What changed in this filing

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Item 4. Controls and Procedures

2026-08-12 compared with 2026-05-12 · 179 added, 161 removed, 1698 unchanged (17% of the section changed)

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Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Our chief executive officer (our principal executive officer) and our chief financial and operating officer (our principal financial officer) evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026.

Based upon such evaluation, our principal

executive officer and principal financial officer have concluded that, as of March 31, 2026, our disclosure controls and procedures were effective at a reasonable assurance level.

executive officer and principal financial officer have concluded that, as of June 30, 2026, our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

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We will need to obtain substantial additional capital in the future to finance our operations and complete the development of any current or future product candidates.

As of March 31, 2026, we had cash and cash equivalents of $150.3 million.

In the second quarter of 2026, we achieved a $6.0 million development milestone related to the collaboration agreement with AbbVie Group Holdings Limited, or AbbVie.

Based on our current operating plans, we anticipate that our existing cash and cash equivalents as of March 31, 2026, together with the development milestone achieved under the AbbVie collaboration in the second quarter of 2026, will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into early 2028.

This estimate excludes any potential additional milestone payments, option-related fees or other contingent payments under our existing collaboration and partnership agreements with AbbVie and Gilead Sciences, Inc., or Gilead, and excludes the potential receipt of up to $36.2 million in additional gross proceeds in the second half of 2026 if all outstanding Series C warrants are exercised at their current exercise price.

As of June 30, 2026, we had cash and cash equivalents of $136.0 million.

In the second quarter of 2026, we achieved a $6.0 million development milestone under our AbbVie collaboration, which we received in the third quarter of 2026.

Based on our current operating plans, we anticipate that our existing cash and cash equivalents as of June 30, 2026, together with the $6.0 million development milestone achieved under our AbbVie collaboration in the second quarter of 2026, will be sufficient to enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2028.

This estimate excludes up to $36.2 million in additional gross proceeds in the second half of 2026 if all outstanding Series C warrants are exercised at their current exercise price and any potential additional milestone payments, option-related fees or other contingent payments under our collaboration and license agreements with AbbVie Group Holdings Limited, or AbbVie, and Gilead Sciences, Inc., or Gilead, including up to $31.0 million in near-term milestones and option extension fees that could be achieved under the AbbVie collaboration through the first half of 2027.

In addition, we have based our estimates on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we anticipate and may need to seek additional capital sooner than anticipated.

Our future capital requirements, both short-term and long-term, will depend on many factors, including, but not limited to:

• the scope, progress, results and costs of research and development for our current and future product candidates, including our current and planned clinical trials for our clinical-stage product candidates, vilastobart and efarindodekin alfa, and ongoing preclinical development for our current and future product candidates;

• the scope, progress, results and costs of research and development for our current and future product candidates, including our current and planned clinical trials for our clinical-stage product candidates, efarindodekin alfa and XTX501, and ongoing preclinical development for our current and future product candidates;

• our ability to maintain our collaboration and license agreements with AbbVie and Gilead;

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We have incurred significant operating losses since our inception and expect to incur significant losses for the foreseeable future.

Since inception, we have incurred significant operating losses, including net losses of $9.5 million and $13.3 million for the three months ended March 31, 2026 and 2025, respectively and $35.0 million for the year ended December 31, 2025.

As of March 31, 2026, we had an accumulated deficit of $428.3 million.

Since inception, we have incurred significant operating losses, including net losses of $15.9 million and $29.1 million for the six months ended June 30, 2026 and 2025, respectively, and $35.0 million for the year ended December 31, 2025.

As of June 30, 2026, we had an accumulated deficit of $434.7 million.

We expect our operating losses and negative operating cash flows to continue for the foreseeable future as we continue to advance our pipeline of novel, masked immuno-oncology, or I-O, molecules through preclinical and clinical development, maintain the infrastructure necessary to support these activities and continue to incur costs associated with operating as a public company.

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We do not anticipate generating revenue from sales of products for the foreseeable future, if ever, and we do not know whether or when we will generate taxable income necessary to utilize our NOLs.

Even if we generate taxable income in the future, our ability to use our NOL carryforwards and tax attributes may nevertheless be limited.

In general, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percentage point change (by value) in the ownership of its equity by certain stockholders over a three-year period), the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income is subject to limitations.

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As a result of these changes and any future ownership changes, if we earn net taxable income, our ability to use our pre-change NOL carryforwards and other pre-change tax attributes to offset such taxable income may be subject to limitations, which could result in increased future tax liability to us and could have an adverse effect on our future results of operations.

There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing

NOLs could expire or otherwise become unavailable to offset future income tax liabilities.

There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs, or other unforeseen reasons, our existing NOLs could expire or otherwise become unavailable to offset future income tax liabilities.

As described below in “Risks Related to Ownership of Our Common Stock—Changes in tax laws or in their implementation or interpretation may adversely affect our business and financial condition,” the Tax Cuts and Jobs Act of 2017, or the Tax Act, as amended by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, includes changes to U.S.

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Our business is highly dependent on the success of our current product candidates, which are in the early stages of development and will require significant additional preclinical and clinical development before we can seek regulatory approval for and commercially launch a product.

Our business and future success is highly dependent on our ability to obtain regulatory approval for, and if approved, successfully launch and commercialize, our current product candidates, including our clinical-stage, masked I-O product candidates:

vilastobart and efarindodekin alfa.

We are currently evaluating vilastobart in combination with atezolizumab (Tecentriq®) in an ongoing Phase 2 clinical trial in patients with microsatellite stable, or MSS, metastatic colorectal cancer, or mCRC, and we are currently evaluating efarindodekin alfa as a monotherapy in an ongoing Phase 2 clinical trial in patients with certain advanced solid tumors.

We also have a portfolio of programs that are in earlier stages of development and may never advance to clinical-stage development, including XTX501, our bispecific PD-1/masked IL-2, which is designed to selectively stimulate PD-1 positive antigen-experienced T cells and enhance their function and is currently advancing in initial IND-enabling activities, and our wholly-owned preclinical programs for a multi-specific masked T cell engager targeting prostate-specific membrane antigen, or PSMA, and six-transmembrane epithelial antigen of prostate 1, or STEAP1, and a masked T cell engager targeting claudin 18.2, or CLDN18.2, as well as an additional masked T cell engager program in collaboration with AbbVie.

Our business and future success is highly dependent on our ability to obtain regulatory approval for, and if approved, successfully launch and commercialize, our current or future product candidates, including our current clinical-stage product candidates, efarindodekin alfa and XTX501.

We are currently evaluating efarindodekin alfa as a monotherapy in an ongoing Phase 2 clinical trial in patients with certain advanced solid tumors.

For XTX501, we expect to initiate dosing in the Phase 1 trial in patients with metastatic non-small cell lung cancer, or NSCLC, and select advanced solid tumors in the second half of 2026.

We also have a portfolio of programs that are in earlier stages of development and may never advance to clinical-stage development, including our wholly-owned preclinical programs for a multi-specific masked T cell engager targeting PSMA+STEAP1, and a masked T cell engager targeting CLDN18.2 as well as an additional masked T cell engager program in collaboration with AbbVie.

Commencing clinical trials in the U.S.

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There are equivalent processes and risks applicable to clinical trial applications in other countries, including countries in the European Union, or EU.

To date, we have only had limited interactions with the FDA regarding our clinical development plans.

We may experience issues surrounding preliminary trial execution, such as delays in FDA acceptance of any future INDs, revisions in trial design and finalization of trial protocols, difficulties with patient recruitment and enrollment, quality and provision of clinical supplies, or early safety signals.

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We cannot be certain of the timely completion or outcome of our preclinical testing and studies, and we cannot predict if the FDA or other regulatory authorities will accept our proposed clinical programs or if the outcome of our preclinical testing and studies will ultimately support the further development of our programs.

As a result, we cannot be sure that we will be able to submit INDs or similar applications for our current or future preclinical programs, including without limitation, the planned IND for XTX501, on the timelines we expect, if at all, and we cannot be sure that submission of INDs or similar applications will result in the FDA or other regulatory authorities allowing clinical trials to begin.

As a result, we cannot be sure that we will be able to submit INDs or similar applications for our current or future preclinical programs, including without limitation, the planned INDs for our masked T cell engager programs targeting CLND18.2 and PSMA+STEAP1, on the timelines we expect, if at all, and we cannot be sure that submission of INDs or similar applications will result in the FDA or other regulatory authorities allowing clinical trials to begin.

Preclinical studies and clinical trials are expensive, time-consuming and difficult to design and implement, and involve uncertain outcomes.

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In particular, while we have conducted certain preclinical studies for each of our clinical stage product candidates, we do not know whether these product candidates will perform in our clinical trials as they have performed in these prior preclinical studies.

Similarly, there can be no assurance that early, interim or preliminary clinical data or results will be predictive of or replicated in future clinical data or results, including without limitation, data reported to date for our Phase 1/2 trial for vilastobart in combination with atezolizumab and our Phase 1 trial for efarindodekin alfa.

Similarly, there can be no assurance that early, interim or preliminary clinical data or results will be predictive of or replicated in future clinical data or results, including without limitation, the data reported to date for our Phase 1 clinical trial for efarindodekin alfa.

Many companies in the biopharmaceutical and biotechnology industries have suffered significant setbacks in late-stage clinical trials after achieving positive results in early-stage development and we cannot be certain that we will not face similar setbacks.

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Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinical studies and clinical trials have nonetheless failed to obtain marketing approval of their products.

of the patient populations, adherence to the dosing regimen and other clinical trial protocols, and the rate of dropout among clinical trial participants.

In some instances, there can be significant variability in safety or efficacy results between different clinical trials of the same product candidate due to numerous factors, including changes in clinical trial procedures set forth in protocols, differences in the size and type of the patient populations, adherence to the dosing regimen and other clinical trial protocols, and the rate of dropout among clinical trial participants.

If we fail to produce positive results in our planned and ongoing preclinical studies or clinical trials, or if we experience material changes in clinical data or results from those we have previously reported, the development timeline and regulatory approval and commercialization prospects for our product candidates, and, correspondingly, our business, financial condition and results of operations would be materially and adversely affected.

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Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of the product candidate for its intended indications.

We cannot guarantee that any clinical trials, including our ongoing Phase 2 clinical trial evaluating vilastobart in combination with atezolizumab or our Phase 2 clinical trial evaluating efarindodekin alfa as a monotherapy, will be conducted as planned or completed on schedule, if at all.

We cannot guarantee that any clinical trials, including our Phase 2 clinical trial evaluating efarindodekin alfa as a monotherapy and our Phase 1/2 clinical trial to evaluate XTX501 in patients with NSCLC and select advanced solid tumors, will be conducted as planned or completed on schedule, if at all.

We may experience numerous unforeseen events leading up to, during or as a result of clinical trials that could delay or prevent the initiation or completion of a clinical trial or our ability to receive marketing approval or commercialize our product candidates, including:

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Our failure to successfully initiate and complete clinical trials of our product candidates and to demonstrate the efficacy and safety necessary to obtain regulatory approval to market any of our product candidates would significantly harm our business.

guarantee that our clinical trials will begin as planned or be completed on schedule, if at all, or that we will not need to restructure our clinical trials.

We cannot guarantee that our clinical trials will begin as planned or be completed on schedule, if at all, or that we will not need to restructure our clinical trials.

Significant preclinical study or clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our product candidates, which may harm our business and results of operations.

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Undesirable or unexpectedly severe side effects caused by our product candidates could cause us to interrupt, delay or halt preclinical studies or could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities.

Traditional cytokine therapies and checkpoint inhibitors have long been associated with severe toxicities, which can be life-threatening or fatal, that have resulted in the

need to dose-reduce, dose-interrupt and discontinue many patients from treatment.

Traditional cytokine therapies and checkpoint inhibitors have long been associated with severe toxicities, which can be life-threatening or fatal, that have resulted in the need to dose-reduce, dose-interrupt and discontinue many patients from treatment.

As has been the case with traditional I-O treatments for cancer, it is possible that there may be severe side effects associated with the use of our current or future product candidates.

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From time to time, we may publish interim top-line or preliminary data from our clinical trials.

For example, we most recently reported updated data from our Phase 2 clinical trial for vilastobart in combination with atezolizumab and from our Phase 1 clinical trial for efarindodekin alfa in November 2025 at the Society for Immunotherapy of Cancer (SITC) 40 th Annual Meeting.

For example, we most recently reported data from our Phase 1 clinical trial for efarindodekin alfa in November 2025 at the Society for Immunotherapy of Cancer (SITC) 40 th Annual Meeting.

Preliminary and interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.

Preliminary or “top-line” data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data previously published.

Preliminary or “top-line” data also remain subject to audit and verification procedures that may result in the final data being materially different from the

preliminary data previously published.

As a result, interim and preliminary data should be viewed with caution until the final data are available.

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We intend to develop our clinical-stage product candidates, and likely other future product candidates, in combination with third-party cancer drugs, which may be either approved or unapproved.

For example, we are currently evaluating vilastobart in combination with atezolizumab (Tecentriq®) in a Phase 2 clinical trial in patients with MSS mCRC.

Our ability to develop and ultimately commercialize our current product candidates, and any future product candidates, used in combination with third-party drugs will depend on our ability

to access such drugs on commercially reasonable terms for clinical trials and their availability for use with our commercialized product, if approved.

Our ability to develop and ultimately commercialize our current product candidates, and any future product candidates, used in combination with third-party drugs will depend on our ability to access such drugs on commercially reasonable terms for clinical trials and their availability for use with our commercialized product, if approved.

We cannot be certain that current or potential future commercial relationships will provide us with a steady supply of such drugs on commercially reasonable terms or at all.

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The success of our business depends primarily upon our ability to discover, develop and commercialize products based on our technological approaches.

While we have had favorable preclinical and early clinical results related to our clinical-stage product candidates, vilastobart and efarindodekin alfa, we have not yet succeeded and may not succeed in demonstrating efficacy and safety for any product candidates in current or future clinical trials or in obtaining marketing approval thereafter.

We rely on matrix metalloproteases, or MMPs, to activate our molecules within the tumor microenvironment.

If MMP activity in human tumors is not sufficient to cleave the masking protein domain, the potential efficacy of our product candidates would be limited.

While we have had favorable preclinical and early clinical results related to certain of our clinical-stage product candidates, we have not yet succeeded and may not succeed in demonstrating efficacy and safety for any product candidates in current or future clinical trials or in obtaining marketing approval thereafter.

We rely on matrix metalloproteases, or MMPs, and other tumor-specific proteases to activate our molecules within the tumor microenvironment.

If protease activity in human tumors is not sufficient to cleave the masking protein domain, the potential efficacy of our product candidates would be limited.

We have no assurance that our product candidates will successfully progress through clinical development and ultimately marketing approval.

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In the event that raw materials required in our manufacturing process need to be derived from biologic sources, they may be difficult to procure and may be subject to contamination or recall.

inventory or potentially delay progression of our preclinical or clinical development of any product candidates we may develop.

Problems with the manufacturing process, even minor deviations from the normal process, could result in product defects, out-of-specification analytical results or manufacturing failures that result in lot failures, product recalls, product liability claims, insufficient inventory or potentially delay progression of our preclinical or clinical development of any product candidates we may develop.

If we successfully develop product candidates, we may encounter problems achieving adequate quantities and quality that meet FDA, European Medicines Agency, or EMA, or other comparable applicable foreign standards or specifications with consistent and acceptable production yields and costs.

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In addition, the regulatory authorities may, at any time, conduct a routine or for-cause inspection of a manufacturing facility involved with the preparation of our product candidates, which inspection is related to other products manufactured at the site or the associated quality systems, for compliance with the regulations applicable to the activities being conducted.

The regulatory authorities also may, at any time following approval of a product for sale, inspect our facilities or the manufacturing facilities of our CDMOs.

The regulatory authorities also may,

at any time following approval of a product for sale, inspect our facilities or the manufacturing facilities of our CDMOs.

If any such inspection identifies a failure to comply with applicable regulations, or if a violation of our product specifications or applicable regulations occurs independent of such an inspection, we or the relevant regulatory authority may require remedial measures that may be costly and/or time-consuming for us or a third party to implement and that may include the temporary or permanent suspension of a clinical trial or commercial sales, the temporary or permanent closure of a facility, or other remedial measures that may delay or disrupt the manufacture or release of our product candidates or other potential products.

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WuXi Biologics is based in and has significant operations in China, where our product candidates are manufactured, which subjects us to additional risks including those related to U.S.

export control laws, potential sanctions or other trade

restrictions imposed by the U.S.

export control laws, potential sanctions or other trade restrictions imposed by the U.S.

Moreover, reliance on third-party manufacturers generally entails risks to which we would not be subject if we manufactured the product candidates ourselves, including:

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These factors could cause the delay of clinical trials, regulatory submissions, required approvals or commercialization of our product candidates, cause us to incur higher costs and prevent us from commercializing our products successfully.

Furthermore, if our suppliers fail to meet contractual requirements, and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical trials may be delayed, or we could lose potential revenue or market share with respect to any product that has received marketing approval.

Furthermore, if our suppliers

fail to meet contractual requirements, and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical trials may be delayed, or we could lose potential revenue or market share with respect to any product that has received marketing approval.

Certain of our research and development and manufacturing activities take place in China through WuXi Biologics.

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(ii) enter into, extend, or renew a contract with any entity using biotechnology equipment or services provided by a BCC to perform a government contract;

or (iii) expend loan or grant funds for biotechnology equipment or services provided by a

BCC, whether directly or through a loan or grant recipient.

The BIOSECURE Act does not name specific companies as BCCs but treats any company on the Department of Defense 1260H list of “Chinese military companies” as a BCC.

or (iii) expend loan or grant funds for biotechnology equipment or services provided by a BCC, whether directly or through a loan or grant recipient.

The BIOSECURE Act does not name specific companies as BCCs but treats any company on the Department of Defense/War 1260H list of “Chinese military companies” as a BCC.

The 1260H list was updated by the Department of Defense in January 2024 and January 2025.

In February 2026, the Department of Defense published an updated list, which included WuXi AppTec, but then abruptly withdrew the list.

The implications of this action remain unclear.

Subsequently, on June 8, 2026, the Department of Defense/War released an updated version of the 1260H list, which included WuXi AppTec, along with two other biotechnology companies (Complete Genomics and Novogene).

WuXi AppTec has challenged its designation as a Chinese military company and litigation remains ongoing.

Since WuXi AppTec was just added to the list, it will be covered under a five-year grandfather clause that allows any contracts signed before the effective date of the ban to be protected through 2031.

Moreover, while WuXi Biologics was originally the biologics division of WuXi AppTec, they are now operationally independent companies.

As a result, we do not expect the recent 1260H listing of WuXi AppTec to impact WuXi Biologics and the services it currently provides to us.

Nonetheless, the U.S.

government has authority to add additional entities of concern to the 1260H list, and there is a risk that such a future listing could include WuXi Biologics.

Separately from our reliance on WuXi Biologics for manufacturing, we engage WuXi AppTec to perform a significant portion of the nonclinical and IND-enabling studies for our product candidates.

However, because we do not use WuXi AppTec’s services in the performance of any U.S.

government contract, and do not rely on U.S.

government grant or loan funds for such services, we do not expect the listing of WuXi AppTec to have a material impact on our operations, and we believe we could transition these services to alternative providers in a timely manner, if necessary.

Nonetheless, if we were to seek or rely on U.S.

government contracts, grants, or loans in the future, or if the U.S.

government were to expand the restrictions applicable to entities on the 1260H list (including through WuXi AppTec’s potential designation under other U.S.

restricted party regimes) and we were unable to transition these services on a timely and cost-effective basis, such developments could adversely affect our business.

Any disruption in China or the U.S .

that significantly impacts WuXi Biologics or other third parties with whom we conduct business now or in the future, including CROs that provide services for our research and development programs, or manufacturers that produce and export raw or manufactured materials in adequate quantities to meet our needs, could impair our ability to operate our business on a day-to-day basis and impede, delay, limit or prevent the research, development or commercialization of our current and future products or product candidates.

that significantly impacts WuXi Biologics, WuXi AppTec or other third parties with whom we conduct business now or in the future, including CROs that provide services for our research and development programs, or manufacturers that produce and export raw or manufactured materials in adequate quantities to meet our needs, could impair our ability to operate our business on a day-to-day basis and impede, delay, limit or prevent the research, development or commercialization of our current and future products or product candidates.

In addition, for any activities conducted in China, we are exposed to the possibility of product supply disruption and increased costs in the event of changes in the policies of the U.S.

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We expect to rely on third parties to conduct, supervise and monitor IND-enabling studies and clinical trials, and to perform other functions for us, and if these third parties perform in an unsatisfactory manner, it may harm our business, reputation and results of operations.

We expect to rely on third parties, including but not limited to, CROs and research and clinical trial sites to ensure our IND-enabling studies and clinical trials are conducted properly and on time, and we expect to rely in the future on third-party vendors for additional research programs as well as other functions.

We rely, and expect to continue to rely, on third parties, including but not limited to, CROs and research and clinical trial sites to ensure our IND-enabling studies and clinical trials are conducted properly and on time, and we expect to rely in the future on third-party vendors for additional research programs as well as other functions.

While we will have agreements governing their activities, we will have limited influence over their actual performance.

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With respect to any T cell engager program for which AbbVie exercises its option, AbbVie will have sole decision-making authority with respect to the continued development and future commercialization of such option program and may elect to prioritize other assets that it believes are more competitive, or it may exercise its right to terminate the license and return the licensed T cell engager program assets to us.

As a result, there can be no assurances that any of the programs covered by

our existing or future collaborations or licenses will be developed further or reach commercialization.

As a result, there can be no assurances that any of the programs covered by our existing or future collaborations or licenses will be developed further or reach commercialization.

Further, our ability to generate revenues from these existing and future arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements.

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In addition, if one of our collaborators terminates its agreement with us, we may find it more difficult to find a suitable replacement collaborator or licensor or for us to attract new collaborators or licensors, and our development programs may be delayed or the perception of us in the business and financial communities could be adversely affected.

All of the risks relating to product

development, regulatory approval and commercialization described in this Annual Report on Form 10-K apply to the activities of our collaborators or licensors.

All of the risks relating to product development, regulatory approval and commercialization described in this “Risk Factors” section apply to the activities of our collaborators or licensors.

These relationships, or those like them, may require us to incur non-recurring and other charges, increase our near- and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business.

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We face significant competition in seeking appropriate collaborators.

Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration, and the proposed collaborator’s evaluation of a number of factors.

collaboration, and the proposed collaborator’s evaluation of a number of factors.

Those factors may include the design or results of clinical trials, the likelihood of approval by the FDA, the EMA or similar regulatory authorities outside the United States, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, the potential of competing products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge, and industry and market conditions generally.

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We will also face competition in any search for third parties to assist us with sales and marketing efforts for our product candidates.

If we are unable to build our own distribution

and marketing capabilities or to find suitable partners for the commercialization of our product candidates, we may have difficulties generating revenue from them.

If we are unable to build our own distribution and marketing capabilities or to find suitable partners for the commercialization of our product candidates, we may have difficulties generating revenue from them.

We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.

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Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization.

We are developing our most advanced clinical-stage, masked I-O product candidates for the treatment of cancer and have not completed clinical development or received marketing approval for either vilastobart or efarindodekin alfa.

We are developing our clinical-stage product candidates for the treatment of cancer and have not completed clinical development or received marketing approval for any of our product candidates.

There are already a variety of available therapies marketed for cancer and some of the currently approved therapies are branded and subject to patent protection, and others are available on a generic basis.

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Insurers and other third-party payors may also encourage the use of generic products.

We expect that if our product candidates are approved, they will be priced at a significant premium over competitive generic products.

We expect that if our product candidates are approved, they

will be priced at a significant premium over competitive generic products.

This may make it difficult for us to achieve our business strategy of using our product candidates in combination with existing therapies or replacing existing therapies with our product candidates.

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To our knowledge, there are no companies currently developing a masked T cell engager program targeting both PSMA and STEAP1 or a masked T cell engager program for CLDN18.2.

However, we are aware of several companies developing non-masked T cell engager programs for CLDN18.2, including but not limited to Amgen Inc., Astellas Pharma Inc., AstraZeneca PLC, GSK plc, Lunan Pharmacuetical Group Co.

and Qilu Pharmaceutical Co., for PSMA, including but not limited to Regeneron Pharmaceuticals Inc.

However, we are aware of several companies developing non-masked T cell engager programs for CLDN18.2, including but not limited to AstraZeneca PLC, Lunan Pharmaceutical Group Co.

Ltd., Qilu Pharmaceutical Co.

and Xencor, Inc.

(licensed to Astellas Pharma Inc.), for PSMA, including but not limited to GSK plc, Regeneron Pharmaceuticals, Inc.

and Xencor, Inc.

(licensed to Johnson & Johnson), and for STEAP1, including but not limited to Xencor, Inc.

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• With respect to efarindodekin alfa, currently there are no IL-12 therapies approved for the treatment of cancer.

However, we are aware of several companies that have IL-12 delivery programs in development, including but not limited to PDS Biotechnology Corporation, Philogen S.p.A., Shanghai KangaBio Co., Ltd.

However, we are aware of several companies that have systemically delivered IL-12 programs in development, including but not limited to PDS Biotechnology Corporation, Philogen S.p.A., Shanghai KangaBio Co., Ltd.

and Werewolf Therapeutics, Inc.

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We also compete with these organizations in establishing clinical trial sites and patient registration for clinical trials, as well as in recruiting and retaining qualified scientific and management personnel, which could negatively affect our level of expertise and our ability to execute our business plan.

Many of our competitors, either alone or with their collaborators, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing

approved products than we do.

Established pharmaceutical companies may invest heavily to accelerate discovery and development of novel product candidates or to in-license novel product candidates that could make our product candidates less competitive or obsolete.

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Under the BPCIA, reference biological product is granted 12 years of non-patent data exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product.

In addition, the licensure of a biosimilar product may not be

made effective by the FDA until 12 years from the date on which the reference product was first licensed.

In addition, the licensure of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed.

During this 12‑year period of exclusivity, another company may still develop and receive licensure of a competing biologic, so long as their BLA does not rely on the reference product or sponsor’s data or submit the application as a biosimilar application.

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These payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in our product candidates, if approved.

Even if our product candidates are approved and we obtain coverage for our product candidates by a third-party payor, such products may not be considered cost-effective and/or the resulting reimbursement payment rates may be insufficient or may require

co-payments that patients find unacceptably high.

Interim reimbursement levels for new medicines, if applicable, may also not be sufficient to cover our costs and may not be made permanent.

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and coverage and reimbursement for products can therefore differ significantly from payor to payor and coverage and reimbursement by one payor does not guarantee coverage and reimbursement by another payor.

As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

Our ability to demonstrate to these third-party payors that any of our approved product candidates creates a meaningful value proposition for patients, prescribers and payors will be important to gaining market access and reimbursement and there is no guarantee that we will be successful in doing so.

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and abroad related to our product candidates that are important to our business;

we also license and may in the future license or purchase additional patents and patent applications filed by others.

we also license and may in the future license or purchase additional patents and patent

applications filed by others.

If we are unable to secure or maintain patent protection with respect to our product candidates and any proprietary products and technology we develop, our business, financial condition, results of operations and prospects could be materially harmed.

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and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all.

Therefore, we cannot be certain that we were the first to file for patent protection on the inventions claimed in our patents or

pending patent applications.

Therefore, we cannot be certain that we were the first to file for patent protection on the inventions claimed in our patents or pending patent applications.

Furthermore, for U.S.

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There can be no assurance that our patent applications or any patent applications that we may license in the future will result in patents being issued.

Further, the scope of the invention claimed in a patent application can be significantly reduced before the patent is issued, and this scope can be reinterpreted after issuance.

Further, the scope of the invention claimed in a patent application can be significantly

reduced before the patent is issued, and this scope can be reinterpreted after issuance.

Even if patent applications we currently own or that we may license in the future issue as patents, they may not issue in a form that will provide us with adequate protection to prevent competitors or other third parties from competing with us, or otherwise provide us with a competitive advantage.

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Some of our patent applications have been granted or may be granted or allowed in the future.

We cannot be certain that an allowed

patent application will become an issued patent.

We cannot be certain that an allowed patent application will become an issued patent.

There may be events that can cause the allowance of a patent application to be withdrawn.

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In addition, in Juno v.

Kite , the Federal Circuit held claims reciting broad antibody genus based on function invalid for lack of written description.

Recently, the Federal Circuit issued precedential decisions in In re Cellect and Allergan v.

MSN that could shorten or eliminate an extended patent term awarded under patent term adjustment in certain patent family

members if challenged on the basis of obviousness-type double patenting.

Kite , the U.S.

Court of Appeals for the Federal Circuit held claims reciting broad antibody genus based on function invalid for lack of written description.

In 2023 and 2024, respectively, the Federal Circuit issued precedential decisions in In re Cellect and Allergan v.

MSN that could shorten or eliminate an extended patent term awarded under patent term adjustment in certain patent family members if challenged on the basis of obviousness-type double patenting.

Recently, the Federal Circuit in Teva Pharmaceuticals v.

Eli Lilly held that method-of-treatment claims reciting a genus of antibodies for a new therapeutic use satisfied the written description and enablement requirements if the claimed antibody genus was well-known in the art.

Additionally, the U.S.

Supreme Court in Hikma Pharmaceuticals USA, Inc.

Amarin Pharma, Inc.

held that induced infringement of pharmaceutical method-of-use patents generally requires affirmative acts encouraging infringement, and that the mere marketing of a product with a “skinny label” is insufficient.

While we do not believe that any of the patents owned or licensed by us will be found invalid based on these decisions, we cannot predict how future decisions by the courts, Congress or the USPTO may impact the value of our patents.

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In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the U.S.

Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the U.S., or from selling or importing products made using our inventions in and into the U.S.

Consequently, we may not be able to prevent third parties from practicing our inventions in all countries

outside the U.S., or from selling or importing products made using our inventions in and into the U.S.

or other jurisdictions.

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Moreover, the growth of our business may depend in part on our ability to acquire, in-license or use additional third-party intellectual property rights.

The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more

established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive.

The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive.

These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.

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If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.

We are generally also subject to all of the same risks described in this Annual Report on Form 10-K with respect to protection of intellectual property that we license as we are for intellectual property that we own.

We are generally also subject to all of the same risks described in this “Risk Factors” section with respect to protection of intellectual property that we license as we are for intellectual property that we own.

If we or our licensors fail to adequately obtain or protect this intellectual property, our ability to commercialize products could suffer.

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This could have a material adverse effect on our competitive position, business, financial conditions, results of operations and growth prospects.

Our business also would suffer if any current or future licensors fail to abide by the terms of the license

or fail to enforce licensed patents against infringing third parties, if the licensed patents or other rights are found to be invalid or unenforceable, or if we are unable to enter into necessary licenses on acceptable terms.

Our business also would suffer if any current or future licensors fail to abide by the terms of the license or fail to enforce licensed patents against infringing third parties, if the licensed patents or other rights are found to be invalid or unenforceable, or if we are unable to enter into necessary licenses on acceptable terms.

Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights.

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Furthermore, this type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method.

Moreover, even if competitors do not actively promote their products for our targeted indications, physicians may prescribe these products “off-label” for those uses that are covered by our method of use patents.

Moreover, even if competitors do not actively promote their products for our targeted indications, physicians may prescribe

these products “off-label” for those uses that are covered by our method of use patents.

Although off-label prescriptions may infringe or contribute to the infringement of method of use patents, the practice is common and such infringement is difficult to prevent by enforcing patent rights or otherwise.

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Moreover, we may fail to identify relevant third-party patents or incorrectly interpret the relevance, scope, or expiration of a third-party patent or incorrectly conclude that a patent is invalid, not enforceable, exhausted, or not infringed by our activities.

itself, the holders of any such patents may be able to block our ability to commercialize the product candidate unless we obtained a license under the applicable patents, or until such patents expire or they are finally determined to be held invalid or unenforceable.

If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of our product candidates, constructs or molecules used in or formed during the manufacturing process, or any final product itself, the holders of any such patents may be able to block our ability to commercialize the product candidate unless we obtained a license under the applicable patents, or until such patents expire or they are finally determined to be held invalid or unenforceable.

Similarly, if any third-party patent were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or methods of use, including combination therapy or patient selection methods, the holders of any such patent may be able to block our ability to develop and commercialize the product candidate unless we obtained a license or until such patent expires or is finally determined to be held invalid or unenforceable.

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In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.

We cannot predict whether any such license would be available on commercially reasonable terms or at all.

We cannot predict whether any such license would be available on commercially reasonable terms or

Furthermore, even in the absence of litigation, we may need or may choose to obtain licenses from third parties to advance our research or allow commercialization of our product candidates.

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If we are unable to successfully obtain rights to required third-party intellectual property or to maintain the existing intellectual property rights we have, we may have to abandon development of such program and our business and financial condition could suffer.

The licensing and acquisition of third-party intellectual property rights is a competitive area, and companies, which may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party intellectual property

rights that we may consider necessary or attractive in order to commercialize our product candidates.

More established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.

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Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business.

time and monetary expenditure.

Third parties may initiate post-grant proceedings and the Patent Trial and Appeal Board of the USPTO may institute such proceedings to determine the validity or priority of inventions with respect to our patents or patent applications or those of our licensors.

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If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.

Even if we are successful in

defending against these claims, litigation could result in substantial costs and could be a distraction to management.

Even if we are successful in defending against these claims, litigation could result in substantial costs and could be a distraction to management.

If our defense to those claims fails, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.

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government rights in certain inventions developed under a government-funded program include a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose, generally referred to as “march-in rights.” To our knowledge, none of our current product candidates are subject to march-in rights.

However, intellectual property rights that we license in the future could be subject to such limitations.

However, intellectual property rights that we license

in the future could be subject to such limitations.

government also has the right to take title to such intellectual property rights if we, or the applicable licensor, fail to disclose the invention to the government and fail to file an application to register the intellectual property within specified time limits.

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During the trademark registration process, we may receive Office Actions from the USPTO objecting to the registration of our trademark.

Although we would be given an opportunity to respond to those objections, we may be

unable to overcome such rejections.

Although we would be given an opportunity to respond to those objections, we may be unable to overcome such rejections.

In addition, in the USPTO and in comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and/or to seek the cancellation of registered trademarks.

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For example, the FDA reviews an application to determine whether there is “substantial evidence” to support a finding of effectiveness for the proposed product for its intended use(s).

The FDA has interpreted this evidentiary standard to generally require at least two adequate and well-controlled clinical trials to establish effectiveness of a new product.

Under certain circumstances, however, the FDA has indicated that a single trial with certain characteristics and additional confirmatory evidence may satisfy this standard.

The FDA issued draft guidance in September 2023 that outlines considerations for relying on confirmatory evidence in lieu of a second clinical trial to demonstrate effectiveness.

In the event that we submit a BLA on the basis of one clinical trial and confirmatory evidence, the FDA could determine that such information is not sufficient to support approval of the application and the agency could require us to conduct an additional trial in support of the BLA.

In most cases, the default requirement for FDA approval of a new product is one adequate and well-controlled pivotal clinical trial plus confirmatory evidence.

However, in the event that we submit a BLA on the basis of one clinical trial and confirmatory evidence, the FDA could determine that such information is not sufficient to support approval of the application, and the FDA could require us to conduct an additional trial in support of the BLA.

Further, under the Pediatric Research Equity Act, or PREA, a BLA or supplement to a BLA for certain biological products must contain data to assess the safety and effectiveness of the biological product in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective, unless the sponsor receives a deferral or waiver from the FDA.

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That action, along with similar actions by the current administration to remove many other healthcare webpages, is the subject of ongoing litigation.

In late July 2025, pursuant to a court order, the FDA restored the draft DAP guidance to its website with a statement that

“information on this page may be modified and/or removed in the future subject to the terms of the court’s order and implemented consistent with applicable law.” Accordingly, in light of these ongoing actions, there is considerable uncertainty surrounding the draft DAP guidance and how the FDA will consider DAPs in connection with its review of BLAs.

In late July 2025, pursuant to a court order, the FDA restored the draft DAP guidance to its website with a statement that “information on this page may be modified and/or removed in the future subject to the terms of the court’s order and implemented consistent with applicable law.” Accordingly, in light of these ongoing actions, there is considerable uncertainty surrounding the draft DAP guidance and how the FDA will consider DAPs in connection with its review of BLAs.

Further, for our new clinical activities in the EU, we will need to navigate the Clinical Trials Regulation (EU) No 536/2014, which became effective in the EU and replaced the prior Clinical Trials Directive 2001/20/EC.

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The loss of FDA leadership and personnel could lead to disruptions and delays in FDA guidance, review, and approval of our product candidates.

In addition, while the FDA’s review of marketing applications and other activities for new drugs and biologics is largely funded through the user fee program established under the Prescription Drug User Fee Act, or PDUFA, it remains unclear how the current administration’s efforts to reduce the workforce of HHS and budget cuts will impact this program and the ability of the FDA to provide guidance and review our product candidates in a timely manner.

For example, while the reduction in workforce reportedly did not specifically target FDA reviewers, many operations, administrative and policy staff that help support such reviews were affected, and those losses could lead to delays in PDUFA reviews and related activities.

In addition, there is a risk that the reduction in workforce and budget cutbacks could threaten the integrity of the PDUFA program itself, because in order for the FDA to obligate user fees collected under PDUFA in the first place, a certain amount of non-user fee appropriations must be spent on the process for the review of applications plus certain other costs during the same fiscal year.

In November 2025, Congress agreed to provide full-year funding for the FDA through September 30, 2026, at a slight decrease compared to previous spending levels.

There were several reports in 2025 of the FDA failing to meet its Prescription Drug User Fee Act, or PDUFA, goal dates for approval of a new drug application, or NDA, or BLA due to heavy workload and limited resources.

There is also substantial uncertainty as to how regulatory reform measures being implemented by the current administration across the government will impact the FDA and other federal agencies with jurisdiction over our activities.

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delaying or terminating federal agency procedures for authorizing international transactions;

initiating aggressive enforcement actions that may disrupt the operations of major research universities that are significant contributors to life sciences research in the United States, and

threatening access to federal agency contracts and other funding awards based on companies’ otherwise lawful corporate policies and choice of counsel.

initiating aggressive enforcement actions that may disrupt the operations of major research universities that are significant contributors to life sciences research in the United States, and threatening access to federal agency contracts and other funding awards based on companies’ otherwise lawful corporate policies and choice of counsel.

These actions could, directly or indirectly, significantly disrupt, delay, prevent, or increase the costs of our research and product commercialization programs, including our ability to develop new product candidates, conduct clinical trials, implement research collaborations with other companies or institutions, and obtain approvals to market and sell new products.

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On April 28, 2025, the U.K.

Parliament adopted amendments to improve and strengthen the U.K.’s clinical trials regulatory regime, which will take

effect on April 28, 2026.

Parliament adopted amendments to improve and strengthen the U.K.’s clinical trials regulatory regime, which will take effect on April 28, 2026.

These changes were needed since the current U.K.

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The revisions may have a significant impact on the pharmaceutical industry and our business.

They would, among other things, set a baseline period of eight years of data exclusivity and one year of market exclusivity, with possible extensions for new indications up to a maximum of 11 years total.

They would, among other things,

set a baseline period of eight years of data exclusivity and one year of market exclusivity, with possible extensions for new indications up to a maximum of 11 years total.

There will likely be a transition period of 24 months, with the changes taking effect in mid-2028.

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The FDA and Congress may further reevaluate the Orphan Drug Act and its regulations and policies.

This may be particularly true in light of a decision from the Court of Appeals for the 11th Circuit in September 2021.

In Catalyst Pharms, Inc.

Becerra , or Catalyst , that court held that, for the purpose of determining the scope of orphan drug exclusivity, the term “same disease or condition” in the statute means the designated “rare disease or condition” and could not be interpreted by the FDA to mean the “indication or use.” Thus, the court concluded, orphan drug exclusivity applies to the entire designated disease or condition rather than the approved “indication or use.” Although there have been legislative proposals to overrule this decision, they have not been enacted into law.

On January 23, 2023, the FDA announced that, in matters beyond the scope of the Catalyst court order, the FDA will continue to apply its existing regulations tying orphan-drug exclusivity to the uses or indications for which the orphan drug is approved.

More recently, however, on February 14, 2025, a federal district court in Washington, D.C., fully embraced the reasoning of the Catalyst decision in another decision challenging the scope of orphan drug exclusivity.

On April 17, 2025, the FDA appealed this decision to the U.S.

For example, in September 2021, the U.S.

Court of Appeals for the 11th Circuit held that, for the purpose of determining the scope of orphan drug exclusivity, the term “same disease or condition” in the statute means the designated “rare disease or condition” and could not be interpreted by the FDA to mean the “indication or use.” Thus, the court concluded, orphan drug exclusivity applies to the entire designated disease or condition rather than the approved “indication or use.” Subsequently, in another case, a federal district court in Washington, D.C., followed the reasoning of the 11 th Circuit decision and that decision was appealed to the U.S.

Court of Appeals for the D.C.

The implications of this decision, and its impact on the FDA’s implementation of the Orphan Drug Act, are unclear at this point.

On February 3, 2026, the Consolidated Appropriations Act of 2026 was enacted into law.

It overruled these court decisions and codified the FDA’s longstanding interpretation of the scope of orphan drug exclusivity to apply to “the same drug for the same approved use or indication within such designated rare disease or condition.” This change, which applies retroactively, expressly authorizes the FDA to approve multiple versions of the same orphan drug for different sub-indications and subpopulations, such as adult and pediatric patients or multiple variations of the same disease that are caused by different genetic variants.

We do not know if, when, or how the FDA may change the orphan drug regulations and policies in the future, and it is uncertain how any changes might affect our business.

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Any product candidate for which we obtain marketing approval will be subject to continual requirements of and review by the FDA and other regulatory authorities.

These requirements include submissions of safety and other post-marketing information and reports, registration and listing requirements, cGMP requirements relating to quality control and manufacturing, quality assurance and corresponding maintenance of records and documents, and requirements regarding the distribution of samples to physicians and recordkeeping.

corresponding maintenance of records and documents, and requirements regarding the distribution of samples to physicians and recordkeeping.

In addition, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of approval or contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the medicine, including the requirement to implement a risk evaluation and mitigation strategy.

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If a company engages in such communications consistent with the guidance’s recommendations, the FDA indicated that it will not treat such communications as evidence of unlawful promotion of a new intended use for the approved product.

In recent years, a significant number of pharmaceutical and biotechnology companies have been the target of inquiries and investigations by various federal and state regulatory, investigative, prosecutorial and administrative entities in connection with the promotion of

products for unapproved uses and other sales practices, including the Department of Justice and various U.S.

Attorneys’ Offices, the Office of Inspector General of the Department of Health and Human Services, the FDA, the Federal Trade Commission, or the FTC, and various state Attorneys General offices.

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In the EU, we may seek PRIME designation for some of our product candidates in the future.

PRIME is a voluntary program aimed at enhancing the EMA’s role to reinforce scientific and regulatory support in order to optimize development and enable accelerated

assessment of new medicines that are of major public health interest with the potential to address unmet medical needs.

PRIME is a voluntary program aimed at enhancing the EMA’s role to reinforce scientific and regulatory support in order to optimize development and enable accelerated assessment of new medicines that are of major public health interest with the potential to address unmet medical needs.

The program focuses on medicines that target conditions for which there exists no satisfactory method of treatment in the EU or even if such a method exists, it may offer a major therapeutic advantage over existing treatments.

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Specifically, the new legislation authorized the FDA to require a sponsor to have its confirmatory clinical trial underway before accelerated approval is awarded and to submit progress reports on its post-approval studies to the FDA every six months until the study is completed.

clinical benefit or where evidence demonstrates the product is not shown to be safe or effective under the conditions of use.

Moreover, FDORA established expedited procedures authorizing FDA to withdraw an accelerated approval if certain conditions are met, including where a required confirmatory trial fails to verify and describe the product’s predicted clinical benefit or where evidence demonstrates the product is not shown to be safe or effective under the conditions of use.

The FDA may also use such procedures to withdraw an accelerated approval if a sponsor fails to conduct any required post-approval study of the product with due diligence, including with respect to “conditions specified by the Secretary.” The new procedures include the provision of due notice and an explanation for a proposed withdrawal, and opportunities for a meeting with the FDA commissioner or the FDA commissioner’s designee and a written appeal, among other things.

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To that end, the FDA outlined considerations for designing, conducting, and analyzing data for trials intended to support accelerated approvals of oncology therapeutics.

Subsequently, in December 2024 and January 2025, the FDA issued additional draft guidance relating to accelerated approval.

Subsequently, in December 2024 and January 2025, the FDA issued

additional draft guidance relating to accelerated approval.

The guidance describes the FDA’s views on what it means to conduct a confirmatory trial with due diligence and how the agency plans to interpret whether such a study needs to be underway at the time of approval.

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The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

These laws may result in

additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our drug product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.

These laws may result in additional reductions in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our drug product candidates for which we may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.

For example, under current legislation, the actual reductions in Medicare payments may vary by up to 4%.

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In the EU, on December 13, 2021, Regulation No 2021/2282 on Health Technology Assessment, or HTA, amending Directive 2011/24/EU, was adopted.

The HTA entered into force in January 2022 and began to apply in January 2025, with a phased implementation depending on the concerned products.

The HTA entered into force in January 2022 and began to apply in January 2025, with a phased

implementation depending on the concerned products.

The HTA intends to boost cooperation among EU member states in assessing health technologies, including new medicinal products as well as certain high-risk medical devices, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas.

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Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap;

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023);

and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).

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Nonetheless, since CMS may establish a maximum price for these products in price negotiations, we would be fully at risk of government action if our products are the subject of Medicare price negotiations.

Moreover, given the risk that could be the case, these provisions of the IRA may also further heighten the risk that we would not be able to achieve the expected return on our drug products or full value of our patents protecting our products if prices are set after such products have been on the market for nine years.

Moreover, given the risk that could be the

case, these provisions of the IRA may also further heighten the risk that we would not be able to achieve the expected return on our drug products or full value of our patents protecting our products if prices are set after such products have been on the market for nine years.

Further, the legislation subjects drug manufacturers to civil monetary penalties and a potential excise tax for failing to comply with the legislation by offering a price that is not equal to or less than the negotiated “maximum fair price” under the law or for taking price increases that exceed inflation.

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Chamber of Commerce, Bristol Myers Squibb Company, the PhRMA, Astellas, Novo Nordisk, Janssen Pharmaceuticals, Novartis, AstraZeneca and Boehringer Ingelheim, also filed lawsuits in various courts with similar constitutional claims against the HHS and CMS.

The HHS has generally won the substantive disputes in these cases, or succeeded in getting claims dismissed for lack of standing.

Every court that has thus far considered substantive challenges to the Medicare drug price negotiation program has ruled against the pharmaceutical industry, dismissing both constitutional and statutory arguments.

We expect that current or future litigation involving provisions of the IRA will have unpredictable and uncertain results on the implementation and impact of the IRA on the biotechnology industry generally, as well as our business and current or future products.

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These pilot programs are proposed to go into effect beginning October 1, 2026.

At the state level, individual states are increasingly aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

In addition, regional healthcare organizations and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.

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If we are unable to properly protect the privacy and security of protected health information, we could be found to have breached our contracts.

Further, if we fail to comply with applicable privacy laws, including applicable HIPAA privacy and security standards, we could face civil and criminal penalties.

Further, if we fail to comply with applicable privacy laws, including applicable HIPAA privacy and security standards, we

could face civil and criminal penalties.

HHS enforcement activity can result in financial liability and reputational harm, and responses to such enforcement activity can consume significant internal resources.

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Similarly, in 2018, California passed into law the California Consumer Privacy Act, or the CCPA, which took effect on January 1, 2020 and imposed many requirements on businesses that process the personal information of California residents.

Many of the CCPA’s requirements are similar to those found in the General Data Protection Regulation, or the GDPR, including requiring businesses to provide notice to data subjects regarding the information collected about them and how such information is used and shared, and providing data subjects the right to request access to such personal information and, in certain cases, request the erasure of such personal

The CCPA also affords California residents the right to opt-out of “sales” of their personal information.

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Similar to the laws in the United States, there are significant privacy and data security laws that apply in Europe and other countries.

The collection, use, disclosure, transfer, or other processing of personal data, including personal health data, regarding individuals who are located in the European Economic Area, or the EEA, and the processing of personal data that takes place in the EEA, is regulated by the GDPR, which went into effect in May 2018 and which imposes obligations on companies that operate in our industry with respect to the processing of personal data and the cross-border transfer of such data.

to the processing of personal data and the cross-border transfer of such data.

The GDPR imposes onerous accountability obligations requiring data controllers and processors to maintain a record of their data processing and policies.

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While many loosely follow GDPR as a model, other laws contain different or conflicting provisions.

These laws will impact our ability to conduct our business

activities, including both our clinical trials and the sale and distribution of commercial products, through increased compliance costs, costs associated with contracting and potential enforcement actions.

These laws will impact our ability to conduct our business activities, including both our clinical trials and the sale and distribution of commercial products, through increased compliance costs, costs associated with contracting and potential enforcement actions.

While we continue to address the implications of the recent changes to data privacy regulations, data privacy remains an evolving landscape at both the domestic and international level, with new regulations coming into effect and continued legal challenges, and our efforts to comply with the evolving data protection rules may be unsuccessful.

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Supreme Court held that the IEEPA does not authorize the President to impose tariffs, invalidating both the “reciprocal” tariffs and certain country-specific tariffs.

The President subsequently invoked Section 122 of the Trade Act of 1974 to impose a 10% tariff, which could be raised to 15%, on nearly all foreign imports.

The President subsequently invoked Section 122 of the Trade Act of 1974, or the Trade Act, to impose a 10% tariff, which could be raised to 15%, on nearly all foreign imports.

The tariffs imposed under Section 122 are temporary and valid for 150 days without congressional approval.

Multiple states have challenged these tariffs in court.The U.S.

Trade Representative concurrently initiated two investigations under Section 301 of the Trade Act of 1974, which may also result in additional tariffs.

On May 7, 2026, the U.S.

Court of International Trade ruled that these tariffs were unlawful and issued a permanent injunction for certain named private party plaintiffs and the State of Washington.

government appealed to the U.S.

Court of Appeals for the Federal Circuit and, on June 11, 2026, the Federal Circuit stayed enforcement of the lower court’s permanent injunction pending further appeals.

In addition, the U.S.

Trade Representative is currently conducting two investigations under Section 301 of the Trade Act, which may also result in additional tariffs.

In June 2026, in one such investigation, it proposed additional tariffs of 10% to 12.5% on products of 60 economies determined to have failed to impose and effectively enforce a prohibition on the importation of goods produced with forced labor.

These proposed tariffs remain subject to an ongoing notice-and-comment process and have not yet taken effect, and the second investigation into structural excess capacity and production in manufacturing sectors remains ongoing.

Separately, in 2025, the Department of Commerce initiated an investigation under Section 232 of the Trade Expansion Act of 1962 into the impact on U.S.

national security of the imports of pharmaceuticals and pharmaceutical ingredients, including finished drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients, and key starting materials, and derivative products of those items.

On September 25, 2025, the U.S.

administration announced that, beginning October 1, 2025, all branded or patented drugs imported in the U.S.

would face a 100% tariff.

At the same time, the administration indicated that these tariffs could be avoided by building pharmaceutical manufacturing facilities in the U.S.

Thereafter, the administration delayed the October 1, 2025 effective date of the tariffs on branded or patented pharmaceutical products announcing that the administration had now “begun preparing” tariffs on manufacturers that do not build in the U.S.

or enter into a most-favored-nation drug pricing agreement with the administration.

Significant uncertainty surrounding trade policy and tariff activity continues.

On April 2, 2026, the administration issued a proclamation invoking Section 232 of the Trade Expansion Act of 1962 to impose tariffs on imports of patented pharmaceuticals, biologics, and associated ingredients into the U.S.

Specifically, beginning July 31, 2026, a 100% tariff will apply to pharmaceutical articles classified in certain 10-digit harmonized tariff, or HTS, codes that are subject to a valid, unexpired U.S.

Specifically, beginning July 31, 2026, a

100% tariff will apply to pharmaceutical articles classified in certain 10-digit harmonized tariff, or HTS, codes that are subject to a valid, unexpired U.S.

patent and are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, or the Orange Book, or are listed in the FDA’s Lists of Licensed Biological Products, or the Purple Book, unless a relevant exemption applies.

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and products classified in certain HTS codes, listed in Annex IV of the proclamation.

Drugs and associated ingredients for all approved indications that are designated as orphan pursuant to the Orphan Drug Act;

Other products likely to be exempt from the tariffs include drugs and associated ingredients for all approved indications that are designated as orphan pursuant to the Orphan Drug Act;

drugs for certain specific uses, including nuclear medicines;

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animal health;

and other specialty pharmaceutical products to be later identified by the Secretary of Commerce are also likely to be exempt from the tariffs.

and other specialty pharmaceutical products to be later identified by the Secretary of Commerce.

The changes in tariffs that have been announced and/or implemented and the underlying uncertainty currently surrounding international trade, could have a negative impact on our costs of materials and production processes, or could cause supply chain disruptions and delays due to new tariff policies or trade restrictions.

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We are exposed to the risk of fraud or other misconduct by our employees, independent contractors, CROs, consultants, commercial partners, vendors and our principal investigators.

Misconduct by these parties could include intentional failures to comply with FDA regulations or the regulations applicable in the EU and other jurisdictions, provide accurate information to the FDA, the EC and other regulatory authorities, comply with healthcare fraud and abuse laws and regulations in the United States and abroad, report financial information or data accurately, or disclose unauthorized activities to us.

information or data accurately, or disclose unauthorized activities to us.

In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices.

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Accordingly, there is no guarantee that we will be able to maintain D&O insurance at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

An inability to secure and maintain D&O

insurance may make it difficult for us to retain and attract talented and skilled directors and officers to serve our company, which could adversely affect our business.

An inability to secure and maintain D&O insurance may make it difficult for us to retain and attract talented and skilled directors and officers to serve our company, which could adversely affect our business.

We do not maintain “key person” insurance for any of our employees.

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Security breaches, loss of data, inability to access systems, and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability or competitive or reputational harm, which could adversely affect our business, results of operations and financial condition.

In addition, artificial intelligence, or AI, presents emerging risks and challenges that may impact our business.

We collect and maintain information in digital and other forms that is necessary to conduct our business, and we are increasingly dependent on information technology systems and infrastructure to operate our business.

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The risk of a security breach or disruption or data loss, particularly through cyber-attacks or cyber intrusion, including by computer hackers, supply chain attacks, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

Additionally, attackers may use artificial intelligence and machine learning to launch more automated, targeted and coordinated attacks against targets.

Additionally, attackers may use AI and machine learning to launch more automated, targeted and coordinated attacks against targets.

In addition, the prevalent use of mobile devices that access confidential information increases the risk of lost or stolen devices, security incidents and data security breaches, which could lead to the loss of confidential information or other intellectual property.

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Any security compromise affecting us, our partners, our service providers or our industry, whether real or perceived, could harm our reputation, erode confidence in the effectiveness of our security measures and lead to regulatory scrutiny.

If such an event were to occur

and cause interruptions in our operations or result in the unauthorized acquisition of or access to personally identifiable information or individually identifiable health information (violating certain privacy laws, as applicable, such as HIPAA, CCPA, HITECH and GDPR), it could result in a material disruption of our discovery and development programs and our business operations, whether due to a loss of our trade secrets or other similar disruptions.

If such an event were to occur and cause interruptions in our operations or result in the unauthorized acquisition of or access to personally identifiable information or individually identifiable health information (violating certain privacy laws, as applicable, such as HIPAA, CCPA, HITECH and GDPR), it could result in a material disruption of our discovery and development programs and our business operations, whether due to a loss of our trade secrets or other similar disruptions.

Some of the federal, state and foreign government requirements include obligations of companies to notify individuals of security breaches involving particular personally identifiable information, which could result from breaches experienced by us or by our vendors, contractors, or organizations with which we have formed strategic relationships.

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While we do maintain cyber liability insurance, our insurance coverages may not be sufficient in type or amount to cover us against any such losses, claims, or liabilities related to security breaches, cyber-attacks, cyber intrusion, or other related breaches or disruptions.

We also face emerging risks associated with the use of generative artificial intelligence and related technologies, including algorithmic error, vendor dependency, potential infringement of third-party intellectual property rights through agent-generated outputs, and an uncertain and rapidly evolving regulatory environment at the state, federal, and international levels, any of which could adversely impact our business, results of operations and financial condition.

We also face additional emerging risks associated with the use of generative AI and related technologies, which we have implemented, and may further expand, into our operations.

The development and use of AI, combined with an uncertain regulatory environment, introduce risks and challenges that may result in reputational harm, liability, or other adverse consequences to our business operations.

In addition, we may face competitive risks if we fail to adopt AI or other machine learning technologies in a timely fashion.

AI algorithms may be flawed, datasets may be insufficient or biased and overreliance on AI or dependence on a specific model or vendor may limit our flexibility, increase costs, or expose us to operational risks if the AI provider modifies or discontinues its services or increases its

AI use could lead to noncompliance with applicable laws and regulations, threats to intellectual property rights, including the leakage of our proprietary information and the risk that AI-generated outputs may infringe third-party intellectual property rights.

In addition, the providers of these AI tools may not meet existing or future regulatory or industry standards with respect to privacy and data protection.

All of these risks also apply to our vendors who use AI and who may incorporate AI tools into their offerings without disclosing this use to us.

If we, our vendors, or our third-party partners experience an actual or perceived breach or other privacy or security incident because of the use of AI, we may lose valuable intellectual property and confidential information, and our reputation and the public perception of the effectiveness of our security measures could be harmed.

Further, bad actors around the world use increasingly sophisticated methods, including AI, to engage in illegal activities involving the theft and misuse of personal information, confidential information and intellectual property.

Additionally, several states have passed laws to regulate the use of AI and the regulatory environment is rapidly evolving at the state, federal, and international levels, which creates potential compliance and enforcement risk.

Any of these developments in AI could damage our reputation, result in the loss of valuable property and information, and adversely impact our business.

A variety of risks associated with marketing our product candidates internationally, if approved, could materially adversely affect our business.

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Additional potential transactions that we may consider in the future include a variety of business arrangements, including spin-offs, strategic partnerships, joint ventures, restructurings, divestitures, business combinations and investments.

Any future transactions could increase our near and long-term expenditures, result in potentially dilutive issuances of our equity securities, including our common stock, or the incurrence of debt, contingent liabilities, amortization expenses or acquired in-process research and development expenses, any of which could affect our financial condition, liquidity and results of operations.

Any future transactions could increase our near and long-term expenditures, result in potentially dilutive

issuances of our equity securities, including our common stock, or the incurrence of debt, contingent liabilities, amortization expenses or acquired in-process research and development expenses, any of which could affect our financial condition, liquidity and results of operations.

Future acquisitions may also require us to obtain sufficient additional capital, which may not be available on favorable terms or at all.

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The trading volume and market price for our common stock may be influenced by many factors, including:

• our recently effected reverse stock split of our common stock, which became effective March 13, 2026;

• the reverse stock split of our common stock, which became effective March 13, 2026;

• the results from our preclinical studies and clinical trials;

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Unstable global economic and political conditions, including economic uncertainty tied to interest rates and heightened inflation, credit and financial market instability, and uncertainty related to ongoing geopolitical conflicts, could adversely affect our business, financial condition, stock price and ability to raise capital.

disruptions, banking disruptions, and uncertainty resulting from geopolitical events, including trade wars, civil and political unrest, wars and other armed conflicts.

The global economy, in particular the financial markets, have recently experienced significant disruption and volatility, including without limitation, as a result of heightened inflation, capital market volatility, interest rate and currency rate fluctuations, volatility in commodity prices, decline in consumer confidence and economic growth, supply chain disruptions, banking disruptions, and uncertainty resulting from geopolitical events, including trade wars, civil and political unrest, wars and other armed conflicts.

In addition, market volatility, high levels of inflation and high interest rates may increase our cost of financing or restrict our access to potential sources of future capital.

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If the disruption and volatility persist or deepen, we may be unable to raise sufficient additional capital on acceptable terms, or at all.

If we are unable to raise sufficient additional capital, our business, financial condition, stock price and results of operations could be adversely affected, and we may need to implement cost reduction strategies, which could include delaying, reducing or altogether terminating both internal and external costs related to our operations and research and development programs.

which could include delaying, reducing or altogether terminating both internal and external costs related to our operations and research and development programs.

In addition, political developments impacting government spending and international trade, including changes in trade agreements, trade disputes, tariffs and investment restrictions, such as the ongoing trade dispute between the United States and China, may negatively impact markets and cause weaker macroeconomic conditions.

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Our principal stockholders and management own a significant percentage of our common stock and exert significant control over matters subject to stockholder approval.

As of December 31, 2025, our executive officers, directors, holders of 5% or more of our common stock and their respective affiliates beneficially owned shares in the aggregate representing a majority of our outstanding common stock.

As of June 30, 2026, our executive officers, directors, holders of 5% or more of our common stock and their respective affiliates beneficially owned shares in the aggregate representing a majority of our outstanding common stock.

As a result of their share ownership, these stockholders, if they act together, would have the ability to influence our management and policies and would be able to significantly affect the outcome of matters requiring stockholder approval, such as elections of directors, amendments of our organizational documents or approvals of any merger, sale of assets or other major corporate transaction.

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To comply with Section 404, we are engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging.

In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting.

improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting.

Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404.

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The OBBBA contains numerous tax provisions that may significantly affect our business or financial condition.

The recent changes under the OBBBA include tax rate extensions, changes to the business interest deduction limitation, the election to either fully deduct or continue to capitalize and amortize domestic research and development expenditures (in contrast to the continued capitalization and amortization of foreign research and development expenditures), changes to the bonus depreciation deduction rules, and changes to the international tax framework.

research and development expenditures), changes to the bonus depreciation deduction rules, and changes to the international tax framework.

Regulatory guidance under the OBBBA and other tax-related legislation is and continues to be forthcoming, and we will utilize such guidance to analyze the impact of such legislation on our business and financial condition.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 4. Controls and Procedures