Vir Biotechnology, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included as part of our Annual Report on Form 10-K for the year ended December 31, 2024. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to the “Company”, “Vir Bio,” “we,” “us” and “our” refer to Vir Biotechnology, Inc. and its consolidated subsidiaries. Overview We are a clinical-stage biopharmaceutical company focused on powering the immune system to transform lives by discovering and developing medicines for serious infectious diseases and cancer.. Our clinical-stage portfolio includes infectious disease programs for Chronic Hepatitis Delta (CHD) and Chronic Hepatitis B (CHB) infections and multiple dual-masked T-cell engagers (TCEs) across validated targets in solid tumor indications. We also has a preclinical portfolio of programs across a range of infectious diseases and oncologic malignancies. Our clinical development pipeline consists of investigational therapies targeting hepatitis delta virus (HDV) and various solid tumors. In HDV, we enrolled the first patient in our phase 3 ECLIPSE registrational program in the first quarter of 2025. Should the ECLIPSE program yield positive results that support regulatory approval and subsequent commercial launch, we believe the combination has the potential to be a new standard of care for hepatitis delta patients, for whom approved treatment options are either limited or unavailable. In oncology, we are advancing phase 1 clinical studies for our dual-masked TCEs: VIR-5818 in patients with HER2-expressing tumors and VIR-5500 in patients with PSMA-expressing metastatic castration-resistant prostate cancer (mCRPC). We are also advancing our third TCE program,VIR-5525, in patients with EGFR-expressing tumors, with phase 1 clinical studies expected to begin in the second quarter of 2025. We are also developing therapeutic candidates in hepatitis B, HIV cure, and other solid tumors, leveraging our expertise and platform strengths. We have an industry-leading management team and board of directors with significant immunology, infectious diseases, and oncology experience, including a proven track record of progressing product candidates from early-stage research through clinical development, and worldwide regulatory approval and commercialization experience. Given the global impact of infectious diseases and cancer, we are committed to developing transformative therapies that can make a meaningful difference in patients’ lives. Significant Developments Following is a summary of selected significant developments affecting our business that occurred since the filing of our Annual Report on Form 10-K for the period ended December 31, 2024. For additional developments or for a more comprehensive discussion of certain developments below, see our Annual Report on Form 10-K for the year ended December 31, 2024. Chronic Hepatitis Delta (CHD) • ECLIPSE 1, the first Phase 3 trial of our registrational program in CHD enrolled its first patient in March 2025 and is progressing as planned. The clinical trial will assess the efficacy and safety of tobevibart and elebsiran compared to deferred treatment in regions such as the U.S. where bulevirtide is not available or other regions where its access is limited. • We are advancing plans for the initiation of ECLIPSE 2, a Phase 3 trial that will evaluate the efficacy and safety of switching to tobevibart and elebsiran in people with CHD who have not achieved viral suppression with bulevirtide therapy. • We plan to share Phase 2 SOLSTICE subgroup analysis data in CHD in a poster presentation at the European Association for the Study of the Liver (EASL) Congress 2025. The poster was selected by EASL to be highlighted during the poster tour on May 8, 2025. • Tobevibart and elebsiran combination therapy is supported by multiple U.S. and EU regulatory designations, including U.S. Food and Drug Administration (FDA) Breakthrough Therapy designation, U.S. FDA Fast Track designation, European Priority Medicines (PRIME) designation and European Orphan Drug designation, signifying the significant unmet need in CHD. 21 Table of Contents Solid Tumors • VIR-5818, the only dual-masked HER2-targeting TCE in clinical trials, continues to advance through dose escalation as a monotherapy, and in combination with pembrolizumab, in multiple tumor types, including metastatic breast cancer and metastatic colorectal cancer. ◦ In early Phase 1 data reported in January 2025, VIR-5818 showed tumor shrinkage across various tumor types in 50% (10/20) of participants receiving doses ≥400 µg/kg, with confirmed partial responses in 33% (2/6) of participants with HER2-positive colorectal cancer (CRC). • VIR-5500, the only dual-masked PSMA-targeting TCE in clinical trials, continues to advance through dose escalation aiming to further optimize dosing and efficacy. ◦ In early Phase 1 data reported in January 2025, VIR-5500 showed PSA reductions in 100% (12/12) of metastatic castration resistant prostate cancer (mCRPC) patients after an initial dose ≥120 µg/kg. PSA 50 response was confirmed in 58% (7/12) of participants. • Early Phase 1 data for VIR-5818 and VIR-5500 reported in January 2025 showed promising safety profiles for both clinical candidates, with maximum tolerated dose not yet reached, no dose-limiting cytokine release syndrome (CRS) observed and no CRS greater than grade 2 reported. • Initial clinical data demonstrate the PRO-XTEN™ masking technology’s potential to minimize systemic toxicity while enabling selective killing of cancer cells in the tumor microenvironment, minimizing CRS and expanding the therapeutic index compared to traditional therapeutic approaches. PRO-XTEN™ is a trademark of Amunix Pharmaceuticals, Inc., a Sanofi company. • We plan to initiate a Phase 1 study of VIR-5525, our PRO-XTEN™ dual-masked EGFR-targeting TCE, in the second quarter of 2025, to evaluate its potential across a number of solid tumor indications. Chronic Hepatitis B (CHB) • We will present functional cure data from the 24-week follow-up of the MARCH Part B Phase 2 clinical study evaluating combinations of tobevibart and elebsiran, alone, or in combination with pegylated interferon alfa (PEG-IFNα) at the EASL Congress 2025 on May 9, 2025. • Future advancement in CHB by us will be contingent on securing a worldwide development and commercialization partner outside China Territory (People’s Republic of China, Hong Kong, Taiwan, and Macau). Preclinical Pipeline Candidates • We continue to progress multiple undisclosed PRO-XTEN™ dual-masked TCEs against clinically validated targets with potential applications across a number of solid tumors. These preclinical candidates integrate the PRO-XTEN™ masking technology with novel TCEs discovered and engineered using Vir Biotechnology’s antibody discovery platform and our proprietary dAIsY™ ( d ata AI s tructure and antibod y ) AI engine. • We have advanced a broadly neutralizing antibody to development candidate status in our HIV cure program in collaboration with the Gates Foundation. Corporate Update • In January 2025, we announced positive initial Phase 1 dose escalation data for two of our PRO-XTEN™ dual-masked TCEs. • During the quarter, Vir Biotechnology and Alnylam Pharmaceuticals, Inc. (Alnylam) amended and restated their collaboration agreement (Restated Alnylam Agreement), with Alnylam electing not to opt-in to its profit-sharing option for elebsiran in CHB and CHD indications. The amended agreement provides us with the flexibility to pursue commercialization partners in markets outside the U.S. 22 Table of Contents Our Collaboration, License and Grant Agreements We have entered into collaboration, license and grant arrangements with various third parties. For details regarding these and other agreements, see Note 4—Grant Agreements and Note 5—Collaboration and License Agreements to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and Note 6—Collaboration and License Agreements to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. Components of Operating Results Revenues Other than sotrovimab, we have not obtained regulatory approval for our product candidates, and we do not expect to generate any significant revenue from the sale of our other product candidates until we complete clinical development, submit regulatory filings and receive approvals from the applicable regulatory bodies for such product candidates, if ever. In December 2024, the FDA revoked EUA granted to sotrovimab in May 2021. Although certain countries outside the U.S. continue to maintain access to 500 mg IV while noting that the clinical efficacy is unknown or uncertain against existing and emerging variants, we cannot predict whether other countries will further limit the use of sotrovimab. We do not expect meaningful collaboration revenue in the future from the sale of sotrovimab for the treatment of COVID-19. Our revenues consist of the following: Collaboration revenue includes recognition of our profit-share from the sales of sotrovimab pursuant to our 2020 collaboration agreement with GlaxoSmithKline plc (together with its affiliates, GSK, and 2020 GSK Agreement). As the lead party for all manufacturing and commercialization activities, GSK incurs all of the manufacturing, sales and marketing expenses and is the principal on sales transactions with third parties. As the agent, we recognize our contractual share (72.5%) of the profit-sharing amounts as revenue, based on sales net of various estimated deductions such as rebates, discounts, chargebacks, credits and returns, less cost of sales and allowable expenses (including manufacturing, distribution, medical affairs, selling, and marketing expenses) in the period the sale occurs. To record collaboration revenue, we utilize certain information from our collaboration partner, including actual net product sales and costs incurred for sales activities, and make key judgments based on business updates related to commercial and clinical activities. Our contractual share of the profit-sharing amounts is subject to potential future adjustments to allowable expenses, which we account for as a form of variable consideration. In previous years, GSK reported to us certain adjustments to allowable manufacturing expenses, which we had previously reserved as a constraint on our cumulative profit-sharing amounts. GSK may continue to adjust allowable manufacturing expenses in future periods. We evaluate the latest available facts and circumstances at each reporting period to re-assess whether any portion of profit-sharing amounts should continue to be constrained. Actual results could materially differ from estimates. In 2025, we expect a nominal amount of collaboration revenue, if any, from our 2020 GSK Agreement, and we may incur negative collaboration revenue related to costs for ongoing required support efforts that our partner GSK leads. Contract revenue includes recognition of revenue generated from license rights issued to GSK, from research and development services under third-party contracts, and from a third-party clinical supply agreement. Grant revenue is comprised of revenue derived from grant agreements with government-sponsored and private organizations. Operating Expenses Cost of Revenue Cost of revenue currently represents royalties earned by third-party licensors on net sales of sotrovimab. We recognize these royalties as cost of revenue when we recognize the corresponding revenue that gives rise to payments due to our licensors. 23 Table of Contents Research and Development To date, our research and development expenses have related primarily to discovery efforts and preclinical and clinical development of our product candidates. Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. We do not track all research and development expenses by product candidate. Research and development expenses consist primarily of costs incurred for our product candidates in development and prior to regulatory approval, which include: • expenses related to license and collaboration agreements, and change in fair value of certain contingent consideration obligations arising from business acquisitions; • personnel-related expenses, including salaries, benefits and stock-based compensation for personnel contributing to research and development activities; • expenses incurred under agreements with third-party contract manufacturing organizations, contract research organizations (CROs), and consultants; • clinical costs, including laboratory supplies and costs related to compliance with regulatory requirements; and • other allocated expenses, including expenses for rent and facilities maintenance, and depreciation and amortization. We expect our research and development expenses to increase substantially in absolute dollars over time as we advance our product candidates into and through preclinical and clinical studies and pursue regulatory approval of our product candidates. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for our product candidates may be affected by a variety of factors including: the safety and efficacy of our product candidates, early clinical data, investment in our clinical programs, the ability of collaborators to successfully develop our licensed product candidates, competition, manufacturing capability and commercial viability. In addition, under our some of our license agreements , we may incur additional clinical, and regulatory milestone payments based on the development progress of certain clinical programs. We may also be required to pay commercial milestone payments and royalties in the event of a successful product launch and our receipt of commercial revenues. Therefore, we are unable to predict the timing or the final cost to complete our clinical programs or validation of our manufacturing and supply processes and delays may occur due to numerous factors. Factors that could cause or contribute to delays or additional costs include, but are not limited to, those discussed in the “Risk Factors” section of this Quarterly Report. As a result of the uncertainties discussed above, we are unable to determine the duration and completion costs of our research and development projects or when and to what extent we will generate significant revenue from the commercialization and sale of any of our product candidates. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. We anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future preclinical and clinical studies, regulatory developments, our ongoing assessments as to each product candidate’s commercial potential. We cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured (if at all) and to what degree such arrangements will affect our development plans and capital requirements. Our clinical development costs may vary significantly based on factors such as: • whether a collaborator is paying for some or all of the costs; • per patient trial costs; • the number of studies required for approval; • the number of sites included in the studies; • enrollment and retention of patients in studies in countries disrupted by geopolitical events, including civil or political unrest; • the length of time required to enroll eligible patients; • the number of patients that participate in the studies; • the number of doses that patients receive; 24 Table of Contents • the drop-out or discontinuation rates of patients; • potential additional safety monitoring requested by regulatory agencies; • the duration of patient participation in the studies and follow-up; • the cost and timing of manufacturing our product candidates; • the phase of development of our product candidates; and • the efficacy and safety profile of our product candidates. Selling, General and Administrative Our selling, general and administrative expenses consist primarily of personnel-related expenses for personnel in executive, finance and other administrative functions, facilities and other allocated expenses, other expenses for outside professional services, including legal, audit and accounting services, insurance costs and change in fair value of certain contingent consideration obligations arising from business acquisitions. Personnel-related expenses consist of salaries, benefits and stock-based compensation. In the long-term as we advance our research and development programs toward potential commercialization, we expect our selling, general, and administrative expenses to increase in absolute dollars to support commercialization activities and related expansion in research and development activities. Restructuring, long-lived asset impairment and related charges Restructuring, long-lived asset impairment and related charges consist primarily of charges incurred in connection with our cost saving initiatives implemented in 2024 and 2023. Change in Fair Value of Equity Investments Change in fair value of equity investments consists of the remeasurement of our investment in Brii Biosciences Limited’s, or Brii Bio Parent, ordinary shares based on the quoted market price at each reporting date. Interest Income Interest income consists of interest earned on our cash, cash equivalents and investments. Other Expense, Net Other expense, net consists of gains and losses from foreign currency transactions and investment management expenses. Provision for Income Taxes Provision for income taxes consists primarily of income taxes on our domestic and foreign operations. 25 Table of Contents Results of Operations Comparison of the Three Months Ended March 31, 2025 and 2024 The following table summarizes our results of operations for the periods presented (in thousands): Three Months Ended March 31, 2025 2024 Change Revenues: Collaboration revenue $ (70) $ (987) $ 917 Contract revenue 1,864 52,191 (50,327) Grant revenue 1,238 5,172 (3,934) Total revenues 3,032 56,376 (53,344) Operating expenses: Cost of revenue — 59 (59) Research and development 118,645 100,125 18,520 Selling, general and administrative 23,944 36,321 (12,377) Restructuring, long-lived assets impairment and related charges, net (10) (48) 38 Total operating expenses 142,579 136,457 6,122 Loss from operations (139,547) (80,081) (59,466) Other income: Change in fair value of equity investments 6,382 (5,915) 12,297 Interest income 12,288 21,283 (8,995) Other expense, net (72) (287) 215 Total other income 18,598 15,081 3,517 Loss before provision for income taxes (120,949) (65,000) (55,949) Provision for income taxes (16) (276) 260 Net loss $ (120,965) $ (65,276) $ (55,689) Revenues The change in collaboration revenue for the three months ended March 31, 2025 compared to the same period in 2024 was nominal. The decrease in contract revenue for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to $51.7 million of deferred revenue recognized during the first quarter of 2024 when GSK’s rights to select up to two additional non-influenza target pathogens expired on March 25, 2024. The decrease in grant revenue for the three months ended March 31, 2025 compared to the same periods in 2024 was primarily due to lower revenue recognized in accordance with our agreement with BARDA and the Gates Foundation. We terminated our agreement with BARDA on December 31, 2024. The decrease in cost of revenue for the three months ended March 31, 2025 compared to the same period in 2024 was nominal. 26 Table of Contents Research and Development Expenses The following table shows the primary components of our research and development expenses for the periods presented (in thousands): Three Months Ended March 31, 2025 2024 Change Contract manufacturing $ 9,336 $ 9,669 $ (333) Clinical costs 20,606 11,607 8,999 Personnel 33,718 46,190 (12,472) Licenses, collaborations and contingent consideration 36,591 5,696 30,895 Other 18,394 26,963 (8,569) Total research and development expenses $ 118,645 $ 100,125 $ 18,520 The increase in research and development expenses for the three months ended March 31, 2025 compared to the same period in 2024 was primarily due to: • higher license, collaborations and contingent consideration expenses related to a $30.0 million expense (paid in April 2025) in connection with signing the Restated Alnylam Agreement and milestone payments due upon the enrollment of the first patient in phase 3 ECLIPSE registrational program for CHD. As part of the Restated Alnylam Agreement, Alnylam had elected to not opt-in to the profit-sharing arrangement for elebsiran, resulting in a milestone and royalty-based structure rather than a profit-sharing model. We are solely responsible for the development, manufacturing, and commercialization activities associated with elebsiran; • higher clinical cost due to the initiation of our phase 3 ECLIPSE registrational program and newer oncology programs; partially offset by: • lower contract manufacturing expenses related to our de-prioritized programs partially offset by activities associated with our newer oncology programs; • lower personnel expenses associated with headcount reductions; and • lower other R&D expenses related to de-prioritized R&D programs and other ongoing cost savings, including the closing of our St. Louis, Missouri and Portland, Oregon sites. Selling, General and Administrative Expenses The decrease in selling, general and administrative expenses for the three months ended March 31, 2025 compared to the same periods in 2024 was primarily due to ongoing cost saving realized through headcount reductions and other initiatives. Restructuring, long-lived assets impairment and related charges The decrease in restructuring, long-lived assets impairment and related charges for the three months ended March 31, 2025 compared to the same period in 2024 was nominal. Our restructuring plans implemented in prior years were substantially completed by the end of 2024. Change in Fair Value of Equity Investments Our equity investment consisted solely of shares of Brii Bio Parent, which is a marketable equity investment and remeasured to fair value at each reporting period. For the three months ended March 31, 2025, we recognized an unrealized gain of $6.4 million due to the change in fair value, compared to an unrealized loss of $5.9 million for the same period in 2024. Interest Income The decrease in interest income for the three months ended March 31, 2025 compared to the same periods in 2024 was primarily due to lower balances of cash, cash equivalents, and investments. 27 Table of Contents Other Expense, Net The change in other expense, net for the three months ended March 31, 2025 compared to the same period in 2024 was nominal. Provision for Income Taxes The decrease in the provision for income taxes for the three months ended March 31, 2025 compared to the same periods in 2024 was nominal. Liquidity, Capital Resources and Capital Requirements Sources of Liquidity To date, we have financed our operations primarily through sales of our common stock from our initial public offering and subsequent follow-on offering, sales of our convertible preferred securities, and payments received under our grant and collaboration agreements. As of March 31, 2025, we had $1.02 billion in cash, cash equivalents, and investments and $94.4 million in restricted cash and cash equivalents, which included the $75.0 million subject to VIR-5525 achieving “first in human dosing” by 2026. As of March 31, 2025, our accumulated deficit was $880.7 million. In November 2023, we entered into a sales agreement (Sales Agreement) with Cowen and Company, LLC, as sales agent (TD Cowen), pursuant to which the Company may from time to time offer and sell shares of its common stock for an aggregate offering price of up to $300.0 million, through or to TD Cowen, acting as sales agent or principal. The shares will be offered and sold under the shelf registration statement on Form S-3 and a related prospectus that we filed with the U.S. Securities and Exchange Commission (SEC) on November 3, 2023. We will pay TD Cowen a commission of up to 3.0% of the aggregate gross proceeds from each sale of shares, reimburse legal fees and disbursements and provide TD Cowen with customary indemnification and contribution rights. As of March 31, 2025, no shares have been issued under the Sales Agreement. Funding Requirements and Conditions Our primary use of our capital resources is to fund our operating expenses, which consist primarily of expenditures related to identifying, acquiring, developing, manufacturing and in-licensing our technology platforms and product candidates, and conducting preclinical studies and clinical trials, and to a lesser extent, selling, general and administrative expenditures. In December 2024, the FDA revoked EUA granted to sotrovimab in May 2021. We do not expect to generate significant revenue from the sale of our other product candidates until we complete clinical development, submit regulatory filings and receive approvals from the applicable regulatory bodies for such product candidates, if ever. We may continue to incur net losses for the foreseeable future. Based upon our current operating plan, we believe that our existing cash, cash equivalents and investments as of March 31, 2025 as noted above will enable us to fund our operations for at least the next 12 months from the filing date of this Quarterly Report on Form 10-Q. However, our operating plan may change as a result of many factors currently unknown to us, and we may need to raise additional capital to complete the development and commercialization of our product candidates and fund certain of our existing manufacturing and other commitments. We expect to finance our cash needs through public or private equity or debt financings, third-party (including government) funding, and marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. See the sections titled “Risk Factors—Risks Related to Our Financial Position and Capital Needs—Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our product candidates” and “Risk Factors—Risks Related to Our Financial Position and Capital Needs—We may require substantial additional funding to finance our operations. If we are unable to raise capital when needed, we could be forced to delay, reduce or terminate certain of our research and development programs or other operations” for a description of the risks that may be associated with any future capital raises. We have based our projections of operating capital requirements on assumptions that may prove to be incorrect, and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of biotechnology products, we are unable to estimate the exact amount of our operating capital requirements. See the section titled “Risk Factors—Risks Related to Our Financial Position and Capital Needs” for a description of certain risks that will affect our future capital requirements. 28 Table of Contents Our primary operating lease arrangements are for office and laboratory spaces located in California and Switzerland with contractual lease periods expiring between 2033 and 2035. As of March 31, 2025, we expect to make total lease payments of approximately $120.5 million through 2035. To date, we have entered into collaboration, license and acquisition agreements where the payment obligations are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones, and we are required to make royalty payments in connection with the sale of products developed under those agreements. For additional information regarding these agreements, including our payment obligations thereunder, see Note 5—Collaboration and License Agreements to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and Note 6—Collaboration and License Agreements to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. For information related to our future commitments under our facilities and manufacturing agreements. see Note 10—Commitments and Contingencies to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements. Cash Flows The following table summarizes our cash flows for the periods presented (in thousands): Three Months Ended March 31, 2025 2024 Net cash (used in) provided by: Operating activities $ (78,116) $ (109,390) Investing activities 126,818 28,420 Financing activities 598 152 Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents $ 49,300 $ (80,818) Operating Activities Cash used in operating activities is derived by adjusting our net loss for non-cash items and changes in operating assets and liabilities. Cash used in operating activities during the three months ended March 31, 2025 decreased compared to the same period in 2024 primarily due to ongoing cost saving realized through headcount reductions, the closing of our St. Louis, Missouri and Portland, Oregon sites and de-prioritized R&D programs. Investing Activities Cash provided by investing activities during the three months ended March 31, 2025 increased compared to the same period in 2024 primarily due to higher cash provided by maturities and sales of investment, net of investment purchases. Cash provided by investing activities during three months ended March 31, 2025 was primarily due to $301.9 million in proceeds received from investments that matured or sold during the year, partially offset by purchases of investments of $173.7 million. Cash provided by investing activities during three months ended March 31, 2024 was primarily due to $592.7 million in proceeds received from investments that matured or sold during the period, partially offset by purchases of investments of $562.9 million. Financing Activities The change in cash provided by financing activities during the three months ended March 31, 2025 compared to the same period in 2024 was nominal. Critical Accounting Policies and Estimates Our unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of our unaudited condensed consolidated financial statements requires us to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosures. We base our estimates on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. For more details on our critical accounting policies, refer to Note 2 Summary of Significant Accounting Policies to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. 29 Table of Contents There have been no significant changes in our critical accounting policies during the three months ended March 31, 2025, as compared with those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.