What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-05 compared with 2026-05-05 · 135 added, 81 removed, 170 unchanged (56% of the section changed)

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our cash runway;

our ability to advance product candidates into, and successfully complete, nonclinical studies and clinical trials;

our ability to advance product candidates into, and successfully complete, non-clinical studies and clinical trials;

our eligibility for, and any expected benefits of, any U.S.

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the potential for eventual regulatory approval and commercialization of our product candidates;

the commercialization of our product candidates, if approved;

the commercialization of our product candidates, if approved, which for ICOTYDE and rusfertide depends largely on the efforts of our collaboration partners;

our ability and the potential to successfully manufacture and supply our product candidates for clinical trials and for commercial use, if approved;

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Also, forward-looking statements represent our estimates and assumptions only as of the date of this Quarterly Report.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results or outcomes could differ materially from those anticipated in any forward-looking statements,

whether as a result of new information, future developments, changes in assumptions or otherwise.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results or

outcomes could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future developments, changes in assumptions or otherwise.

We caution investors that our business and financial performance are subject to substantial risks and uncertainties.

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in the United States and other jurisdictions.

We are a discovery through late-stage development biopharmaceutical company with a proprietary peptide technology platform that enables de novo discovery of peptide therapeutics.

We are a discovery through late-stage development biopharmaceutical company with a proprietary technology platform that enables de novo discovery of peptide therapeutics.

Our development products and discovery programs fall into three broad therapeutic areas:

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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 New Drug Application (“NDA”) filing for the treatment of erythrocytosis in patients with PV, which we and Takeda submitted in December 2025.

We discovered rusfertide, advanced it into Phase 3 development, and entered into a license and collaboration agreement with Takeda Pharmaceuticals, Inc.

(“Takeda”) in January 2024 (the “Takeda Collaboration Agreement”).

In March 2026, the FDA accepted the NDA and granted Priority Review status for rusfertide.

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

The NDA for rusfertide is currently under priority review by the FDA, with a Prescription Drug User Fee Act target action date in the third quarter of 2026.

The NDA for rusfertide is currently under priority review by the FDA, with a Prescription Drug User Fee Act target action date in August 2026.

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

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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.

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

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 by mid-2026 and initiate a Phase 2 trial by the end of 2026.

We believe data from our Phase 1 study supports our decision to advance PN-881 into a comprehensive Phase 2b psoriasis program, with initiation expected in early first quarter 2027.

Obesity Program

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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 in mid-2026 and the first quarter of 2027, 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.

A Phase 1 clinical study for PN-477sc has been initiated, and the initiation of a Phase 1 study for PN-477o is anticipated in the first half of 2027.

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.

IND-enabling studies are ongoing, with the initiation of a Phase 1 study for the PN-458 oral formulation anticipated in the second half of 2027.

Oral Hepcidin Program

In December 2025, we nominated development candidate PN-8047, an orally administered small molecule hepcidin functional mimetic, 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.

IND-enabling studies for PN-8047 are ongoing, with the initiation of a Phase 1 study anticipated in the first quarter of 2027.

Other Programs

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Significant Cash Resources

We ended the first quarter of 2026 with cash, cash equivalents and marketable securities of approximately $620.3 million, as compared to cash, cash equivalents and marketable securities of approximately $646.0 million as of December 31, 2025.

We ended the second quarter of 2026 with cash, cash equivalents and marketable securities of approximately $849.5 million, as compared to cash, cash equivalents and marketable securities of approximately $646.0 million as of December 31, 2025.

For the remainder of 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

License and Collaboration Agreements

JNJ License and Collaboration Agreement

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In March 2026, we earned a $50.0 million milestone payment upon FDA approval of ICOTYDE for the treatment of moderate-to-severe plaque psoriasis in adults and pediatric patients 12 years of age or older who weigh at least 40 kg and are candidates for systemic therapy or phototherapy.

As of March 31, 2026, we have earned a total of

$387.5 million in non-refundable payments from JNJ under the agreement.

We are eligible to receive up to $580.0 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%.

As of June 30, 2026, we have earned a total of $387.5 million in non-refundable upfront and milestone payments from JNJ under the agreement.

We are eligible to

receive up to $580.0 million in future development and sales milestone payments, including the following potential milestones:

We will also receive upward tiered 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 condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.

The ultimate magnitude of our royalty stream, along with the achievement of development and commercial milestones, will depend upon ICOTYDE’s commercial launch success and market trajectory, which depends on the efforts of our collaboration partner, as well as the successful clinical development, regulatory approval, and commercialization of ICOTYDE in the additional indications currently being studied.

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 January 2024, we entered into 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, we and Takeda submitted an NDA to the FDA for rusfertide in PV, which is currently under priority review.

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profit and loss sharing arrangement (50% to us and 50% to Takeda) under the Takeda Collaboration Agreement.

The opt-out election triggered a $200.0 million payment to us, with an additional $200.0 million opt-out fee and a separate $75.0 million milestone upon FDA approval of rusfertide.

The opt-out election triggered a $200.0 million payment to us, which we received in the second quarter of 2026, and we also became eligible to receive an additional $200.0 million opt-out fee and a separate $75.0 million milestone, both of which are due upon FDA approval of rusfertide.

Following the opt-out, Takeda has an exclusive worldwide license to develop and commercialize rusfertide, and we are eligible to receive tiered royalties ranging from 14% to 29% on annual worldwide net sales, with an approximate weighted-average royalty rate of 21% at $1.5 billion in annual net sales and a rate of 29% for incremental annual 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.

In addition, under the agreement, we are eligible to receive up to $775.0 million in sales milestones.

Upcoming potential development milestones and potential sales milestones under the agreement include the following:

See Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for further details related to the agreement.

The receipt of future royalties and commercial milestones is contingent upon the relevant products receiving FDA approval and achieving a successful commercial launch, which depends on the efforts of our collaboration partner.

Risks and Uncertainties

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“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

We have incurred cumulative net losses from inception through March 31, 2026 of $466.9 million.

We have incurred cumulative net losses from inception through June 30, 2026 of $304.0 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.

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

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S.

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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 three months ended March 31, 2026, 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, 2025 filed with the SEC on February 25, 2026.

There have been no material changes to our critical accounting policies during the three and six months ended June 30, 2026, 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, 2025 filed with the SEC on February 25, 2026.

Components of Our Results of Operations

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See Note 3 to the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.

Early in a product launch, prescription volume and recognized royalty revenue may not move in parallel.

Commercial launches often include access-support initiatives, such as starter packs and bridge programs designed to help patients initiate therapy while reimbursement pathways are established.

As a result, prescription activity can serve as a leading indicator of strong adoption, while associated royalty revenue may lag in the near term as prescriptions convert into reimbursed, recurring product sales.

Research and Development Expenses

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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.

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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 the prior year period 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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Allocated costs consist of expenses for rent and maintenance of facilities, information technology, depreciation and amortization expense and 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.

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.

Interest Income

Interest income consists of interest earned on our cash, cash equivalents and marketable securities, which is comprised of contractual interest, premium amortization and discount accretion.

Other Income, Net

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

Other (Expense) Income, Net

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

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

Comparison of the Three Months Ended June 30, 2026 and 2025

Three Months Ended

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Total operating expenses

Loss from operations

Income (loss) from operations

Interest income

Other income, net

Income (loss) before income tax benefit

Income tax benefit

Other (expense) income, net

Income (loss) before income tax expense

Income tax expense

Net income (loss)

*Percentage not meaningful.

(1) Includes $7.8 million and $8.0 million of non-cash stock-based compensation expense for the three months ended March 31, 2026 and 2025, respectively.

(2) Includes $6.7 million and $5.8 million of non-cash stock-based compensation expense for the three months ended March 31, 2026 and 2025, respectively.

(1) Includes $7.5 million and $6.3 million of non-cash stock-based compensation expense for the three months ended June 30, 2026 and 2025, respectively.

(2) Includes $6.5 million and $4.6 million of non-cash stock-based compensation expense for the three months ended June 30, 2026 and 2025, respectively.

License and Collaboration Revenue

License and collaboration revenue was comprised of the following for the periods presented:

Three Months Ended March 31,

Three Months Ended

(Dollars in thousands)

License and collaboration revenue:

JNJ License and Collaboration Agreement revenue

Takeda Collaboration Agreement revenue

Takeda Collaboration Agreement and other

Total license and collaboration revenue

*Percentage not meaningful.

Our revenue is derived from licensing and collaboration agreements and 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 three months ended March 31, 2026 of $56.4 million was comprised of (i) a $50.0 million milestone payment related to the JNJ License and Collaboration Agreement upon FDA approval of ICOTYDE for the treatment of moderate-to-severe plaque psoriasis, (ii) $3.3 million related to the Takeda Collaboration Agreement for development services provided by us during the period using the cost-based input method, and (iii) $3.1 million from Takeda for rusfertide clinical supplies.

The remaining $6.3 million in deferred revenue as of March 31, 2026 will be recognized through the conclusion of the development services performance obligation.

License and collaboration revenue for the three months ended March 31, 2025 of $28.3 million was related to the Takeda Collaboration Agreement, including (i) $22.8 million related to the proportional recognition of the $25.0 milestone deemed probable of being achieved due to the Phase 3 VERIFY trial meeting its primary endpoint and (ii) $5.5 million related to the initial transaction price for development services provided by us during the period.

Revenue recognition for the $25.0 million milestone, which was payable upon completion of the VERIFY clinical study report, was allocated based on the initial standalone selling price of each performance obligation under the agreement.

The remaining $2.2 million in revenue related to the milestone is recognized through the conclusion of the development services performance obligation.

We recorded a corresponding contract asset of $22.8 million on our condensed consolidated balance sheet as of March 31, 2025.

Our revenue is derived from licensing and collaboration agreements and is highly variable and dependent upon factors such as the timing of when regulatory and sales milestones are achieved, if at all, commercial launch efforts by our collaboration partners, and the accounting for any upfront payments associated with any existing or new agreements.

License and collaboration revenue for the three months ended June 30, 2026, was $213.5 million, which consisted of (i) $192.4 million related to the proportional recognition of the $200.0 million opt-out payment received from Takeda, and (ii) $21.1 million for ongoing development services, including post opt-out wind down services, rusfertide clinical supplies provided by us under the Takeda Collaboration Agreement and other revenues.

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

As described above, we opted out of the U.S.

profit and loss sharing arrangement right under the Takeda Collaboration Agreement in April 2026 and are 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 expect to receive significant royalties in 2026 from the launch of ICOTYDE and may receive royalties from rusfertide , pending potential FDA approval and commercial launch.

profit and loss sharing arrangement under the Takeda Collaboration Agreement in April 2026 and are eligible to receive both an additional $200.0 million opt-out payment and an enhanced milestone payment of $75.0 million upon FDA approval of rusfertide, which is expected in August 2026.

In addition, we may receive royalties and sales milestones from rusfertide , pending potential FDA approval and commercial launch.

Research and Development Expenses

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*Percentage not meaningful.

Research and development expenses increased $10.8 million, or 30%, from $35.9 million for the three months ended March 31, 2025 to $46.7 million for the three months ended March 31, 2026.

Research and development expenses increased $5.0 million, or 14%, from $37.0 million for the three months ended June 30, 2025 to $42.1 million for the three months ended June 30, 2026.

The increase was primarily due to an increase of $8.6 million in costs related to our Phase 1 study for development candidate PN-881 initiated in the third quarter of 2025 and an $8.4 million increase in pre-clinical and drug discovery research program expense, partially offset by a decrease of $12.0 million in rusfertide expenses primarily related to the completion of our Phase 3 VERIFY trial during the first quarter of 2025.

We had 108 and 100 full-time equivalent research and development headcount as of June 30, 2026 and 2025, respectively.

Research and development personnel-related expenses for the three months ended June 30, 2026 increased by $1.9 million as compared to the three months ended June 30, 2025, primarily driven by increases in wages, benefits and stock-based compensation.

We expect research and development expenses to increase significantly in the second half of 2026 compared to the first half of 2026.

The increase is expected to be driven primarily by the advancement of PN-881 into a comprehensive Phase 2b psoriasis program, planned investments in clinical manufacturing and related activities, including at-risk expenditures to ensure readiness for other programs as they advance to clinical development (PN-477sc, PN-458, PN-8047), additional pre-clinical discovery programs, and increases in headcount and stock-based compensation expense.

The timing and magnitude of these expenses will vary depending on the progress of our programs, including the initiation and pace of clinical trials and related development activities.

General and Administrative Expenses

General and administrative expenses increased $2.1 million, or 20%, from $10.6 million for the three months ended June 30, 2025 to $12.6 million for the three months ended June 30, 2026.

The increase was primarily due to an increase in personnel-related expenses driven by increases in wages, benefits and stock-based compensation.

We had 33 and 30 full-time equivalent general and administrative headcount as of June 30, 2026 and 2025, respectively.

Interest Income

Interest income decreased by $1.0 million, or 13%, from $7.4 million for the three months ended June 30, 2025 to $6.4 million for the three months ended June 30, 2026 primarily due to lower yields and lower average investment balance as compared to the prior period.

Income Tax Expense

Income tax expense was $2.3 million and $0.2 million for the three months ended June 30, 2026 and 2025, respectively.

The increase in income tax expense for the three months ended June 30, 2026 was primarily due to pretax income recorded as compared to a pretax loss for the prior year period.

The effective tax rate was 1.4% and 0% for the three months ended June 30, 2026 and 2025, respectively.

Comparison of the Six Months Ended June 30, 2026 and 2025

Six Months Ended

(Dollars in thousands)

License and collaboration revenue

Operating expenses:

Research and development (1)

General and administrative (2)

Total operating expenses

Income (loss) from operations

Interest income

Other (expense) income, net

Income (loss) before income tax expense

Income tax expense

Net income (loss)

*Percentage not meaningful.

(1) Includes $15.3 million and $14.3 million of non-cash stock-based compensation expense for the six months ended June 30, 2026 and 2025, respectively.

(2) Includes $13.2 million and $10.4 million of non-cash stock-based compensation expense for the six months ended June 30, 2026 and 2025, respectively.

License and Collaboration Revenue

License and collaboration revenue was comprised of the following for the periods presented:

Six Months Ended

(Dollars in thousands)

License and collaboration revenue:

Takeda Collaboration Agreement and other

JNJ License and Collaboration Agreement milestone

Total license and collaboration revenue

*Percentage not meaningful.

Our revenue is derived from licensing and collaboration agreements and is highly variable and dependent upon factors such as the timing of when regulatory and sales milestones are achieved, if at all, commercial launch efforts by our collaboration partners, and the accounting for any upfront payments associated with any existing or new agreements.

License and collaboration revenue for the six months ended June 30, 2026 was $269.8 million, which consisted of (i) $192.4 million related to the proportional recognition of the $200.0 million opt-out payment received under the Takeda Collaboration Agreement, (ii) $27.4 million for ongoing development services, including post opt-out wind down services, rusfertide clinical supplies provided by us under the Takeda Collaboration Agreement and other revenues, and (iii) a $50.0 million milestone payment related to the JNJ License and Collaboration Agreement, which was earned upon FDA approval of ICOTYDE for the treatment of moderate-to-severe plaque psoriasis.

License and collaboration revenue for the six months ended June 30, 2025 was $33.9 million, which consisted of (i) $23.4 million related to the proportional recognition of the $25.0 million milestone from Takeda deemed probable of being achieved due to the Phase 3 VERIFY trial meeting its primary endpoint and (ii) $10.5 million for development

services provided by us during the period under the Takeda Collaboration Agreement based on the cost-based input method.

Research and Development Expenses

Six Months Ended

(Dollars in thousands)

Clinical and development expense — rusfertide

Clinical and development expense — PN-881

Clinical and development expense — other

Pre-clinical and drug discovery research expense

Total research and development expenses

*Percentage not meaningful.

Research and development expenses increased $15.9 million, or 22%, from $72.9 million for the six months ended June 30, 2025 to $88.8 million for the six months ended June 30, 2026.

The increase was primarily due to an increase of $17.4 million in costs related to our Phase 1 study for development candidate PN-881 initiated in the third quarter of 2025 and a $14.4 million increase in pre-clinical and drug discovery research program expense, partially offset by a decrease of $15.9 million in rusfertide expenses primarily related to the completion of our Phase 3 VERIFY trial during the first quarter of 2025.

We had 100 and 97 full-time equivalent research and development head count as of March 31, 2026 and 2025, respectively.

Research and development personnel-related expenses for the three months ended March 31, 2026 increased by $1.0 million as compared to the three months ended March 31, 2025, primarily driven by increases in wages and benefits.

We expect research and development expenses to increase significantly as compared to prior periods as we continue to invest in new discovery programs and our disclosed pre-clinical programs and advance multiple clinical candidates into development.

The timing and magnitude of these expenses will vary depending on the progress or our programs, including the initiation and pace of clinical trials and related development activities.

We had 108 and 100 full-time equivalent research and development headcount as of June 30, 2026 and 2025, respectively.

Research and development personnel-related expenses for the six months ended June 30, 2026 increased by $2.9 million as compared to the six months ended June 30, 2025, primarily driven by increases in wages, benefits and stock-based compensation.

We expect research and development expenses to increase significantly in the second half of 2026 compared to the first half of 2026.

The timing and magnitude of these expenses will vary depending on the progress of our programs, including the initiation and pace of clinical trials and related development activities.

General and Administrative Expenses

General and administrative expenses increased $1.5 million, or 13%, from $11.7 million for the three months ended March 31, 2025 to $13.3 million for the three months ended March 31, 2026.

The increase was primarily due to a $1.8 million increase in personnel-related expenses, primarily driven by increases in wages and benefits and stock-based compensation, partially offset by a $0.3 million decrease in professional services and other expenses.

We had 31 and 27 full-time equivalent general and administrative head count as of March 31, 2026 and 2025, respectively.

General and administrative expenses increased $3.6 million, or 16%, from $22.3 million for the six months ended June 30, 2025 to $25.9 million for the six months ended June 30, 2026.

The increase was primarily due to an increase in personnel-related expenses, primarily driven by increases in wages, benefits and stock-based compensation.

We had 33 and 30 full-time equivalent general and administrative headcount as of June 30, 2026 and 2025, respectively.

Interest Income

Interest income decreased by $1.7 million, or 22%, from $7.6 million for the three months ended March 31, 2025 to $5.9 for million for the three months ended March 31, 2026 due to a decrease in invested balances and lower effective yields.

Income Tax Benefit

Income tax benefit was $1.5 million and zero for the three months ended March 31, 2026 and 2025, respectively.

Income tax benefit for the three months ended March 31, 2026 included a discrete credit for stock-based compensation expense specific to the current quarter.

Interest income decreased by $2.7 million, or 18%, from $15.0 million for the six months ended June 30, 2025 to $12.3 million for the six months ended June 30, 2026 primarily due to lower yields and lower average investment balance as compared to the prior period.

Income Tax Expense

Income tax expense was $0.8 million and $0.2 million for the six months ended June 30, 2026 and 2025, respectively.

The increase in income tax expense for the six months ended June 30, 2026 was primarily due to pretax income recorded as compared to a pretax loss for the prior year period.

The effective tax rate was 0.5% and 0% for the six months ended June 30, 2026 and 2025, respectively.

Liquidity and Capital Resources

Sources of Liquidity

We had $620.3 million and $646.0 million in cash, cash equivalents and marketable securities as of March 31, 2026 and December 31, 2025, respectively.

We had $849.5 million and $646.0 million in cash, cash equivalents and marketable securities as of June 30, 2026 and December 31, 2025, 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.

Capital Requirements

As of March 31, 2026, we had $620.3 million in cash, cash equivalents and marketable securities and an accumulated deficit of $466.9 million.

Our capital expenditures were $0.2 million and $1.6 million for the three months ended March 31, 2026 and the year ended December 31, 2025, respectively.

As of June 30, 2026, we had $849.5 million in cash, cash equivalents and marketable securities and an accumulated deficit of $304.0 million.

Our capital expenditures were $0.4 million and $1.6 million for the six months ended June 30, 2026 and the year ended December 31, 2025, respectively.

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

Three Months Ended

Six Months Ended

Condensed Consolidated Statements of Cash Flows Data:

(Dollars in thousands)

Cash (used in) provided by operating activities

Cash provided by operating activities

Cash provided by (used in) investing activities

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Change in deferred revenue

Cash (Used in) Provided by Operating Activities

Cash used in operating activities for the three months ended March 31, 2026 was $48.9 million and consisted primarily of a net change of $67.1 million in net operating assets and liabilities, partially offset by net income of $3.8 million and certain non-cash items, including $14.5 million of stock-based compensation expense.

The $174.3 million increase in cash used in operating activities during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily due to the receipt of a $165.0 million milestone payment under the JNJ License and Collaboration Agreement in January 2025 and a $50.0 million milestone payment receivable under the JNJ License and Collaboration Agreement during the three months ended March 31, 2026, partially offset by a $22.8 million change in contract asset and an increase of $15.4 million in net income during the three months ended March 31, 2026.

Cash Provided by Operating Activities

Cash provided by operating activities for the six months ended June 30, 2026 was $170.1 million and consisted primarily of net income of $166.6 million and certain non-cash items, including $28.6 million of stock-based compensation expense, partially offset by a net change of $24.7 million in net operating assets and liabilities.

The $73.5 million increase in cash provided by operating activities during the six months ended June 30, 2026, as compared

to the six months ended June 30, 2025, was primarily due to a $200.0 million payment received upon the exercise of our opt-out right under the Takeda Collaboration Agreement in April 2026 and a $50.0 million milestone payment received under the JNJ License and Collaboration Agreement, partially offset by a $178.3 million change in receivable from collaboration partner during the six months ended June 30, 2026.

Cash Provided by (Used in) Investing Activities

Cash provided by investing activities for the three months ended March 31, 2026 was $90.9 million and consisted primarily of proceeds from maturities and sales of marketable securities of $160.1 million, partially offset by purchases of marketable securities of $69.0 million and purchases of property and equipment of $0.2 million.

The $185.3 million increase in cash provided by investing activities for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily related to the investment of milestone payments received in 2025.

Cash provided by investing activities for the six months ended June 30, 2026 was $88.5 million and consisted primarily of proceeds from maturities and sales of marketable securities of $292.5 million, partially offset by purchases of marketable securities of $203.6 million and purchases of property and equipment of $0.4 million.

The $128.1 million increase in cash provided by investing activities for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was primarily related to the investment of payments received from collaboration partners in 2026.

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 three months ended March 31, 2026 was $23.4 million and consisted of net cash proceeds from the issuance of common stock upon exercises of stock options and purchases of stock under our employee stock purchase plan (“ESPP”).

The $11.9 million increase in cash provided by financing activities for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily due to an $11.5 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 six months ended June 30, 2026 was $33.1 million and consisted of net cash proceeds from the issuance of common stock upon exercises of stock options and purchases of stock under our employee stock purchase plan (“ESPP”).

The $18.7 million increase in cash provided by financing activities for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, was primarily due to an $18.3 million increase 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 three months ended March 31, 2026, 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, 2025 filed with the SEC on February 25, 2026.

During the six months ended June 30, 2026, 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, 2025 filed with the SEC on February 25, 2026.

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