What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-08 · 207 added, 95 removed, 330 unchanged (48% of the section changed)

19 unchanged sentences

Operating lease liability, net of current portion

Common stock warrant liabilities

Total liabilities

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Common stock, $ 0.0001 par value;

200,000,000 shares authorized at March 31, 2025 and December 31, 2024;

51,775,264 shares issued and outstanding at March 31, 2025;

600,000,000 shares authorized at June 30, 2025 and 200,000,000 shares authorized at December 31, 2024;

51,827,910 shares issued and outstanding at June 30, 2025;

45,756,773 shares issued and outstanding at December 31, 2024

7 unchanged sentences

(In thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Collaboration and license revenue

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Loss from operations

Other income, net

Total other income, net

Other income (expense), net

Change in fair value of common stock warrant liabilities

Other income (expense), net

Total other income (expense), net

Net loss and comprehensive loss

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Condensed Consolidated Statements of Stockholders’ Equity

For the three months ended March 31, 2025 and 2024

For the three months ended June 30, 2025 and 2024

(In thousands, except share data)

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Paid-In Capital

Balance at March 31, 2025

Issuance of prefunded warrants in connection with a follow-on public offering, net of issuance costs

Issuance of common stock under employee stock purchase plan

Exercise of stock options

Stock-based compensation expense

Balance at June 30, 2025

Stockholders’

Paid-In Capital

Balance at March 31, 2024

Issuance of common stock and prefunded warrants to Gilead and certain accredited investors in private placements, net of issuance costs

Issuance of common stock in connection with at-the-market offerings, net of issuance costs

Issuance of common stock under employee stock purchase plan

Vesting of restricted common stock

Exercise of stock options

Stock-based compensation expense

Balance at June 30, 2024

The accompanying notes are an integral part of these condensed consolidated financial statements.

XILIO THERAPEUTICS, INC.

Condensed Consolidated Statements of Stockholders’ Equity

For the six months ended June 30, 2025 and 2024

(In thousands, except share data)

Stockholders’

Paid-In Capital

Balance at December 31, 2024

Issuance of prefunded warrants in connection with a follow-on public offering, net of issuance costs

Issuance of common stock in connection with the AbbVie stock purchase agreement, net of issuance costs

Issuance of common stock in connection with at-the-market offerings, net of issuance costs

Issuance of common stock under employee stock purchase plan

Vesting of restricted stock units

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Stock-based compensation expense

Balance at March 31, 2025

Balance at June 30, 2025

Stockholders’

1 unchanged sentence

Balance at December 31, 2023

Issuance of common stock in connection with the Gilead stock purchase agreement, net of issuance costs

Issuance of common stock and prefunded warrants to Gilead and certain accredited investors in private placements, net of issuance costs

Issuance of common stock in connection with at-the-market offerings, net of issuance costs

Issuance of common stock under employee stock purchase plan

Vesting of restricted common stock

Exercise of stock options

Stock-based compensation expense

Balance at March 31, 2024

Balance at June 30, 2024

The accompanying notes are an integral part of these condensed consolidated financial statements.

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(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

Stock-based compensation expense

Change in fair value of common stock warrant liabilities

Issuance costs allocated to common stock warrant liabilities

Changes in operating assets and liabilities:

License agreement receivable

Prepaid and other assets

Operating lease right-of-use asset

Accounts payable

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Deferred revenue

Operating lease liability

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Cash flows from investing activities:

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Payments of finance lease

Proceeds from issuance of common stock under employee stock purchase plan

Proceeds from exercise of stock options

Proceeds from issuance of common stock in connection with the Gilead stock purchase agreement, net of issuance costs

Proceeds from issuance of prefunded warrants and common stock warrants in connection with a follow-on public offering, net of issuance costs

Proceeds from issuance of common stock in connection with the AbbVie stock purchase agreement, net of issuance costs

Proceeds from issuance of common stock in connection with at-the-market offerings, net of issuance costs

Proceeds from issuance of common stock and prefunded warrants to Gilead and certain accredited investors in private placements, net of issuance costs

Net cash provided by financing activities

Increase (decrease) in cash, cash equivalents and restricted cash

Increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

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Capital expenditures included in accounts payable or accrued expenses

Issuance costs included in accounts payable or accrued expenses

Reconciliation to amounts within the consolidated balance sheets:

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Description of Business, Liquidity and Going Concern

Description of Business

Xilio Therapeutics, Inc.

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The Company was incorporated in Delaware in June 2020, and its headquarters are located in Waltham, Massachusetts.

Liquidity and Going Concern

In June 2025, the Company received initial gross proceeds of $ 50.0 million upon the closing of a follow-on public offering of prefunded warrants and accompanying common stock warrants.

If certain of the common stock warrants are exercised in cash at their initial exercise price of $ 0.75 per warrant, the Company will receive up to $ 100.0 million of additional gross proceeds by the second half of 2026.

See Note 8 for additional information.

Since its inception, the Company has devoted substantially all of its financial resources and efforts to research and development activities.

As of March 31, 2025, the Company had an accumulated deficit of $ 397.0 million and has incurred significant operating losses, including net losses of $ 13.3 million and $ 17.2 million for the three months ended March 31, 2025 and 2024, respectively.

The Company expects its operating losses and negative operating cash flows to continue for the foreseeable future as it continues to advance its product candidates through clinical trials, maintains the infrastructure necessary to support these activities and continues to incur costs associated with operating as a public company.

As of March 31, 2025, the Company had cash and cash equivalents of $ 89.1 million.

Based on its current operating plans, the Company anticipates that its existing cash and cash equivalents as of March 31, 2025 will be sufficient to fund the Company’s operating expenses and capital expenditure requirements into the first quarter of 2026.

However, the Company has based this estimate on assumptions that may prove to be wrong, and the Company could exhaust its available capital resources sooner than it anticipates.

In addition, since these amounts are not expected to be sufficient to fund its operations for at least twelve months from the date of issuance of the accompanying condensed consolidated financial statements, there is substantial doubt about the Company’s ability to continue as a going concern.

To continue to fund the operations of the Company, management has developed plans, which in the near term primarily consist of raising additional capital through one or more of the following:

additional equity or debt financings;

additional collaborations, partnerships or licensing transactions;

or other sources.

However, there can be no assurance that the Company will be able to complete any such transaction on acceptable terms or otherwise, and the Company may be unable to obtain sufficient additional capital.

If the Company is not able to secure sufficient additional capital in the near term, the Company will need to implement additional cost reduction strategies, which could include delaying, limiting, further reducing or eliminating both internal and external costs related to its operations and research and development programs.

As of June 30, 2025, the Company had an accumulated deficit of $ 412.9 million and has incurred significant operating losses, including net losses of $ 29.1 million and $ 31.1 million for the six months ended June 30, 2025 and 2024, respectively.

The Company expects its operating losses and negative operating cash flows to continue for the foreseeable future as it continues to advance its pipeline of novel, tumor-activated I-O molecules through preclinical and clinical development, maintains the infrastructure necessary to support these activities and continues to incur costs associated with operating as a public company.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern within twelve months from the date of the issuance of these condensed consolidated financial statements.

In order to fund its operations, the Company will need to raise additional capital, which could be obtained through the cash exercise, if any, of common stock warrants issued in connection with the June 2025 follow-on public offering, the receipt of milestone payments, option-related fees or other contingent payments under the Company’s existing agreements with Gilead Sciences, Inc.

(“Gilead”) and AbbVie Group Holdings Limited (“AbbVie”), additional public or private equity offerings, debt financings, additional collaborations, partnerships or licensing arrangements or other sources.

However, there can be no assurance that the Company will receive additional proceeds from the exercise of the common stock warrants or from contingent payments under its existing agreements with Gilead or AbbVie or that the Company will be able to complete any additional transactions on acceptable terms or otherwise.

If the Company is not able to secure sufficient additional capital when needed, the Company may need to implement additional cost reduction strategies, which could include delaying, limiting, further reducing or eliminating both internal and external costs related to its operations and research and development programs.

In addition, the Company has based its estimates on assumptions that may prove to be wrong, and the Company could exhaust its available capital resources sooner than it anticipates.

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.

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Securities and Exchange Commission (the “SEC”).

Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S.

Any reference in these notes to applicable guidance is meant

to refer to the authoritative U.S.

GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”).

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The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements.

In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements contain all adjustments which are necessary to present fairly the Company’s financial position as of March 31, 2025 and the results of its operations for the three months ended March 31, 2025 and 2024 and cash flows for the three months ended March 31, 2025 and 2024.

In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements contain all adjustments which are necessary to present fairly the Company’s financial position as of June 30, 2025 and the results of its operations for the three and six months ended June 30, 2025 and 2024 and cash flows for the six months ended June 30, 2025 and 2024.

Such adjustments are of a normal and recurring nature.

The results for the three months ended March 31, 2025 are not necessarily indicative of the results for the year ending December 31, 2025 or for any future period.

The results for the three and six months ended June 30, 2025 are not necessarily indicative of the results for the year ending December 31, 2025 or for any future period.

Principles of Consolidation

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The significant accounting policies used in preparation of the unaudited condensed consolidated financial statements are described in Note 2, “ Summary of Significant Accounting Policies ” of the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Except as described below, there have been no material changes to the significant accounting policies previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Common Stock Warrants

The Company accounts for warrants to purchase shares of its common stock in accordance with the guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).

The Company classifies warrants issued for the purchase of shares of its common stock as either equity or liability instruments based on an assessment of the specific terms and conditions of each respective contract.

Such assessment includes determining whether the warrants are freestanding financial instruments or embedded in a host instrument, whether the warrants are liabilities within the scope of ASC 480, whether the warrants meet the definition of a derivative in ASC 815 and whether the warrants meet the requirements for equity classification pursuant to the indexation and equity classification criteria in ASC 815.

The Company determines the classification for its warrants at the time of issuance and updates its assessment as necessary.

Warrants that meet all of the criteria for equity classification are recorded as a component of additional paid-in capital and are not subsequently remeasured.

Warrants that are classified as liabilities are recorded at fair value on the issuance date and remeasured to fair value at each reporting period, with the change in fair value recorded as a component of other income (expense), net, on the condensed consolidated statements of operations and comprehensive loss.

Use of Estimates

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The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates.

Significant estimates of accounting reflected in these condensed consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued expenses, the valuation of stock-based compensation, including stock options and restricted stock units, useful life of long-lived assets and income taxes.

Significant estimates of accounting reflected in these condensed consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued expenses, the valuation of the common stock warrant liabilities, the valuation of stock-based compensation, including stock options and restricted stock units, useful life of long-lived assets and income taxes.

Actual results could differ from those estimates.

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ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted.

The Company is currently evaluating the potential impact of adopting this new guidance on its condensed consolidated financial statements and related disclosures.

The Company is currently evaluating the potential impact of adopting this new guidance on its condensed consolidated

financial statements and related disclosures.

In November 2024, the FASB issued ASU No.

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The Company is currently evaluating the potential impact of adopting this new guidance on its condensed consolidated financial statements and related disclosures.

Fair Value Measurements

The Company measures the following liabilities at fair value on a recurring basis:

Financial liabilities:

Series A warrant to purchase common stock

Series B warrant to purchase common stock

Series C warrant to purchase common stock

Total financial liabilities

The fair value of the common stock warrant liabilities, which are described in more detail in Note 8, are calculated utilizing a Black-Scholes option pricing model for the Series A warrants and a Monte Carlo simulation model for the Series B warrants and the Series C warrants.

The Black-Scholes option pricing model and the Monte Carlo simulation model both require the use of assumptions, certain of which are not observable in the market, which represent Level 3 measurements within the fair value hierarchy.

The Black-Scholes pricing model and the Monte Carlo simulation model assumptions include the warrant exercise price, the expected life of the warrant, the current price of the Company’s common stock, expected volatility, the risk-free interest rate for the expected life of the warrant and expected dividend yield.

The Monte Carlo simulation assumptions also include the potential impacts of the warrant strike price reset features.

The inputs used in the fair market value of the Company’s common stock warrants liabilities as of the issuance date and June 30, 2025 were the following:

(issuance date)

June 30, 2025

Closing price of common stock

Warrant exercise price

Expected volatility

Risk free interest rate

Expected dividend yield

Expected term (in years)

The following table summarizes the changes in the fair market value of the Company’s common stock warrant liabilities, which are classified within the Level 3 fair value hierarchy:

warrant liability

Balance at December 31, 2024

Initial fair value of common stock warrant liability

Change in fair value of common stock warrant liability

Balance at June 30, 2025

Property and Equipment, Net

Property and equipment, net consists of the following as of March 31, 2025 and December 31, 2024:

Property and equipment, net consists of the following as of June 30, 2025 and December 31, 2024:

Laboratory equipment

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Property and equipment, net

The Company recognized depreciation and amortization expense related to property and equipment of $ 0.5 million and $ 0.4 million for the three months ended March 31, 2025 and 2024, respectively.

The Company recognized depreciation and amortization expense related to property and equipment of $ 0.9 million and $ 0.8 million for the six months ended June 30, 2025 and 2024, respectively.

Accrued Expenses

Accrued expenses consist of the following as of March 31, 2025 and December 31, 2024:

Accrued expenses consist of the following as of June 30, 2025 and December 31, 2024:

External research and development

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Collaboration, License and Option Agreement with AbbVie

In February 2025, Xilio Development entered into a collaboration, license and option agreement (the “Collaboration Agreement”) with AbbVie Group Holdings (“AbbVie”) for up to four programs leveraging the Company’s proprietary tumor-activation technology and platform, consisting of (i) an exclusive license for a program to develop and commercialize a masked antibody-based immunotherapy (the “Collaboration Program”) and (ii) an exclusive option for (a) an initial program to discover, develop and commercialize masked T cell engager molecules for an agreed upon initial target and backup target (“Initial Option Program”), and (b) subject to the terms of the Collaboration Agreement, up to two additional programs (each, an “Additional Option Program” and together with the Initial Option Program, the “Option Programs”).

In connection with the Collaboration Program, Xilio Development is responsible for conducting all preclinical development through lead generation (“Collaboration Program Services”).

In February 2025, Xilio Development entered into a collaboration, license and option agreement (the “Collaboration Agreement”) with AbbVie for up to four programs leveraging the Company’s proprietary tumor-activation technology and platform, consisting of (i) an exclusive license for a program to develop and commercialize a masked antibody-based immunotherapy (the “Collaboration Program”) and (ii) an exclusive option for (a) an initial program to discover, develop and commercialize masked T cell engager molecules for an agreed upon initial target and backup target (“Initial Option Program”), and (b) subject to the terms of the Collaboration Agreement, up to two additional programs (each, an “Additional Option Program” and together with the Initial Option Program, the “Option Programs”).

In connection with the Collaboration Program, Xilio Development is responsible for conducting all preclinical

development through lead generation (“Collaboration Program Services”).

For the Initial Option Program, AbbVie’s option right is exercisable beginning on the effective date of the Collaboration Agreement, and for each Additional Option Program, AbbVie’s option right is exercisable following delivery of written notice of nomination of such Additional Option Program.

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in a private placement at a purchase price of $ 2.30 per share for an aggregate purchase price of $ 10.0 million.

As of March 31, 2025, the Company has received $ 52.0 million in payments under the AbbVie agreements, consisting of a $ 42.0 million upfront cash payment under the Collaboration Agreement and $ 10.0 million in gross proceeds from the private placement under the stock purchase agreement.

In addition, as of March 31, 2025, the Company is eligible to receive up to approximately $ 2.1 billion in additional contingent payments under the Collaboration Agreement, consisting of (i) up to $ 305.0 million in aggregate program nomination fees, preclinical development option extension fees and option fees for the Option Programs and (ii) up to $ 1.8 billion in aggregate development, regulatory and sales-based milestones for all Option Programs and the Collaboration Program.

As of June 30, 2025, the Company has received $ 52.0 million in payments under the AbbVie agreements, consisting of a $ 42.0 million upfront cash payment under the Collaboration Agreement and $ 10.0 million in gross proceeds from the private placement under the stock purchase agreement.

In addition, as of June 30, 2025, the Company is eligible to receive up to approximately $ 2.1 billion in additional contingent payments under the Collaboration Agreement, consisting of (i) up to $ 305.0 million in aggregate program nomination fees, preclinical development option extension fees and option fees for the Option Programs and (ii) up to $ 1.8 billion in aggregate development, regulatory and sales-based milestones for all Option Programs and the Collaboration Program.

In addition, the Company is eligible to receive tiered royalties ranging in the high single digits on annual global net product sales for the Option Program and is eligible to receive tiered royalties ranging in the mid-single digits on annual global net product sales for the Collaboration Program.

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(iv) a material right to receive additional services related to the Initial Option Program;

and (v) a material right related to AbbVie’s one-time right to substitute the initial target with the backup target

for the Initial Option Program.

and (v) a material right related to AbbVie’s one-time right to substitute the initial target with the backup target for the Initial Option Program.

For purposes of ASC 606, the transaction price at the outset of the arrangement was determined to be $ 49.1 million, which consisted of the upfront cash payment of $ 42.0 million under the Collaboration Agreement and the $ 7.1 million premium on the sale of common stock to AbbVie Inc.

The Company used the most likely amount method to estimate variable consideration.

All contingent payments are fully constrained as of March 31, 2025, as the achievement of the milestones underlying such contingent payments is based on either the Company or AbbVie’s ability to execute under the development plan which is not certain at contact inception.

All contingent payments are fully constrained as of June 30, 2025, as the achievement of the milestones underlying such contingent payments is based on either the Company or AbbVie’s ability to execute under the development plan which is not certain at contact inception.

Accordingly, all such contingent payments are excluded from the transaction price.

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The Company determined the estimated standalone selling price for material rights by estimating the standalone selling price of the underlying performance obligations included in the material right and estimating the probability that AbbVie will exercise such material right.

Revenue associated with the Collaboration Program Performance Obligation and the Initial Option Program Performance Obligation are recognized as the underlying services are provided as control is transferred over time.

Revenue associated with the Collaboration Program Performance Obligation and the Initial Option Program Performance Obligation is recognized as the underlying services are provided as control is transferred over time.

The Company measures progress based on the amount of costs incurred relative to the total costs expected to fulfill the combined performance obligation.

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If the material right is exercised, the Company will evaluate the performance obligations underlying the option exercised and recognize the amount allocated to the material right and any additional consideration over the appropriate recognition period associated with the underlying performance obligations.

During the three months ended March 31, 2025, the Company recognized collaboration revenue of $ 0.7 million under the Collaboration Agreement and the stock purchase agreement.

As of March 31, 2025, the Company recorded deferred revenue of $ 48.4 million, of which $ 25.6 million was recorded as a current liability on the Company’s condensed consolidated balance sheet.

The deferred revenue is expected to be recognized as revenue through at least 2026 depending on (i) the timing of services being provided for the Collaboration Program and the Initial Option Program and (ii) the timing of AbbVie’s exercise or expiration of the material rights.

During the three and six months ended June 30, 2025, the Company recognized collaboration and license revenue of $ 4.8 million and $ 5.6 million, respectively, under the Collaboration Agreement and the stock purchase agreement.

As of June 30, 2025, the Company recorded deferred revenue of $ 43.6 million, of which $ 26.7 million was recorded as a current liability on the Company’s condensed consolidated balance sheet.

The deferred revenue is expected to be recognized as revenue through at least 2026 depending on (i) the timing of services being provided for the Collaboration Program and

the Initial Option Program and (ii) the timing of AbbVie’s exercise or expiration of the material rights.

License Agreement with Gilead Sciences, Inc.

In March 2024, Xilio Development entered into a license agreement with Gilead Sciences, Inc.

(“Gilead”), pursuant to which it granted Gilead an exclusive global license to develop and commercialize XTX301, the Company’s tumor-activated IL-12 product candidate, and specified other molecules directed to IL-12.

Xilio Development is responsible for conducting clinical development for XTX301 in the ongoing Phase 1 clinical trial through an initial planned Phase 2 dose expansion clinical trial.

Following the delivery by Xilio Development of a specified clinical data package for XTX301 related to the Phase 1 clinical trial and planned Phase 2 clinical trial, Gilead can elect to transition responsibilities for the development and commercialization of XTX301 to Gilead, subject to the terms of the license agreement and payment by Gilead of a $ 75.0 million transition fee.

In March 2024, Xilio Development entered into a license agreement with Gilead, pursuant to which it granted Gilead an exclusive global license to develop and commercialize XTX301, the Company’s tumor-activated IL-12 product candidate, and specified other molecules directed to IL-12.

Xilio Development is responsible for conducting clinical development for XTX301 through an initial Phase 2 clinical trial.

Following the delivery by Xilio Development of a specified clinical data package for XTX301 related to the Phase 1 clinical trial and an initial Phase 2 clinical trial, Gilead can elect to transition responsibilities for the development and commercialization of XTX301 to Gilead, subject to the terms of the license agreement and payment by Gilead of a $ 75.0 million transition fee.

In connection with the execution of the license agreement, in March 2024, the Company also entered into a stock purchase agreement with Gilead.

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The prefunded warrants are exercisable any time at an exercise price of $ 0.0001 per share, subject to Gilead not being deemed a beneficial owner of greater than 19.9 % of the Company’s common stock upon the exercise of the prefunded warrants.

As of March 31, 2025, the Company has received $ 55.0 million in payments under the Gilead agreements, consisting of the $ 30.0 million upfront cash payment under the license agreement and $ 25.0 million in gross proceeds from private placements under the stock purchase agreement.

As of March 31, 2025, the Company is eligible to receive up to $ 592.5 million in additional contingent payments, which consist of the $ 75.0 million transition fee and up to $ 517.5 million in specified development, regulatory and sales-based milestones.

As of June 30, 2025, the Company has received $ 55.0 million in payments under the Gilead agreements, consisting of the $ 30.0 million upfront cash payment under the license agreement and $ 25.0 million in gross proceeds from private placements under the stock purchase agreement.

As of June 30, 2025, the Company is eligible to receive up to $ 592.5 million in additional contingent payments, which consist of the $ 75.0 million transition fee and up to $ 517.5 million in specified development, regulatory and sales-based milestones.

Prior to the potential transition fee, up to $ 17.5 million of the total additional contingent payments are related to a near-term development milestone.

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The Company determined that the license agreement represents a contract with a customer within the scope of ASC 606 and identified two promises under the license agreement:

(i) the exclusive licenses granted to Gilead related to the Company’s IL-12 program and (ii) the provision by Xilio Development and its affiliates of development services related to ongoing and planned clinical trials for XTX301 through an initial planned Phase 2 clinical trial.

The Company determined that the exclusive license and development services were not capable of being distinct on the basis that the development services to be provided by Xilio Development are specialized in nature, specifically with respect to its specialized expertise related to XTX301, the IL-12 program and the Company’s proprietary platform for tumor-activated biologics.

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The Company used the most likely amount method to estimate variable consideration.

All contingent payments are fully constrained as of March 31, 2025, as the achievement of the milestones underlying such contingent payments is uncertain and highly susceptible to factors outside of the Company’s control.

All contingent payments are fully constrained as of June 30, 2025, as the achievement of the milestones underlying such contingent payments is uncertain and highly susceptible to factors outside of the Company’s control.

Accordingly, all such contingent payments are excluded from the transaction price.

The Company reevaluates the

transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur and may adjust the transaction price as necessary.

The Company reevaluates the transaction price at the end of each reporting period and as uncertain events are resolved or other changes in circumstances occur and may adjust the transaction price as necessary.

Sales-based royalties, including milestone payments based on the level of sales, were also excluded from the transaction price, as the license is deemed to be the predominant item to which the royalties relate.

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In management’s judgment, this input method is the best measure of progress towards satisfying the combined performance obligation and reflects a faithful depiction of the transfer of goods and services.

During the three months ended March 31, 2025, the Company recognized collaboration and license revenue of $ 2.2 million under the license agreement and the stock purchase agreement with Gilead.

During the three months ended March 31, 2024, the Company did not recognize any collaboration and license revenue under the license agreement and the stock purchase agreement with Gilead As of March 31, 2025, the Company recorded deferred revenue under the license agreement and the stock purchase agreement of $30.6 million, of which $ 14.7 million was recorded as a current liability on the Company’s condensed consolidated balance sheet.

During the three and six months ended June 30, 2025, the Company recognized collaboration and license revenue of $ 3.3 million and $ 5.5 million, respectively, under the license agreement and the stock purchase agreement with Gilead.

During each of the three and six months ended June 30, 2024, the Company recognized $ 2.4 million of collaboration and license revenue under the license agreement and the stock purchase agreement with Gilead.

As of June 30, 2025, the Company recorded deferred revenue under the license agreement and the stock purchase agreement of $ 27.3 million, of which $ 15.6 million was recorded as a current liability on the Company’s condensed consolidated balance sheet.

The deferred revenue is expected to be recognized as collaboration and license revenue through at least 2027 depending on the timing of certain clinical development activities.

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Collaboration and license revenue recognized

Deferred revenue as of March 31, 2025

Deferred revenue as of June 30, 2025

Clinical Trial Collaboration with F.

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Therefore, the Company applied a reasonable, rational, and consistently applied accounting policy election to record the cost-sharing payments under the clinical supply agreement as a reduction of research and development expenses in the condensed consolidated statements of operations and comprehensive loss for the period in which a study development event is achieved.

The Company recognized a reduction of research and development expense of $ 2.0 million during each of the three months ended March 31, 2025 and 2024.

As of each of March 31, 2025 and 2024, $ 2.0 million of earned but unpaid cost-sharing payments were included in prepaid expenses and other current assets of the Company’s condensed consolidated balance sheets.

The Company did no t recognize a reduction of research and development expense during each of the three months ended June 30, 2025 and 2024.

The Company recognized a reduction of research and development expense of $ 2.0 million during each of the six months ended June 30, 2025 and 2024.

Commitments and Contingencies

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The Company is obligated to pay its portion of real estate taxes and costs related to the premises, including costs of operations, maintenance, repair, replacement, and management of the leased premises, which it began paying simultaneous with the rent commencement date in March 2020.

As of March 31, 2025 and December 31, 2024, the Company had a letter of credit for the benefit of its landlord in the amount of $ 1.8 million, collateralized by a money market account, which is recorded as restricted cash on the condensed consolidated balance sheets.

As of June 30, 2025 and December 31, 2024, the Company had a letter of credit for the benefit of its landlord in the amount of $ 1.8 million, collateralized by a money market account, which is recorded as restricted cash on the condensed consolidated balance sheets.

Preferred Stock and Common Stock

Undesignated Preferred Stock

As of March 31, 2025 and December 31, 2024, the Company’s certificate of incorporation, as amended, authorizes the Company to issue up to 5,000,000 shares of undesignated preferred stock at $ 0.0001 par value per share.

As of March 31, 2025 and December 31, 2024, there were no shares of preferred stock issued or outstanding.

As of March 31, 2025 and December 31, 2024, the Company is authorized to issue up to 200,000,000 shares of common stock, $ 0.0001 par value per share under its certificate of incorporation, as amended.

As of June 30, 2025 and December 31, 2024, the Company’s restated certificate of incorporation, as amended, authorizes the Company to issue up to 5,000,000 shares of undesignated preferred stock at $ 0.0001 par value per share.

As of June 30, 2025 and December 31, 2024, there were no shares of preferred stock issued or outstanding.

As of June 30, 2025, the Company’s restated certificate of incorporation, as amended, authorized the Company to issue up to 600,000,000 shares of common stock, $ 0.0001 par value per share.

As of December 31, 2024, the Company’s restated certificate of incorporation, as amended, authorized the Company to issue up to 200,000,000 shares of common stock, $ 0.0001 par value per share.

Follow-On Public Offering

In June 2025, the Company closed a follow-on public offering of prefunded warrants and accompanying common stock warrants and received initial gross proceeds of $ 50.0 million before deducting underwriting discounts and commissions and offering expenses payable by the Company.

In connection with the offering, the Company issued prefunded warrants to purchase 66,676,000 shares of common stock, accompanied by Series A warrants to purchase 66,676,000 shares of common stock (or, in certain circumstances, prefunded warrants) (the “Series A warrants”), Series B warrants to purchase 66,676,000 shares of common stock (or, in certain circumstances, prefunded warrants) (the “Series B warrants”), and Series C warrants to purchase 66,676,000 shares of common stock (or, in certain circumstances, prefunded warrants) (the “Series C warrants”).

The combined public offering price of one prefunded warrant, one Series A warrant, one Series B warrant and one Series C warrant, which were sold together but are immediately separable, was $ 0.7499 , which was equal to the combined offering price of the prefunded warrants, Series A warrants, Series B warrants and Series C warrants, less the $ 0.0001 per share exercise price of the prefunded warrants.

The exercisability of the prefunded warrants and common stock warrants is subject to limitations on exercise.

Specifically, a holder will be prohibited from exercising any portion of any warrant if immediately prior to or following such exercise such holder (together with its affiliates) would beneficially own more than 4.99 % (or up to 19.99 % at the election of the holder) of the Company’s issued and outstanding common stock immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrant.

However, any holder of any warrant may increase or decrease such percentage to any other percentage not in excess of 19.99 %, provided that any such increase will not be effective until the 61 st day after notice from the holder is delivered to the Company.

Each Series A warrant will be exercisable on the earlier of (i) December 1, 2025 and (ii) the trading day immediately following a period of five consecutive trading days on which the closing sale price of the Company’s common stock is a minimum of $ 1.50 per share for one share of common stock and will have an exercise price of $ 0.75 per share of common stock.

In addition, each Series A warrant will expire upon the earlier of (i) June 5, 2030 or (ii) immediately upon the

exercise of the corresponding prefunded warrant held by a holder in proportion to the extent that such corresponding prefunded warrant is exercised prior to December 1, 2025;

provided that this term (ii) will no longer apply to the Series A warrants beginning on the first trading day immediately following a period of five consecutive trading days on which the closing sale price of the Company’s common stock is a minimum of $ 1.50 per share for one share of common stock.

Each Series B warrant will be exercisable on or after November 1, 2025, with an exercise price of $ 0.75 per share of common stock, and will expire on December 2, 2025, provided that if the closing sale price of the Company’s common stock is below the exercise price on such date, the exercise price will reset to the closing sale price on December 1, 2025 and the expiration time will be extended to December 31, 2025.

Each Series C warrant will be exercisable on or after June 1, 2026, with an exercise price of $ 0.75 per share of common stock, and will expire on the earlier of (i) December 2, 2026 and (ii) the expiration time of the Series B warrant held by a holder in proportion to the extent that the corresponding Series B warrant expires without being exercised.

In addition, if the closing sale price of the Company’s common stock is below the exercise price on December 2, 2026, the exercise price will reset to the closing sale price on December 1, 2026 and the expiration time will be extended to December 31, 2026.

The prefunded warrants and Series A warrants may be exercised for cash or on a net exercise or “cashless” basis, and the Series B warrants and Series C warrants may be exercised for cash or on a net exercise or “cashless” basis in the event there is no effective registration statement or prospectus available which covers the Series B warrants and Series C warrants and shares of common stock issuable upon exercise of the Series B warrants and Series C warrants.

There can be no assurance that any of the warrants will be exercised for cash or at all, and it is possible that the common stock warrants may expire without being exercised.

If all of the Series B warrants and the Series C warrants sold in the offering are exercised in cash at their initial exercise price, the Company will receive additional gross proceeds of approximately $ 100.0 million by the end of 2026.

In the event of certain fundamental transactions, each holder of the prefunded warrants and the common stock warrants has the right to receive, upon exercise of such warrant, the same amount and kind of securities, cash or property as such holder would have been entitled to receive upon the occurrence of such fundamental transaction if it had been, immediately prior to such fundamental transaction, the holder of the number of shares of common stock underlying such holder’s warrant without regard to any limitations on exercise contained in such holder’s warrant.

The holders of Series A warrants are alternatively entitled to elect to receive consideration in an amount equal to the Black Scholes value of the unexercised portion of such holder’s Series A warrants and if the fundamental transaction is within the Company’s control, the Series A warrant holders can require the Black Scholes value to be paid in cash.

In addition, for each dollar of non-dilutive capital received by the Company prior to the exercise or expiration of the Series B warrants and Series C warrants, the Company may elect to cancel a number of warrant shares equal to $1.00 divided by the $0.75 warrant exercise price (or one and one-third warrants ) without any compensation paid by the Company to the warrant holders.

For example, if the Company received $30.0 million in non-dilutive capital, it could elect to cancel 40.0 million of warrant shares.

Subject to certain specified exceptions, non-dilutive capital includes:

upfront payments under any future collaboration, license or similar agreement;

milestone payments and option fees under any current or future collaboration, license or similar agreement;

and net proceeds pursuant to any equity issuance where the purchase price per share is above $ 1.50 .

The Company concluded that the prefunded warrants, the Series A warrants, the Series B warrants and the Series C warrants are freestanding financial instruments because each of these instruments can be transferred or assigned by the holder subject to compliance with the applicable securities laws and are legally detachable and separately exercisable.

The Company determined the classification of each warrant based on the guidance in ASC 480 and ASC 815.

As part of this assessment under ASC 815, the Company was required to allocate its available authorized shares of common stock to its outstanding contracts and commitments.

The Company applied an accounting policy to first allocate available authorized shares of common stock based on the earliest issuance date of the contract.

To the extent more than one contract or commitment made was issued on the same date, the available shares of common stock were allocated first to the contract with the earliest potential exercise date.

The Company concluded that the prefunded warrants are classified as equity.

The Company concluded the Series A warrants, the Series B warrants and the Series C warrants are required to be initially classified as liabilities as a result of their settlement provisions.

The Series A warrants, the Series B warrants and the Series

C warrants will continue to be classified as liabilities until such time as the applicable warrant is exercised, expires, or qualifies for equity classification.

The Company received initial gross proceeds from the offering of $ 50.0 million, before deducting approximately $ 3.0 million in aggregate issuance costs related to the offering, which consisted of underwriting discounts and commissions and offering expenses payable by the Company.

The Company allocated the gross proceeds as follows:

$ 26.8 million to the Series A warrants, $ 6.6 million to the Series B warrants and $ 5.1 million to the Series C warrants, in each case, based on the fair value of each instrument on the date of issuance with the remaining $ 11.5 million allocated to the prefunded warrants.

The Company allocated the issuance costs to the financial instruments in a manner consistent with the allocation of the proceeds.

The Company allocated approximately $ 2.3 million in issuance costs to the common stock warrants that are classified as liabilities, which was recorded as a component of other income (expense), net, on the condensed consolidated statements of operations and comprehensive loss during the three and six months ended June 30, 2025.

The Company allocated approximately $ 0.7 million in issuance costs to the prefunded warrants that are classified in equity, which was recorded as a reduction to additional paid in capital on the condensed consolidated balance sheets as of June 30, 2025.

During the three and six months ended June 30, 2025, the Company recognized a loss of less than $ 0.1 million related to the change in fair value of the common stock warrants, which is recorded as a component of the change in fair value of common stock warrant liabilities on the condensed consolidated statements of operations and comprehensive loss.

Private Placement

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During the year ended December 31, 2024, the Company issued and sold 7,000,000 shares of its common stock pursuant to the Cowen Sales Agreement at a price of $ 1.00 per share for aggregate gross proceeds of $ 7.0 million.

During the three months ended March 31, 2025, the Company issued and sold an additional 1,550,000 shares of its common stock pursuant to the Cowen Sales Agreement at a weighted average price of $ 1.3348 per share for aggregate gross proceeds of approximately $ 2.1 million.

During the six months ended June 30, 2025, the Company issued and sold an additional 1,550,000 shares of its common stock pursuant to the Cowen Sales Agreement at a weighted average price of $ 1.3348 per share for aggregate gross proceeds of approximately $ 2.1 million.

In March 2025, the Company filed a universal shelf registration statement on Form S-3 with the SEC to register for sale up to $ 250.0 million of its common stock, preferred stock, debt securities, units and warrants, which the Company may issue and sell from time to time in one or more offerings, which became effective on May 8, 2025 (333-285703) (the “New S-3 Shelf”).

In March 2025, the Company terminated the Cowen Sales

Agreement, and the Company entered into a new sales agreement with Leerink Partners, LLC (the “Leerink Sales Agreement”), under which the Company may issue and sell shares of its common stock from time to time at an aggregate offering price of up to $ 50.0 million.

In March 2025, the Company terminated the Cowen Sales Agreement, and the Company entered into a new sales agreement with Leerink Partners, LLC (the “Leerink Sales Agreement”), under which the Company may issue and sell shares of its common stock from time to time at an aggregate offering price of up to $ 50.0 million.

Prior to the effectiveness of the New S-3 Shelf, the offering of shares under the Leerink Sales Agreement was registered under the Prior S-3 Shelf.

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Shares Reserved for Future Issuance

The Company has reserved for future issuances the following shares of common stock underlying the securities issued below as of March 31, 2025 and December 31, 2024:

The Company has reserved for future issuances the following shares of common stock underlying the securities issued below as of June 30, 2025 and December 31, 2024:

Stock options and unvested restricted stock units

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Prefunded warrants

Common stock warrants

Total shares reserved for future issuance

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On January 1, 2025, the number of shares reserved for issuance under the 2021 Plan automatically increased by 2,293,405 shares.

As of March 31, 2025, there were 2,217,457 shares of common stock available for future issuance under the 2021 Plan.

As of June 30, 2025, there were 1,822,188 shares of common stock available for future issuance under the 2021 Plan.

2022 Inducement Plan

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In November 2024, the number of shares reserved for issuance under the 2022 Inducement Plan increased by 500,000 shares.

In March 2025, the number of shares reserved for issuance under the 2022 Inducement Plan increased by an additional

500,000 shares.

As of March 31, 2025, there were 592,200 shares of common stock available for future issuance under the 2022 Inducement Plan.

In March 2025, the number of shares reserved for issuance under the 2022 Inducement Plan increased by an additional 500,000 shares.

As of June 30, 2025, there were 383,000 shares of common stock available for future issuance under the 2022 Inducement Plan.

2021 Employee Stock Purchase Plan

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The Company initially reserved 292,031 shares of common stock for issuance under the 2021 ESPP.

The 2021 ESPP provides that the number of shares of common stock reserved for issuance under the 2021 ESPP will be cumulatively increased on January 1 of each calendar year by 1 % of the number of shares of the Company’s common stock outstanding on such date or such lesser amount determined by the Company’s board of directors (up to a maximum increase of 584,062 shares of common stock per year).

The 2021 ESPP provides that the number of shares of common

stock reserved for issuance under the 2021 ESPP will be cumulatively increased on January 1 of each calendar year by 1 % of the number of shares of the Company’s common stock outstanding on such date or such lesser amount determined by the Company’s board of directors (up to a maximum increase of 584,062 shares of common stock per year).

On January 1, 2025, the number of shares reserved for issuance under the 2021 ESPP was increased by 458,681 shares.

As of March 31, 2025, there were 1,359,889 shares available for future issuance under the 2021 ESPP.

During the six months ended June 30, 2025 and 2024, the Company issued 45,505 shares of common stock and 38,998 shares of common stock under the 2021 ESPP, respectively.

As of June 30, 2025, there were 1,314,384 shares available for future issuance under the 2021 ESPP.

Stock-Based Compensation Expense

During the three months ended March 31, 2025 and 2024, the Company recorded compensation expense related to stock options, restricted stock units and restricted common stock for employees and non-employees and share purchases under the 2021 ESPP for employees, which was allocated as follows in the condensed consolidated statements of operations and comprehensive loss:

Three Months Ended March 31,

During the three and six months ended June 30, 2025 and 2024, the Company recorded compensation expense related to stock options, restricted stock units and restricted common stock for employees and non-employees and share purchases under the 2021 ESPP for employees, which was allocated as follows in the condensed consolidated statements of operations and comprehensive loss:

Three Months Ended June 30,

Six Months Ended June 30,

Research and development expense

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Outstanding as of December 31, 2024

Outstanding as of March 31, 2025

Exercisable as of March 31, 2025

Outstanding as of June 30, 2025

Exercisable as of June 30, 2025

(1) The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock as of the end of the period.

Using the Black-Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the three months ended March 31, 2025 and 2024 was $ 0.74 per share and $ 0.41 per share, respectively.

The following assumptions were used in determining the fair value of options granted during the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Using the Black-Scholes option pricing model, the weighted average fair value of options granted to employees and directors during the six months ended June 30, 2025 and 2024 was $ 0.72 per share and $ 0.68 per share, respectively.

The following assumptions were used in determining the fair value of options granted during the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

Risk-free interest rate

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Expected volatility

As of March 31, 2025, the Company had unrecognized stock-based compensation expense of $ 6.0 million related to stock options issued to employees and directors, which is expected to be recognized over a weighted-average period of 2.4 years.

As of June 30, 2025, the Company had unrecognized stock-based compensation expense of $ 5.2 million related to stock options issued to employees and directors, which is expected to be recognized over a weighted-average period of 2.3 years.

Restricted Stock Units

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Unvested as of December 31, 2024

Unvested as of March 31, 2025

For each of the three months ended March 31, 2025 and 2024, the Company recognized less than $ 0.1 million of stock-based compensation expense related to these awards.

As of March 31, 2025, the Company had unrecognized stock-based compensation expense of $ 0.2 million related to these restricted stock units, which is expected to be recognized over 2.8 years.

Unvested as of June 30, 2025

For each of the six months ended June 30, 2025 and 2024, the Company recognized less than $ 0.1 million of stock-based compensation expense related to these awards.

As of June 30, 2025, the Company had unrecognized stock-based compensation expense of $ 0.2 million related to these restricted stock units, which is expected to be recognized over 2.5 years.

Net Loss Per Share

The Company calculates basic net loss per share by dividing net loss by the weighted average number of shares of common stock outstanding.

The weighted average number of shares of common stock used in the basic and diluted net loss per share calculation includes the prefunded warrants issued in connection with the Company’s private placements with certain existing investors and Gilead, as the prefunded warrants are exercisable at any time for nominal cash consideration.

As of March 31, 2025, no prefunded warrants have been exercised and 25,602,707 prefunded warrants are outstanding.

The weighted average number of shares of common stock used in the basic and diluted net loss per share calculation includes the prefunded warrants to purchase common stock issued in connection with the Company’s private placements with certain existing investors and Gilead and the Company’s follow-on public offering, as the prefunded warrants are exercisable at any time for nominal cash consideration.

As of June 30, 2025, no prefunded warrants have been exercised and 92,278,707 prefunded warrants are outstanding.

The following table sets forth the outstanding shares of common stock equivalents, presented based on amounts outstanding at each period end, that were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have been anti-dilutive:

Three Months Ended

Unvested restricted common stock

Six Months Ended

Unvested restricted stock units

Outstanding stock options

Common stock warrants

Unvested employee stock purchase plan shares

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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 1. Financial Statements