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 programs for Chronic Hepatitis Delta (CHD) 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, ECLIPSE registrational program is fully underway with all three trials initiated. 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 the first patient dosed in phase 1 clinical studies in July 2025. We are also developing therapeutic candidates in 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 Quarterly Report on Form 10-Q for the period ended March 31, 2025. 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 and our Quarterly Report on Form 10-Q for the period March 31, 2025. CHD • ECLIPSE registrational program is fully underway following enrollment of the first patients in ECLIPSE 2 and ECLIPSE 3. ◦ ECLIPSE 2 will compare the combination of tobevibart and elebsiran to continued bulevirtide monotherapy in participants with CHD who have not achieved undetectable hepatitis delta virus RNA despite bulevirtide treatment. ◦ ECLIPSE 3 will compare the combination of tobevibart and elebsiran to bulevirtide monotherapy in participants with CHD who have not received bulevirtide before. • ECLIPSE 1 and 2 are designed to provide the registrational efficacy and safety data needed for potential submission to global regulatory agencies, including agencies in the U.S. and Europe. ECLIPSE 3 is expected to provide important supportive data to help establish access and reimbursement in key markets. 21 Table of Contents Solid Tumors • First patient dosed in the Phase 1 clinical study of VIR-5525, our investigational PRO-XTEN ™ dual-masked T-cell engager (TCE) targeting EGFR. ◦ VIR-5525 will be evaluated for the treatment of a variety of EGFR-expressing solid tumors in areas of high unmet need such as non-small cell lung cancer (NSCLC), colorectal cancer (CRC), head and neck squamous cell carcinoma (HNSCC), and cutaneous squamous cell carcinoma (cSCC). ◦ Our Phase 1 clinical trial of PRO-XTEN™ masked VIR-5818 evaluates the TCE in multiple tumor types, including metastatic breast cancer and metastatic CRC. ◦ VIR-5818 is the only dual-masked HER2-targeting TCE in clinical development. ◦ We have completed monotherapy dose escalation and are analyzing the data while continuing to dose escalate VIR-5818 in combination with pembrolizumab. • VIR-5500, the only dual-masked PSMA-targeting TCE in clinical trials, continues to advance through dose escalation. ◦ We received Investigational New Drug clearance from the U.S. Food and Drug Administration (FDA) to evaluate VIR-5500 in combination with androgen receptor pathway inhibitors for earlier lines of metastatic castration-resistant prostate cancer treatment, unlocking new opportunities to transform patient lives. • 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. Chronic Hepatitis B (CHB) • We presented 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 European Association for the Study of the Liver (EASL) Congress 2025 on May 9, 2025. The study-defined primary endpoint, proportion of participants with undetectable hepatitis B surface antigen (HBsAg) at 24 weeks post-end of treatment, was achieved by 17% (3/18) and 21% (3/14) of participants with baseline HBsAg<1,000 IU/mL receiving tobevibart and elebsiran without or with PEG-IFNα, respectively. Preclinical Pipeline Candidates • Leveraging our immune system expertise and platform strengths, 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 our antibody discovery platform and our proprietary dAIsY™ (data AI structure and antibody) AI engine. 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. 22 Table of Contents 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 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. 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; 23 Table of Contents • 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; • 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 24 Table of Contents 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. 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 Income (Expense), Net Other income (expense), net consists of gains and losses from foreign currency transactions and investment management expenses. (Provision for) Benefit from Income Taxes (Provision for) benefit from income taxes consists primarily of income taxes on our domestic and foreign operations. 25 Table of Contents Results of Operations Comparison of the Three and Six Months Ended June 30, 2025 and 2024 The following table summarizes our results of operations for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2025 2024 Change 2025 2024 Change Revenues: Collaboration revenue $ (495) $ 55 $ (550) $ (565) $ (932) $ 367 Contract revenue 1,526 886 640 3,390 53,077 (49,687) Grant revenue 183 2,134 (1,951) 1,421 7,306 (5,885) Total revenues 1,214 3,075 (1,861) 4,246 59,451 (55,205) Operating expenses: Cost of revenue 11 52 (41) 11 111 (100) Research and development 97,509 105,113 (7,604) 216,154 205,238 10,916 Selling, general and administrative 22,283 30,265 (7,982) 46,227 66,586 (20,359) Restructuring, long-lived assets impairment and related charges, net (172) 26,275 (26,447) (182) 26,227 (26,409) Total operating expenses 119,631 161,705 (42,074) 262,210 298,162 (35,952) Loss from operations (118,417) (158,630) 40,213 (257,964) (238,711) (19,253) Other income: Change in fair value of equity investments (3,382) 429 (3,811) 3,000 (5,486) 8,486 Interest income 10,785 18,846 (8,061) 23,073 40,129 (17,056) Other income (expense), net 226 (535) 761 154 (822) 976 Total other income 7,629 18,740 (11,111) 26,227 33,821 (7,594) Loss before (provision for) benefit from income taxes (110,788) (139,890) 29,102 (231,737) (204,890) (26,847) (Provision for) benefit from income taxes (170) 1,512 (1,682) (186) 1,236 (1,422) Net loss $ (110,958) $ (138,378) $ 27,420 $ (231,923) $ (203,654) $ (28,269) Revenues The change in collaboration revenue for the three and six months ended June 30, 2025 compared to the same periods in 2024 was nominal. The increase in contract revenue for the three months ended June 30, 2025 compared to the same period in 2024 was nominal. The decrease in contract revenue for the six months ended June 30, 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 and six months ended June 30, 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. Certain grant agreements with the Gates Foundation expired during the first half of 2025. We terminated our agreement with BARDA on December 31, 2024. Cost of Revenue The decrease in cost of revenue for the three and six months ended June 30, 2025 compared to the same periods 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 June 30, Six Months Ended June 30, 2025 2024 Change 2025 2024 Change Clinical costs $ 20,361 $ 12,318 $ 8,043 $ 40,967 $ 23,925 $ 17,042 Contract manufacturing 14,063 10,524 3,539 23,399 20,193 3,206 Personnel 33,165 43,670 (10,505) 66,883 89,860 (22,977) Licenses, collaborations and contingent consideration 11,301 5,182 6,119 47,892 10,878 37,014 Other 18,619 33,419 (14,800) 37,013 60,382 (23,369) Total research and development expenses $ 97,509 $ 105,113 $ (7,604) $ 216,154 $ 205,238 $ 10,916 The decrease in research and development expenses for the three months ended June 30, 2025 compared to the same periods in 2024 was primarily due to: • lower other R&D expenses related to de-prioritized R&D programs and other ongoing cost savings; • lower personnel expenses associated with headcount reductions; partially offset by: • higher clinical cost due to the initiation of our ECLIPSE registrational program and progression of our oncology programs; and • higher license, collaborations and contingent consideration expenses related to the increase in fair value of contingent consideration obligation for the potential future milestone payments in connection with our CHD program. The increase in research and development expenses for the six months ended June 30, 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 in connection with signing the Restated Alnylam Agreement and milestone payments due upon the enrollment of the first patient in ECLIPSE registrational program for CHD and, to lesser extent, the increase in fair value of contingent consideration obligation for the potential future milestone payments in connection with our CHD program. 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 progression of our oncology programs; partially offset by: • lower other R&D expenses related to de-prioritized R&D programs and other ongoing cost savings; and • lower personnel expenses associated with headcount reductions. Selling, General and Administrative Expenses The decrease in selling, general and administrative expenses for the three and six months ended June 30, 2025 compared to the same periods in 2024 was primarily due to efficiencies and cost savings from previously announced restructuring initiatives. Restructuring, long-lived assets impairment and related charges The decrease in restructuring, long-lived assets impairment and related charges for the three and six months ended June 30, 2025 compared to the same periods in 2024 was due to the substantial completion of previously announced restructuring initiatives by the end of 2024. 27 Table of Contents 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 date. For the three and six months ended June 30, 2025, we recognized an unrealized loss of $3.4 million and unrealized gain of $3.0 million due to the change in fair value, respectively, compared to an unrealized gain of $0.4 million and unrealized loss of $5.5 million for the same periods in 2024, respectively. Interest Income The decrease in interest income for the three and six months ended June 30, 2025 compared to the same periods in 2024 was primarily due to lower balances of cash, cash equivalents, and investments. Other Income (Expense), Net The change in other income (expense), net for the three and six months ended June 30, 2025 compared to the same periods in 2024 was nominal. (Provision for) Benefit from Income Taxes The provision for income taxes for the three and six months ended June 30, 2025 was nominal. The benefit for income taxes for the three and six months ended June 30, 2024 was primarily due to favorable adjustments in estimated tax payable. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law by President Trump, which includes permanent extensions of most expiring Tax Cuts and Jobs Act provisions and changes to international tax provisions. We are evaluating the potential impacts of the OBBBA. 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 June 30, 2025, we had $892.1 million in cash, cash equivalents, and investments and $95.2 million in restricted cash and cash equivalents, which included the $75.0 million subject to VIR-5525 achieving “first in human dosing” by 2026. In July 2025, the first patient was dosed in phase 1 study evaluating VIR-5525. As of June 30, 2025, our accumulated deficit was $991.7 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 June 30, 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 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 June 30, 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. 28 Table of Contents 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. 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 June 30, 2025, we expect to make total lease payments of approximately $128.4 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 7—Commitments and Contingencies to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, and 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): Six Months Ended June 30, 2025 2024 Net cash (used in) provided by: Operating activities $ (198,335) $ (187,237) Investing activities 183,274 240,027 Financing activities 2,644 3,094 Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents $ (12,417) $ 55,884 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 six months ended June 30, 2025 increased compared to the same period in 2024 primarily due to milestone payments related to the enrollment of the first patient in ECLIPSE registrational program for CHD and overall higher payments for clinical costs associated with CHD and oncology programs, partially offset by ongoing cost saving realized through headcount reductions, the closing of our St. Louis, Missouri and Portland, Oregon sites and de-prioritized R&D programs. 29 Table of Contents Investing Activities Cash provided by investing activities during the six months ended June 30, 2025 decreased compared to the same period in 2024 primarily due to lower cash provided by maturities and sales of investment, net of investment purchases. Cash provided by investing activities during six months ended June 30, 2025 was primarily related to $553.2 million in proceeds received from investments that matured or sold, partially offset by purchases of investments of $366.1 million. Cash provided by investing activities during six months ended June 30, 2024 was primarily due to $1.1 billion in proceeds received from investments that matured or sold, partially offset by purchases of investments of $834.3 million. Financing Activities The change in cash provided by financing activities during the six months ended June 30, 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. There have been no significant changes in our critical accounting policies during the six months ended June 30, 2025, as compared with those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.