What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-23 compared with 2025-02-24 · 141 added, 114 removed, 247 unchanged (51% of the section changed)

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The Company’s current lead development candidate is ivonescimab, a novel, potential first-in-class bispecific antibody intending to combine the effects of immunotherapy via a blockade of PD-1 with the anti-angiogenesis effects of an anti-VEGF compound into a single molecule.

On December 5, 2022, the Company entered into a Collaboration and License Agreement (the “License Agreement”) with Akeso, Inc.

and its affiliates (collectively, “Akeso”) pursuant to which the Company has in-licensed intellectual property related to ivonescimab.

Through the License Agreement, the Company obtained the rights to

develop and commercialize ivonescimab in the United States, Canada, Europe, and Japan.

On December 5, 2022, the Company entered into the License Agreement with Akeso pursuant to which the Company has in-licensed intellectual property rights related to ivonescimab (as amended, the “License Agreement”).

Through the License Agreement, the Company obtained the rights to develop and commercialize ivonescimab in the United States, Canada, Europe, and Japan.

The License Agreement and transaction closed in January 2023 following customary waiting periods.

On June 3, 2024, the Company entered into an amendment to the License Agreement with Akeso to expand its territories covered under the License Agreement to also include the Latin America, Middle East and Africa regions (collectively, and as expanded, the "Licensed Territory").

On June 3, 2024, the Company entered into the Second Amendment with Akeso to expand its territories covered under the License Agreement to also include Latin America, including Mexico and all countries in Central America and South America, the Middle East and Africa.

The Company’s operations are focused on the development of ivonescimab and other future activities, as the Company determines.

The Company has begun its development for ivonescimab in non-small cell lung cancer (“NSCLC”), specifically launching Phase III clinical trials in the following proposed indications:

(a) ivonescimab combined with chemotherapy in patients with epidermal growth factor receptor (“EGFR”)-mutated, locally advanced or metastatic non-squamous NSCLC who have progressed after treatment with a third-generation EGFR tyrosine kinase inhibitor (“TKI”) (“HARMONi”);

(b) ivonescimab combined with chemotherapy in first-line metastatic NSCLC patients (“HARMONi-3”)

In addition, the Company has begun to activate clinical trial sites in the United States for a Phase III clinical study in the following proposed indication:

The Company is developing ivonescimab in NSCLC and CRC, specifically conducting Phase III clinical trials in the following proposed indications:

(a) ivonescimab combined with chemotherapy in patients with EGFR-mutated, locally advanced or metastatic non-squamous NSCLC who were previously treated with a third-generation EGFR TKI (“HARMONi”);

(b) ivonescimab combined with chemotherapy in patients with first-line metastatic NSCLC (including separate statistical analyses planned for patients with squamous NSCLC and non-squamous NSCLC) (“HARMONi-3”);

(c) ivonescimab monotherapy in patients with first-line metastatic NSCLC whose tumors have high PD-L1 expression (“HARMONi-7”);

(d) ivonescimab combined with chemotherapy in patients with first-line unresectable metastatic CRC (“HARMONi-GI3”).

In October 2024, the Company completed enrollment in its HARMONi clinical trial.

The Company expects to disclose topline results from HARMONi in mid-2025, depending upon maturation of the data per the protocol.

In May 2025, we announced topline results from our multiregional, double-blinded, placebo-controlled, Phase III study HARMONi.

At the prespecified primary data analysis, ivonescimab in combination with chemotherapy demonstrated a statistically significant improvement in PFS, the magnitude of which we believe to be clinically meaningful, with a hazard ratio of 0.52 (95% CI:

p<0.00001) compared to placebo in combination with chemotherapy;

median PFS was 6.8 months for those patients receiving ivonescimab plus chemotherapy compared to 4.4 months for those receiving chemotherapy.

PFS was assessed by BICR.

We believe the PFS hazard ratio that was observed in both Asian and Western sub-populations to be clinically meaningful.

The primary analysis demonstrated the consistency of the magnitude of the PFS benefit between patients randomized in Asian and Western territories, as well as the consistency in a single-region study (HARMONi-A) with this multiregional study.

In a longer-term follow-up of PFS, which included all Western patients and at least six months of follow-up time for all patients, ivonescimab plus chemotherapy demonstrated a consistent hazard ratio in PFS as the primary PFS analysis observed HR = 0.57;

0.46 – 0.71).

With the longer-term follow-up analysis, consistency of the magnitude of PFS benefit was demonstrated between patients randomized in Asia and Western patients when measured by hazard ratio.

This longer-term follow-up analysis of PFS was performed at the time of the primary OS analysis.

Ivonescimab in combination with chemotherapy showed a positive trend in OS in the primary analysis without achieving a statistically significant benefit with a hazard ratio of 0.79 (95% CI:

This trend provides further support for its use in EGFRm NSCLC post-TKI therapy, a setting where high unmet need continues to exist with limited approved options in the United States and other western territories.

Currently there are no FDA-approved regimens that have demonstrated a statistically significant OS benefit in this patient setting.

Both Asian and North American patients demonstrated a positive trend in OS.

The results of the primary analysis in this multiregional study were consistent with that of the single-region randomized Phase III HARMONi-A study, which demonstrated a statistically significant OS benefit with a hazard ratio of 0.74 in the primary OS analysis in a similar patient population.

In September 2025, an additional ad hoc OS analysis was performed for the HARMONi study, whereby the Western patients were followed for a longer period of time (Asian patients were locked at the time of the primary analysis).

In this analysis that included longer-term follow-up of Western patients (median follow-up time of Western patients of 13.7 months), a hazard ratio consistent with the primary analysis was observed with an improved nominal p-value (HR=0.78;

nominal p=0.0332).

Median OS for this analysis remained the same in both arms as was observed in the primary analysis.

Median OS in Western patients receiving ivonescimab was 17.0 months compared to 14.0 months for those receiving placebo (HR=0.84);

median OS in North American patients, specifically, had not yet been reached in the ivonescimab arm compared to 14.0 months in the placebo arm (HR=0.70).

The hazard ratios for Western patients in totality, as well as patients from the North American and European regions individually, improved from the primary OS analysis to the analysis with longer-term follow-up of Western patients.

Consistent benefit was observed across pre-defined subgroups.

The dual primary endpoints were allocated separate alpha levels and tested individually.

The alpha was recycled from the PFS to the OS analysis upon the successful achievement of the PFS endpoint.

Based on the results of the HARMONi clinical trial, we submitted a BLA in the fourth quarter of 2025 in order to seek approval for ivonescimab plus chemotherapy for this proposed indication.

The positive results of the multiregional Phase III study are detailed further under “Product Pipeline” below.

As previously disclosed, the FDA noted that a statistically significant OS benefit is necessary to support marketing authorization in this setting.

After careful consideration of the safety and efficacy profile of the current FDA-approved options for patients in this setting, the positive results of the Phase III multiregional study, including regional consistency, as well as discussions with key opinion leaders and those physicians who have administered ivonescimab to patients in a clinical study setting, we believe that the safety and efficacy data generated in the HARMONi study demonstrates that the ivonescimab regimen offers a potential treatment option for patients impacted by EGFR-mutant NSCLC in this setting with a favorable benefit-risk profile despite the lack of a statistically significant OS benefit.

Summit announced in January 2026 that the FDA accepted for filing the BLA seeking approval for ivonescimab in combination with chemotherapy for this proposed indication.

The FDA noted it intends to perform a complete review of the accepted and filed BLA, including planned mid-cycle and wrap-up meetings, and, subject to major deficiencies not being identified during the FDA’s review, proposed labeling, prior to the Prescription Drug User Fee Act goal action date of November 14, 2026.

Key Components of our Results of Operations

Operating expenses

The majority of our operating expenses since inception have consisted of research and development activities and general and administrative costs.

Research and Development and Acquired in-process research and development Expenses

Research and Development Expenses

Research and development expenses consist of all costs associated with our research and development activities.

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General and administrative expenses consist primarily of salaries and benefits related to our executive, finance, business development, human resources, legal and other support functions.

Other general and administrative expenses include stock-

based compensation expenses, market research costs, facility-related costs, consulting costs and expenses associated with the requirements of being a publicly traded company in the United States, including insurance, legal, audit and taxation services fees.

Other general and administrative expenses include stock-based compensation expenses, market research costs, facility-related costs, consulting costs and expenses associated with the requirements of being a publicly traded company in the United States, including insurance, legal, audit and taxation services fees.

We anticipate that our general and administrative expenses will continue to increase in the future as we increase our headcount to support our planned clinical trials of ivonescimab, continued research and development and potential commercialization of our product candidates.

We also anticipate continued accounting, audit, regulatory, compliance, insurance and investor and public relations expenses associated with being a publicly traded company in the United States.

Other operating (expense) income, net

Other operating (expense) income, net consists primarily of research and development ("R&D") tax credits received in the United Kingdom (“U.K.”).

We benefit from two U.K.

research and development tax credit cash rebate regimes:

Small and Medium Enterprise Program (“SME Program”) and the Research and Development Expenditure Credit Program (“RDEC Program”).

Under both schemes, we receive cash payments that are not dependent on our pre-tax net income levels.

Based on criteria established by His Majesty’s Revenue and Customs (“HMRC”), a portion of expenditures being carried out in relation to our pipeline research and development, clinical trials management and third-party manufacturing development activities are eligible for the SME regime tax credits and amounts recognized from grants and clinical trial support from government entities, philanthropic, non-government and not-for-profit organizations.

Other Income, Net

Other expense, net primarily consists of foreign currency net gains and losses and investment income related to investments in money market funds and U.S.

Other income, net primarily consists of foreign currency net gains and losses and investment income related to investments in money market funds and U.S.

treasury securities.

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Due to the nature of our business, we have generated losses since inception.

We have recorded a full valuation allowance against the deferred tax assets with respect to these tax losses in excess of our deferred tax liabilities in each jurisdiction because we do not consider it more likely than not that there will be suitable taxable profits in the foreseeable future based on the evidence available against which to offset these losses.

have recorded a full valuation allowance against the deferred tax assets with respect to these tax losses in excess of our deferred tax liabilities in each jurisdiction because we do not consider it more likely than not that there will be suitable taxable profits in the foreseeable future based on the evidence available against which to offset these losses.

Results of Operations

For a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2023 compared to December 31, 2022, please refer to Item 7 of Part II, “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, 2023, which was

filed with the SEC on February 20, 2024, and is available on the SEC's website at www.sec.gov and our Investor Relations website at www.smmttx.com/investor-information.

For a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2024 compared to December 31, 2023, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 24, 2025, and is available on the SEC’s website at www.sec.gov and our Investor Relations website at www.smmttx.com/investor-information.

Amounts reported in millions within this Annual Report on Form 10-K are computed based on the amounts in thousands, and therefore, the sum of components may not equal the total amount reported in millions due to rounding.

Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024

(in millions) Year Ended December 31,

2024 2023 $ Change

Year Ended December 31,

(in millions) 2025 2024 $ Change

Operating expenses:

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Acquired in-process research and development — 15.0 (15.0)

15.0 520.9 (505.9)

General and administrative 556.7 60.2 496.5

Total operating expenses 1,094.4 226.0 868.4

Other operating income, net 0.3 1.0 (0.7)

Operating loss (226.0) (609.6) 383.6

Other income, net 14.8 13.4 1.4

13.4 11.2 2.2

Interest expense — (8.7) 8.7

Net loss $ 1,079.6 $ 221.3 $ 858.3

Operating Expenses

Research and Development and Acquired in-process research and development Expenses

The table below summarizes our research and development and acquired in-process research and development expenses by category for the year ended December 31, 2024 and 2023, respectively.

(in millions) Year Ended December 31,

2024 2023 $ Change

Research and Development Expenses

The table below summarizes our research and development expenses by category for the year ended December 31, 2025 and 2024, respectively.

Year Ended December 31,

(in millions) 2025 2024 $ Change

Oncology clinical trial related costs $ 266.4 $ 100.9 $ 165.5

Acquired in-process research and development — 15.0 (15.0)

Anti-infectives (1)

0.3 (1.5) 1.8

Compensation related costs, excluding stock-based compensation 52.7 33.9 18.8

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Total $ 537.7 $ 165.8 $ 371.9

(1) Anti-infectives includes the Company’s antibiotic pipeline research activities and ridinilazole or CDI program activities (collectively, “Anti-infectives).

The entry into the License Agreement with Akeso, Inc., effective in January 2023, represents a significant change in our strategy from anti-infectives to the therapeutic area of oncology.

We invested our resources in the clinical development of ivonescimab during the years ended December 31, 2024 and 2023.

The entry into the License Agreement represents a significant change in our strategy from anti-infectives to the therapeutic area of oncology.

We invested our resources in the clinical development of ivonescimab in the periods presented.

Oncology clinical trial related costs represent our investment in the clinical development of ivonescimab, known as SMT112 in the Licensed Territory.

Research and development expenses (excluding acquired in progress research and development noted below) increased by $91.4 million during the year ended December 31, 2024, compared to the same period in the prior year.

This increase was primarily due to our continued investment in oncology clinical trial related costs for ivonescimab, known as SMT112 in the Licensed Territory, resulting in an increase of $65.7 million and an increase in compensation and stock-based compensation related expenses of $23.9 million in the year ended December 31, 2024, to support the clinical development of ivonescimab as we continue to hire additional clinical resources in the oncology field, coupled with acceleration charges related to the achievement of certain market conditions on performance stock option awards.

Research and development expenses increased by $371.9 million during the year ended December 31, 2025, compared to the same period in the prior year.

This increase was in part due to the increase in stock-based compensation expense of $202.6 million for the year ended December 31, 2025, as a result of the modification to our performance-based stock option awards during the second quarter of 2025.

In addition, our continued investment in oncology expenses for ivonescimab, known as SMT112 in our Licensed Territory, resulted in an increase of $165.5 million for the year ended December 31, 2025, primarily due to adding new clinical trials and expanding current clinical trials from last year.

We expect oncology-related research and development costs to continue to increase as we progress with the development of ivonescimab.

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This was recorded in our consolidated statement of operations and comprehensive loss as acquired in process research and development expenses for the year ended December 31, 2024.

Our investment in ivonescimab included $520.9 million for the year ended December 31, 2023 related to our upfront milestone payments pursuant to the License Agreement with Akeso.

The License Agreement closed in January 2023, and both Akeso and Summit entered into the Common Stock Issuance Agreement (“Issuance Agreement”).

Pursuant to the License Agreement and Issuance Agreement, Akeso elected to receive 10 million shares of our common stock in lieu of $25.1 million cash and was paid $274.9 million in cash as the initial upfront payment.

The remaining $200.0 million upfront payment was paid on March 6, 2023.

Acquired in-process research and development expense comprised of the $474.9 million paid in cash, the fair value of the 10 million shares of common stock on the date of closing the transaction of $45.9 million, and $0.1 million of direct transactions costs incurred.

General and Administrative Expenses

The table below summarizes our general and administrative expenses by category for the year ended December 31, 2025 and 2024, respectively.

(in millions) Year Ended December 31,

2024 2023 $ Change

Year Ended December 31,

(in millions) 2025 2024 $ Change

Compensation related costs, excluding stock-based compensation $ 22.9 $ 14.7 $ 8.2

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Legal fees and professional services 11.2 4.8 6.4

4.8 6.9 (2.1)

Other general and administrative expenses 8.8 5.7 3.1

Total $ 556.7 $ 60.2 $ 496.5

General and administrative expenses increased by $30.2 million for the year ended December 31, 2024, compared to the same period in the prior year, primarily due to an increase of $25.3 million in stock-based compensation related to an increase in equity award grants and the acceleration charges related to the achievement of certain market conditions on performance stock option awards.

Additionally, compensation-related costs, excluding stock-based compensation increased by $4.6 million, for the year ended December 31, 2024, compared to the same period in the prior year, as the Company is focused on building its executive management team to continue supporting its growth.

General and administrative expenses increased by $496.5 million for the year ended December 31, 2025, compared to the same period in the prior year.

The increase was primarily due to the increase in stock-based compensation expense of $478.8 million for the year ended December 31, 2025, as a result of the modification to our performance-based stock option awards during the second quarter of 2025.

In addition, compensation related costs, excluding stock-based compensation, increased by $8.2 million, for the year ended December 31, 2025, compared to the same period in the prior year, as the Company is focused on building its executive management team and legal fees and professional services increased by $6.4 million for the year ended December 31, 2025, compared to the same period in the prior year to continue supporting the development of ivonescimab.

We expect general and administrative expenses to continue to increase as we scale our infrastructure and management to support development of ivonescimab.

Other Operating (Expense) Income, net

The table below summarizes our other operating (expense) income by category for the year ended December 31, 2024 and 2023, respectively:

(in millions) Year Ended December 31,

2024 2023 $ Change

Research and development tax credits $ 0.3 $ 1.0 $ (0.7)

Total $ 0.3 $ 1.0 $ (0.7)

research and development tax credits decreased by $0.7 million for the year ended December 31, 2024, compared to the same period in the prior year, as management updated its estimates for qualifying expenditures relating to ivonescimab, which resulted in a decrease in tax credits claimed.

Other Income (Expense), Net

The table below summarizes our other income (expense), net by category for the year ended December 31, 2024 and 2023, respectively.

(in millions) Year Ended December 31,

2024 2023 $ Change

Foreign currency (losses) gains

Other Income, Net

The table below summarizes our other income, net by category for the year ended December 31, 2025 and 2024, respectively.

Year Ended December 31,

(in millions) 2025 2024 $ Change

Foreign currency loss

$ (0.6) $ (0.1) $ (0.5)

Investment income 15.5 13.5 2.0

13.5 10.5 3.0

Reclassification of cumulative currency translation gain

Other expense, net

Other (0.1) — (0.1)

Total $ 14.8 $ 13.4 $ 1.4

Other income (expense), net increased by $2.2 million for the year ended December 31, 2024, compared to the same period in the prior year, primarily due to an increase of $3.0 million in interest income due to the higher short-term investments balance, partially offset by unfavorable changes in foreign currency losses of $0.7 million.

Other income, net increased by $1.4 million for the year ended December 31, 2025, compared to the same period in the prior year, primarily due to an increase of $2.0 million in interest income due to the higher cash equivalents and short-term investments balance.

Interest Expense

Interest expense on promissory notes payable to related parties decreased to $8.7 million for the year ending December 31, 2024, from $16.5 million during the year ending December 31, 2023, due to full payment of promissory note in October 2024.

Interest expense decreased for the year ending December 31, 2025 compared to the same period in the prior year, due to the repayment in full of the promissory note in October 2024.

Liquidity and Capital Resources

Sources of Liquidity

To date, we have financed our operations primarily through issuances of our common stock, including our most recent private placement issued in September 2024 for gross proceeds of $235.0 million and the raise of $44.2 million gross proceeds from our ATM Agreement during 2024, issuance of debt, and receipt of payments to us under license and collaboration arrangements.

To date, we have financed our operations primarily through issuances of our common stock, including our most recent private placements issued in October 2025 and September 2024 for gross proceeds of $500.0 million and $235.0 million, respectively,

and the raise of $150.7 million gross proceeds from our ATM Agreement since inception, issuance of debt, and receipt of payments to us under license and collaboration arrangements.

We have devoted substantially all of our efforts to research and development, including clinical trials.

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In addition, our expenses will increase if and as we:

• invest in clinical development of ivonescimab in the Licensed Territory;

• invest in clinical development of ivonescimab in our Licensed Territory;

• conduct research and continue development of additional product candidates;

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During the year ended December 31, 2025, we incurred a net loss of $1,079.6 million, and cash flows used in operating activities was $322.9 million.

As of December 31, 2024 we had an accumulated deficit of $1,214.6 million, cash and cash equivalents and short-term investments in U.S.

treasury securities of $412.3 million.

As of December 31, 2025 we had an accumulated deficit of $2,294.2 million, cash and cash equivalents and short-term investments of $713.4 million.

We expect to continue to generate operating losses for the foreseeable future.

We have evaluated whether our cash, cash equivalents and short-term investments provide sufficient cash to fund our operating cash needs for the next 12 months from the date of issuance of these annual financials.

We concluded that our cash, cash equivalents and short-term investments as of December 31, 2024 will fund our operating cash needs for at least the next 12 months from the date of issuance of these financial statements.

From time to time, we may raise additional equity or debt capital through both registered offerings off of a shelf registration, including “at-the-market” offerings, and private offerings of securities.

During the year ended December 31, 2025, the Company raised gross proceeds of $500,037 from a private placement and $106,498 from the Company’s at-the-market sales agreement.

With these recent financings, the Company has evaluated and concluded that its cash, cash equivalents and short-term investments provide sufficient cash to fund its operating cash needs for at least the next 12 months from the date of issuance of these consolidated financial statements.

From time to time, we may raise additional equity or debt capital through both registered offerings off of a shelf registration, including ATM offerings, and private offerings of securities.

On February 20, 2024, we filed a shelf registration statement on Form S-3 with the SEC, which the SEC declared effective on February 27, 2024.

Through our shelf registration statement we may, from time to time, sell up to an aggregate of $450 million of our common stock, preferred stock, debt securities, depositary shares, warrants, subscription rights, purchase contracts, or units.

Of the $450 million of liquidity available to us under this shelf registration statement, on May 13, 2024, we had established an at-the-market offering program with J.P.

Morgan Securities LLC, as sales agent, in the amount of up to $90 million, of which $45.8 million remains available for sale as of December 31, 2024.

If we require or elect to seek additional capital through debt or equity financing in the future, we may not be able to raise capital on terms acceptable to us or at all.

To the extent we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities will result in dilution to our stockholders.

If we are required and unable to raise additional capital when desired, our business, operating results and financial condition may be adversely affected.

As of the date of this report, additional capital has not been secured.

Through our shelf registration statement we may, from time to time, sell up to an aggregate of $450.0 million of our common stock, preferred stock, debt securities, depository shares, warrants, subscription rights, purchase contracts, or units.

Of the $450.0 million of liquidity available to us under this shelf registration statement, on May 13, 2024, we had established an ATM offering program with J.P.

Morgan Securities LLC, as sales agent, in the amount of up to $90.0 million.

On August 11, 2025, we entered into an amendment (the “Amendment”) to the distribution agreement, which amended that certain distribution agreement, dated May 13, 2024, by and between us and sales agent (the “Original Distribution Agreement” and, as amended by the Amendment, the “Distribution Agreement”).

Pursuant to the Amendment, the Original Distribution Agreement was amended to, among other things, increase the aggregate offering price of shares of the Company’s common stock, par value $0.01 per share, from time to time, through the sales agent, by up to an additional $360.0 million.

The remaining gross proceeds available under the Distribution Agreement as of December 31, 2025 was approximately $299.3 million.

In addition to the payments already made to Akeso, under the License Agreement and Second Amendment, there are additional potential milestone payments of $4.56 billion, as Akeso will be eligible to receive regulatory milestones of up to $1.05 billion and commercial milestones of up to $3.51 billion.

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If we raise additional funds through collaborations, strategic alliances or marketing, distribution, or licensing 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.

If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves, which could materially adversely affect our business prospects or our ability to continue operations.

The following table summarizes the results of our cash flows for the years ended December 31, 2024 and 2023.

(in millions) Year Ended December 31,

The following table summarizes our cash flows for the years ended December 31, 2025 and 2024.

Year Ended December 31,

(in millions) 2025 2024

Net cash used in operating activities $ (322.9) $ (142.1)

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Operating Activities

Net cash used in operating activities for the year ended December 31, 2024 was $142.1 million and primarily resulted from a net loss of $221.3 million, which included an adjustment of $15.0 million in cash payments related to investing activities for the purchase of in-process research and development from Akeso under the terms of the License Agreement and the associated direct transaction costs, non-cash charges of $48.7 million and a net increase in working capital of $15.5 million.

Net cash used in operating activities for the year ended December 31, 2025 was $322.9 million and primarily consisted of net loss of $1,079.6 million and a $31.4 million net change in operating assets and liabilities, partially offset by non-cash charges of $725.2 million.

The non-cash charges primarily consisted of $732.4 million of stock-based compensation driven by the modification to outstanding performance-based stock option awards which removed the performance-based vesting criteria, partially offset by $7.0 million relating to amortization of the discount on short-term investments in U.S.

Treasury securities.

The net change in working capital is primarily due to a $15.3 million increase in accounts payable, a $12.9 million increase in accrued liabilities and other current liabilities, a $4.9 million decrease in prepaid expenses and other current assets, a $2.9 million increase in accrued compensation, partially offset by a $4.9 million increase in other assets.

Non-cash charges primarily include $51.0 million of stock-based compensation, partially offset by $2.6 million related to the amortization of discount on short-term investments.

The net increase in working capital is primarily due to an $11.9 million increase in accrued liabilities and other current liabilities, a $6.6 million increase in accrued compensation, a $2.5 million decrease in other assets, and a $2.0 million increase in accounts payable, partially offset by a $7.9 million increase in prepaid expenses and other current assets.

Net cash used in operating activities for the year ended December 31, 2023 was $76.8 million and resulted from a net loss of $614.9 million, which included an adjustment of $475.0 million in cash payments related to investing activities for the purchase of in-process research and development from Akeso under the terms of the License Agreement and the associated direct transaction costs and non-cash charges of $63.6 million and a net decrease in working capital of $0.5 million.

Non-cash charges primarily include a $45.9 million expense for the issuance of shares in lieu of cash for the Akeso upfront payment, $14.1 million of stock-based compensation, $6.3 million related to non-cash interest expense, and a $0.5 million impairment charge, partially offset by $1.9 million related to amortization of discount on short-term investments and $0.8 million in a net unrealized foreign exchange gain.

The net increase in working capital is primarily due to a $3.7 million increase in other long-term assets, a $2.4 million decrease in accrued liabilities, and a $0.4 million decrease in lease liabilities, partially offset by a $4.2 million decrease in the research and development tax credit receivable and a $2.3 million increase in accounts payable.

The net change in operating assets and liabilities is primarily due to an $11.9 million increase in accrued liabilities and other current liabilities, a $6.6 million increase in accrued compensation, a $2.5 million decrease in other assets, and a $2.0 million increase in accounts payable, partially offset by a $7.4 million increase in prepaid expenses and other current assets.

Investing Activities

Net cash used in investing activities for the years ended December 31, 2025 was $174.3 million and primarily consisted of net purchases of short-term investments of $173.7 million.

Net cash used in investing activities for the years ended December 31, 2024 was $205.3 million and was primarily due to $190.2 million of net purchases of short-term investments and $15.0 million of cash payments made to Akeso pursuant to the License Agreement.

Net cash used in investing activities for the years ended December 31, 2023 was $587.8 million and was primarily due to $475.0 million of cash payments made to Akeso pursuant to the License Agreement and $112.9 million of net purchases of short-term investments.

Financing Activities

Net cash provided by financing activities for the year ended December 31, 2025 was $617.5 million and primarily consisted of proceeds from a private placement of $500.0 million, $104.5 million net proceeds from our current Distribution Agreement, $7.3 million of proceeds received related to the exercise of warrants and proceeds received of $5.7 million related to employee stock awards and purchase plans.

Net cash provided by financing activities for the year ended December 31, 2024 was $381.2 million and was primarily due to $434.9 million of proceeds from various private placements, $43.0 million net proceeds from our current ATM Agreement, and proceeds received of $2.7 million related to employee stock awards, partially offset by a $100.0 million early principal payment on promissory notes payable to a related party.

Net cash provided by financing activities for the year ended December 31, 2023 was $86.5 million and was primarily due to net proceeds received of $104.1 million (net of paid issuance costs) related to the issuance of common stock from the 2023 Rights Offering and net of the extinguishment of $395.3 million of principal and accrued interest due and payable by us under the $400 million Duggan Promissory Note in satisfaction of the subscription price for the shares subscribed by Mr.

Duggan in the 2023 Rights Offering, $5.0 million received for the issuance of common stock via a private placement to a related party, and $1.2 million received for the exercise of stock option warrants, partially offset by the repayment of $24.7 million related to promissory notes from related parties.

Contractual Obligations and Commitments

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Operating lease obligations (1)

$ 27.3 $ 3.5 $ 8.2 $ 6.4 $ 9.2

(1) For additional information, please see Note 11 to our consolidated financial statements contained in this Annual Report on Form 10-K.

Debt commitments

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The Notes accrued interest at an initial rate of 7.5%.

All interest on the Notes was paid on the date of signing for the

period through February 15, 2023.

All interest on the Notes was paid on the date of signing for the period through February 15, 2023.

Such prepaid interest was paid in a number of shares of our common stock, par value $0.01 (“Common Stock”) equal to the dollar amount of such prepaid interest, divided by $0.7913 (the consolidated closing bid price immediately preceding the time we entered into the Note Purchase Agreement, plus $.01), which was 9,720,291 shares.

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For additional information about the License Agreement with Akeso, refer to Note 4, “Akeso License and Collaboration Agreement” to the Consolidated Financial Statements included under Item 15, “Exhibits, Financial Statement Schedules.”

Indemnifications

Our certificate of incorporation provides that it will indemnify the directors and officers to the fullest extent permitted by Delaware law.

In addition, we have entered into indemnification agreements with all of the directors and executive officers.

These indemnification agreements may require us, among other things, to indemnify each such director or executive officer for some expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by him or her in any action or proceeding arising out of his or her service as one of our directors or executive officers.

We believe the fair value for these indemnification obligations is minimal.

Accordingly, we have not recognized any liabilities relating to these obligations as of December 31, 2024.

Legal Proceedings

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business.

We are not currently subject to any material legal proceedings.

Litigation Relating to the December 2022 Notes Entered into in Connection with the License Agreement

On March 17, 2025, Rainaldi Revocable Trust, a purported stockholder of the Company, filed a derivative lawsuit in the Delaware Court of Chancery against certain of the Company’s current and former directors and the Company, solely as a nominal defendant, concerning the December 2022 Notes entered into by the Company, Mr.

Duggan and Dr.

Zanganeh in connection with the License Agreement.

The suit asserts claims for breach of fiduciary duty and unjust enrichment and seeks, among other things, unspecified damages, rescission of the shares that Mr.

Duggan and Dr.

Zanganeh received as part of prepaid interest payments under the December 2022 Notes, as well as attorneys’ fees and costs.

Pursuant to the December 2022 Notes, the Company obtained $520 million in bridge financing through three unsecured promissory notes:

(1) a $400 million note issued to Mr.

Duggan due on February 15, 2023;

(2) a $20 million note issued to Dr.

Zanganeh due on February 15, 2023;

and (3) a $100 million note issued to Mr.

Duggan due on September 15, 2023 (the “$100 Million Note”).

The notes had an interest rate of 7.5% through February 15, 2023, with prepaid interest through that date paid in shares valued at $0.7913 per share.

For periods after February 15, 2023, interest would accrue at the U.S.

prime interest rate plus 50 basis points for three months, and thereafter at the U.S.

prime rate plus 300 basis points.

The notes contained no warrant coverage and no security interests.

The Company announced the 2023 Rights Offering on December 6, 2022, which ran from February 7 through March 1, 2023.

The 2023 Rights Offering was fully subscribed, with stockholders purchasing 476,190,471 shares of the Company’s common stock at $1.05 per share, raising $500 million in gross proceeds.

Duggan and Dr.

Zanganeh fully subscribed to their basic subscription rights, with Mr.

Duggan participating by purchasing 376,489,880 shares for approximately $395.31 million.

Following the Company’s fully subscribed $500 million 2023 Rights Offering, Dr.

Zanganeh’s $20 million note was repaid on February 15, 2023, and Mr.

Duggan's $400 million note was repaid.

In the interest of minimizing stockholders dilution, the $100 Million Note was extended, and eventually the $75.5 million repayment was funded through the proceeds of the September 2024 Private Placement in which Mr.

Duggan purchased 3,325,991 shares for an aggregate purchase price of $75.5 million as a participant in the September 2024 Private Placement at a purchase price of $22.70 per share, and the remaining $24.5 million was repaid in full on October 1, 2024, along with $7.3 million in accrued interest.

Defendants’ motion to dismiss the complaint was filed on May 16, 2025 (the “Motion to Dismiss”).

Plaintiff filed a motion to certify certain constitutional questions to the Delaware Supreme Court on May 29, 2025 (the “Motion to Certify”).

Defendants agreed to a stipulation staying briefing on the Motion to Certify and the Motion to Dismiss pending the Delaware Supreme Court’s decision in another case involving substantially the same constitutional questions.

On June 18, 2025, the Court granted such stipulation.

European Patent Opposition

On June 18, 2025, an unknown third party filed a notice of opposition against the Company’s in-licensed EP3882275B1 patent (the “’275 patent”) in the European Opposition Division of the European Patent Office (“EPO”).

The ’275 patent covers Ivonescimab.

The notice primarily asserts that the 275 patent lacks inventive step.

The Company contests these assertions and worked with its collaboration partner, Akeso, to timely file a response before the European Opposition Division of the EPO on January 2, 2026.

Critical Accounting Policies and Significant Judgments and Estimates

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The Company records interest and penalties related to income tax matters as part of income tax expense.

The Company accounts for uncertainty in income taxes by applying a two-step process to determine the amount of tax benefit to be recognized.

First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities.

The Company accounts for uncertain tax positions taken in its tax filings by applying a two-step process to determine the amount of tax benefit to be recognized.

First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities having full knowledge of the facts and applicable tax rules.

If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed as the amount of benefit to recognize in the consolidated financial statements.

The amount of benefits that may be used is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.

The amount of benefits that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.

The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties.

At December 31, 2024 and 2023, the Company had unrecognized tax positions of $2.1 million and $1.1 million, respectively.

Due to the Company’s full valuation allowance, the unrecognized tax benefits would not materially impact the Company’s effective tax rate when recognized.

The Company does not anticipate the total amount of unrecognized tax benefits to significantly increase or decrease in the next 12 months.

The Company’s policy is to recognize interest and penalties related to uncertain tax positions as part of its income tax provision.

At December 31, 2025, 2024, and 2023 the Company had unrecognized tax positions of $3.9 million, $2.1 million, and $1.1 million, respectively.

Due to the Company’s full valuation allowance, the unrecognized tax benefits are not expected to materially impact the Company’s effective tax rate when recognized or significantly increase or decrease in the next 12 months.

In addition, the Company’s policy is to recognize interest and penalties related to uncertain tax positions as part of its income tax provision.

Recent Accounting Pronouncements

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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