What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-23 compared with 2025-03-13 · 326 added, 228 removed, 1097 unchanged (34% of the section changed)

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We undertake no obligation to update forward-looking statements, which reflect events or circumstances occurring after the date of this Form 10-K.

We are an oncology company developing site-specific and novel-format antibody drug conjugates, or ADCs, enabled by our proprietary integrated cell-free protein synthesis platform, XpressCF ® , and our site-specific conjugation platform, XpressCF+ ® .

We aim to design and develop therapeutics using the most relevant and potent modalities, including ADCs, bispecific ADCs, immunostimulatory ADCs, or iADCs, and dual conjugate ADCs, or ADC 2 s.

We are a clinical stage oncology company developing site-specific and novel-format antibody drug conjugates, or ADCs, enabled by our proprietary integrated cell-free protein synthesis platform, XpressCF ® , and our site-specific conjugation platform, XpressCF+ ® .

We aim to design and develop therapeutics using the most relevant and potent modalities, including ADCs, bispecific ADCs, immunostimulatory ADCs, or iADCs, and dual-payload ADCs, or dpADCs.

Our molecules are directed primarily against clinically validated targets where the current standard of care is suboptimal.

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Our mission is to transform the lives of patients by creating medicines with improved therapeutic profiles for areas of unmet need.

Once identified, production of protein drug candidates can be rapidly and predictably scaled in our current Good Manufacturing Practices, or cGMP, compliant manufacturing facility or in the facility of one of our contract development and manufacturing organization, or CDMO, partners.

We have the ability to manufacture our proprietary cell-free extract that supports our production of proteins on a large scale using a semi-continuous fermentation process.

Our highest priority wholly-owned preclinical product candidate is STRO-004.

This product candidate is a single homogeneous ADC directed against tissue factor, or TF, which we intend to develop for the treatment of solid tumors.

We anticipate filing an IND for STRO-004 in the second half of 2025.

Our highest priority wholly-owned product candidate is STRO-004, a single homogeneous ADC directed against tissue factor, or TF, which we are developing for the treatment of solid tumors.

We believe STRO-004 has the potential to be a best-in-class ADC targeting TF.

Preclinical data suggest that STRO-004 has potent antitumor activity and the potential for a differentiated safety profile.

Our other preclinical assets include an ADC targeting Integrinβ6 and ADC 2 s, and iADCs.

We plan to file three INDs over the next three years, including for STRO-004.

Enabled through our proprietary XpressCF® and XpressCF+® platforms, we have entered into multi-target, product-focused collaborations with leading pharmaceutical and biotechnology companies in the field of oncology, with our ongoing relationships that include licensing to Ipsen, on an exclusive basis, the right to research, develop, manufacture and commercialize STRO-003.

STRO-003 is intended to be developed for the treatment of solid tumors and we anticipate filing of an IND in connection with this program in 2025.

In addition, we have an ongoing iADC collaboration with Astellas.

In preclinical studies, STRO-004 has demonstrated potent antitumor activity and the potential for a differentiated safety profile.

We filed an IND and received IND clearance for STRO-004 in October 2025, and initiated a Phase 1 trial in November 2025.

The Phase 1 open-label, multicenter trial of STRO-004 is designed to evaluate the safety, pharmacokinetics, and preliminary anti-tumor activity of STRO-004 in patients with advanced TF-expressing solid tumors, including non-small cell lung cancer, head and neck squamous cell carcinoma, cervical cancer, colorectal cancer, pancreatic ductal adenocarcinoma, endometrial cancer, and bladder cancer.

The dose-escalation phase includes multiple cohorts with ascending dose levels, supported by strong tolerability in non-human primates at up to 50 mg/kg.

Dosing of patients in the dose level 2 cohort was completed and dosing of patients in the dose level 3 cohort was initiated in February 2026.

We expect to report initial preliminary data, including safety and pharmacokinetic data, from this trial in mid-2026.

Our preclinical assets include STRO-0227 and STRO-006.

STRO-006 is an ADC targeting Integrinß6, or ITGß6.

We believe STRO-006 has the potential to be a best-in-class ADC targeting ITGß6 based on preclinical studies that have demonstrated potent antitumor activity and the potential for a differentiated safety profile.

IND-enabling activities are underway for STRO-006 that could potentially support an IND filing in connection with this program in 2026.

STRO-227 is our first wholly-owned dual-payload ADC, a dual-payload ADC targeting Protein Tyrosine Kinase 7, or PTK7.

This approach incorporates two distinct cytotoxic payloads, one that is designed to inhibit tubulin and another that is designed to inhibit topoisomerase.

We have initiated certain chemistry, manufacturing and controls, or CMC, related activities for the PTK7-targeting dual-payload ADC and anticipate filing an IND in connection with this program in late 2026 or early 2027.

Enabled through our proprietary XpressCF® and XpressCF+® platforms, we have entered into multitarget, product-focused collaborations with leading pharmaceutical and biotechnology companies in the field of oncology and we may enter into additional such collaborations in the future.

We have an ongoing multitarget iADC collaboration with Astellas Pharma Inc.

for the development iADC targets (the “Astellas Agreement”).

Clinical trials for the first iADC licensed pursuant to the Astellas Agreement were initiated in the first quarter of 2026.

addition, we may partner or out-license our wholly-owned preclinical or clinical development programs depending on resource and capital availability.

Our XpressCF ® and XpressCF+ ® platforms have also supported Vaxcyte, focused on discovery and development of vaccines for the treatment and prophylaxis of infectious disease.

The lead programs for Vaxcyte are VAX-31 and VAX-24, its 31-valent and 24-valent, respectively, pneumococcal conjugate vaccine candidates.

Vaxcyte is responsible for performing all research and development activities, and we provide technical support and supply XtractCF ® and other materials to Vaxcyte.

Vaxcyte is responsible for performing all research and development activities and we provide technical support.

In June 2023, we entered into a purchase and sale agreement, or the Purchase Agreement with Blackstone, in which Blackstone acquired the right to receive our 4% royalty, or revenue interest, in the potential future net sales of Vaxcyte products, including Vaxcyte’s pneumococcal conjugate vaccine, or PCV, products, such as VAX-24 and VAX-31.

Following agreement with Vaxcyte on the Form Definitive Agreement and upon effectiveness of an amendment to the licensing agreement, the revenue interest in the 4% royalty on potential future sales of Vaxcyte products other than Vaxcyte’s PCV products reverted to us.

Thus, we retain the right to receive a 4% royalty on sales of Vaxcyte’s products other

than PCV products.

Thus, we retain the right to receive a 4% royalty on sales of Vaxcyte’s products other than PCV products.

In November 2023, Vaxcyte exercised its option to access expanded rights to develop and manufacture cell-free extract for use in development and manufacture of its vaccine products, among certain other rights.

Since the commencement of our operations, we have devoted substantially all of our resources to performing research and development and manufacturing activities in support of our own product development efforts and those of our collaborators, raising capital to support and expand such activities and providing general and administrative support for these operations.

We have funded our operations to date primarily from upfront, milestone and other payments under our collaboration agreements with BMS, Merck, Astellas, Vaxcyte, Ipsen, EMD Serono, BioNova, and Tasly, the issuance and sale of redeemable convertible preferred stock, our initial public offering, or IPO, follow-on public and other offerings of common stock, sales of our common stock through our At-the-Market Facility (“ATM Facility”) pursuant to our Open Market Sales Agreement SM dated April 2, 2021 (the “Sales Agreement”) with Jefferies LLC (“Jefferies”), debt financing, sale of our holdings of Vaxcyte common stock, and the royalty monetization agreement with Blackstone.

We have funded our operations to date primarily from upfront, milestone and other payments under our collaboration agreements with BMS, Merck, Astellas, Vaxcyte, Ipsen, EMD Serono, BioNova, and Tasly, the issuance and sale of redeemable convertible preferred stock, our initial public offering, or IPO, follow-on public and other offerings of common stock, sales of our common stock through our At-the-Market Facility pursuant to our Open Market Sales Agreement SM dated April 2, 2021, or the Sales Agreement, with Jefferies LLC, or Jefferies, debt financing, sale of our holdings of Vaxcyte common stock, and the royalty monetization agreement with Blackstone.

In March 2025, our Board of Directors approved a strategic portfolio review, or the March 2025 Restructuring Plan, with an associated planned reduction in our workforce, as a result of its review of current strategic priorities, resource allocation, and cost reduction intended to reduce operating costs, streamline operations and extend our cash runway.

In connection with this March 2025 Restructuring Plan, we deprioritized further investment in our late stage clinical development product candidate, luveltamab tazevibulin, which development has been terminated, and refocused our activities on our clinical and preclinical pipeline, including STRO-004, STRO-227, and STRO-006.

In addition, in 2025, we made the strategic decision to cease operations at our San Carlos manufacturing facility and rely on an external manufacturing strategy, in which all elements of our product candidates and platform reagents are manufactured by qualified third-party CMOs.

We have identified a contract manufacturing organization, or CMO, to serve as our strategic partner for the production of cell-free extract and have initiated and completed technology transfer to this CMO.

Similarly, we have identified a CMO to produce custom reagents used in our cell-free production and have initiated and completed this technology transfer as well.

Given the success of these technology transfers, we wound down our manufacturing activities in our San Carlos facility and expect to exit the facility completely in 2026 upon expiration of our leases.

In September 2025, we announced a further reduction in our workforce of approximately one third of our remaining employees, or the September 2025 Restructuring Plan, and, together with the March 2025 Restructuring Plan, the Restructuring Plans, which was intended to further reduce operating costs, streamline operations, and extend our cash runway.

We do not have any products approved for commercial sale and have not generated any revenue from commercial product sales.

We had a loss from operations of $238.5 million and a net loss of $227.5 million for the year ended December 31, 2024, which net loss included the non-operating, realized gain of $32.1 million related to the sale of our holdings of Vaxcyte common stock.

We had a loss from operations of $89.3 million and net loss of $106.8 million, which net loss included the non-operating, unrealized gain of $9.9 million related to our holdings of Vaxcyte common stock, for the year ended December 31, 2023.

We had a loss from operations of $158.4 million and a net loss of $191.1 million for the year ended December 31, 2025.

We had a loss from operations of $238.5 million and a net loss of $227.5 million, which net loss included the non-operating, realized gain of $32.1 million related to the sale of our holdings of Vaxcyte common stock, for the year ended December 31, 2024.

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

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If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, access, marketing, manufacturing and distribution.

We expect a short-term reduction in operating expenses as we strategically reprioritize our resources.

However, over the long term, we anticipate an increase in our operating expenses as we advance our product candidates through clinical development, seek regulatory approvals for our product candidates, engage in other research and development activities, expand our pipeline of product candidates, maintain and expand our intellectual property portfolio, seek regulatory and marketing approval for any product candidates that we may develop, acquire or in-license other assets or technologies, ultimately establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval, and operate as a public company.

We expect a reduction in operating expenses as we strategically reprioritize our resources.

However, we anticipate our operating expenses would increase as we advance our product candidates through clinical development, seek regulatory approvals for our product candidates, engage in other research and development activities, expand our pipeline of product candidates, maintain and expand our intellectual property portfolio, seek regulatory and marketing approval for any product candidates that we may develop, acquire or in-license other assets or technologies, ultimately establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval, and operate as a public company.

In light of our current resources and the cost of development, we are continuing our process of evaluating our programs and spending.

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, our expenditures on other research and development activities and the timing of achievement and receipt of upfront, milestones and other collaboration agreement payments.

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials, our expenditures on other research and development and general and administrative activities, and the timing of achievement and receipt of upfront, milestones and other collaboration agreement payments.

A discussion and analysis of our financial condition, results of operations, and cash flows for the year ended December 31, 2023 is included in 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 filed with the SEC on March 13, 2025.

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We do not have any products approved for commercial sale and have not generated any revenue from commercial product sales.

Our total revenue to date has been generated principally from our collaboration and license agreements with BMS, Merck, Astellas, Vaxcyte, Ipsen, EMD Serono, BioNova, and Tasly, and to a lesser extent, from manufacturing, supply and services and materials we provide to the above collaborators.

Our total revenue to date has been generated principally from our collaboration and license agreements with Astellas, Vaxcyte, Ipsen, and other collaborators, and to a lesser extent, from manufacturing, supply and services and materials we provide to the above collaborators.

We derive revenue from collaboration arrangements, under which we may grant licenses to our collaboration partners to further develop and commercialize our proprietary product candidates.

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For arrangements that include multiple performance obligations, we allocate the transaction price to the identified performance obligations based on the standalone selling price, or SSP, of each distinct performance obligation.

In instances where SSP is not directly observable, we develop assumptions that require judgment to determine the SSP for each performance obligation identified in the contract.

In instances where SSP is not directly observable, we develop assumptions that require judgment to

determine the SSP for each performance obligation identified in the contract.

These key assumptions may include full-time equivalent, or FTE, personnel effort, estimated costs, discount rates and probabilities of clinical development and regulatory success.

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However, over the longer term, we anticipate such expenses would increase as we advance our product candidates through clinical development and toward potential commercialization.

Restructuring and Related Costs

In March 2025, we announced the March 2025 Restructuring Plan resulting in the prioritization of our three wholly-owned preclinical programs in our next-generation ADC pipeline.

We also announced that we are deprioritizing additional investment into development of luvelta across all indications and are reducing headcount by nearly 50 percent.

In September 2025, we announced a further reduction in our workforce of approximately one third of our remaining employees.

In connection with these events, we reported the following restructuring costs in "Restructuring and Related Costs" in our interim condensed Statements of Operations for the year ended December 31, 2025:

• Clinical trial expenses and other third-party costs for the deprioritization of the luvelta program;

• Severance and benefits expense;

• Contract terminations and other costs.

Interest Income

Interest income consists primarily of interest earned on our invested funds.

Unrealized Gain (Loss) on Equity Securities

Unrealized gain (loss) on equity securities consists of the remeasurement of our investment in Vaxcyte common stock.

Non-cash interest expense related to the sale of future royalties

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As further described in the financial statements in Note 9.

Deferred Royalty Obligation related to the Sale of Future Royalties, in June 2023, we entered into the Purchase

Agreement with Blackstone, pursuant to which we sold to Blackstone our 4% royalty, or revenue interest, in the potential future net sales of Vaxcyte’s PCV products, such as VAX-24 and VAX-31.

Deferred Royalty Obligation related to the Sale of Future Royalties, in June 2023, we entered into the Purchase Agreement with Blackstone, pursuant to which we sold to Blackstone our 4% royalty, or revenue interest, in the potential future net sales of Vaxcyte’s PCV products, such as VAX-24 and VAX-31.

Non-cash interest expense will be recognized over the estimated life of the royalty term arrangement using the effective interest method based on the imputed interest rate derived from estimated amounts and timing of potential future royalty payments to be earned and received by Blackstone from Vaxcyte under the 2015 License Agreement.

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Other income (expense), net, also includes the realized gain on the sale of Vaxcyte common stock.

We recorded an income tax benefit of $0.1 million during the year ended December 31, 2025, primarily attributable to adjustments resulting from the overpayment of prior-year state income taxes.

We recorded an income tax charge of $2.4 million during the year ended December 31, 2024.

The income tax charge was primarily due to prior period tax provision to return adjustment.

We recorded an income tax charge of $18.2 million during the year ended December 31, 2023.

The income tax charge was primarily due to unfavorable book-tax differences related to capitalizing and amortizing research and development expenditures under Internal Revenue Code, or IRC, Section 174, the upfront payment from the sale of future royalties, deferred revenue, foreign income tax, and IRC Section 382 limitations imposed on the utilization of our historical tax attributes as a result of cumulative ownership changes that we experienced in prior years.

All other income tax charges and benefits for the years ended December 31, 2025 and 2024 have been immaterial, primarily due to the net loss in each year.

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General and administrative

Restructuring and related costs

Total operating expenses

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Interest income

Unrealized gain on equity securities

Non-cash interest expense related to the

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Provision for income taxes

*Percentage not meaningful

We have recognized revenue as follows during the indicated periods:

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Merck Sharp & Dohme Corporation (“Merck”)

Bristol Myers Squibb Company (“BMS”)

Merck KGaA, Darmstadt, Germany (operating in the United States and Canada under the name “EMD Serono”)

Total revenue

*Percentage not meaningful

Total revenue decreased by $91.7 million, or 60%, during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

This was primarily due to a $98.7 million decrease in Vaxcyte revenue, of which $97.5 million in upfront and option exercise revenue related to the option exercised by Vaxcyte was earned in 2023, and $1.2 million was from a decrease in research and development services and materials supply, a $5.6 million decrease in BMS revenue due to their decision to end clinical development of CC-99712 in 2023, a $5.8 million decrease in Merck revenue, primarily due to a $5.6 million decrease in manufacturing activities supporting clinical trial supply and a $0.2 million decrease in research and development services as a result of Merck’s decision to end clinical development of MK-1484 during the third quarter of 2024.

Lastly, Tasly revenue decreased by $0.9 million primarily due to a $5.0 million contingent payment earned in 2023 and a $0.9 million decrease in clinical product supply under the 2023 Tasly Supply Agreement, which were partially offset by a $5.0 million contingent payment earned in 2024.

These decreases were partially offset by a $18.9 million increase from Astellas, of which $22.9 million was from the ongoing performance related to partially unsatisfied performance obligations, and included a cumulative catch-up adjustment of $17.8 million on the contract modification date from Astellas' decision not to nominate a third target program under the Astellas Agreement and $0.9 million from materials supply, which were partially offset by decreases of $3.5 million from the financing component related to the Astellas Agreement and $1.4 million from research and development services.

Additionally, there was a $0.6 million increase in Ipsen revenue from research and development services and materials supply, which commenced in the second quarter of 2024.

Total revenue increased by $40.4 million, or 65%, during the year ended December 31, 2025 as compared to the year ended December 31, 2024.

This was primarily due to a $55.8 million increase from Ipsen, which included the derecognition of $53.2 million in deferred revenue resulting from Ipsen's strategic decision not to advance the STRO-003 program under its partnership with us, and a $2.6 million increase in manufacturing activities supporting clinical trial supply.

These increases were partially offset by an $7.4 million decrease from Astellas, of which $8.0 million related to ongoing performance on partially unsatisfied performance obligations, which includes a cumulative catch-up adjustment in the second quarter of 2024 of $17.8 million from Astellas’ decision not to nominate a third target program under the Astellas Agreement, offset by a $5.7 million cumulative catch-up adjustment in the first quarter of 2025 due to a change in transaction price reflecting a $7.5 million contingent payment earned for the initiation by Astellas of the first IND-enabling toxicology study for the first target program under the Astellas Agreement, and a $6.6 million cumulative catch-up adjustment in the fourth quarter of 2025 due to a change in transaction price reflecting a $7.5 million contingent payment earned for the initiation by Astellas of the first IND-enabling toxicology study for the second target program under the Astellas Agreement.

An additional $2.9 million decrease was from the financing component under the Astellas Agreement, partially offset by a $3.4 million increase in research and development services and materials supply.

Revenue also decreased by $5.9 million from Tasly related to a $5.0 million contingent payment received in 2024 and a $0.9 million decrease in materials supply, and $2.0 million from Vaxcyte related to research and development services and materials supply.

Research and Development Expense

Research and development expense increased by $71.6 million, or 40%, during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The overall increase was due primarily to increases of $43.0 million in outside services mainly due to increased CMO-related activities, $12.1 million in preclinical research and clinical development expenses, $11.3 million in facilities expenses and IT-related expenses, $4.3 million in personnel-related expenses due to higher headcount, $2.5 million in equipment and office-related expenses, and $0.2 million in travel-related expenses, partially offset by a decrease of $1.7 million in laboratory supplies.

Research and development expense decreased by $85.6 million, or 34%, during the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The overall decrease was due primarily to decreases of $27.1 million in outside services, $28.5 million in preclinical research and clinical development expenses, $19.3 million in personnel-related expenses, $5.6 million in laboratory supplies, $4.9 million in allocated facilities and IT-related expenses, and $0.3 million in travel-related expenses.

Following the implementation of the Restructuring Plans, we began reporting restructuring costs and other costs associated with the deprioritized luvelta program under "Restructuring and related costs" in our financial statements.

General and Administrative Expense

General and administrative expense decreased by $7.4 million, or 15%, during the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The overall decrease was due primarily to decreases of $10.5 million in IT-related expenses and $5.7 million in personnel-related expenses, partially offset by increases of $0.8 million in outside services, $0.6 million in equipment and office-related expenses, and $0.6 million in allocated facilities-related expenses.

The overall decrease was due primarily to decreases of $5.9 million in personnel-related expenses, $2.3 million in outside services, $0.5 million in equipment and office-related expenses, and $0.4 million in travel-related expenses, partially offset by an increase of $1.6 million in allocated facilities and IT-related expenses.

Some general and administrative expenses previously recorded under this category are now reported under "Restructuring and related costs" in our financial statements following the implementation of our Restructuring Plans.

Restructuring and Related Costs

The following table presents the components of restructuring and related costs from the Restructuring Plans, as further described and disclosed in Note 11 to our condensed financial statements:

December 31, 2025

(in thousands)

Clinical trial expense and other third-party costs for the deprioritization of

the luvelta program

Severance and benefits expense

Contract termination and other restructuring costs

Impairment / write-down of long-lived assets and other related costs

We will continue to recognize expenses in future periods for the deprioritization of the luvelta program and related costs, of which we recognized a significant portion in 2025.

The ultimate amount of expense will be

affected by the timing to complete our cost commitments to our third-party CROs and CMOs and the full wind-down of the clinical trials.

We will revise our estimates for the costs to deprioritize these studies for the luvelta program and the amount of severance and benefits paid to employees as new information becomes available to us in future periods.

Interest Income

Interest income increased by $4.1 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023, due primarily to higher average investment balances in 2024.

Unrealized Gain on Equity Securities

We sold the remaining shares of Vaxcyte common stock, resulting in no unrealized gain on equity securities during the year ended December 31, 2024, as compared to an unrealized gain of $9.9 million for the year ended December 31, 2023.

As of December 31, 2024, we do not hold any shares of Vaxcyte common stock.

Interest income decreased by $9.4 million during the year ended December 31, 2025 as compared to the year ended December 31, 2024, due primarily to lower average investment balances and lower average rates of return in 2025.

Non-cash Interest Expense related to the Sale of Future Royalties

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Interest and Other Income (Expense), Net

Interest and other income (expense), net, decreased by $37.0 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023, due primarily to a recognized gain of $32.1 million on the sale of Vaxcyte common stock and decreases of $3.6 million from the financing component related to the Astellas Agreement and $1.3 million in interest incurred on our loan which was fully paid in March 2024.

Interest and other income (expense), net, decreased by $29.6 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024, due primarily to a $32.1 million gain on the sale of Vaxcyte common stock recognized during the year ended December 31, 2024 and a $0.5 million decrease from foreign exchange fluctuations, partially offset by a $3.0 million decrease from the financing component related to the Astellas Agreement.

Liquidity and Capital Resources

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As of December 31, 2025, we had cash, cash equivalents and marketable securities of $141.4 million, and an accumulated deficit of $978.0 million.

Contingent payment from Astellas

In the first quarter of 2025, we earned a $7.5 million contingent payment from Astellas for their initiation of an IND-enabling toxicology study for the first program under our collaboration with Astellas.

In the fourth quarter of 2025, we earned a $7.5 million contingent payment from Astellas for their initiation of an IND-enabling toxicology study for the second program under our collaboration with Astellas.

Vaxcyte Equity Ownership

During the year ended December 31, 2024, we sold the remaining 667,780 shares of Vaxcyte common stock for net proceeds of $74.0 million.

As of December 31, 2024, we do not hold any shares of Vaxcyte common stock.

As of December 31, 2025 and 2024, we do not hold any shares of Vaxcyte common stock.

Vaxcyte Agreement

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The gross proceeds from these sales were approximately $75.0 million, before deducting fees and offering expenses.

On February 9, 2026, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Leerink Partners LLC and TD Securities (USA) LLC, as representatives of the several underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to issue and sell 7,868,383 shares of its common stock (the “Shares”) to the Underwriters (the “February 2026 Offering”).

The Shares were sold at an offering price of $13.98 per share.

The gross proceeds from the February 2026 Offering were approximately $110.0 million, before deducting underwriting discounts and commissions and estimated February 2026 Offering expenses.

Ipsen Agreements

In March 2024, we and Ipsen Pharma SAS (“Ipsen”) entered into an Exclusive License Agreement (the “Ipsen License Agreement”) pursuant to which we licensed to Ipsen, on an exclusive basis, the right to research, develop, manufacture and commercialize STRO-003.

In consideration for the rights and licenses granted by us to Ipsen in the Ipsen License Agreement, Ipsen (i) paid us an upfront license fee in the amount of $50.0 million in April 2024 and (ii) Ipsen Biopharmaceuticals, Inc.

In consideration for the rights and licenses granted by us to Ipsen in the Ipsen License Agreement, (i) Ipsen paid us an upfront license fee in the amount of $50.0 million in April 2024 and (ii) Ipsen Biopharmaceuticals, Inc.

(USA) (“Ipsen USA”) purchased 482,738 shares of our common stock for $25.0 million, at a price of approximately $51.79 per share, in accordance with the terms set forth in a certain investment agreement by and between us and the Ipsen USA dated March 29, 2024 (the “Ipsen Investment Agreement”, and, together with the Ipsen License Agreement, the “Ipsen Agreements”).

We are eligible to receive up to an additional $447.0 million in developmental and regulatory milestones, assuming multiple indications, and up to $360.0 million in sales milestones, as well as tiered royalty payments ranging from low double-digit to mid-teen digit percentages of annual net sales of STRO-003, subject to certain adjustments specified in the Ipsen License Agreement.

The royalty payment obligations under the Ipsen License Agreement expire on a country-by-country basis no earlier than ten years following the first commercial sale of STRO-003 in the applicable country.

Ipsen may terminate the Ipsen License Agreement for convenience with sixty calendar days prior written notice or for certain other specified reasons.

We may terminate the Ipsen License Agreement if Ipsen or any of its Affiliates challenge the validity of any patents controlled by us that are licensed under the agreement.

Both Ipsen and we may terminate the Ipsen License Agreement (i) for material breach by the other party and a failure to cure such breach within the time period specified in the Ipsen License Agreement or (ii) the other party’s bankruptcy event.

In June 2025, Ipsen informed us of its strategic decision not to advance the STRO-003 program under its partnership with us, following the review of new data and developments in the ROR1 landscape.

STRO-003 continues to be recognized as a well-engineered ADC candidate.

In June 2021, we entered into a third amendment, (the "Third Amendment") to our manufacturing facility lease, dated May 18, 2011, as amended, by and between Alemany Plaza LLC, located at San Carlos, California, or San Carlos Lease, as an extension to the term of the San Carlos Lease for a period of five years, (the "Lease Extension Period").

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Funding Requirements

Based upon our current operating plan, we believe that our existing capital resources will enable us to fund our operating expenses and capital expenditure requirements through at least the next twelve months after the date of this filing.

Based upon our current operating plan, we believe that our existing capital resources as well as the proceeds from the February 2026 Offering will enable us to fund our operating expenses and capital expenditure requirements through at least the next twelve months after the date of this filing.

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

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Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies, and may cause us to delay, reduce the scope of or suspend one or more of our preclinical and clinical studies, research and development programs or commercialization efforts, and may necessitate us to delay, reduce or terminate planned activities in order to reduce costs.

unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical studies.

Due to the numerous risks and uncertainties associated with the development and commercialization of our product candidates and the extent to which we may enter into additional collaborations with third parties to participate in their development and commercialization, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical studies.

To the extent we raise additional capital through new collaborations, strategic alliances, or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us.

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In March 2025, we approved a restructuring plan with an associated reduction in workforce as a result of a review of current strategic priorities, resource allocation, and cost reduction intended to reduce operating costs, streamline operations and extend our cash runway.

We intend to decommission or otherwise exit our manufacturing facility in San Carlos by the end of 2025 and rely on an external manufacturing strategy where all elements of our product candidates and platform reagents are manufactured by qualified third-party CMOs.

We intend to decommission or otherwise exit our manufacturing facility in San Carlos by the mid-2026 and rely on an external manufacturing strategy where all elements of our product candidates and platform reagents are manufactured by qualified third-party CMOs.

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

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Cash used in operating activities for the year ended December 31, 2025 was $177.2 million.

Our net loss of $191.1 million included $38.2 million for non-cash interest expense on our deferred royalty obligation, $14.0 million for stock-based compensation, $7.3 million for depreciation and amortization, $5.9 million for non-cash lease expense, $3.4 million for the accretion of discount on marketable securities, and $1.7 million for impairment charges.

Cash used in operating activities also reflected a net change in operating assets and liabilities of $50.4 million, due to a decrease of $69.7 million in deferred revenue primarily due to the derecognition of $53.2 million in deferred revenue resulting from Ipsen's strategic decision not to advance the STRO-003 program under its partnership with us, and revenue recognized under the Astellas Agreement, a decrease of $7.5 million in operating lease liability, and a decrease of $2.5 million in accounts payable due to timing of payments, which were partially offset a decrease of $19.4 million in prepaid expenses and other assets primarily due to decrease in CRO- and CMO-related activities as a result of the deprioritization of STRO-002, a decrease of $4.6 million in accounts receivable primarily due to the termination of the Ipsen Agreement and the completion of technology transfer, an increase of $3.6 million in accrued expenses and other liabilities due primarily to increases in CRO and CMO restructuring costs as a result of the deprioritization of luvelta.

Cash used in operating activities for the year ended December 31, 2024 was $191.5 million.

Our net loss of $227.5 million included non-cash amounts of $32.1 million for the realized gain on the sale of Vaxcyte common stock, $31.1 million for non-cash interest expense on our deferred royalty obligation, $24.7 million for stock-based compensation, $9.7 million for the accretion of discount on marketable securities, $7.2 million for depreciation and amortization, and $5.1 million for non-cash lease expense.

Cash used in operating activities also reflected a net change in operating assets and liabilities of $8.9 million, due to a decrease of $27.5 million in accounts receivable primarily from receiving $25.0 million from Vaxcyte as the second of two installment payments for the option exercise price under the Vaxcyte Agreement, and an increase of $7.8 million in deferred revenue primarily due to the upfront payment from Ipsen, partially offset by revenue recognized under the Astellas and Tasly Agreements, which were partially offset by an increase of $11.6 million in prepaid expenses and other assets primarily due to increase in CMO-related activities, a decrease of $6.6 million in accounts payable, accrued expenses and other liabilities due to timing of payments, a decrease of $6.4 million in our operating lease liability, and a decrease of $1.8 million in accrued compensation expense.

Cash used in operating activities for the year ended December 31, 2023 was $111.6 million.

Our net loss of $106.8 million included non-cash charges of $24.9 million for stock-based compensation, $12.6 million for non-cash interest expense on our deferred royalty obligation, $9.9 million for the unrealized gain on equity securities as a result of the remeasurement of the estimated fair value of our investment in Vaxcyte common stock, $9.1 million for the accretion of discount on our marketable securities, $6.8 million for depreciation and amortization, $3.6 million for noncash lease expenses and $0.6 million in other non-cash charges.

Cash used in operating activities also reflected a net change in operating assets and liabilities of $34.4 million, due to a decrease of $32.6 million in our deferred revenue from revenue recognized under our collaboration agreements, an increase of $28.9 million in accounts receivable primarily due to a receivable from Vaxcyte under the Vaxcyte Agreement, and a decrease of $4.6 million in our operating lease liability, which were partially offset by an increase of $30.1 million in accounts payable, accrued expenses and other liabilities mainly due to the tax liability and timing of

payments, an increase of $1.5 million in accrued compensation due to increased headcount, and a decrease of $0.1 million in prepaid expenses and other assets.

Cash Flows from Investing Activities

Cash provided by investing activities of $45.0 million for the year ended December 31, 2025 was primarily related to maturities and sales of marketable securities of $311.7 million, partially offset by purchases of marketable securities of $265.0 million, and purchases of property and equipment of $1.7 million, principally for laboratory equipment.

Cash provided by investing activities of $218.5 million for the year ended December 31, 2024 was primarily related to maturities and sales of marketable securities of $609.1 million, and net proceeds from the sale of Vaxcyte common stock of $74.0 million, partially offset by purchases of marketable securities of $461.5 million, and purchases of property and equipment of $3.1 million, principally for laboratory equipment

Cash used in investing activities of $3.9 million for the year ended December 31, 2023 was primarily related to purchases of marketable securities of $460.3 million and purchases of property and equipment of $4.3 million, principally for laboratory equipment, partially offset by maturities and sales of marketable securities of $460.7 million.

Cash Flows from Financing Activities

Cash provided by financing activities of $44 thousand for the year ended December 31, 2025 was primarily related to $0.4 million of net proceeds received from participants in our employee equity plans, partially offset by a $0.3 million tax payment related to the net shares settlement of vested restricted stock units.

Cash provided by financing activities of $94.1 million for the year ended December 31, 2024 was primarily related to $71.5 million of net proceeds from the underwritten common stock offering, $25.0 million of proceeds from Ipsen USA upon the purchase of our common stock under the Ipsen Investment Agreement, $1.8 million of net proceeds received from participants in our employee equity plans, and $0.3 million of proceeds received from the exercise of common stock options, partially offset by debt repayment of $4.1 million and a $0.5 million tax payment related to the net shares settlement of vested restricted stock units.

Cash provided by financing activities of $137.5 million for the year ended December 31, 2023 was primarily related to $136.2 million of net proceeds from the sale of future royalties, $12.0 million of net proceeds from our ATM Facility sales of common stock, $2.0 million of net proceeds received from participants in our employee equity plans and $0.3 million of proceeds received from the exercise of common stock options, partially offset by debt repayment of $12.5 million and a $0.5 million tax payment related to the net share settlement of certain vested restricted stock units.

Contractual Obligations and Other Commitments

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We do not have any products approved for commercial sale and have not generated any revenue from commercial product sales.

Our total revenue to date has been generated principally from our collaboration and

license agreements with BMS, Merck, Astellas, Vaxcyte, Ipsen, EMD Serono, BioNova, and Tasly, and to a lesser extent, from manufacturing, supply and services and materials we provide to our collaborators.

When we enter into collaboration agreements, we assess whether the arrangements fall within the scope of ASC 808, Collaborative Arrangements (ASC 808) based on whether the arrangements involve joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards.

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(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

and (v) recognize revenue when (or as) the entity

satisfies a performance obligation.

However, if we conclude that our collaboration partner is not a customer for certain activities and associated payments, such as for certain collaborative research, development, manufacturing and commercial activities, we present such payments as a reduction of research and development expense or general and administrative expense, based on where we present the underlying expense.

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Since milestone and contingent payments may become payable to us upon the initiation of a clinical study or filing for or receipt of regulatory approval, we review the relevant facts and circumstances to determine when we should update the transaction price, which may occur before the triggering event.

When we update the transaction price for milestone and contingent payments, we allocate the changes in the total transaction price to each performance obligation in the agreement on the same basis as the initial allocation.

When we update the transaction price for milestone and contingent payments, we allocate the changes in the total transaction price to each performance obligation in the agreement on the same

basis as the initial allocation.

Any such adjustments are recorded on a cumulative catch-up basis in the period of adjustment, which may result in recognizing revenue for previously satisfied performance obligations in such period.

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To the extent our future estimates of earned royalties are greater or less than previous estimates or the estimated timing of such payments is materially different than our previous estimates, we will prospectively recognize related non-cash interest expense.

As of December 31, 2024, we had federal net operating loss, or NOL, carryforwards of $149.8 million and federal general business credits from research and development expenses totaling $30.5 million, as well as state NOL carryforwards of $108.0 million and state research and development credits of $32.1 million.If not utilized, the federal NOL carryforwards will expire at various dates beginning in 2027, and the federal credits will expire at various dates beginning in 2032.

As of December 31, 2025, we had federal net operating loss, or NOL, carryforwards of $376.3 million and federal general business credits from research and development expenses totaling $35.9 million, as well as state NOL carryforwards of $108.2 million and state research and development credits of $33.6 million.

If not utilized, the federal NOL carryforwards will expire at various dates beginning in 2027, and the federal credits will expire at various dates beginning in 2032.

The state NOL carryforwards will expire at various dates beginning in 2030, if not utilized.

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Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.

As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and we will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax

benefit is still appropriate.

The recognition and measurement of tax benefits requires significant judgment.

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To achieve our objectives, we maintain a portfolio of cash equivalents and investments in a variety of securities of high credit quality.

We had cash, cash equivalents and marketable securities of $316.9 million and $333.7 million as of December 31, 2024 and 2023, respectively, which consisted of money market funds, commercial paper, corporate debt securities, asset-backed securities, U.S.

We had cash, cash equivalents and marketable securities of $141.4 million and $316.9 million as of December 31, 2025 and 2024, respectively, which consisted of money market funds, commercial paper,

corporate debt securities, asset-backed securities, U.S.

government securities, and U.S.

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Statements of Comprehensive Loss

Statements of Stockholders’ Equity

Statements of Stockholders’ Equity (Deficit)

Statements of Cash Flows

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We have audited the accompanying balance sheets of Sutro Biopharma, Inc.

(the Company) as of December 31, 2024 and 2023, the related statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

(the Company) as of December 31, 2025 and 2024, the related statements of operations, comprehensive loss, stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 13, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

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Description of the Matter

As discussed in Note 9 to the financial statements, on June 21, 2023, the Company closed a purchase and sale agreement (the “Agreement”) with Blackstone Life Sciences (“Blackstone”), pursuant to which the Company sold to Blackstone its 4% royalty in potential net sales of Vaxcyte Inc.’s products and received an upfront payment of $140 million.

As discussed in Note 9 to the financial statements, on June 21, 2023, the Company closed a purchase and sale agreement (the “Agreement”) with Blackstone Life Sciences (“Blackstone”), pursuant to which the Company sold to Blackstone its 4% royalty interest in potential net sales of Vaxcyte Inc.’s products and received an upfront payment of $140 million.

The Company concluded the Agreement represented a sale of future royalties and accounted for the transaction under Accounting Standards Codification (ASC) 470 as debt.

The Company estimated the amount of future royalty payments and expected interest expense using the effective interest rate method

over the life of the agreement.

The Company estimated future royalty payments and expected interest expense using the effective interest rate method over the life of the agreement.

The carrying value of the liability related to the sale of future royalties at December 31, 2025 was $220 million and the interest expense for the year ended December 31, 2025 was $38 million.

The auditing of the Agreement was complex due to the significant judgment and estimation used by management related to the sale of future royalties and due to the nature and extent of audit effort required to address these matters.

The accounting involves significant judgment and inherent uncertainties as it relates to the Company's estimate of future sales for which royalties will be paid, which in turn significantly impacts the calculation of interest expense recognized.

Auditing this matter was challenging because it involved evaluating management’s judgments and estimates related to future sales subject to royalties, which are inherently uncertain and directly affect the ending deferred royalty obligation balance

and the interest expense recognized for the period, thereby requiring extensive audit effort to address these considerations.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of the controls over the review of estimation used related to the sale of future royalties and its calculation.

To test the carrying value of the liability related to the sale of future royalties and the amount of interest expense recognized, our audit procedures included, among others, assessing the methodology used, evaluating the reasonableness of the significant estimates discussed above, and testing the completeness and accuracy of the underlying data used by the Company.

Specifically, we tested the calculation of the liability balance including the classification of the balance as non-current.

In addition, we evaluated the Company’s estimate of future sales, by comparing the estimates to available peer data and market research.

We also recalculated the current year interest expense using the effective interest method based on the Company’s estimate of future royalties to be paid.

We obtained an understanding of the controls over the review of management’s estimates related to the sale of future royalties and its calculation.

To test the carrying value of the liability related to the sale of future royalties and the related interest expense recognized, our audit procedures included, among others, assessing the consistency of the methodology applied since inception of the agreement, evaluating the reasonableness of management’s assumptions used to estimate future sales subject to royalties, and testing the completeness and accuracy of the underlying data used by the Company.

Specifically, we evaluated the Company’s estimate of future sales, by comparing the estimates to available peer data and market research.

We also recalculated the current year interest expense using the effective interest method based on the Company’s estimate of future royalties payments.

/s/ Ernst & Young LLP

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Marketable securities

Investment in equity securities

Accounts receivable

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Restricted cash

Liabilities and Stockholders’ Equity

Liabilities and Stockholders’ Equity (Deficit)

Current liabilities:

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Commitments and contingencies (Note 7)

Stockholders’ equity:

Stockholders’ equity (deficit):

Preferred stock, $ 0.001 par value — 10,000,000 shares authorized

as of December 31, 2024 and 2023;

as of December 31, 2025 and December 31, 2024;

no shares issued and

outstanding as of December 31, 2024 and 2023

outstanding as of December 31, 2025 and December 31, 2024

Common stock, $ 0.001 par value — 300,000,000 shares authorized

as of December 31, 2024 and 2023;

as of December 31, 2025 and December 31, 2024;

8,584,309 and

61,009,829 shares issued and outstanding as of

December 31, 2024 and 2023, respectively

8,306,398 shares issued and outstanding as of December 31, 2025

and December 31, 2024, respectively

Additional paid-in-capital

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Accumulated deficit

Total stockholders’ equity

Total Liabilities and Stockholders’ Equity

Total stockholders’ equity (deficit)

Total Liabilities and Stockholders’ Equity (Deficit)

See accompanying notes to financial statements.

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General and administrative

Restructuring and related costs

Total operating expenses

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Interest income

Unrealized gain on equity securities

Non-cash interest expense related to the

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SUTRO BIOPHARMA, INC.

Statements of Stockholders’ Equity

Statements of Stockholders’ Equity (Deficit)

(in thousands, except share amounts)

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Income (Loss)

Balances at December 31, 2021

Exercise of common stock options

Issuance of common stock under Employee Stock

Purchase Plan

Vesting of restricted stock units

Stock transaction associated with taxes withheld on

restricted stock units

Stock-based compensation expense

Issuance of common stock in connection with

At-The-Market sale, net of issuance costs of $ 2,026

Net unrealized loss on available-for-sale securities

Equity (Deficit)

Balances at December 31, 2023

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Stock-based compensation expense

Issuance of common stock in connection with

At-The-Market sale, net of issuance costs of $ 459

Issuance of common stock in connection with the

underwritten offering, net of issuance costs of $ 3,474

Issuance of common stock to Ipsen Biopharmaceuticals, Inc.

(USA) under the Ipsen Investment Agreement

Net unrealized income on available-for-sale securities

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Stock-based compensation expense

Issuance of common stock in connection with the

underwritten offering, net of issuance costs of $ 3,474

Issuance of common stock to Ipsen Biopharmaceuticals, Inc.

(USA) under the Ipsen Investment Agreement

Net unrealized income on available-for-sale securities

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Non-cash lease expenses

Impairment charges

Realized gain on sale of equity securities

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Change in operating lease liability

Net cash (used in) provided by operating activities

Net cash used in operating activities

Investing activities

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Purchases of equipment and leasehold improvements

Proceeds from exercise of options for Vaxcyte shares

Net cash provided by (used in) investing activities

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Payments of debt

Proceeds from the sale of future royalties, net of issuance costs

Proceeds from exercise of common stock options

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Purchase of property and equipment included in accounts payable

Value of 167,780 shares of Vaxcyte common stock received under the Vaxcyte

Financing component associated with program fees

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The Company was incorporated on April 21, 2003 and is headquartered in South San Francisco , California .

Underwritten Offering

Underwritten Offerings

In April 2024, the Company closed an underwritten offering with BofA Securities, Inc., pursuant to which the Company issued and sold 1,447,876 shares of its common stock at an offering price of $ 51.79 per share .

The gross proceeds from these sales were approximately $ 75.0 million, before deducting fees and offering expenses.

The Shares were sold at an offering price of $ 13.98 per share.

The gross proceeds from the February 2026 Offering were approximately $ 110.0 million, before deducting underwriting discounts and commissions and estimated February 2026 Offering expenses.

Restructuring Plans

On March 13, 2025, the Company announced the completion of a strategic portfolio review (the "March 2025 Restructuring Plan") resulting in the prioritization of the Company's three wholly-owned preclinical programs in the Company's next-generation ADC pipeline, beginning with the Company's potentially best-in-class exatecan ADC targeting Tissue Factor, STRO-004.

As a result of the reprioritization, the Company deprioritized additional investment into the development of luveltamab tazevibulin, or STRO-002, and luvelta-related activities, principally across clinical and manufacturing functions.

The Company will continue to explore outlicensing opportunities for luvelta.

In addition, given the Company’s significant progress in fully externalizing its cell-free manufacturing to scale, the Company exited its internal GMP manufacturing facility at the end of 2025.

On September 29, 2025, the Company announced further organizational restructuring to prioritize the advancement of its three preclinical ADC programs and its research and development collaborations (the "September 2025 Restructuring Plan", and, together with the March 2025 Restructuring Plan, the “Restructuring Plans”).

Taken together, the March 2025 Restructuring Plan and the September 2025 Restructuring Plan resulted in a reduction in the Company’s workforce by approximately two-thirds .

See Note 11 for additional information on the effect of the Restructuring Plans on the financial statements.

The Company has incurred significant losses and has negative cash flows from operations.

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The Company will need to raise additional capital to support the completion of its research and development activities and to support its operations.

The Company believes that its unrestricted cash, cash equivalents, and marketable securities as of December 31, 2024 will enable the Company to maintain its operations for a period of at least 12 months following the filing date of these financial statements.

The Company believes that its unrestricted cash, cash equivalents, and marketable securities as of December 31, 2025, together with the proceeds from the February 2026 Offering, will enable the Company to maintain its operations for a period of at least 12 months following the filing date of these financial statements.

Reverse Stock Split

On December 2, 2025, the Company filed a Certificate of Amendment to its Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to implement a 1-for-10 reverse stock split (the “Reverse Stock Split”) of the Company’s common stock.

The Reverse Stock Split was reflected on the Nasdaq Global Market beginning with the opening of trading on December 3, 2025 and did not alter the par value of the Common Stock, change the number of authorized shares, or modify any voting rights or other terms of the Common Stock.

No fractional shares were issued in connection with the Reverse Stock Split and stockholders who were affected by a fractional share were rounded up to the nearest full share.

In addition, a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options to purchase shares of Common Stock and the number of shares reserved for issuance pursuant to the Company’s equity incentive and inducement plans, and employee stock purchase plan.

All share amounts and per share amounts disclosed in this Annual Report on Form 10-K have been adjusted retroactively to reflect the Reverse Stock Split for all periods presented.

Basis of Presentation and Summary of Significant Accounting Policies

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Actual results could differ from such estimates or assumptions.

Restructuring

The Company records employee severance costs based on whether the termination benefits are provided under an on-going benefit arrangement or under a one-time benefit arrangement.

The Company accounts for on-going termination benefit arrangements, such as those arising from employment agreements, applicable regulations or past practices, in accordance with ASC Topic 712, Compensation-Nonretirement Postemployment Benefits (“ASC Topic 712”).

Under ASC Topic 712, liabilities for post-employment benefits related to past services and that vest or are accumulated over time are recorded at the time the obligations are probable of being incurred and can be reasonably estimated.

The Company accounts for one-time employment benefit arrangements in accordance with ASC Topic 420, Exit or Disposal Cost Obligations (“ASC Topic 420”).

The Company records restructuring charges at fair value for one-time employee termination benefits on the communication date from management to the employees, provided that management has committed to a plan of termination, the plan identifies the employees and their expected termination dates, the details of termination benefits are complete, and it is unlikely that changes to the plan will be made or the plan will be withdrawn.

Other associated costs are recognized in the period in which the liability is incurred.

Costs incurred to terminate contracts are recognized upon their termination, e.g., when notice of termination is provided to the counterparty.

Other exit-related costs are recognized as incurred.

See Note 11 for additional information.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which enhances the disclosures required for operating segments in the Company's annual and interim financial statements.

ASU 2023-07 is effective for the Company in the Company's annual reporting for fiscal 2024 and for interim period reporting beginning in fiscal 2025 on a retrospective basis.

The Company adopted the new standard effective beginning fiscal year 2024.

The Company presented the effects of the adoption of ASU 2023-07 in Note 10.

Segment Reporting.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

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ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 .

Early adoption is permitted.

The Company is currently assessing the impact that adopting this new accounting standard will have on its financial statements.

The Company adopted the new standard effective beginning fiscal year 2025.

The Company prospectively presented the effects of the adoption of ASU 2023-09 in Note 14.

Income Taxes.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

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Impairment, if any, is measured at the amount by which the carrying amount of a long-lived asset exceeds its fair value.

The Company did no t recognize any impairment charges during the years ended December 31, 2024, 2023 and 2022.

The Company recognized impairment charges and related costs of $ 1.6 million during the year ended December 31, 2025 .

See Note 11 for details.

The Company did no t recognize any impairment charges during the year ended December 31, 2024.

As of December 31, 2025 and 2024 , management believes that no revision to the remaining useful lives or write down of the remaining long-lived assets is required.

Asset Held for Sale

The Company considers equipment to be assets held for sale when all of the following criteria are met:

• management commits to a plan to sell an equipment;

• it is unlikely that the disposal plan will be significantly modified or discontinued;

• the equipment is available for immediate sale in its present condition;

• actions required to complete the sale of the equipment have been initiated;

• sale of the equipment is probable and the Company expects the completed sale will occur within one year;

• the equipment is actively being marketed for sale at a price that is reasonable given its current market value.

Upon designation as an asset held for sale, the Company records the carrying amount of each equipment at the lower of its carrying amount or its estimated fair value, less estimated costs to sell, and ceases depreciation.

The Company determines if an arrangement is or contains a lease at contract inception by assessing whether the arrangement contains an identified asset and whether the lessee has the right to control such asset.

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In June 2023, Blackstone made an upfront payment of $ 140.0 million to the Company and will also pay up to an additional $ 250.0 million upon the achievement of various return thresholds as set forth in the Purchase Agreement.

The net proceeds from the upfront payment received by the Company from the sale of future royalties from Vaxcyte are recorded as deferred royalty

obligation related to the sale of future royalties on the Company's Balance Sheets.

The net proceeds from the upfront payment received by the Company from the sale of future royalties from Vaxcyte are recorded as deferred royalty obligation related to the sale of future royalties on the Company's Balance Sheets.

As royalties are earned and remitted pursuant to the 2015 License Agreement, the balance of the deferred royalty obligation will be amortized over the estimated life of the royalty term arrangement, and non-cash interest expense related to the sale of future royalties is recorded using the effective interest method.

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Issuance fees and costs directly related to the Purchase Agreement were offset against the initial carrying value of the deferred royalty obligation and are being amortized using the effective interest method over the estimated life of the royalty term arrangement.

Foreign Currency Translation

The Company’s financial statements are presented in U.S.

The Company's functional currency is USD.

Income and expenses have been translated into U.S.

dollars at average monthly exchange rates for the period.

Assets and liabilities have been translated using exchange rates on the balance sheet dates.

Transactions denominated in a currency other than the functional currency are remeasured based upon the exchange rate at the date of remeasurement with the resulting gain or loss included in the accompanying statements of operations within research and development expenses, and interest and other (income) expense, net.

For the year ended December 31, 2025 , the Company recorded a net foreign currency transaction loss of $ 1.1 million.

For the year ended December 31, 2024 , the Company recorded an immaterial net foreign currency transaction loss.

Revenue Recognition

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To the extent that the arrangement falls within the scope of ASC 808, the Company assesses whether the payments between the Company and its collaboration partner fall within the scope of other accounting literature.

If it concludes that payments from the collaboration partner to the Company represent consideration from a customer, such as license fees and contract research and development activities, the Company accounts for those payments within the scope of Accounting Standards Update (ASU) No.

If it concludes that payments from the collaboration partner to the Company represent

consideration from a customer, such as license fees and contract research and development activities, the Company accounts for those payments within the scope of Accounting Standards Update (ASU) No.

2014-09 (Topic 606), Revenue from Contracts with Customers (“ASC 606”).

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If the actual timing of the performance of services or the level of effort varies from the original estimates, the Company will adjust the accrual accordingly.

Payments made to third parties under these arrangements in advance of the performance of the related services by the third parties are recorded as prepaid expenses until the services are rendered.

Payments made to third parties under these arrangements in

advance of the performance of the related services by the third parties are recorded as prepaid expenses until the services are rendered.

Stock-Based Compensation

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government securities

agency securities

December 31, 2024

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Corporate debt securities

Equity securities

Asset-backed securities

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This pricing methodology applies to Level 1 investments, which are comprised of money market funds and U.S.

government securities and the shares of Vaxcyte common stock held by the Company.

government securities.

If quoted prices in active markets for identical assets are not available, then the Company uses quoted prices for similar assets or inputs other than quoted prices that are observable, either directly or indirectly.

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Investments in Equity Securities

During the year ended December 31, 2024, the Company sold 667,780 shares of Vaxcyte common stock it held at their fair market value of approximately $ 74.0 million, net of transaction cost and recognized a gain of $ 32.1 million which is recorded under interest and other income (expense), net, in the Statements of Operations.

No shares of Vaxcyte common stock were sold during the year ended December 31, 2023.

The Company recognized an unrealized gain of $ 9.9 million and $ 12.1 million on equity securities during the years ended December 31, 2023, and 2022, respectively.

As of December 31, 2024, the Company did no t hold any shares of Vaxcyte common stock.

As of December 31, 2023, the Company held 667,780 shares of Vaxcyte common stock with an estimated fair value of $ 41.9 million.

During the year ended December 31, 2024, the Company sold 667,780 shares of Vaxcyte common stock at their fair market value of approximately $ 74.0 million, net of transaction cost and recognized a gain of $ 32.1 million which is recorded under interest and other income (expense), net, in the Statements of Operations.

As of December 31, 2025 and 2024, the Company did no t hold any shares of Vaxcyte common stock.

Cash Equivalents and Marketable Securities

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government securities

agency securities

amounts classified as cash equivalents

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No marketable securities had maturities of more than one year as of December 31, 2025 and 2024.

There were $ 69.9 million and $ 110.9 million of investments in an unrealized loss position of $ 9,000 and $ 33,000 as of December 31, 2024 and 2023, respectively .

During the years ended December 31, 2025 and 2024 , the Company did no t record any other-than-temporary impairment charges on its available-for-sale securities.

Based on the Company’s procedures under the expected credit loss model, including an assessment of unrealized gains and losses on the portfolio after December 31, 2024, the Company concluded that the unrealized losses for its marketable securities were not attributable to credit and therefore an allowance for credit losses for these securities has not been recorded as of December 31, 2024.

Also, based on the scheduled

maturities of the investments, the Company was more likely than not to hold these investments for a period of time sufficient for a recovery of the Company’s cost basis.

Based on the Company’s procedures under the expected credit loss model, including an assessment of unrealized losses on the portfolio after December 31, 2025, the Company concluded that the unrealized losses for its marketable securities were not attributable to credit and therefore an allowance for credit losses for these securities has not been recorded as of December 31, 2025.

Also, based on the scheduled maturities of the investments, the Company was more likely than not to hold these investments for a period of time sufficient for a recovery of the Company’s cost basis.

The Company recognized no material gains or losses on its cash equivalents and current marketable securities as of December 31, 2025 and as a result, the Company did not reclassify any amounts out of accumulated other comprehensive income (loss) for the year then ended.

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Merck Sharp & Dohme Corporation (“Merck”)

Bristol Myers Squibb Company (“BMS”)

Merck KGaA, Darmstadt, Germany (operating in the United

States and Canada under the name “EMD Serono”)

BioNova Pharmaceuticals, Ltd.

Total revenue

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In June 2022, the Company entered into a License and Collaboration Agreement (the “Astellas Agreement”) with Astellas for the development of immunostimulatory antibody-drug conjugates for up to three biological targets, to be identified by Astellas.

The Company will conduct research and preclinical development of any compound (as designated by Astellas) in each of the three programs in accordance with the terms of a research plan between the Company and Astellas.

The Company will conduct research and pre-clinical development of any compound (as designated by Astellas) in each of the three programs in accordance with the terms of a research plan between the Company and Astellas.

Astellas will have an exclusive worldwide license to develop and commercialize any such designated compound, subject to the Company’s rights to participate in cost and profit sharing in the United States, as described below.

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Additionally, under ASC 606, the Company determined a financing component associated with the $ 90.0 million upfront payment and has calculated $ 25.6 million as of December 31, 2025 on the unearned revenue portion beyond one year from the effective date of the agreement, which amount is being recognized as interest expense and revenue over the estimated service period for the target programs.

The Company is also eligible to receive up to $ 422.5 million in development, regulatory and commercial milestones for each product candidate, and tiered royalties ranging from low double-digit to mid-teen percentages on worldwide sales of any commercial products that may result from the collaboration, subject to customary deductions under certain circumstances.

The Company can also elect to convert any product candidate into a cost and profit-sharing arrangement, for the United States only.

In the event the Company makes such election, it will share commercialization costs and profits relating to such product candidate equally with Astellas in the United States, and no royalties will be due from Astellas for net sales of such product candidates in the United States.

In June 2024, Astellas notified the Company that it would not be nominating a third target program.

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For the JSC performance obligation, as the remaining services were determined to be distinct from those already provided, the Company determined that the contract modification should be treated as a termination of the existing contract and the creation of a new contract, to be accounted for prospectively.

Revenues under the Astellas Agreement were as follows:

In March 2025, the Company earned a $ 7.5 million contingent payment for the initiation by Astellas of the first IND-enabling toxicology study for the first target program under the Astellas Agreement.

The $ 7.5 million was, in

prior periods, considered to be a fully constrained variable consideration.

Removal of the constraint on this variable consideration resulted in a change to the total transaction price, from $ 90.0 million to $ 97.5 million.

The Company allocated the updated transaction price to all identified performance obligations on the same basis as the June 2024 re-allocation under the Astellas Agreement.

After re-allocation of the updated transaction price, the Company updated the cost-based input measure of progress for the remaining performance obligations and recorded a cumulative catch-up adjustment to revenue of $ 5.7 million relating to the ongoing unsatisfied performance obligations.

In December 2025, the Company earned a $ 7.5 million contingent payment for the initiation by Astellas of the first IND-enabling toxicology study for the second target program under the Astellas Agreement.

The $ 7.5 million was, in prior periods, considered to be a fully constrained variable consideration.

Removal of the constraint on this variable consideration resulted in a change to the total transaction price, from $ 97.5 million to $ 105 million.

The Company allocated the updated transaction price to all identified performance obligations on the same basis as the June 2024 re-allocation under the Astellas Agreement.

After re-allocation of the updated transaction price, the Company updated the cost-based input measure of progress for the remaining performance obligations and recorded a cumulative catch-up adjustment to revenue of $ 6.6 million relating to the ongoing unsatisfied performance obligations.

The Company can also elect to convert any product candidate into a cost and profit-sharing arrangement, for the United States only.

2025 Astellas Supply Agreement

In January 2025, the Company entered into a Cell Free Extract supply agreement (the “CFE Supply Agreement”) with Astellas, wherein the Company will provide manufacturing and supply chain management services, including supply of XtractCF® for use in manufacturing collaboration clinical product candidates.

Revenues under the Astellas Agreements were as follows:

Year ended December 31,

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Total revenue

As of December 31, 2024 and 2023, there was $ 29.1 million and $ 69.0 million of deferred revenue, respectively, related to the upfront payment received by the Company under the Astellas Agreement.

As of December 31, 2025 , there was $ 12.6 million of deferred revenue related to the upfront payment and contingent payments received by the Company under the Astellas Agreement and the CFE Supply Agreement.

As of December 31, 2024, there was $ 29.1 million of deferred revenue related to the upfront payment received by the Company under the Astellas Agreement.

Collaboration with Tasly

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In December 2021, the Company entered into a license agreement with Tasly to grant Tasly an exclusive license to develop and commercialize STRO-002, or luveltamab tazevibulin, or luvelta, in Greater China (the “Tasly License Agreement”).

Tasly will pursue the clinical development, regulatory approval, and commercialization of luvelta in multiple indications, including ovarian cancer, non-small cell lung cancer, triple-negative breast cancer, and other indications in Greater China.

Tasly will pursue the clinical development, regulatory approval, and

commercialization of luvelta in multiple indications, including ovarian cancer, non-small cell lung cancer, triple-negative breast cancer, and other indications in Greater China.

The Company will retain development and commercial rights of luvelta globally outside of Greater China, including the United States.

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The Tasly Amendment also added an additional regulatory milestone payment to the Tasly License Agreement, providing additional potential payments totaling up to $ 350.0 million related to development, regulatory and commercialization milestones, beyond the payments described above, and made certain other ministerial edits.

During the year ended December 31, 2022, the Company recognized the $ 25.0 million upfront payment as revenue after the payment, net of a withholding tax, was received by the Company from Tasly.

The withholding tax of $ 2.5 million was recorded as an income tax charge related to the upfront payment.

During the year ended December 31, 2023, the Company recognized a $ 5.0 million contingent payment as revenue, net of withholding tax, after Tasly received its first IND clearance by National Medical Products Administration, or NMPA, in Greater China.

The withholding tax of $ 0.5 million was recorded as an income tax charge related to the contingent payment.

During the year ended December 31, 2024, the Company recognized a $ 5.0 million contingent payment as revenue, net of withholding tax, after the Company announced the selected dose from the dose-optimization portion (Part 1) of REFRaME-O1 for luvelta.

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(in thousands)

Upfront payment

Contingent payment

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As of December 31, 2025 and 2024 , there was $ 12.7 million and $ 12.4 million in such accruals related to the Vaxcyte Supply Agreement.

For the years ended December 31, 2024, 2023 and 2022, the agreed-upon reimbursements by Vaxcyte of the costs associated with such arrangements, principally for pass-through costs from the CMOs, were $ 9.0 million, $ 8.6 million and $ 12.4 million, respectively, and were accounted for by the Company as a reduction to research

and development expense based on the Company’s conclusion that Vaxcyte was not a customer for such activities and associated payments.

For the years ended December 31, 2025 and 2024 , the agreed-upon reimbursements by Vaxcyte of the costs associated with such arrangements, principally for pass-through costs from the CMOs, were $ 1.2 million and $ 9.0 million, respectively, and were accounted for by the Company as a reduction to research and development expense based on the Company’s conclusion that Vaxcyte was not a customer for such activities and associated payments.

Vaxcyte Agreement

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(in thousands)

Upfront payments

Research and development services

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Total revenue

Refer to Note 9 below for information relating to the Purchase Agreement between the Company and Blackstone, pursuant to which the Company sold to Blackstone its 4 % royalty, or revenue interest, in potential future net sales of Vaxcyte products, including VAX-24 and VAX-31.

Ipsen Agreements

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The fair market value of the common stock issued to Ipsen USA in April 2024 was $ 24.6 million, based on the stock price on the date of issuance, resulting in a $ 0.4 million premium on the Ipsen Investment Agreement.

The Company is eligible to receive up to an additional $ 447.0 million in developmental and regulatory milestones, assuming multiple indications, and up to $ 360.0 million in sales milestones, as well as tiered royalty

payments ranging from low double-digit to mid-teen digit percentages of annual net sales of STRO-003, subject to certain adjustments specified in the Ipsen License Agreement.

Ipsen may terminate the Ipsen License Agreement for convenience with sixty calendar days prior written notice or for certain other specified reasons.

The Company may terminate the Ipsen License Agreement if Ipsen or any of its Affiliates challenge the validity of any patents controlled by the Company that are licensed under the agreement.

Both Ipsen and the Company may terminate the Ipsen License Agreement (i) for material breach by the other party and a failure to cure such breach within the time period specified in the Ipsen License Agreement or (ii) the other party’s bankruptcy event.

The Company concluded that the Ipsen License Agreement contains three promised goods and services consisting of the STRO-003 license, technology transfer, and IND-enabling activities.

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The Company determined that the total transaction price of the Ipsen License Agreement was $ 50.4 million, comprised of the one-time, nonrefundable, non-creditable upfront payment of $ 50.0 million paid by Ipsen under the Ipsen License Agreement, and a $ 0.4 million premium from the Ipsen Investment Agreement.

Revenue for the performance obligation will be recognized at a point in time when the Company has completed all its deliverables, i.e., STRO-003 license, technology transfer, and IND-enabling activities, at which time Ipsen would have what it needs from the Company to file an IND for STRO-003.

Ipsen Transition Services Agreement ("TSA"), Material Transfer Agreement ("MTA") and Manufacturing and Supply Agreement (“MSA”)

Revenue for the performance obligation would be recognized at a point in time when the Company has completed all its deliverables, i.e., STRO-003 license, technology transfer, and IND-enabling activities, at which time Ipsen would have what it needs from the Company to file an IND for STRO-003.

In July 2024, the Company executed the Transition Services Agreement (“TSA”) with Ipsen.

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The pricing is based on an agreed upon cost-plus arrangement.

In June 2025, Ipsen informed the Company of its strategic decision not to advance the STRO-003 program under its partnership with the Company, following the review of new data and developments in the ROR1

STRO-003 continues to be recognized as a well-engineered ADC candidate.

The Company assessed the contract modification under ASC 606 which changed the scope of the performance obligations such that Ipsen was not expecting, and the Company was not intending to, perform any additional activities beyond June 30, 2025, resulting in the acceleration of the remaining deferred revenue recorded on the Company’s financial statements.

In August 2025, the Company and Ipsen formally executed the Termination Agreement to terminate the License Agreement and all related agreements except the Investment Agreement.

Revenues under the Ipsen agreements were as follows:

1 unchanged sentence

(in thousands)

Ongoing performance related to

unsatisfied performance obligations

Research and development services

1 unchanged sentence

Total revenue

As of December 31, 2024, there was $ 53.2 million of deferred revenue related to the Ipsen Agreements.

Collaboration with Merck

In August 2024, Merck informed the Company of its decision to discontinue the clinical trial of MK-1484 in patients.

Merck stated that the decision was based on strategic portfolio considerations.

As of December 31, 2025 and 2024 , there was zero and $ 53.2 million of deferred revenue, respectively, related to the Ipsen Agreements.

Property and Equipment, Net

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Total property and equipment, net

Depreciation and amortization expense amounted to $ 7.2 million, $ 6.8 million and $ 5.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Depreciation and amortization expense amounted to $ 7.3 million and $ 7.2 million for the years ended December 31, 2025 and 2024, respectively.

The Company recognized impairment charges of $ 0.2 million for the leasehold improvements at its San Carlos facility and a $ 0.5 million loss on assets held for sales related to property plant and equipment for the year ended December 31, 2025.

See Note 11 for additional information.

Commitments and Contingencies

In June 2021, the Company entered into a third amendment (the “Third Amendment”) to its manufacturing facility lease, dated May 18, 2011, as amended, by and between Alemany Plaza LLC, located in San Carlos, California (the “San Carlos Lease”), as an extension to the term of the San Carlos Lease for a period of five years (the “Lease Extension Period”).

Pursuant to the Third Amendment, the San Carlos Lease will expire on July 31, 2026 , and it includes an option to renew the San Carlos Lease for an additional five years .

The aggregate estimated base rent payments due over the Lease Extension Period is approximately $ 4.2 million, subject to certain terms contained in the San Carlos Lease.

In June 2021, the Company entered into a first amendment (the “First Amendment”) to its manufacturing support facility lease, dated March 4, 2015, as amended, by and between 870 Industrial Road LLC, located in San Carlos, California (the “Industrial Lease”), as an extension to the term of the Industrial Lease for a period of five years (the “Industrial Lease Extension Period”).

Pursuant to the first Amendment, the Industrial Lease will expire on June 30, 2026 , and it includes an option to renew the Industrial Lease for an additional five years .

The aggregate estimated base rent payments due over the Industrial Lease Extension Period is approximately $ 4.3 million, subject to certain terms contained in the Industrial Lease.

In September 2020, the Company entered into a sublease agreement (the “Sublease”) with Five Prime Therapeutics, Inc.

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The components of lease costs, which the Company includes in operating expenses in the Statements of Operations, were as follows:

Year ended December 31,

(in thousands)

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Total lease cost

During the years ended December 31, 2024, 2023 and 2022, the Company recorded operating lease expense of $ 7.9 million, $ 7.0 million and $ 6.2 million, respectively, and paid $ 9.2 million, $ 8.0 million, and $ 1.7 million, respectively, of operating lease payments related to the lease liabilities, which the Company includes in net cash used in operating activities in the Statements of Cash Flows.

During the years ended December 31, 2025 and 2024 , the Company recorded operating lease expense of $ 7.9 million and $ 7.9 million, respectively, and paid $ 9.5 million and $ 9.2 million, respectively, of operating lease payments related to the lease liabilities, which the Company includes in net cash used in operating activities in the Statements of Cash Flows.

As of December 31, 2025 and 2024 , the weighted-average remaining lease term was 2.0 years and 2.8 years, respectively, and the weighted-average discount rate used to determine the operating lease liability was 10.8 % for both years.

The Company recognized impairment charges and related costs of $ 0.9 million for the San Carlos Lease and Industrial Lease ROU assets for the year ended December 31, 2025.

See Note 11 for additional information.

As of December 31, 2025, the maturities of the Company’s operating lease liabilities were as follows:

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Tax and related expenses

Restructuring related accrual

Total accrued expenses and other current liabilities

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There are a number of factors that could materially affect the fair value of the deferred royalty obligation.

Such factors include, but are not limited to, the amount and timing of potential future royalty payments to be earned and received by Blackstone from Vaxcyte under the 2015 License Agreement, changing standards of care, the introduction of competing products, manufacturing or other delays, intellectual property matters, adverse events that result in governmental health authority imposed restrictions on the use of the vaccine products, and other events or circumstances that could result in reduced royalty payments from Vaxcyte to Blackstone, which are not within the Company's control, and all of which would result in a reduction of non-cash royalty revenues and the non-cash interest expense over the estimated life of the royalty term arrangement.

The Company periodically assesses the estimated royalty payments to be earned by Blackstone from Vaxcyte and, to the extent that the amount or timing of such payments is materially different than our original estimates, the Company will prospectively adjust the imputed interest rate and the related amortization of the deferred royalty obligation.

As of December 31, 2024, the Company's effective interest rate used to amortize the liability is 19.8 %.

Such factors include, but are not limited to, the amount and timing of potential future royalty payments to be earned and received by Blackstone from Vaxcyte under the 2015 License Agreement, changing standards of care, the introduction of competing products, manufacturing or other delays, intellectual property matters, adverse events that result in governmental health authority imposed restrictions on the use of the vaccine products, and other events or circumstances that could result in reduced royalty payments from Vaxcyte to Blackstone, which are not within the Company's control, and all of which would result in a reduction or increase of non-cash royalty revenues and the non-cash interest expense over the estimated life of the royalty term arrangement.

The Company periodically assesses the estimated royalty payments to be earned by Blackstone from Vaxcyte and, to the extent that the amount or timing of such payments is materially different than its original estimates, the Company prospectively adjusts the imputed interest rate and the related amortization of the deferred royalty obligation.

As of December 31, 2025 , the effective interest rate used by the Company to amortize the liability is 17.8 %.

During the year ended December 31, 2025 , the Company recognized approximately $ 38.2 million of non-cash interest expense on the deferred royalty obligation, which amount will increase such balance.

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Liability related to sale of future Vaxcyte royalties - beginning balance

Proceeds from the sale of future Vaxcyte royalties

Issuance costs

Non-cash interest expense associated with the sale of future Vaxcyte royalties

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Travel-related expenses

Restructuring and related costs

Operating expenses

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All of the Company’s long-lived assets are maintained in the United States.

Restructuring and Related Costs

As discussed in Note 1, in connection with the Restructuring Plans, the Company reported the following costs in restructuring, impairments and other costs of deprioritized program:

• Clinical trial expenses and other third-party costs for the deprioritization of the luvelta program;

• Severance and benefits expense;

• Contract termination and other costs;

• Impairment / write-down of long-lived assets and other related costs.

Total restructuring and related costs from the Restructuring Plans include the following:

December 31, 2025

(in thousands)

Clinical trial expense and other third-party costs for the deprioritization of

the luvelta program

Severance and benefits expense

Contract termination and other restructuring costs

Impairment / write-down of long-lived assets and other related costs

The Company expects the Restructuring Plans to be substantially completed by the first quarter of 2026.

Clinical trial expense and other third-party costs for the deprioritization of luvelta, including contract termination costs

The clinical costs associated with deprioritization of the luvelta program primarily include third-party costs with the Company's CROs and CMOs who support the clinical trial and other development expenses to transition patients from the Company-led trials to standard of care or, in limited cases, post-trial access, as well as direct employee costs supporting these efforts.

The Company also incurred termination costs with CMOs who support certain manufacturing services of luvelta that were cancelled as part of the restructuring.

Payments for third party and internal costs incurred during the year ended December 31, 2025 were $ 23.4 million.

As of December 31, 2025, the aggregated accruals of $ 12.6 million associated with these costs are reported within accrued expenses and other current liabilities.

Severance and Benefit Expense

Employees affected by the reduction in force under the Restructuring Plans are entitled to receive severance payments and certain Company-funded benefits.

The following table provides details regarding the severance and other termination benefit expense and a reconciliation of such liability for the year ended December 31, 2025, which is reported within accrued compensation on the Balance Sheet:

December 31, 2025

(in thousands)

Liability balance as of December 31, 2024

Expense recognized during the period

Payments during the period

Liability balance as of December 31, 2025

The remaining expense expected to be incurred in connection with severance payments and certain Company-funded benefits is zero for the March 2025 Restructuring Plan and $ 0.2 million for the September 2025 Restructuring Plan.

Further, under the Company's Severance and Change in Control Plan (the “CIC Plan”), eligible employees terminated in connection with the March 2025 Restructuring Plan are entitled to acceleration of their unvested equity awards.

During the year ended December 31, 2025, these expenses amounted to $ 3.0 million and were recorded under ASC 718, Compensation—Stock Compensation ("ASC-718").

No future amounts are expected to be incurred in connection with acceleration of unvested equity.

Impairment of Long-Lived Assets

In connection with the 2025 Restructuring Plans, the Company ceased its manufacturing and other operating activities in the San Carlos facility during December 2025 and determined an impairment indicator was present.

The Company reassessed its asset grouping and newly identified an asset group, encompassing property and equipment and ROU assets at the San Carlos facility (the "San Carlos Asset Group"), for the purpose of long-lived asset impairment assessment.

As a result of the impairment assessment on the San Carlos Asset Group, during the year ended December 31, 2025, the Company recognized $ 1.1 million of impairment charges on its property and equipment and ROU assets, which are included in restructuring and related costs on the Statement of Operations.

Assets Held for Sale

In December 2025, the Company conducted an auction, with the assistance of a third party, of certain of its property and equipment at the San Carlos facility.

The assets auctioned remain at the San Carlos Facility as of December 31, 2025, and the transfer of the assets to successful bidders will happen in 2026.

The Company classified such assets as held-for-sale assets on December 31, 2025 and remeasured them to the fair value minus costs to sell of $ 0.4 million, which is included in prepaid expenses and other current assets on the Balance Sheet.

The related loss on assets held for sale of $ 0.5 million are included in restructuring and related costs on the Statement of Operations for the year ended December 31, 2025.

Stockholders’ Equity

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Equity Incentive Plans, Equity Inducement Plans, Employee Stock Purchase Plan and Stock-Based Compensation

2004 Equity Incentive Plan, 2018 Equity Incentive Plan, 2021 Equity Inducement Plan, and Amended and Restated 2021 Equity Inducement Plan

2018 Equity Incentive Plan, 2021 Equity Inducement Plan, and Amended and Restated 2021 Equity Inducement Plan

In September 2018, the Company adopted the 2018 Equity Incentive Plan (“2018 Plan”), which became effective on September 25, 2018.

As a result, the Company will not grant any additional awards under the 2004 Equity Incentive Plan (“2004 Plan”).

The terms of the 2004 Plan and applicable award agreements will continue to govern any outstanding awards thereunder.

In addition to the shares of common stock reserved for future issuance under the 2004 Plan that were added to the 2018 Plan upon its effective date, the Company initially reserved 2,300,000 shares of common stock for issuance under the 2018 Plan.

The Company initially reserved 230,000 shares of common stock for issuance under the 2018 Plan.

In addition, the number of shares of common stock reserved for issuance under the 2018 Plan will automatically increase on the first day of January for a period of up to ten years , commencing on January 1, 2019, in an amount equal to 5 % of the total number of shares of the Company’s capital stock outstanding on the last day of the preceding year (rounded to the nearest whole share), or a lesser number of shares determined by the Company’s board of directors.

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Additionally, in February 2023, the Company amended and restated the Amended and Restated 2021 Plan and reserved an additional 50,000 shares of common stock available for issuance under the Amended and Restated 2021 Plan to be granted by the Company to certain employees as a material inducement to their acceptance of employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4).

Additionally, in May 2025, the Company amended and restated the Amended and Restated 2021 Plan and reserved an additional 225,000 shares of common stock available for issuance under the Amended and Restated 2021 Plan to be granted by the Company to certain employees.

The total number of shares reserved for issuance pursuant to the Amended and Restated 2021 Plan is 425,000 shares .

As of December 31, 2025, the Company had 676,072 shares available for grant under the 2018 Plan and the 2021 Plan.

The following table summarizes option activity under the Company’s 2004 Plan, 2018 Plan and 2021 Plan:

The following table summarizes option activity under the Company’s Equity Incentive Plans:

Exercise Price

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86.4 %- 89.2 %

81.8 %- 83.5 %

Risk-free interest rate

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The Company used the “simplified” method to determine the expected term of options granted, which calculates the expected term as the average of the weighted-average vesting term and the contractual term of the option.

Expected Volatility —Since the Company has limited information available on the volatility of its common stock due to its short trading history, the expected volatility was estimated based on the average historical volatilities of common stock of comparable publicly traded entities over a period equal to the expected term of the stock option grants.

The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

Expected Volatility —The expected volatility is determined by using a blended approach of the Company and its industry peers’ historical volatilities.

Risk-Free Interest Rate —The risk-free interest rate is based on the U.S.

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The aggregate number of shares issued over the term of the Company’s ESPP, subject to stock-splits, recapitalizations or similar events, may not exceed 305,000 shares of the Company’s common stock.

At the Company’s annual stockholder meeting in June 2024, the Company amended the ESPP (the “Amended ESPP”) to increase the overall limit on the number of shares that may be issued under the Amended ESPP throughout its ten-year term from 2,300,000 shares to 3,050,0000 shares of the Company’s common stock.

The fair value of the ESPP shares is estimated using the Black-Scholes option pricing model.

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88.4 - 93.7 %

65.9 - 88.1 %

Risk-free interest rate

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Restricted stock units

Restructuring and related costs

As of December 31, 2025 , unrecognized stock-based compensation expense related to the unvested stock options and RSUs granted was $ 3.3 million and $ 6.3 million, respectively.

The remaining unrecognized compensation cost is expected to be recognized over a weighted-average period of 2.1 years and 2.3 years, respectively.

As of December 31, 2024, there is $ 0.2 million of unrecognized stock-based compensation expense related to the ESPP.

The remaining unrecognized compensation cost related to the unvested stock options and RSUs is expected to be recognized over a weighted-average period of 2.7 years and 2.1 years, respectively.

As of December 31, 2025 , there was $ 26,000 of unrecognized stock-based compensation expense related to the ESPP.

The components of loss before income tax provision consist of the following:

Year Ended December 31,

(in thousands)

United States

Loss before provision for income taxes

Current provision for income taxes consists of the following:

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Total current provision for income taxes

For the year ended December 31, 2024, the Company recognized an income tax expense of $ 2.4 million.

This was primarily due to prior period tax provision to return adjustment.

The effective tax rates for the year ended December 31, 2024 vary from the U.S.

For the year ended December 31, 2025 , the Company recognized an income tax benefit of $ 0.1 million.

This was primarily due to adjustments resulting from the overpayment of prior-year state income taxes.

The effective

tax rate for the year ended December 31, 2025 varies from the U.S.

federal statutory tax rate of 21 % primarily due to the Company’s inability to recognize the benefit from its net deferred tax assets, which are offset by a valuation allowance.

2 unchanged sentences

For the year ended December 31, 2024, the Company recognized an income tax expense of $ 2.4 million.

The income tax charge for the year ended December 31, 2023, was primarily due to unfavorable book-tax differences related to capitalizing and amortizing research and development expenditures under Internal Revenue Code, or IRC, Section 174, the upfront payment from the sale of future royalties, deferred revenue, foreign income tax, and IRC Section 382 limitations imposed on the utilization of the Company's historical tax attributes as a result of cumulative ownership changes that the Company experienced in prior years.

The Company recorded a foreign income tax charge of $ 2.5 million during the year ended December 31, 2022, due to a withholding tax in China on its license revenue from Tasly.

The effective tax rate of the Company’s provision (benefit) for income taxes differs from the federal statutory rate as follows:

This was primarily due to prior period tax provision to return adjustment.

The effective tax rates for the year ended December 31, 2024 vary from the U.S.

federal statutory tax rate of 21 % primarily due to the Company’s inability to recognize the benefit from its net deferred tax assets, which are offset by a valuation allowance.

Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, the reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2025 was as follows:

Year Ended December 31, 2025

(in thousands)

federal statutory rate

State tax, net of federal benefit

Change in valuation allowance

Non taxable or nondeductible items:

Stock compensation

Foreign-Derived Intangible Income deduction

Foreign withholding

Changes in unrecognized tax benefits

The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2024 in accordance with the guidance prior to the adoption of ASU 2023-09 as follows:

December 31, 2024

Federal statutory rate

Change in valuation allowance

Stock compensation

Income taxes paid, net of (refunds), for the year ended December 31, 2025 and 2024 is immaterial and $ 17.5 million, respectively.

The components of the Company’s deferred tax assets consist of the following:

9 unchanged sentences

Accruals and other

Fixed asset basis

Total deferred tax assets

4 unchanged sentences

Fixed asset basis

Vaxcyte investment

Total deferred tax liabilities

2 unchanged sentences

Due to the Company’s history of operating losses and future sources of taxable income, the Company believes that the realization of the deferred tax assets is currently not more likely than not to be realized and, accordingly, have provided a full valuation allowance against net deferred tax assets.

For the years ended December 31, 2024, 2023 and 2022, the net increase in the valuation allowance was $ 60.1 million, $ 36.5 million and $ 30.6 million, respectively.

For the years ended December 31, 2025 and 2024 , the net increase in the valuation allowance was $ 44.4 million and $ 60.1 million, respectively.

As of December 31, 2025 , the Company had federal net operating loss carryforwards of $ 376.3 million and federal general business credits from research and development expenses totaling $ 35.9 million, as well as state net operating loss carryforwards of $ 108.2 million and state research and development credits of $ 33.6 million.

12 unchanged sentences

The actual amount of any taxes due could vary significantly depending on the ultimate timing and nature of any settlement.

The amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate is $ 12.1 million, $ 8.7 million and $ 8.6 million as of December 31, 2024, 2023 and 2022, respectively.

The amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate is $ 13.4 million and $ 12.1 million as of December 31, 2025 and 2024, respectively.

One or more of these unrecognized tax benefits could be subject to a valuation allowance if and when recognized in a future period, which could impact the timing of any related effective tax rate benefit.

The Company believes that the amount by which the unrecognized tax benefits may increase or decrease within the next 12 months is not estimable.

The Company determines its uncertain tax positions based on a determination of whether and how much of a tax benefit taken by the Company in its tax filings is more likely than not to be sustained upon examination by the relevant income tax authorities.

5 unchanged sentences

Gross unrecognized tax benefit at December 31

The Company is subject to taxation in the United States and various state jurisdictions.

All tax years remain subject to examination for U.S.

federal and state purposes.

All net operating losses generated to date are subject to adjustment for U.S.

federal and state purposes.

The Company is not currently under examination in federal or state jurisdictions.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law, which includes significant changes to U.S.

The Company has evaluated the impact of OBBBA and determined that it does not have a material impact on the financial statements as of and for the year ended December 31, 2025 due to a full valuation allowance established against net deferred tax assets.

Net Loss Per Share

10 unchanged sentences

Shares to be issued under ESPP

Subsequent Event

Restructuring

On March 13, 2025, the Company announced the completion of a strategic portfolio review resulting in the prioritization of the Company's three wholly-owned preclinical programs in the Company's next-generation ADC pipeline.

The Company also announced that the Company is deprioritizing additional investment into development of luvelta across all indications and is reducing headcount by nearly 50 percent.

Further, given the Company’s significant progress in fully externalizing the cell-free manufacturing to scale, the Company intends to exit its internal GMP manufacturing facility by year-end.

The Company is currently evaluating the accounting impact on the 2025 financial statements.

All shares, options, stock units and warrants to purchase shares of common stock and loss per share amounts have been adjusted to give retroactive effect to the Reverse Stock Split as described in Note 1, for all periods presented above.

Defined Contribution Plan

The Company sponsors a 401(k) retirement savings plan for the benefit of its employees.

Eligible employees may contribute a percentage of their compensation to this plan, subject to statutory limitations.

The Company made contributions to the plan for eligible participants, and recorded contribution expenses of $ 0.8 million and $ 1.5 million for the years ended December 31, 2025 and 2024 , respectively.

Changes in and Disagreements with Acco untants on Accounting and Financial Disclosure

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