Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Operating results for the three and six months ended June 30, 2026, are not necessarily indicative of results that may occur in future interim periods or future fiscal years. Some of the statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements. These forward-looking statements are based on management’s beliefs and assumptions and on information currently available to our management and involve significant elements of subjective judgment and analysis. Words such as “expects,” “will,” “anticipates,” “targets,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “potential,” “should,” “could,” variations of such words, and similar expressions are intended to identify forward-looking statements. Our actual results and the timing of events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a difference include those discussed under the heading “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 4, 2026, and in Part II, Item 1A of this Quarterly Report on Form 10-Q. These and many other factors could affect our future financial and operating results. We undertake no obligation to update any forward-looking statement to reflect events after the date of this Quarterly Report on Form 10-Q. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into or review of, all relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely on these statements.
Overview
SCYNEXIS, Inc. is a clinical-stage biotechnology company focused on developing innovative therapies for severe and difficult-to-treat diseases with significant unmet medical need. Our strategy is centered on advancing differentiated product candidates with novel mechanisms of action that may provide meaningful clinical benefit and commercial opportunity.
Our pipeline is led by SCY-770, a novel, highly selective direct AMP-activated protein kinase (AMPK) activator being developed for the treatment of Autosomal Dominant Polycystic Kidney Disease (ADPKD). ADPKD is a progressive inherited kidney disorder characterized by cyst growth, declining renal function and increased risk of end-stage kidney disease. SCY-770 has received Orphan Drug Designation from the U.S. Food and Drug Administration (FDA) and is designed to target multiple biological pathways associated with cyst formation and disease progression. SCY-770’s mechanism has the potential to address core drivers of disease biology and therefore may be applicable across a broad segment of the ADPKD patient population. As a result, if successfully developed, SCY-770 could offer a differentiated therapeutic profile with the potential for broader use relative to certain existing treatments.
Our proprietary antifungal platform, “fungerps,” includes BREXAFEMME® (ibrexafungerp tablets), the first approved representative of this novel antifungal class, which we licensed to GlaxoSmithKline Intellectual Property (No. 3) Limited (GSK) in May 2023, and SCY-247, a next-generation antifungal compound currently in clinical development. We retain worldwide rights to SCY-247 and additional fungerp compounds in preclinical and discovery-stage development.
We believe our pipeline positions us to participate in multiple areas of significant unmet medical need, including rare kidney disease and invasive fungal infections, where treatment options remain limited and meaningful innovation continues to be needed.
Recent Business Highlights
Acquisition of SCY-770 Program
On March 30, 2026, we entered into an asset purchase agreement with Poxel SA pursuant to which we acquired Poxel’s direct AMPK activator research and development program and related assets, including the compound previously known as PXL-770, now referred to as SCY-770.
We believe the acquisition of SCY-770 significantly enhances our pipeline by adding a clinical-stage rare disease program with the potential to address a large and underserved patient population. The transaction also aligns with our strategic objective of expanding into high-value rare disease indications supported by differentiated science and potentially efficient development pathways.
Pursuant to the agreement, we made an upfront payment of $8.0 million and may be required to make additional development and commercial milestone payments upon achievement of specified milestones.
SCY-770 for ADPKD
SCY-770 is an orally administered small-molecule direct AMPK activator that has been evaluated in multiple clinical studies, including Phase 1 trials and a Phase 2a study in patients with nonalcoholic fatty liver disease. Across studies completed
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to date, SCY-770 has demonstrated a favorable pharmacokinetic and tolerability profile. The FDA has granted SCY-770 Orphan Drug designation.
We are developing SCY-770 as a potential disease-modifying therapy for ADPKD. We believe SCY-770’s mechanism of action may offer a differentiated therapeutic approach by targeting key biological processes associated with cyst growth, inflammation and metabolic dysregulation implicated in ADPKD progression.
We currently anticipate:
• completing a Phase 1 confirmatory study during the third quarter of 2026 which will assess food effect and exposure to support dose selection for a Phase 2 study in patients with ADPKD;
• initiating a Phase 2 proof-of-concept clinical study in ADPKD patients during the fourth quarter of 2026; and
• obtaining an early efficacy readout during the second half of 2027.
We believe existing and newly generated preclinical and clinical data may support an efficient development strategy. Subject to discussions with the FDA, we believe there may be potential for a streamlined regulatory pathway utilizing imaging-based surrogate endpoints together with confirmatory clinical benefit measures; however, no agreement with the FDA regarding any such pathway has been reached.
Our goal is to develop SCY-770 as a therapy capable of slowing disease progression, limiting cyst growth and improving long-term patient outcomes.
ADPKD Market Opportunity
ADPKD is among the most common inherited kidney disorders and represents a leading genetic cause of kidney failure. The disease is associated with substantial morbidity, progressive loss of kidney function and significant healthcare burden.
We estimate that approximately 140,000 to 160,000 individuals in the United States have been diagnosed with ADPKD, with global prevalence estimated in the millions. Current treatment options remain limited, and existing therapies may present tolerability, monitoring or access-related challenges for certain patients. We believe there is substantial unmet need and potentially meaningful market opportunity for additional therapies capable of slowing disease progression in ADPKD while offering improved tolerability relative to currently available treatment options.
We believe these dynamics create a substantial opportunity for new therapies capable of slowing disease progression while potentially offering improved tolerability, broader patient applicability and long-term treatment utility.
The competitive landscape for ADPKD is evolving but remains limited. Tolvaptan, marketed in the United States as JYNARQUE, is currently the only therapy approved that can slow progression of ADPKD. Its use is limited to patients at risk of rapid progression due to tolerability issues, prescribing restrictions, and requirements associated with a risk evaluation and mitigation strategies (REMS) program. In 2025, the FDA approved Lupin’s generic formulation of tolvaptan for the treatment of ADPKD, providing a lower‑cost alternative to JYNARQUE; however, the generic product is subject to the same REMS requirements and safety considerations as the branded product and does not address the tolerability‑related limitations that have constrained broader adoption of tolvaptan‑based therapy.
We believe SCY-770 may be differentiated by its direct activation of AMPK, a central regulator of cellular energy homeostasis implicated in multiple pathways relevant to ADPKD pathogenesis. Unlike approaches targeting narrow genetic subsets or downstream disease mechanisms, SCY-770 may have the potential for applicability across a broader ADPKD population, although these potential advantages have not yet been clinically established.
SCY-247 Program
SCY-247 is a next-generation antifungal compound being developed in oral and intravenous formulations for the treatment and prevention of invasive fungal infections.
SCY-247 has demonstrated broad-spectrum antifungal activity in preclinical studies, including activity against multidrug-resistant Candida and Aspergillus strains. We believe SCY-247 possesses several potentially differentiated attributes, including oral bioavailability, potent antifungal activity, tissue penetration and pharmacokinetic characteristics supportive of once-daily dosing.
SCY-247 is currently being evaluated in Phase 1 oral and intravenous formulation studies. The oral formulation studies are now complete, with data from the Phase 1 intravenous formulation study anticipated to be available in the third quarter of 2026. Subject to the results of the Phase 1 oral and intravenous studies and available funding, a clinical Phase 2 study of SCY-247 would be anticipated to be initiated in the first half of 2027 in patients with IC.
The FDA has granted SCY-247 Qualified Infectious Disease Product, Fast Track and Orphan Drug designations.
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BREXAFEMME
The transfer of the BREXAFEMME New Drug Application to GSK was completed in November 2025 and GSK will be able to initiate regulatory interactions with the FDA to discuss the relaunch of BREXAFEMME for vulvovaginal candidiasis and refractory vulvovaginal candidiasis in the U.S. market. We potentially stand to receive $146.0 million in annual net sales milestones plus royalties in the low-to-mid-single digits upon the relaunch of BREXAFEMME by GSK that could provide a significant future source of non-dilutive capital.
Financing Activities
In March 2026, we entered into a securities purchase agreement with certain institutional and accredited investors in a private placement financing transaction.
The financing generated aggregate gross and net proceeds of $40.0 million and $36.9 million, respectively. We believe this financing strengthens our balance sheet and enhances our ability to advance the development of SCY-770 and SCY-247. We believe our existing cash and cash equivalents and investments are sufficient to fund our on-going operations into 2029.
In addition, if the accompanying common warrants issued in the financing are fully exercised for cash, we could receive additional gross proceeds of up to approximately $52.2 million, subject to warrant exercise conditions.
Reverse Stock Split and Nasdaq Compliance
In June 2025, we received notice from Nasdaq that the closing bid price of our common stock had fallen below the minimum bid price requirement for continued listing. Nasdaq subsequently granted us a compliance period through June 15, 2026 to regain compliance with Nasdaq Listing Rule 5550(a)(2). As of May 28, 2026, we had not regained compliance with the minimum bid price requirement.
On May 28, 2026, we filed with the Secretary of State of the State of Delaware a Certificate of Amendment to our Amended and Restated Certificate of Incorporation, to effect a one-for-eight reverse stock split of our outstanding common stock. On the effective date of May 29, 2026, the number of our issued and outstanding shares of common stock was decreased from 79,459,299 (pre-reverse stock split) to 9,932,359 and the par value per common share remained unchanged.
On June 15, 2026, we received a letter from Nasdaq notifying us that Nasdaq has determined that for the last 10 consecutive business days, from June 1, 2026 to June 12, 2026, the closing bid price of our common stock has been at $1.00 per share or greater and that, accordingly, we have regained compliance with Listing Rule 5550(a)(2) and this matter is now closed.
Components of Operating Results
Revenue
Revenue consists of license agreement revenue associated with the GSK license agreement.
Research and Development Expense
Research and development expense consists of expenses incurred while performing research and development activities to discover, develop, or improve potential product candidates we seek to develop. This includes conducting preclinical studies and clinical trials, manufacturing and other development efforts, and activities related to regulatory filings for product candidates. We recognize research and development expenses as they are incurred. Our research and development expense primarily consists of:
• costs related to executing preclinical and clinical trials, drug formulation, manufacturing and other development;
• salaries and personnel-related costs, including benefits and any stock-based compensation, for personnel in research and development functions;
• medical affairs related expense and salary that is incurred to discover, develop, or improve potential product candidates;
• other costs in seeking regulatory approval of our products;
• acquired IPR&D with no alternative future use; and
• allocated overhead.
SCY-247 and ibrexafungerp as part of the MARIO Phase 3 study were the only key research and development projects during the periods presented. We expect to continue to incur significant research and development expense for the foreseeable future as we continue our effort to develop SCY-770 and SCY-247, and to potentially develop our other product candidates, subject to the availability of additional funding.
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The successful development of product candidates is highly uncertain. At this time, we cannot reasonably estimate the nature, timing or costs required to complete the remaining development of any product candidates. This is due to the numerous risks and uncertainties associated with the development of product candidates.
Selling, General and Administrative Expense
Selling, general and administrative expense consists primarily of salaries and personnel-related costs, including employee benefits and any stock-based compensation. This includes personnel in executive, finance, human resources, business development, medical affairs, marketing and commercial, and administrative support functions. Other expenses include facility-related costs not otherwise allocated to research and development expense, professional fees for accounting, auditing, tax and legal services, consulting costs for general and administrative purposes, patent application and legal fees, information systems and marketing efforts.
Other Expense (Income)
All of our other expense (income) recognized in the three and six months ended June 30, 2026 and 2025, consists of amortization of debt issuance costs and discount, interest income, interest expense, other income, and the warrant liabilities fair value adjustment.
Results of Operations for the Three Months Ended June 30, 2026 and 2025
The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025, together with the changes in those items in dollars and percentage (dollars in thousands):
Three Months Ended June 30,
2026
2025
Period-to-Period Change
License agreement revenue
$
235
$
1,364
$
(1,129
)
(82.8
)
%
Operating expenses:
Research and development
3,891
7,141
(3,250
)
(45.5
)
%
Selling, general and administrative
4,119
3,784
335
8.9
%
Total operating expenses
8,010
10,925
(2,915
)
(26.7
)
%
Loss from operations
(7,775
)
(9,561
)
1,786
(18.7
)
%
Other (income) expense:
Interest income
(685
)
(510
)
(175
)
34.3
%
Other income
(335
)
—
(335
)
—
Warrant liabilities fair value adjustment
(14,152
)
(2,166
)
(11,986
)
553.4
%
Total other income
(15,172
)
(2,676
)
(12,496
)
467.0
%
Net income (loss)
$
7,397
$
(6,885
)
$
14,282
(207.4
)
%
Revenue. For the three months ended June 30, 2026 and 2025, revenue consists of $0.2 million and $1.4 million in license agreement revenue associated with the GSK license agreement.
Research and Development. For the three months ended June 30, 2026, research and development expenses decreased to $3.9 million compared to $7.1 million for the three months ended June 30, 2025. The decrease of $3.3 million, or 46%, for the three months ended June 30, 2026, was primarily driven by a decrease of $1.6 million in chemistry, manufacturing, and controls (CMC) expense, a $0.8 million decrease in preclinical expense, a $0.5 million decrease in clinical expense and a net decrease of $0.4 million in other research and development expense.
The $1.6 million decrease in CMC expense was primarily associated with a $1.4 million decrease in costs and expenses associated with the manufacturing of ibrexafungerp for the MARIO Phase 3 study which was terminated in the fourth quarter of 2025. The $0.8 million decrease in preclinical expense was primarily associated with certain preclinical costs associated with the development of the oral formulation of SCY-247 in the three months ended June 30, 2025. The $0.5 million decrease in clinical expense was primarily due to the $0.9 million decrease in expense associated with MARIO Phase 3 study that was terminated in the fourth quarter of 2025, and a $1.5 million decrease in expense for the Phase 1 oral formulation studies for SCY-247, offset in part by an increase in expense of $1.6 million for the Phase 1 intravenous formulation study for SCY-247, and a $0.3 million increase in expense for the Phase 1 SCY-770 study.
Selling, General & Administrative . For the three months ended June 30, 2026, selling, general and administrative expenses increased to $4.1 million compared to $3.8 million for the three months ended June 30, 2025. The increase of $0.3 million, or 9%, for the three months ended June 30, 2026, was primarily due to the increase of $0.3 million in professional fees.
Interest Income . For the three months ended June 30, 2026 and 2025, we recognized $0.7 million and $0.5 million, respectively, in interest income on our money market funds and investments.
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Other Income . For the three months ended June 30, 2026, we recognized $0.3 million in other income associated with certain research and development tax credits.
Warrant Liabilities Fair Value Adjustment . For the three months ended June 30, 2026 and 2025, we recognized gains of $14.2 million and $2.2 million, respectively, in the fair value adjustment related to the warrant liabilities primarily due to the decrease in our stock price during the respective periods.
Results of Operations for the Six Months Ended June 30, 2026 and 2025
The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025, together with the changes in those items in dollars and percentage (dollars in thousands):
Six Months Ended June 30,
2026
2025
Period-to-Period Change
License agreement revenue
$
235
$
1,620
$
(1,385
)
(85.5
)
%
Operating expenses:
Research and development
16,243
12,282
3,961
32.3
%
Selling, general and administrative
8,707
7,528
1,179
15.7
%
Total operating expenses
24,950
19,810
5,140
25.9
%
Loss from operations
(24,715
)
(18,190
)
(6,525
)
35.9
%
Other expense (income):
Amortization of debt issuance costs and discount
—
312
(312
)
(100.0
)
%
Interest income
(1,168
)
(1,305
)
137
(10.5
)
%
Interest expense
—
173
(173
)
(100.0
)
%
Other income
(742
)
—
(742
)
—
%
Warrant liabilities fair value adjustment
(8,903
)
(5,094
)
(3,809
)
74.8
%
Total other income
(10,813
)
(5,914
)
(4,899
)
82.8
%
Net loss
$
(13,902
)
$
(12,276
)
$
(1,626
)
13.2
%
Revenue. For the six months ended June 30, 2026 and 2025, revenue consists of $0.2 million and $1.6 million in license agreement revenue associated with the GSK license agreement.
Research and Development. For the six months ended June 30, 2026, research and development expenses increased to $16.2 million compared to $12.3 million for the six months ended June 30, 2025. The increase of $4.0 million, or 32%, for the six months ended June 30, 2026, was primarily driven by the $8.0 million IPR&D expense recognized for the acquisition of SCY-770 in the six months ended June 30, 2026, offset in part by a decrease of $1.5 million in preclinical expense, a decrease of $1.6 million CMC expense, a decrease of $0.7 million in salary expense, and a net decrease of $0.2 million in other research and development expense.
The $1.6 million decrease in CMC was primarily associated with a $1.6 million decrease in costs and expenses associated with the manufacturing of ibrexafungerp for the MARIO Phase 3 study which was terminated in the fourth quarter of 2025. The $1.5 million decrease in preclinical expense was primarily associated with certain preclinical costs associated with the development of the oral and IV formulations of SCY-247 in the six months ended June 30, 2025.
Selling, General & Administrative . For the six months ended June 30, 2026, selling, general and administrative expenses increased to $8.7 million compared to $7.5 million for the six months ended June 30, 2025. The increase of $1.2 million, or 16%, was primarily due to the recognition of $0.9 million in offering costs for the March 2026 Private Placement warrant issuance in the six months ended June 30, 2026 and a $0.6 million increase in other professional fees, offset in part by a net decrease of $0.3 million in other selling, general, and administrative expense.
Amortization of Debt Issuance Costs and Discount . For the six months ended June 30, 2025, we recognized $0.3 million in amortization of debt issuance costs and discount. The debt issuance costs and discount for our March 2019 convertible notes, which were fully paid at maturity in March 2025, primarily consisted of an allocated portion of advisory fees and other issuance costs and the initial fair value of the derivative liability.
Interest Income . For the six months ended June 30, 2026 and 2025, we recognized $1.2 million and $1.3 million, respectively, in interest income on our money market funds and investments.
Interest Expense . For the six months ended June 30, 2025, we recognized $0.2 million in interest expense on our March 2019 convertible notes which were fully paid at maturity in March 2025.
Other Income . For the six months ended June 30, 2026, we recognized $0.7 million in other income associated with certain research and development tax credits.
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Warrant Liabilities Fair Value Adjustment . For the six months ended June 30, 2026 and 2025, we recognized gains of $8.9 million and $5.1 million, respectively, in the fair value adjustment related to the warrant liabilities primarily due to the decrease in our stock price during the respective periods.
Liquidity and Capital Resources
Sources of Liquidity
As of June 30, 2026, we had cash and cash equivalents and investments of $71.1 million, compared to cash and cash equivalents and short-term investments of $56.3 million as of December 31, 2025. We believe our capital resources are sufficient to fund our on-going operations for a period of at least 12 months subsequent to the issuance of the accompanying unaudited condensed consolidated financial statements. As of June 30, 2026, our accumulated deficit was $399.0 million.
Consistent with our operating plan, we expect to incur significant research and development expenses and selling, general and administrative expenses. As a result of our continued significant expenses, we will need additional capital to fund our operations, which we may obtain through one or more of equity offerings, debt financings, other non-dilutive third-party funding (e.g., grants), strategic alliances and licensing or collaboration arrangements. We may offer shares of our common stock pursuant to our effective shelf registration statements or our “at-the-market” offering program pursuant to the Controlled Equity Offering SM Sales Agreement with Cantor Fitzgerald & Co.
Cash Flows
The following table sets forth the significant sources and uses of cash for the six months ended June 30, 2026 and 2025 (in thousands):
Six Months Ended June 30,
2026
2025
Cash, cash equivalents, and restricted cash, January 1
$
21,448
$
16,595
Net cash used in operating activities
(22,986
)
(14,960
)
Net cash (used in) provided by investing activities
(25,283
)
23,713
Net cash provided by (used in) financing activities
37,497
(14,084
)
Net decrease in cash, cash equivalents, and restricted cash
(10,772
)
(5,331
)
Cash, cash equivalents, and restricted cash, June 30
$
10,676
$
11,264
Operating Activities
The $8.0 million increase in net cash used in operating activities for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025 was primarily due to the $8.0 million payment for the acquisition of SCY-770 and the continued development costs associated with SCY-247 in the six months ended June 30, 2026.
Net cash used in operating activities of $23.0 million for the six months ended June 30, 2026, primarily consisted of the $13.9 million net loss adjusted for non-cash charges that included the gain on change in fair value of the warrant liabilities of $8.9 million, $0.9 million in offering costs for the March 2026 Private Placement warrant issuance, and stock-based compensation expense of $1.1 million, partially offset by a net unfavorable change in operating assets and liabilities of $2.3 million. The net unfavorable change in operating assets and liabilities of $2.3 million is due to the increase of $1.5 million in operating assets and a decrease of $0.8 million in operating liabilities. The $1.5 million increase in prepaid expenses, other current assets, deferred costs, and other was primarily due to the $0.9 million increase in other current assets for certain tax credit receivables recognized in the six months ended June 30, 2026.
Net cash used in operating activities of $15.0 million for the six months ended June 30, 2025, primarily consisted of the $12.3 million net loss adjusted for non-cash charges that included the gain on change in fair value of the warrant liability of $5.1 million and stock-based compensation expense of $1.6 million, partially offset by a net favorable change in operating assets and liabilities of $0.6 million. The net favorable change in operating assets and liabilities of $0.6 million is due to a net favorable change of $1.1 million due to the decrease in operating assets offset by a net unfavorable change of $0.4 million due to the decrease in operating liabilities The net $1.1 million decrease in operating assets is primarily due to a $0.8 million decrease in prepaid expenses, other assets, deferred costs, and other. The $0.8 million decrease in prepaid expenses, other assets, deferred costs, and other was primarily due to the $0.4 million decrease in prepaid research and development services that were recognized in the six months ended June 30, 2025 and a $0.4 million decrease in other current assets. The net unfavorable change of $0.4 million in operating liabilities is primarily due to the $1.7 million increase in accounts payable, offset in part by a $1.3 million decrease in accrued expenses primarily due to the $0.9 million decrease in accrued bonus which was paid in the six months ended June 30, 2025.
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Investing Activities
Net cash used in investing activities of $25.3 million for the six months ended June 30, 2026 consisted of purchases and maturities of investments of $39.5 million and $14.2 million, respectively.
Net cash provided by investing activities for the six months ended June 30, 2025 consisted of the maturities of investments of $23.7 million.
Financing Activities
Net cash provided by financing activities of $37.5 million for the six months ended June 30, 2026, consisted primarily of the $40.0 million in proceeds received from the March 2026 Private Placement.
Net cash used in financing activities of $14.1 million for the six months ended June 30, 2025, consisted primarily of the $14.0 million repayment of the convertible debt in March 2025.
Future Funding Requirements
We expect to incur expenses in connection with our efforts to further development activities, particularly as we continue the research, development and clinical trials of, and seek regulatory approval for, product candidates. We anticipate that we will need substantial additional funding in connection with our continuing future operations.
We are continually evaluating our operating plan and assessing the optimal cash utilization for our SCY-770 and SCY-247 development strategy. We have based our estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect. Because of the numerous risks and uncertainties associated with the development and commercialization of product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenses necessary to complete the development of product candidates.
Our future capital requirements will depend on many factors, including:
• the progress, and costs, of the clinical development of SCY-770 and SCY-247;
• the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals;
• the ability of product candidates to progress through clinical development successfully;
• our need to expand our research and development activities;
• the costs associated with securing, establishing and maintaining manufacturing capabilities;
• our ability to successfully achieve the regulatory and commercial milestones under our GSK license agreement;
• our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;
• our need and ability to hire additional management and scientific and medical personnel;
• our need to implement additional, as well as to enhance existing, internal systems and infrastructure, including financial and reporting processes and systems and the associated compliance costs; and
• the economic and other terms, timing and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future.
Until such time, if ever, as we can generate substantial revenue from product sales, we expect to finance our cash needs through a combination of net proceeds from equity offerings, debt financings, or other non-dilutive third-party funding (e.g., grants), strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our common stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through sales of assets, other third-party funding, strategic alliances and licensing or collaboration arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.
Significant Estimates and Judgments
Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which we have prepared in accordance with accounting principles generally accepted in the
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United States, or GAAP. The preparation of our condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our condensed consolidated financial statements, as well as the reported revenues and expenses during the reported periods. We evaluate these estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Our critical estimates and judgments are described within Item 7 to our Annual Report on Form 10-K for the year ended December 31, 2025.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.