, controlled Phase 3 trial to evaluate the safety and efficacy of icotrokinra compared with placebo in participants with moderate-to-severe plaque psoriasis, with PASI-90 (90% improvement in skin lesions as measured by the Psoriasis Area and Severity Index (“PASI”) and Investigator’s Global Assessment (“IGA”) scores of 0 (clear) or 1 (almost clear) as co-primary endpoints;

● ICONIC-TOTAL (NCT06095102) – A 311-patient randomized, controlled Phase 3 trial to evaluate the efficacy and safety of icotrokinra compared with placebo for the treatment of plaque psoriasis in participants with at least moderate severity affecting special areas (scalp, genital, and/or palms of the hands and soles of the feet) with overall IGA scores of 0 or 1 as the primary endpoint;

● ICONIC-ADVANCE 1 (NCT06143878) – A 774-patient randomized, controlled Phase 3 trial to evaluate the effectiveness of icotrokinra in participants with moderate-to-severe plaque psoriasis compared to placebo and Sotyktu® (“deucravacitinib”).

The trial’s primary co-endpoints are PASI-90 and IGA scores of 0 or 1;

● ICONIC-ADVANCE 2 (NCT06220604) – A 731-patient Phase 3 trial similarly designed to ICONIC ADVANCE 1 in participants with moderate-to-severe plaque psoriasis;

● Pustular/Erythrodermic Psoriasis (NCT06295692) – A 19-patient open label Phase 3 trial to evaluate the effectiveness of icotrokinra in participants with pustular or erythrodermic psoriasis;

● ICONIC-PsA 2 (NCT06807424) – A 750-patient randomized, controlled Phase 3 trial to evaluate the efficacy and safety of icotrokinra compared with placebo in biologic-experienced patients with active psoriatic arthritis (“PsA”);

● ANTHEM-UC (NCT06049017) – A 252-patient randomized, controlled Phase 2b trial to evaluate the safety and effectiveness of icotrokinra compared with placebo in participants with moderate-to-severely active ulcerative colitis (“UC”).

In the fourth quarter of 2024, we announced positive topline results for the ICONIC-LEAD and ICONIC-TOTAL Phase 3 trials.

In the ICONIC-LEAD trial, once daily icotrokinra showed significant skin clearance versus placebo in adults and adolescents with moderate to-severe plaque psoriasis.

At week 16, nearly two-thirds (64.7%) of patients treated with icotrokinra achieved IGA scores of 0 or 1 and 49.6% achieved PASI-90, compared to 8.3% and 4.4% on placebo, respectively.

In addition, topline results from the Phase 3 ICONIC-TOTAL trial showed that once daily icotrokinra met the primary endpoint of IGA scores of 0 or 1 at week 16 as compared to placebo.

Comprehensive results from both ICONIC-LEAD and ICONIC-TOTAL are expected to be presented at upcoming medical congresses and shared with health authorities in planned submissions.

Topline results for the ANTHEM trial for icotrokinra in UC are expected in the first quarter of 2025.

Topline results for the ICONIC-ADVANCE 1, ICONIC-ADVANCE 2, and pustular/erythrodermic psoriasis trials are expected in the second quarter of 2025.

On July 27, 2021, we entered into an Amended and Restated License and Collaboration Agreement with JNJ, which amended and restated the License and Collaboration Agreement, effective July 13, 2017, by and between the Company and JNJ, as amended by the first amendment, effective May 7, 2019 (together, the “JNJ License and Collaboration Agreement”) for the development and commercialization of icotrokinra.

During the fourth quarter of 2023, we earned a $50.0 million milestone payment in connection with the dosing of the third patient in the ICONIC-TOTAL Phase 3 clinical trial of icotrokinra in patients with moderate-to-severe psoriasis and a $10.0 million milestone payment upon the dosing of the third patient in the ANTHEM Phase 2b trial in patients with moderately-to-severely active UC.

The JNJ License and Collaboration Agreement was further amended in November 2024 to:

● increase the milestone payment for a Phase 3 clinical trial of any licensed product for any indication meeting its primary endpoint by $50.0 million, from $115.0 million to $165.0 million;

● eliminate the $35.0 million milestone payment previously due for the acceptance of an NDA filing by the FDA for a licensed product for any indication;

● eliminate the $15.0 million milestone payment previously due for the dosing of the third patient in the first Phase 3 clinical trial of a licensed product for a second indication.

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 nonrefundable payments from JNJ from 2017 through December 31, 2024.

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

● $50.0 million milestone upon approval of an NDA for icotrokinra in any indication;

● $25.0 million milestone upon the acceptance of an NDA filing by the FDA for icotrokinra in a second indication;

● $45.0 million milestone upon the approval of an NDA for icotrokinra in a second indication.

We also remain eligible to receive upward tiering royalties on net product sales at percentages ranging from 6% percent to 10% percent, with 10% percent applicable for net sales over $4.0 billion.

See Note 3 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.

In the fourth quarter of 2024, we announced the selection of PN-881, a potential best-in-class oral peptide IL-17 antagonist, as a development candidate for the treatment of immune-mediated skin diseases.

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

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.

Discovery Platform

Our clinical and pre-clinical assets are all derived from our proprietary discovery platform.

Our platform enables us to engineer novel, structurally constrained peptides that are designed to retain key advantages of both orally delivered small molecules and injectable antibody drugs while overcoming many of their limitations as therapeutic agents.

Importantly, constrained peptides can be designed to potentially alleviate the fundamental instability inherent in traditional peptides to allow different delivery forms, such as oral, subcutaneous, intravenous, and rectal.

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

We have a pre-clinical stage program to identify an orally administered hepcidin mimetic/ferroportin blocker, 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.

We also have an oral peptide-based metabolic/obesity program and expect to nominate a development candidate in the second quarter of 2025.

We currently expect to exercise that right in the second quarter of 2026, within the 90-day opt-out window beginning 120 days after the NDA filing date as prescribed in the agreement.

If we exercise our opt-out right, Takeda will have an exclusive worldwide license to develop and commercialize rusfertide, and we will receive royalties of 14% to 29% on annual worldwide net sales, with a weighted average royalty rate of 21% at $1.5 billion in net sales and a rate of 29% for net sales over $1.5 billion.

In addition, under the agreement, we are eligible to receive up to an aggregate of $975.0 million in development, regulatory and sales milestones, including the $25.0 million milestone payment already received in September 2025, and up to $400.0 million in payments for exercising the opt-out right.

Upcoming potential development milestones and potential sales milestones under the agreement if we exercise our opt-out right include the following:

If we do not exercise our opt-out right, we will be eligible to receive up to an aggregate of $305.0 million in development, regulatory and sales milestones and will continue sharing equally in profits and losses associated with rusfertide in the United States.

In addition, we will receive tiered royalties ranging from 10% to 17% on ex-U.S.

net sales of rusfertide.

See Note 3 to the Consolidated Financial Statements included elsewhere in this Annual Report for further details related to the agreement, including our opt-out rights.

Tax Legislation

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.

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.

See Note 13 to the Consolidated Financial Statements included elsewhere in this Annual Report for additional information.

Risks and Uncertainties

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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.

We expect to continue to incur significant research and development expenses and other expenses related to our ongoing operations, product development, pre-clinical discovery programs and pre-commercialization activities.

As a result, we may incur losses in the future as we continue the development of, and seek regulatory approval for, our product candidates.

We expect to continue to incur significant research and development expenses and other expenses related to our ongoing operations, clinical development and pre-clinical discovery programs.

Critical Accounting Polices and Estimates

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On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, accruals for research and development activities, stock-based compensation, income taxes, marketable securities and leases.

Estimates related to revenue recognition include assumptions used to determine standalone selling price utilized to allocate the transaction price between distinct performance obligations, assumptions used to recognize revenue over time for certain performance obligations for which a cost-based input method is used as the measure of

progress and estimates of whether contingent consideration should be included in the transaction price at each reporting period.

revenue over time for certain performance obligations for which a cost-based input method is used as the measure of progress and estimates of whether contingent consideration should be included in the transaction price at each reporting period.

We base these estimates on historical and anticipated results, trends and various other assumptions that we believe are reasonable under the circumstances, including assumptions as to forecasted amounts and future events.

Actual results may differ materially from these estimates.

There has been uncertainty and disruption in the global economy and financial markets due to a number of factors, including geopolitical instability, inflationary pressures, high interest rates, a recessionary environment, domestic and global monetary and fiscal policy, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, banking and other financial institution instability and other factors.

We have taken into consideration any known impacts in our accounting estimates to date and are not aware of any additional specific events or circumstances that would require any additional updates to our estimates or judgments or a revision of the carrying value of our assets or liabilities as of the date of the filing of this Annual Report on Form 10-K.

These estimates may change as new events occur, circumstances change, and additional information is obtained.

There has been 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.

Our business may also be impacted by changes or disruptions at the FDA and other government agencies.

We have taken into consideration any known impacts to our accounting estimates to date and are not aware of any additional specific events or circumstances that would require any additional updates to our estimates or judgments or a revision of the carrying value of our assets or liabilities as of the date of the filing of this Annual Report on Form 10-K.

These estimates may change as new events occur, and additional information is obtained.

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

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If other observable transactions in which we have sold the same performance obligation separately are not available, we estimate the standalone selling price of each performance obligation.

Key assumptions to determine the standalone selling price may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.

Key assumptions to determine the standalone selling price may include forecast revenues, development timelines, reimbursement rates for personnel costs, discount rates and probability of technical and regulatory success.

Whenever we determine that goods or services promised in a contract should be accounted for as a combined performance obligation over time, we determine the period over which the performance obligations will be performed and revenue will be recognized.

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Costs incurred or labor hours are typically used as the measure of performance.

Management’s judgment is required in determining the level of effort required under an arrangement and the period over which we expect to complete our performance obligations.

Management’s judgment is required to determine the level of effort required under an arrangement and the period over which we expect to complete our performance obligations.

If we determine that the performance obligation is satisfied over time, any upfront payment received is initially recorded as deferred revenue on our consolidated balance sheets.

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License and Collaboration Revenue

Our license and collaboration revenue is derived from payments we receive under the Takeda Collaboration Agreement and the JNJ License and Collaboration Agreement.

Our license and collaboration revenue is derived from payments we receive from our collaboration partners under the JNJ License and Collaboration Agreement and the Takeda Collaboration Agreement.

We expect our revenue to increase significantly in future periods due to the receipt of milestone payments, including payments related to NDA approvals, the potential exercise of our opt-out rights under the Takeda Collaboration Agreement, and royalties, if NDA approval is received for Icotyde in psoriasis and/or rusfertide in PV and one or both of these products are commercialized.

See Note 3 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional information.

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● facilities and other allocated expenses, which include expenses for rent and maintenance of facilities, information technology, depreciation and amortization expense and administrative and other supplies.

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 incentive program as of each balance sheet date and make accruals and related adjustments based on the most current and relevant data available.

We may alternatively be eligible for a nonrefundable tax offset.

We allocate direct and indirect costs incurred to product candidates when they enter clinical development.

For product candidates in clinical development, direct costs consist primarily of clinical, pre-clinical, and drug discovery costs, costs of supplying drug substance and drug product for use in clinical and pre-clinical studies, including clinical manufacturing costs, contract research organization fees, and other contracted services pertaining to specific clinical and pre-clinical studies.

pre-clinical studies.

Indirect costs allocated to our product candidates on a program-specific basis include research and development employee salaries, benefits, and stock-based compensation, and indirect overhead and other administrative support costs.

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As such, we do not provide financial information regarding the costs incurred for early stage pre-clinical and drug discovery programs on a program-specific basis prior to the clinical development stage.

We expect our research and development expenses to increase in the near term as compared to prior year periods as we continue to focus our resources toward (i) progressing our rusfertide program into late stage clinical trials and preparing for regulatory filings and commercialization, and (ii) advancing our pre-clinical and drug discovery research programs, including progressing our recently nominated product development candidate PN-881 through IND-enabling studies, or foreign equivalents.

We do not intend to dedicate further internal resources to clinical development or contract manufacturing activities for our PN-943 clinical program.

We expect our research and development expenses to increase in the near term as compared to prior year periods as we continue to focus our resources toward advancing our pre-clinical and drug discovery research and clinical programs, including progressing our product development candidates PN-881, PN-477, PN-458 and PN-8047 through IND-enabling studies, or foreign equivalents.

The process of conducting research, identifying potential product candidates, conducting pre-clinical studies and clinical trials necessary to obtain regulatory approval and commencing pre-commercialization activities is costly and time intensive.

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General and Administrative Expenses

General and administrative expenses consist of personnel costs, allocated facilities costs and other expenses for outside professional services, including legal, human resources, audit and accounting services, IT and pre-commercialization expenses, including selling and marketing costs.

General and administrative expenses consist of personnel costs, allocated costs, and other expenses for outside professional services, including legal, human resources and audit and accounting services.

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

Allocated expenses 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 expense 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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Other Income (Expense), Net

Other income (expense), net consists primarily of amounts related to foreign exchange gains and losses and related items.

Other income (expense), net consists primarily of amounts related to foreign exchange gains and losses, realized gains and losses on marketable securities, and related items.

Results of Operations

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Total operating expenses

Income (loss) from operations

(Loss) income from operations

Interest income

Other income (expense), net

Income (loss) before income tax expense

Other income, net

(Loss) income before income tax expense

Income tax expense

Net income (loss)

*Percentage not meaningful.

Net (loss) income

(1) Includes $26.4 million and $20.9 million of non-cash stock-based compensation expense for the years ended December 31, 2025 and 2024, respectively.

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Total license and collaboration revenue

*Percentage not meaningful.

License and collaboration revenue increased by $374.4 million from $60.0 million for the year ended December 31, 2023 to $434.4 million for the year ended December 31, 2024.

Takeda Collaboration Agreement revenue of $269.4 million for the year ended December 31, 2024 was comprised of (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 agreement in March 2024, and (ii) $15.3 million allocated to development services provided by us during the period based on the cost input method.

The remaining balance of $30.6 million was recorded as deferred revenue as of December 31, 2024, which will be recognized over time based on a measure of our efforts toward satisfying our performance obligation relative to the total expected efforts or inputs to satisfy the performance obligation (e.g.

costs incurred compared to total budget).

JNJ License and Collaboration Agreement revenue represents the achievement of non-refundable milestone payments pursuant to the JNJ License and Collaboration Agreement, as amended in November 2024, of $165.0 million and $60.0 million for the years ended December 31, 2024 and 2023, respectively.

License and collaboration revenue decreased by $388.4 million from $434.4 million for the year ended December 31, 2024 to $46.0 million for the year ended December 31, 2025.

The decrease in revenue was primarily attributable to lower milestone and collaboration revenue, which is highly variable and dependent upon factors such as the timing of when regulatory and sales milestones are achieved, if at all, and the accounting for any upfront payments associated with any existing or new agreements.

License and collaboration revenue for the year ended December 31, 2025 of $46.0 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) $24.7 million for development services provided by us during the period based on the cost-based input method.

As of December 31, 2025, the remaining $9.6 million in deferred revenue will be recognized through the conclusion of the development services performance obligation.

License and collaboration revenue for the year ended December 31, 2024 of $434.4 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, (ii) $15.3 million allocated to development services provided by us during the period based on the cost input method under the Takeda Collaboration Agreement

and (iii) $165.0 million milestone payment pursuant to the terms of the JNJ License and Collaboration Agreement for a Phase 3 clinical trial of any licensed product for any indication meeting its primary endpoint.

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

Revenue from licensing and collaboration agreements, by its very nature, is highly variable and dependent upon factors such as the timing of when regulatory and sales milestones are achieved, if at all, and the accounting for any upfront payments and performance obligations associated with any existing or new agreements.

As discussed above, 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 JNJ License and Collaboration Agreement, as amended in November 2024.

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) any 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.

As described above, we have the right under the Takeda Collaboration Agreement to opt-out of the US profit and loss sharing arrangement.

We currently expect to exercise that right in the second quarter of 2026 and, if we exercise that right, will be eligible to receive up to $400.0 million in payments, along with an enhanced milestone payment of $75.0 million upon the FDA’s approval of rusfertide.

In addition, we may also receive royalties in 2026 from the launch of Icotyde and rusfertide , if they obtain FDA approval.

Research and Development Expenses

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Total research and development expenses

*Percentage not meaningful.

Research and development expenses increased $21.2 million, or 15%, from $138.1 million for the year ended December 31, 2024 to $159.3 million for the year ended December 31, 2025.

The increase was primarily due to an increase of $19.0 million in pre-clinical and drug discovery research expense, including costs related to PN-881, our recently nominated IL-17 development candidate, partially offset by a decrease of $0.9 million in expenses for our PN-943 program as further development work was deprioritized in 2023.

The increase was primarily due to an increase of $23.4 million in pre-clinical and drug discovery research program expenses, including costs related to our obesity program product candidates PN-477 and PN-458 and our oral hepcidin program product candidate PN-8047, and $10.5 million in costs related to IL-17 program product candidate PN-881.

We initiated a Phase 1 clinical study of PN-881 during the fourth quarter of 2025 and have included costs associated with this program beginning in October 2025 in the table above.

These amounts were partially offset by a decrease of $12.7 million in rusfertide expenses due primarily to the completion of our Phase 3 VERIFY trial during the first quarter of 2025.

We had 103 and 98 full-time equivalent research and development employees as of December 31, 2025 and 2024, respectively.

Research and development personnel-related expenses for the year ended December 31, 2024 increased by $10.0 million as compared to the year ended December 31, 2023, including increases of $6.1 million in personnel-related expenses and $3.9 million in stock-based compensation expense.

Research and development personnel-related expenses for the year ended December 31, 2025 increased by $6.5 million as compared to the year ended December 31, 2024, primarily driven by an increase in stock-based compensation expense.

General and Administrative Expenses

General and administrative expenses increased $1.4 million, or 3%, from $43.5 million for the year ended December 31, 2024 to $44.9 million for the year ended December 31, 2025.

This increase was primarily due to a $4.6 million increase in advisory and legal fees related to the Takeda Collaboration agreement and a $4.4 million increase in stock-based compensation expense.

This increase was primarily due to a $2.9 million increase in stock-based compensation expense and an increase of $2.6 million in professional services expenses, partially offset by $4.6 million in advisory and legal fees incurred during the year ended December 31, 2024 related to the Takeda Collaboration Agreement.

We had 29 and 28 full-time equivalent general and administrative employees as of December 31, 2025 and 2024, respectively.

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Interest income increased $2.5 million, or 9%, from $26.3 million for the year ended December 31, 2024 to $28.8 million for the year ended December 31, 2025.

This increase was primarily due to higher invested balances, including the $300.0 million one-time, nonrefundable upfront payment received under the Takeda Collaboration Agreement in April 2024.

This increase was primarily due to higher invested balances, partially offset by lower average yields during 2025.

Income Tax Expense

Income tax expense was $4.2 million and $0 for the year ended December 31, 2024 and 2023, respectively.

Income tax expense was $0.8 million and $4.2 million for the year ended December 31, 2025 and 2024, respectively.

Income tax expense for the year ended December 31, 2025 consisted of adjustments related to the filing of our 2024 tax return during the period.

Income tax expense for the year ended December 31, 2024 was a result of taxable income from the recognition of revenue in connection with the Takeda Collaboration Agreement and the JNJ License and Collaboration Agreement.

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Sources of Liquidity

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

Proceeds from Sales of Our Common Stock

We had $646.0 million and $559.2 million in cash, cash equivalent and marketable securities as of December 31, 2025 and 2024, respectively.

Historically we have funded our operations primarily from receipt of payments under collaboration agreements, as discussed in “Collaboration Agreements” above, and net proceeds from the sale of shares of our common stock.

In April 2023, we completed an underwritten public offering of 5,000,000 shares of our common stock at a public offering price of $20.00 per share and issued an additional 750,000 shares of common stock at a price of $20.00 per share following the underwriters’ exercise of their option to purchase additional shares.

Net proceeds, after deducting underwriting commissions and offering costs paid by us, were approximately $107.8 million.

In August 2022, we entered into an Open Market Sale Agreement SM , pursuant to which we may offer and sell up to $100.0 million shares of our common stock from time to time in “at-the-market” offerings (the “2022 ATM Facility”).

Net proceeds, after deducting underwriting commissions and offering costs paid by us, were approximately $107.8 million for the year ended December 31, 2023.

In August 2022, we entered an Open Market Sale Agreement SM , pursuant to which we may offer and sell up to $100.0 million shares of our common stock from time to time in “at-the-market” offerings (the “2022 ATM Facility”).

During the year ended December 31, 2023, we sold 1,749,199 shares of our common stock under the 2022 ATM Facility for net proceeds of $24.3 million, after deducting issuance costs.

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Pre-Funded Warrants

In August 2018, we entered into a Securities Purchase Agreement with certain accredited investors (each, an “Investor” and, collectively, the “Investors”), pursuant to which we sold an aggregate of 2,750,000 shares of our common stock at a price of $8.00 per share for aggregate net proceeds of $21.7 million, after deducting offering expenses payable by us.

In August 2018, we entered into a Securities Purchase Agreement with certain accredited investors (each, an “Investor” and, collectively, the “Investors”).

In a concurrent private placement, we issued the Investors warrants to purchase an aggregate of 2,750,000 shares of our common stock (each, a “Warrant” and, collectively, the “Warrants”).

Each Warrant was exercisable from August 8, 2018 through August 8, 2023.

Warrants to purchase 1,375,000 shares of our common stock had an exercise price of $10.00 per share and Warrants to purchase 1,375,000 shares of our common stock had an exercise price of $15.00 per share.

In August 2023, prior to the expiration of the Warrants, we entered into certain agreements with the Investors and their affiliates under which we agreed to allow the Warrants to be exercised in exchange for pre-funded warrants representing the same number of Warrant Shares underlying the Warrants with an exercise price of $0.001 per share (the “Pre-Funded Warrants”).

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The Pre-Funded Warrants will expire upon the day they are exercised in full.

The Pre-Funded Warrants are exercisable at any time prior to expiration except that the Pre-Funded Warrants cannot be exercised by the Investors if, after giving effect thereto, the Investors would beneficially

own more than 9.99% of our common stock, subject to certain exceptions.

The common stock and Pre-Funded Warrants met the criteria for equity classification and the net proceeds from the transaction were recorded as a credit to additional paid-in capital.

In accordance with Accounting Standards Topic 260, Earnings Per Share , outstanding Pre-Funded Warrants are included in the computation of basic net loss per share because the exercise price is negligible, and they are fully vested and exercisable after the original issuance date.

In accordance with Accounting Standards Topic 260, “ Earnings Per Share,” outstanding Pre-Funded Warrants are included in the computation of basic net loss (income) per share because the

exercise price is negligible, and they are fully vested and exercisable after the original issuance date.

No Pre-Funded Warrants were exercised during the year ended December 31, 2025.

During the year ended December 31, 2024, Pre-Funded Warrants to purchase 84,992 shares were net exercised, resulting in the issuance of 84,989 shares of common stock.

As of December 31, 2025, Pre-Funded Warrants to purchase 1,500,000 shares of common stock remained outstanding.

Receipt of Payments Under Collaboration Agreements

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

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

Upcoming potential development milestones under the Takeda Collaboration Agreement include:

● $25.0 million upon successful achievement of the primary endpoint in the Phase 3 VERIFY trial for rusfertide in PV;

● $50.0 million upon FDA approval of an NDA for rusfertide in PV (or $75.0 million if we exercise our full right to opt out of the 50:50 U.S.

profit and loss sharing arrangement in exchange for enhanced economics).

Under the JNJ License and Collaboration Agreement, we earned a $50.0 million milestone payment upon the dosing of the third patient in the ICONIC-TOTAL Phase 3 trial in late October 2023, which we received in December 2023.

We earned a $10.0 million milestone payment upon the dosing of the third patient in the ANTHEM Phase 2b trial in patients with UC in December 2023, which we received in January 2024.

The JNJ License and Collaboration Agreement was further amended in November 2024 to:

● increase the milestone payment for a Phase 3 clinical trial of any licensed product for any indication meeting its primary endpoint by $50.0 million, from $115.0 million to $165.0 million;

● eliminate the $35.0 million milestone payment previously due for the acceptance of an NDA filing by the FDA for use of licensed product for any indication;

● eliminate the $15.0 million milestone payment previously due for the dosing of the third patient in the first Phase 3 clinical trial of a licensed product for a second indication.

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

We earned a total of $337.5 million in nonrefundable payments from JNJ from 2017 through December 31, 2024.

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

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

Upcoming potential development milestones under the JNJ License and Collaboration Agreement include:

● $50.0 million milestone upon approval of an NDA for icotrokinra in any indication;

● $25.0 million milestone upon the acceptance of an NDA filing by the FDA for icotrokinra in a second indication;

● $45.0 million milestone upon the approval of an NDA for icotrokinra in a second indication.

Capital Requirements

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We expect that our existing cash, cash equivalents and marketable securities will be sufficient to fund our operations for at least the next twelve months from the date of this Annual Report on Form 10-K based on current operating plans and financial forecasts.

We may require additional funding to advance our early discovery pipeline and to develop, acquire, or in-license other potential product candidates.

Our future funding requirements will depend on many factors, including:

● the progress, timing, scope, results and costs of advancing our clinical trials for our product candidates, including the ability to enroll patients in a timely manner for our clinical trials;

● the costs of and our ability to obtain clinical supplies for our current product candidates and any other product candidates we may identify and develop;

● our ability to successfully commercialize our current product candidates with our collaboration partners and any other product candidates we may identify and develop;

● the success of our existing or future collaborations with third parties;

● the selling and marketing costs associated with rusfertide, which is being co-developed and co-commercialized with Takeda under the Takeda Collaboration Agreement, and any other product candidates we may identify and develop, including the costs and timing of expanding our sales and marketing capabilities;

● the achievement of development, regulatory and sales milestones resulting in payments to us from JNJ under the JNJ License and Collaboration Agreement, Takeda under the Takeda Collaboration Agreement or other such arrangements that we may enter into, and the timing of receipt of such payments, if any;

● the timing, receipt and amount of royalties from JNJ under the JNJ License and Collaboration Agreement or Takeda under the Takeda Collaboration Agreement upon regulatory approval or clearance, if any;

● the amount and timing of sales and other revenues from our current product candidates and any other product candidates we may identify and develop, including the sales price and the availability of adequate third-party reimbursement;

● the cash requirements of any future acquisitions or discoveries of product candidates;

● the time and costs necessary to respond to technological and market developments;

● the extent to which we may acquire or in-license other product candidates and technologies.

Such additional funding may come from various sources, including raising additional capital, seeking access to debt, and seeking additional collaborative or other arrangements with partners, but such funding may not be available on terms acceptable to us, if at all.

As discussed in Part I, Item 1A, “Risk Factors,” we are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by domestic and global monetary and fiscal policy, changes in trade policies, including tariffs or other restrictions or the threat of such actions, geopolitical instability, inflationary pressures, high interest rates and banking and other financial institution instability, among other factors.

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.

Further, our operating plans may change, and we may need additional funds to meet operational needs and capital requirements for clinical trials, other research and development activities and pre-commercialization costs.

If we do raise additional capital through public or private equity offerings or convertible debt securities, the ownership interest of our existing stockholders could be diluted, and the terms of these securities could include liquidation or other preferences that could adversely affect our stockholders’ rights.

If we raise additional capital through debt financing, we could be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to fully estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated product development programs.

For additional information, see Part I, Item 1A, “Risk Factors — Risks Related to our Financial Position and Capital Requirements.”

While we do not currently anticipate a need for additional funding, we may require additional funding in the future to advance our discovery pipeline and to develop, acquire, or in-license other potential product candidates.

Our future funding requirements will depend on many factors, including those described in Part I, Item 1A, “Risk Factors.” Such additional funding may come from various sources, including raising additional capital, seeking access to debt, and seeking additional collaborative or other arrangements with partners, but such funding may not be available on terms acceptable to us, if at all.

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

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Cash provided by (used in) operating activities

Cash (used in) provided by investing activities

Cash used in investing activities

Cash provided by financing activities

Stock-based compensation

Deferred revenue

Change in deferred revenue

Cash Provided by (Used in) Operating Activities

Cash provided by operating activities for the year ended December 31, 2025 was $57.7 million and consisted primarily of a net change of $146.2 million in net operating assets and liabilities and certain non-cash items, including $46.0 million of stock-based compensation, partially offset by a net loss of $130.1 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 a $21.0 million change in deferred revenue.

The $126.5 million decrease in cash provided by operating activities during the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to the receipt of a $300.0 million one-time, non-refundable upfront payment upon the effectiveness of the Takeda Collaboration Agreement in 2024, partially offset by the receipt of the $165.0 million milestone payment from JNJ and the $25.0 million milestone payment from Takeda in 2025.

Cash provided by operating activities for the year ended December 31, 2024 was $184.2 million and consisted primarily of our net income of $275.2 million and certain non-cash items, including $37.6 million of stock-based compensation, partially offset by a net change of $122.6 million in net operating assets and liabilities.

The change in net operating assets and liabilities was driven primarily by a change of $155.0 million in receivable from a collaboration partner related to a milestone payment under the JNJ License and Collaboration Agreement, partially offset by a change of $30.6 million in deferred revenue related to the Takeda Collaboration Agreement.

The $254.4 million increase in cash provided by operating activities during the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to the receipt of a $300.0 million one-time, non-refundable upfront payment related to the Takeda Collaboration Agreement.

Cash used in operating activities for the year ended December 31, 2023 was $70.2 million and consisted primarily of our net loss of $79.0 million and a net change of $19.5 million in net operating assets and liabilities, partially offset by certain non-cash items, including $29.2 million of stock-based compensation expense.

The $37.9 million decrease in cash used in operating activities for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to a $48.4 million decrease in our net loss and a $5.1 million increase in stock-based compensation expense, partially offset by a $4.0 million decrease in accretion of discount on marketable securities and an $11.7 million net change in net operating assets and liabilities.

Cash (Used in) Provided by Investing Activities

The $254.4 million increase in cash provided by operating activities during the year ended December 31, 2024, as compared to the year ended December 31,

2023, was primarily due to the receipt of a $300.0 million one-time, non-refundable upfront payment upon the effectiveness of the Takeda Collaboration Agreement in 2024.

Cash Used in Investing Activities

Cash used in investing activities for the year ended December 31, 2025 was $49.3 million and consisted primarily of purchases of marketable securities of $546.6 million and purchases of property and equipment of $1.6 million, partially offset by proceeds from maturities and sales of marketable securities of $498.8 million.

The $250.2 million decrease in cash used in investing activities for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily related to investments made with a portion of the proceeds from the $300.0 million upfront payment received from Takeda in 2024.

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

Cash used in investing activities for the year ended December 31, 2024 was $299.5 million and consisted of purchases of securities of $621.7 million and purchases of property and equipment of $1.4 million, partially offset by proceeds from maturities of marketable securities of $323.6 million.

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Purchases of property and equipment were primarily related to purchases of leasehold improvements and laboratory equipment.

Cash used in investing activities for the year ended December 31, 2023 was $39.3 million and consisted of purchases of marketable securities of $191.1 million and purchases of property and equipment of $0.6 million, partially offset by proceeds from maturities of marketable securities of $152.4 million.

The $130.7 million decrease in cash provided by investing activities for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily related to a decrease in the net activity of purchases and maturities of marketable securities.

Purchases of property and equipment were primarily related to purchases of laboratory and computer equipment.

Cash Provided by Financing Activities

Cash provided by financing activities for the year ended December 31, 2025 was $22.9 million and consisted of net cash proceeds of $23.3 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 $144.6 million decrease in cash provided by financing activities for year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to $107.8 million of proceeds received from a public offering of our common stock in April 2023, $24.3 million of proceeds from ATM sales of our common stock in 2023, and $34.3 million in proceeds from exercises of warrants in 2023 in exchange for Pre-Funded Warrants and common stock.

The $3.0 million decrease in cash provided by financing activities for year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to a $3.1 million decrease in proceeds from the issuance of common stock upon exercise of options and purchases of common stock under our ESPP.

Cash provided by financing activities for the year ended December 31, 2024 was $25.9 million and consisted of net cash proceeds of $26.5 million from the issuance of common stock upon exercises of stock options and purchases of stock under our ESPP, partially offset by $0.6 million in tax withholding payments related to the net settlement of restricted stock units.

The $144.6 million decrease in cash provided by financing activities for year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to $107.8 million of proceeds received from a public offering of our common stock in April 2023, $24.3 million of proceeds from sales of our common stock under the 2022 ATM Facility in 2023, and $34.3 million in proceeds from exercises of warrants in 2023 in exchange for Pre-Funded Warrants and common stock.

These changes were partially offset by a $21.7 million increase in proceeds from the issuance of common stock upon exercise of options and purchases of common stock under our ESPP.

Cash provided by financing activities for the year ended December 31, 2023 was $170.5 million and consisted primarily of net cash proceeds of $107.8 million from the April 2023 public offering of our common stock, $24.3 million from sales of our common stock under the 2022 ATM Facility, $34.4 million from the exercise of the Warrants in exchange for issuance of Pre-Funded Warrants and common stock, and $4.8 million in proceeds from the issuance of common stock upon exercise of stock options and purchases of common stock under our ESPP.

The $151.6 million increase in cash provided by financing activities for the year ended December 31, 2023, as compared to the year ended December 31, 2022, was primarily due to a $107.8 million increase in net cash proceeds from the April 2023 public offering, a $9.7 million increase in cash proceeds from ATM sales and a $34.4 million increase in net cash proceeds from the exercise of the Warrants.

Contractual Obligations and Other Commitments

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Under the Takeda Collaboration Agreement, we may share with Takeda certain development, manufacturing and commercialization costs.

The actual amounts that we may pay Takeda or that Takeda may pay us will depend on a number of factors, some of which are outside of our control and some of which are contingent upon the success, if

achieved, of certain development and regulatory activities.

See Note 3 to the Consolidated Financial Statements elsewhere in this Annual Report on Form 10-K for additional information.

In January 2020, we initiated arbitration proceedings with the International Court of Arbitration of the International Chamber of Commerce against Zealand Pharma A/S (“Zealand”) related to a collaboration agreement we and Zealand entered into in 2012 and terminated in 2014.

The agreement provides for certain post-termination payment obligations to Zealand with respect to compounds related to the collaboration that we elect to further develop and that meet specified conditions.

In August 2021, we and Zealand agreed to resolve the dispute and reached an Arbitration Resolution Agreement.

Under the Arbitration Resolution Agreement, we recognized $4.0 million in development milestone payments to Zealand in the third quarter of 2021 and are obligated to pay Zealand certain milestone and royalty payments for rusfertide.

The potential future payments include (i) up to $2.75 million in future development milestone payments, (ii) a low single digit royalty on worldwide net sales, and (iii) sales milestones for achievement of annual net sales amounts in specific geographies.

Under the Arbitration Resolution Agreement, we are obligated to make certain payments related to rusfertide, including (i) up to $2.75 million future development milestone payments, (ii) a 1% royalty on worldwide net sales, and (iii) sales milestones for achievement of annual net sales amounts in specific geographies.

See Note 7 and Note 9 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K for additional information.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis