What changed in this filing

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Item 1. Financial Statements

2026-08-13 compared with 2026-05-13 · 155 added, 106 removed, 512 unchanged (34% of the section changed)

28 unchanged sentences

Preferred stock, par value $ 0.0001 per share;

25,000,000 shares authorized and no shares issued and outstanding as of March 31, 2026 and December 31, 2025

25,000,000 shares authorized and no shares issued and outstanding as of June 30, 2026 and December 31, 2025

Common stock, par value $ 0.0001 per share;

175,000,000 shares authorized at March 31, 2026 and December 31, 2025, respectively;

62,383,377 and 54,485,518 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

175,000,000 shares authorized at June 30, 2026 and December 31, 2025, respectively;

63,330,747 and 54,485,518 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital

8 unchanged sentences

For the three months ended

For the six months ended

License and collaboration revenue

3 unchanged sentences

General and administrative

Acquired in-process research and development

Total operating expenses

3 unchanged sentences

Interest expense on senior secured term loan

Interest expense on convertible senior notes

Interest income

Other (expense) income, net

Other income (expense), net

Total other income (expense), net

25 unchanged sentences

Balance as of March 31, 2026

Exercises of common stock options

Vesting of restricted stock units

Stock-based compensation expense

Issuance of common stock from underwriters' exercise of the overallotment option of equity offering in full, net of underwriting commissions and other offering costs

Unrealized loss on investments

Foreign currency translation adjustment

Balance as of June 30, 2026

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

3 unchanged sentences

Additional Paid-in Capital

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

6 unchanged sentences

Balance as of March 31, 2025

Exercises of common stock options

Stock-based compensation expense

Unrealized gain on investments

Foreign currency translation adjustment

Balance as of June 30, 2025

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

2 unchanged sentences

(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 used in operating activities:

Acquired in-process research and development

Depreciation expense

3 unchanged sentences

Non-cash interest expense on senior secured term loan

Non-cash interest expense on convertible senior notes

Stock-based compensation expense

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Proceeds from sales and maturities of investments

Net cash provided by (used in) investing activities

Payments of milestones achieved pursuant to license agreements

Net cash used in investing activities

Cash flows from financing activities:

Payments of other offering costs for the ATM offering

Payments of debt issuance costs

Payments of other offering costs for the ATM offering and equity offering

Payments of debt issuance costs for the senior secured term loan and convertible senior notes

Proceeds from exercise of stock options

1 unchanged sentence

Proceeds from issuance of common stock under ATM offering, net of commissions

Proceeds from issuance of common stock in connection with an equity offering, net of underwriting discounts and commissions

Proceeds from issuance of common stock in connection with an equity offering, inclusive of underwriters' exercise of the overallotment option in full, net of underwriting discounts and commissions

Proceeds from senior secured term loan, net of discount

Proceeds from the issuance of convertible senior notes, net of commissions

Proceeds from the issuance of convertible senior notes, inclusive of underwriters' exercise of the overallotment option in full, net of commissions

Net cash provided by financing activities

18 unchanged sentences

The Company’s condensed consolidated financial statements include the accounts of its wholly owned subsidiaries which include Zenas BioPharma (HK) Limited (“Zenas HK”), Zenas BioPharma (USA) LLC, Shanghai Zenas Biotechnology Co.

Limited, Zenas BioPharma Securities Corp., Zenas BioPharma GmbH and Zenas BioPharma B.V.

Limited, Zenas BioPharma Securities Corp., Zenas BioPharma GmbH (Switzerland), Zenas BioPharma B.V.

and Zenas BioPharma GmbH (Germany).

Liquidity and Capital Resources

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The Company’s capital to date has been generated primarily with proceeds received through the sale and issuance of preferred stock, convertible senior notes, the sale of common stock from its initial public offering (“IPO”), private and public equity offerings (please see Note 10, Common Stock , to these unaudited condensed consolidated financial statements), as well as from payments received under the Company’s license, collaboration and royalty purchase agreements (please see Note 7, License and Collaboration Revenue and Note 9, Royalty Obligation , to these unaudited condensed consolidated financial statements) and the senior secured term loan with Pharmakon Advisors, LP (“Pharmakon”) (please see Note 6, Long-Term Obligations , to these unaudited condensed consolidated financial statements).

The Company has not generated any revenue from product sales since inception, and its product candidates currently under development will require significant additional research and development efforts, including extensive clinical testing and regulatory approval prior to commercialization.

The Company has incurred operating losses and negative cash flows, since its inception, including net losses of $ 81.0 million and $ 33.6 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, the Company had an accumulated deficit of $ 846.1 million.

The Company has not generated any revenue from product sales since inception, and its product candidates currently under development will require significant additional research and development efforts and regulatory approval prior to commercialization.

The Company has incurred operating losses and negative cash flows since its inception, including net losses of $ 111.5 million and $ 52.2 million for the three months ended June 30, 2026 and 2025, respectively, and $ 192.4 million and $ 85.8 million for the six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, the Company had an accumulated deficit of $ 957.6 million.

Management expects operating losses and negative operating cash flows to continue for the foreseeable future.

During the first quarter of 2026, the Company alleviated the uncertainty associated with its ability to continue as a going concern through the execution of its senior secured term loan, the issuance of convertible senior notes and the concurrent equity offering, see Note 6, Long – Term Obligations and Note 10 – Common Stock to these unaudited condensed

consolidated financial statements.

The Company expects that its existing cash, cash equivalents and investments of $ 718.5 million as of March 31, 2026, will be sufficient to fund its operating and capital expenditures for at least twelve months from the date of the issuance of these unaudited condensed consolidated financial statements.

The Company expects that its existing cash, cash equivalents and investments of $ 673.9 million as of June 30, 2026, will be sufficient to fund its operating and capital expenditures for at least twelve months from the date of the issuance of these unaudited condensed consolidated financial statements.

Summary of Significant Accounting Policies

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Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2026, and the results of operations and its cash flows for the three months ended March 31, 2026 and 2025.

The financial data and other information disclosed in these notes related to the three months ended March 31, 2026 and 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2026, any other interim periods, or any future year or period.

The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of June 30, 2026, and the results of operations and its cash flows for the three and six months ended June 30, 2026 and 2025.

The financial data and other information disclosed in these notes related to the three and six months ended June 30, 2026 and 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2026, any other interim periods, or any future year or period.

These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2025, and the notes thereto, which are included in the Company’s Annual Report on Form 10-K as filed with the SEC, on March 16, 2026.

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Fair Value Measurements

The following table presents information about the Company’s assets and liabilities that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value (in thousands):

As of March 31, 2026

The following table presents information about the Company’s financial assets that are regularly measured and carried at fair value and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value (in thousands):

As of June 30, 2026

Total Carrying Value

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Corporate debt securities

Government securities

As of December 31, 2025

11 unchanged sentences

Government securities

There have been no material impairments of the Company’s assets measured and carried at fair value as of March 31, 2026 and December 31, 2025.

In addition, there have been no changes in valuation techniques as of March 31, 2026 and December 31, 2025.

For information on the fair value of the Company’s long-term liabilities, see Note 6, Long-Term Obligations and Note 9, Royalty Obligation, to these unaudited condensed consolidated financial statements.

There have been no material impairments of the Company’s assets measured and carried at fair value as of June 30, 2026 and December 31, 2025.

In addition, there have been no changes in valuation techniques as of June 30, 2026 and December 31, 2025.

The fair value of Level 1 instruments classified as money market funds and government securities are valued using quoted market prices in active markets.

The fair value of Level 2 instruments classified as short-term investments was determined using other than quoted prices in active markets, which are either directly or indirectly

observable as of the reporting date and fair value is determined using models or other valuation methodologies.

During the three months ended March 31, 2026 and year ended December 31, 2025, there were no transfers between levels.

The fair value of Level 2 instruments classified as short-term investments was determined using other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date and fair value is determined using models or other valuation methodologies.

During the six months ended June 30, 2026 and year ended December 31, 2025, there were no transfers between levels.

The short and long-term investments are classified as available-for-sale securities.

As of March 31, 2026, the remaining contractual maturities of the available-for-sale securities were 1 to 13 months , and the balance in the Company’s accumulated other comprehensive income was comprised of activity related to the Company’s available-for-sale securities.

There were no realized gains or losses recognized on the sale or maturity of available-for-sale securities during the three months ended March 31, 2026 and 2025.

As of June 30, 2026, the remaining contractual maturities of the available-for-sale securities were 1 to 16 months , and the balance in the Company’s accumulated other comprehensive income was comprised of activity related to the Company’s available-for-sale securities.

There were no realized gains or losses recognized on the sale or maturity of available-for-sale securities during the three and six months ended June 30, 2026 and 2025.

As a result, the Company did not reclassify any amounts out of accumulated other comprehensive income for the same period.

The Company had a limited number of available-for-sale securities in insignificant loss positions as of March 31, 2026, which the Company does not intend to sell and has concluded it will not be required to sell before recovery of amortized cost for the investment maturity.

The Company had a limited number of available-for-sale securities in insignificant loss positions as of June 30, 2026, which the Company does not intend to sell and has concluded it will not be required to sell before recovery of amortized cost for the investment maturity.

The following table summarizes the available-for-sale securities (in thousands):

As of March 31, 2026

As of June 30, 2026

Amortized Cost

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Other non-current assets consisted of the following (in thousands):

March 31, 2026

June 30, 2026

December 31, 2025

4 unchanged sentences

Accrued expenses consisted of the following (in thousands):

March 31, 2026

June 30, 2026

December 31, 2025

2 unchanged sentences

Professional and consultant fees

Interest expense on convertible senior notes

Income taxes payable

13 unchanged sentences

The Loan Agreement bears interest at annual interest rate of 3-month secured overnight financing rate (“SOFR”) subject to a 3.25 % floor, plus 5.75 % payable quarterly in arrears.

The Company may elect for 100 % of the interest for the first 24 months following the Tranche A Loan funding date to be paid-in-kind without an increase in the interest rate.

The Company may elect for 100 % of the interest for the first 24 months following the Tranche A Loan funding date to be paid-in-kind (“PIK Interest”) without an increase in the interest rate.

The Company is required to pay a funding fee equal to (i) 2.00 % of the funding amount of the Tranche A on the funding date of such loan, (ii) 2.00 % of $ 50,000,000 of the funding amount of the Tranche B on the funding date for such loan, (iii) 1.00 % of any amounts in excess of $ 50,000,000 of the funding amount for the Tranche B on the funding date for such loan, and (iv) 1.00 % of each of the funding amount of the Tranche C, Tranche D, and Tranche E on each respective funding date.

3 unchanged sentences

The Company determined that all of the embedded features identified in the Loan Agreement were either clearly or closely related to the debt host and did not require bifurcation as a derivative liability, or the fair value of the bifurcated features was immaterial to the Company’s condensed consolidated financial statements.

The Company received net proceeds of $ 73.0 million after deducting discounts and debt issuance costs as of March 31, 2026.

No repayment of principal or payment of interest was made during the three months ended March 31, 2026.

The following table reflects the Company’s senior secured term loan as of March 31, 2026 (in thousands):

Total net proceeds were $ 72.0 million after deducting discounts and debt issuance costs as of June 30, 2026.

As of June 30, 2026, the Company elected to pay interest on the Term Loan as PIK Interest, which was added to the outstanding principal balance of the term loan.

No repayment of principal was made during the three and six months ended June 30, 2026.

The following table reflects the Company’s senior secured term loan as of June 30, 2026 (in thousands):

Outstanding principal balance

Accumulated PIK interest applied to term loan balance

Unamortized debt discounts and issuance costs

2 unchanged sentences

The Company incurred $ 3.0 million of debt discounts and issuance costs, which were capitalized and deferred when incurred and subsequently amortized over the term of the Loan Agreement.

The effective interest rate of the Loan Agreement, including the amortization of the debt issuance cost was 11.06% for the three months ended March 31, 2026.

The effective interest rate of the Loan Agreement, including the amortization of the debt issuance costs was 10.99% for the three months ended June 30, 2026.

Interest expense in relation to the Loan Agreement, including amortization of debt discounts and issuance costs amortization is as follows (in thousands):

Cash interest expense

For the three months ended

For the six months ended

Amortization of debt discounts and issuance costs

PIK interest expense (applied to term loan principal balance)

Total interest expense

6 unchanged sentences

Pursuant to the Loan Agreement, each tranche has a required exit consideration fee, with respect to any prepayment, repayment or as a result of the acceleration of maturity, an amount equal to the product of the amount of principal prepaid or repaid, multiplied by 1 % to 2 % based on the specific tranche.

The Loan Agreement requires repayment in full of all term loans in four equal payments commencing on September 30, 2028 to the extent the Tranche B/C Approval Condition is not met on or prior to June 30, 2028.

The Loan Agreement requires repayment in full of all

term loans in four equal payments commencing on September 30, 2028 to the extent the Tranche B/C Approval Condition is not met on or prior to June 30, 2028.

The Loan Agreement contains customary prepayment fees and provisions, events of default, including a material adverse change to the Company, and representations, warranties and covenants, including financial covenants.

The financial covenants include (i) at all times prior to the satisfaction of the Tranche B/C Approval Condition, a minimum liquidity requirement and (ii) subject to the outstanding aggregate principal amount of Term Loans advanced under the Loan Agreement being equal to or greater than $ 200.0 million, a minimum trailing twelve months consolidated net revenue covenant.

As of March 31, 2026, the Company was in compliance with its debt covenants under the Loan Agreement.

As of June 30, 2026, the Company was in compliance with its debt covenants under the Loan Agreement.

Convertible Senior Notes

In March 2026, the Company issued an aggregate principal amount of $ 200.0 million of 2.50 % convertible senior notes due 2032 (the “Convertible Notes”) with multiple individual investors (the “Holders”) in an underwritten public offering.

In April 2026, the underwriters of the Company’s offering of the Convertible Notes exercised their overallotment option in full, pursuant to which the Company issued an additional principal amount of $ 30.0 million of Convertible Notes, before deducting commissions costs of $ 0.9 million.

The Convertible Notes were issued pursuant to, and are governed by, an indenture (the “Base Indenture”), dated March 31, 2026, between the Company and U.S.

25 unchanged sentences

Since the embedded conversion feature meets the equity scope exception from derivative accounting, and, also since the embedded conversion option does not need to be separately accounted for as an equity component under ASC 470-20, the proceeds from the issuance of the Convertible Notes were recorded as a liability.

The Company incurred issuance costs related to the Convertible Notes of $ 6.4 million, which was recorded as debt issuance costs and were included as a reduction to the Convertible Notes on the unaudited condensed consolidated balance sheet.

The debt issuance costs are amortized to interest expense using the effective interest rate method over the term of the Convertible Notes, resulting in an effective interest rate of 3.07 % as of March 31, 2026.

The outstanding balance of the Convertible Notes consisted of the following as of March 31, 2026 (in thousands):

The Company incurred issuance costs related to the Convertible Notes of $ 7.3 million, which were recorded as debt issuance costs and were included as a reduction to the Convertible Notes on the unaudited condensed consolidated balance sheet.

The debt issuance costs are amortized to interest expense using the effective interest rate method over the term of the Convertible Notes, resulting in an effective interest rate of 3.07 %.

The outstanding balance of the Convertible Notes consisted of the following as of June 30, 2026 (in thousands):

Outstanding principal balance

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Carrying value

The carrying value of the convertible notes approximates the fair value and was determined based on the actual last traded price of the underlying shares of common stock and represents a Level 1 measurement within the fair value hierarchy.

For the three months ended March 31, 2026, no interest expense was recognized.

The fair value of the Convertible Notes is influenced by the Company’s common stock price and has been classified as Level 1 within the fair value hierarchy as it uses quoted prices in active markets.

The estimated fair value of the Convertible Notes as of June 30, 2026, was approximately $ 275.5 million.

None of the Convertible Notes were converted, no r did the Company redeem any of the Convertible Notes as of June 30, 2026.

Interest expense in relation to the Convertible Notes, including amortization of commissions and offering costs is as follows (in thousands):

For the three and six months ended

Cash interest expense

Amortization of commissions and offering costs

Total interest expense

The indenture contains customary events of default and covenants, including (i) certain payment defaults on the notes (ii) a default by the Company in its other obligations or agreements under the Indenture or the Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture;

2 unchanged sentences

and (v) certain events of bankruptcy, insolvency and reorganization involving the Company or any of its significant subsidiaries.

As of March 31, 2026, the Company was in compliance with its covenants under the Indenture.

As of June 30, 2026, the Company was in compliance with its covenants under the Indenture.

License and Collaboration Revenue

2 unchanged sentences

Pursuant to the BMS Agreement, BMS paid the Company a one-time non-refundable upfront cash payment of $ 50.0 million.

The Company is entitled to receive further separate development, regulatory milestone payments from BMS of

up to approximately $ 79.5 million.

The Company is entitled to receive further separate development, regulatory milestone payments from BMS of up to approximately $ 79.5 million.

The Company is also entitled to receive one-time sales milestone payments up to $ 70.0 million upon BMS achieving certain net sales milestones in a given year in the BMS Territory.

2 unchanged sentences

BMS will fund their pro rata share of the total global study costs up to a specified percentage of the patients enrolled in the study from the BMS Territory.

Should the percentage of patients from the BMS Territory fall below the specified percentage, BMS’s funding would proportionately decrease.

The global development activities under the agreement do not represent a transaction with a customer and reimbursement payments received by the Company for global development activities are accounted for as a reduction of the related research and development expenses.

As of March 31, 2026 and 2025, the Company recorded $ 1.1 million and $ 1.7 million, respectively, as a receivable included in prepaid expenses and other current assets, as a reduction to research and development expense for global development costs to be reimbursed by BMS.

The Company did no t recognize revenue related to the BMS Agreement during the three months ended March 31, 2026 and 2025.

As of June 30, 2026 and 2025, the Company recorded $ 0.8 million and $ 1.3 million, respectively, as a receivable included in prepaid expenses and other current assets.

The Company recorded $ 0.8 million and $ 1.3 million for the three months ended June 30, 2026 and 2025, respectively, and $ 1.9 million and $ 3.0 million for the six months ended June 30, 2026 and 2025, respectively, as a reduction to research and development expense for global development costs to be reimbursed by BMS.

The Company did no t recognize revenue related to the BMS Agreement during the three and six months ended June 30, 2026 and 2025.

Tenacia Biotechnology Co.

Novation Agreement

In October 2024, the Company entered into a novation agreement with Tenacia Biotechnology (Hong Kong) Co., Limited (“Tenacia”), under which the Company transferred its rights and obligations under the agreements with Dianthus to Tenacia (the “Tenacia Agreement”).

Pursuant to the Tenacia Agreement, Tenacia paid the Company a one-time non-refundable upfront cash payment of $ 5.0 million, which was recognized as revenue in the fourth quarter of 2024.

During the three and six months ended June 30, 2026, the Company recognized revenue of $ 1.0 million, related to the achievement of a certain development milestone.

The Company did no t recognize revenue related to the Tenacia Agreement during the three and six months ended June 30, 2025.

The Company is entitled to receive remaining development, regulatory, and sales milestones from Tenacia of up to approximately $ 85.0 million if certain milestones are achieved.

License Agreement with Zai Lab (Hong Kong) Limited

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

royalty based milestones structured 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 transaction price relates.

Sales and royalty based milestones structured 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 transaction price relates.

The Company will recognize such milestone and royalty revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

As of March 31, 2026 and 2025, no milestones were achieved or deemed probable of achievement.

As of June 30, 2026 and 2025, no milestones were achieved or deemed probable of achievement.

License Agreements

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The Company is also obligated to reimburse Xencor for third-party costs incurred for certain patent filings, prosecution and maintenance as further specified in the 2020 Xencor Agreement.

During the three months ended March 31, 2026 and 2025, the Company did no t incur any such reimbursable costs.

2021 Xencor Agreement

In May 2021, the Company entered into a license agreement with Xencor (the “2021 Xencor Agreement”), under which the Company obtained an exclusive, royalty-bearing, sublicensable worldwide license to research, develop, manufacture, market and sell obexelimab.

The Company is obligated to make regulatory milestone payments up to $ 75.0 million, including $ 10.0 million for FDA marketing authorization submission and $ 20.0 million for marketing approval, and one-time sales milestone payments up to $ 385.0 million upon achieving milestone events of net sales in a given calendar year in the territory equal to certain threshold amounts.

The Company is obligated to make regulatory milestone payments up to $ 75.0 million, including $ 10.0 million for FDA marketing authorization submission which was achieved during the three months ended June 30, 2026 and $ 20.0 million for marketing approval, and one-time sales milestone payments up to $ 385.0 million upon achieving milestone events of net sales in a given calendar year in the territory equal to certain threshold amounts.

In addition, the Company is required to pay Xencor tiered royalties on annual net sales of successfully commercialized products utilizing obexelimab, with the royalty percentages varying based on regions and ranging from the mid-single digits to the mid-teens.

For the three months ended March 31, 2026 and 2025, the Company did not record any reimbursable patent-related costs.

During the three months ended June 30, 2026, the Company completed the FDA marketing authorization submission and made a $ 10.0 million milestone payment which was recorded as acquired in-process research and development expense.

During three and six months ended June 30, 2026 and 2025, the Company did not record any reimbursable patent-related costs.

License Agreement with Viridian Therapeutics, Inc.

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For additional information on the Zai License Agreement, please see License Agreement with Zai Lab (Hong Kong) Limited in Note 7 – License and Collaboration Revenue to these unaudited condensed consolidated financial statements.

During the three months ended March 31, 2026 and 2025, the Company recognized no expense related to Viridian contract manufacturing organization (“CMO”) costs.

During the three and six months ended June 30, 2026 and 2025, the Company did no t incur expenses related to Viridian contract manufacturing organization (“CMO”) costs.

Viridian has agreed to reimburse the Company for certain services the Company performs on Viridian’s behalf, with reimbursements being recorded as a reduction in research and development expenses.

During the three months ended March 31, 2026, the Company did not incur any reimbursable expenses.

the three months ended March 31, 2025, the Company recorded $ 0.1 million in reimbursable expenses.

Additionally, during the three months ended March 31, 2026 and 2025, the Company did not achieve any milestones.

During the three and six months ended June 30, 2026, the Company did not incur any reimbursable expenses.

During the three and six months ended June 30, 2025, the Company recorded an immaterial amount and $ 0.2 million in reimbursable expenses, respectively.

Additionally, during the six months ended June 30, 2026 and 2025, the Company did not achieve any milestones.

License Agreement with InnoCare Pharma Inc.

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Pursuant to the InnoCare License Agreement, the Company made one-time non-refundable upfront cash payments totaling $ 35.0 million and issued 5,000,000 shares of common stock to InnoCare (“InnoCare Shares”) in exchange for these rights.

The Company is also required to make an additional one-time non-refundable cash payment of $ 25.0 million and issue an additional 2,000,000 shares of common stock to InnoCare upon the initiation of Zenas’ Phase 3 clinical trial for orelabrutinib in any indication other than primary progressive MS, or by March 31, 2026, upon the occurrence of certain specified events, whichever comes first (the “Near-term Milestone”).

The Company is also required to make an additional one-time non-refundable cash payment of $ 25.0 million and issue an additional 2,000,000 shares of common stock to InnoCare upon the achievement of a specified development milestone related to Zenas’ Phase 3 clinical trial for orelabrutinib in any indication other than primary progressive MS, or by March 31, 2026, upon the occurrence of certain specified events, whichever comes first (the “Near-term Milestone”).

In addition, the Company has agreed to make one-time, potential near-term milestone payments of $ 20.0 million each, upon the achievement of certain regulatory milestones for ZB021 and ZB022 (the “Regulatory Milestones”).

The Company is further obligated to pay future regulatory and commercial milestones of up to $ 723.0 million related to orelabrutinib, and future development, regulatory, and commercial milestones of up to $ 656.0 million, inclusive of the two $ 20.0 million Regulatory Milestones specified above, for each preclinical compound if certain milestones are successfully achieved.

During the three months ended June 30, 2026, the Company achieved the ZB021 Regulatory Milestone and made a payment of $ 20.0 million, which was recorded as acquired in-process research and development expense.

The Company is further obligated to pay future regulatory and commercial milestones of up to $ 723.0 million related to orelabrutinib, and future development, regulatory, and commercial milestones of up to $ 636.0 million for ZB021, and $656.0 million for ZB022, inclusive of the $ 20.0 million Regulatory Milestone for ZB022 specified above, if certain milestones are successfully achieved.

In addition, the Company is obligated to pay royalties on net sales at rates ranging from high-single digits to high-teens for orelabrutinib, and mid-single digits to mid-teens for the preclinical compounds.

Under the InnoCare License Agreement, the Company was obligated to reimburse InnoCare for certain clinical trial startup costs and Investigational New Drug (“IND”) enabling activities which were incurred prior to and after the effective date of the agreement.

During the three months ended March 31, 2026, the Company incurred $ 1.2 million of expense, of which $ 0.8 million was paid to InnoCare related to the acquired programs.

Under the InnoCare License Agreement, the Company is obligated to reimburse InnoCare for certain clinical trial startup costs and Investigational New Drug (“IND”) enabling activities which were incurred prior to and after the effective date of the agreement.

During the three and six months ended June 30, 2026, the Company incurred $ 0.7 million and $ 1.9 million of expense, respectively.

During the three and six months ended June 30, 2026, the Company made payments of $ 1.4 million and $ 2.2 million to InnoCare related to the acquired programs, respectively.

Royalty Obligation

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The Company will evaluate the estimated timing and amount of future royalty payments for each reporting period and will revise the effective interest rate prospectively if those estimates change materially.

The fair value of the liability approximates the carrying value and was determined based on the current estimate of the timing and amount of expected future royalty payments expected to be paid over the estimated term of the Royalty Purchase Agreement, which are subject to significant estimation uncertainty and are based on various assumptions made by the Company.

These assumption inputs are determined to be Level 3 inputs in the fair value hierarchy as they involve significant unobservable inputs and judgment.

The following table shows the activity within the liability account of the arrangement (in thousands):

March 31, 2026

June 30, 2026

Proceeds from royalty obligation

1 unchanged sentence

Interest expense related to royalty obligation

Royalty obligation as of March 31, 2026

Royalty obligation as of June 30, 2026

Effective interest rate

These assumption inputs are determined to be Level 3 inputs in the fair value hierarchy as they involve significant unobservable inputs and judgment.

In September 2024, upon the completion of the IPO, the Company restated its certificate of incorporation, pursuant to which the Company is authorized to issue 175,000,000 shares of common stock $ 0.0001 par value.

3 unchanged sentences

and as a result, prices may vary.

For the three months ended March 31, 2026, the Company sold 2,827,723 shares of common stock under the 2025 ATM Program, with proceeds of $ 71.5 million, net of commissions.

As of March 31, 2026, $ 96.8 million remained available under the 2025 ATM Program.

For the three months ended June 30, 2026, the Company did not sell any shares of common stock under the 2025 ATM Program.

As of June 30, 2026, $ 96.8 million remained available under the 2025 ATM Program.

In October 2025, the Company entered into a securities purchase agreement for a private placement in public entity (“PIPE”) (the “PIPE Purchase Agreement”), pursuant to which the Company sold (i) 6,262,112 shares of common stock to certain institutional and accredited investors at a price of $ 19.00 per share and (ii) 48,918 shares of common stock to certain directors and officers of the Company at a price of $ 20.85 per share.

2 unchanged sentences

Total proceeds for the follow-on offering were approximately $ 100.0 million, before deducting commissions and estimated offering costs of $ 6.4 million payable by the Company.

In April 2026, the underwriters of the Company’s follow-on equity offering exercised their overallotment option in full, pursuant to which the Company issued and sold an additional 750,000 shares of common stock, at $ 20.00 per share, for gross proceeds of $ 15.0 million, before deducting commissions and estimated offering costs of $ 0.9 million payable by the Company.

The holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders (and written actions in lieu of meetings), and there are no cumulative voting rights.

The Company has reserved the following shares of common stock for the potential conversion of outstanding stock options, restricted stock units (“RSUs”) and employee stock purchase plan:

March 31, 2026

The Company has reserved the following shares of common stock for the potential conversion of outstanding stock options, restricted stock units (“RSUs”), employee stock purchase plan and conversion of Convertible Notes:

June 30, 2026

December 31, 2025

8 unchanged sentences

The 2020 Plan allowed the Company to grant stock options, restricted stock awards, restricted stock units (“RSUs”) and other stock-based awards to employees, officers, directors and consultants of the Company and its subsidiaries.

As of March 31, 2026, 3,203,773 shares of stock options were issued and outstanding under the 2020 Plan.

As of June 30, 2026, 3,092,255 shares of stock options were issued and outstanding under the 2020 Plan.

In September 2024, the Company’s board of directors (the “Board”) adopted the 2024 Equity Incentive Plan (the “2024 Plan”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO.

2 unchanged sentences

On January 1, 2026, the number of shares of common stock available for issuance under the Company’s 2024 Plan increased to 3,156,138 .

As of March 31, 2026, 3,208,418 shares of common stock were available for issuance under the 2024 Plan.

As of June 30, 2026, 1,028,297 shares of common stock were available for issuance under the 2024 Plan.

2026 Inducement Plan

5 unchanged sentences

The Company initially reserved 1,000,000 shares of common stock for the issuance of awards under the 2026 Inducement Plan.

As of March 31, 2026, 541,525 shares of common stock were available for issuance under the 2026 Inducement Plan.

As of June 30, 2026, 270,900 shares of common stock were available for issuance under the 2026 Inducement Plan.

Stock Options

7 unchanged sentences

The Individual Inducement Grants are included in the stock option award tables below.

As of March 31, 2026, the Company granted 1,062,000 non-statutory stock options as Individual Inducement Grants, which were awarded during the year ended December 31, 2025.

The Company did not grant any stock options or RSUs as Individual Inducement Grants during the three months ended March 31, 2026.

As of June 30, 2026, the Company granted 1,062,000 non-statutory stock options as Individual Inducement Grants, which were awarded during the year ended December 31, 2025.

The Company did not grant any stock options or RSUs as Individual Inducement Grants during the three or six months ended June 30, 2026.

The following table presents a summary of the Company’s stock option activity and related information:

6 unchanged sentences

Forfeited or cancelled

Outstanding - March 31, 2026

Options vested and exercisable as of March 31, 2026

Options vested and expected to vest as of March 31, 2026

The aggregate intrinsic value of the stock options outstanding is calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock for those stock options that had an exercise price lower than the fair value of the Company’s common stock as of the measurement date of March 31, 2026.

Outstanding - June 30, 2026

Options vested and exercisable as of June 30, 2026

Options vested and expected to vest as of June 30, 2026

Restricted Stock Units

1 unchanged sentence

RSUs with time-based vesting conditions are valued on the grant date using the grant date market value price of the underlying shares of the Company’s common stock.

The Company did not grant any RSU’s in 2024.

The following table summarizes the Company’s RSU activity:

2 unchanged sentences

Unvested as of December 31, 2025

Unvested as of March 31, 2026

No RSUs vested during the three months ended March 31, 2026.

As of March 31, 2026, unrecognized stock-based compensation expense was $ 80.3 million, which is expected to be recognized over a weighted-average period of 2.7 years.

Unvested as of June 30, 2026

The fair value of RSUs vested during the three and six months ended June 30, 2026 was $ 2.2 million.

As of June 30, 2026, unrecognized stock-based compensation expense was $ 109.6 million, which is expected to be recognized over a weighted-average period of 3.0 years.

The Company recognized stock-based compensation expense related to the issuance of equity awards to employees and directors in the unaudited condensed consolidated statement of operations as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Research and development

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On January 1, 2026, the number of shares of common stock authorized for issuance under the ESPP increased to 1,317,977 .

As of March 31, 2026, 1,273,608 shares were available for future issuance under the ESPP.

There were 44,369 shares issued under the ESPP during the three months ended March 31, 2026.

As of June 30, 2026, 1,273,608 shares were available for future issuance under the ESPP.

During the three months ended June 30, 2026, there were no issuances under the ESPP.

During the six months ended June 30, 2026, there were 44,369 shares issued under the ESPP.

Net Loss Per Share

1 unchanged sentence

Therefore, the weighted-average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same.

The Company excluded the following shares from the computation of diluted net loss as of March 31, 2026 and 2025 because including them would have had an anti-dilutive effect:

The Company excluded the following shares from the computation of diluted net loss as of June 30, 2026 and 2025 because including them would have had an anti-dilutive effect:

Options to purchase common stock

2 unchanged sentences

Shares of common stock underlying convertible senior notes outstanding 1

1 Represents conversion rate, as of March 31, 2026, of 37.7358 shares of common stock per $1,000 principal amount of notes.

1 Represents conversion rate, as of June 30, 2026, of 37.7358 shares of common stock per $1,000 principal amount of notes.

Commitments and Contingencies

2 unchanged sentences

Under such agreements, the Company is contractually obligated to make certain minimum payments to the vendors, with the exact amounts in the event of termination to be based on the timing of the termination and the exact terms of the agreement.

As of March 31, 2026, our total non-cancellable clinical manufacturing contract payment obligations are $ 19.7 million of which the full obligation is payable within 12 months.

As of June 30, 2026, our total non-cancellable clinical manufacturing contract payment obligations are $ 15.8 million of which the full obligation is payable within 12 months.

Indemnification Agreements

3 unchanged sentences

To date, the Company has not incurred any material costs as a result of such indemnifications.

The Company is not currently aware of any indemnification claims and had not accrued any liabilities related to such obligations in its unaudited condensed consolidated financial statements as of March 31, 2026.

Litigation and Other Proceedings

The Company may periodically become subject to legal proceedings and claims arising in the ordinary course of business.

As of March 31, 2026, the Company was not subject to any material legal proceedings which would reasonably be expected to have a material adverse effect on the Company’s financial results.

As of June 30, 2026, the Company was not subject to any material legal proceedings which would reasonably be expected to have a material adverse effect on the Company’s financial results.

Related Party Transactions

2 unchanged sentences

In connection with the completion of the IPO, in September 2024, all outstanding shares of preferred stock converted into shares of common stock.

As of March 31, 2026, Xencor held less than 10 % of the shares of the Company’s outstanding common stock.

As of June 30, 2026, Xencor held less than 10 % of the shares of the Company’s outstanding common stock.

Viridian Therapeutics, Inc.

The Company has obtained a license from Viridian to research, develop, manufacture, market and sell an antibody product candidate in China.

The Company has concluded that Viridian is a related party because although Fairmount Funds Management LLC owns less than 10 % of shares of the Company’s outstanding common stock, they have a seat on the Board and are also a 10% or greater stockholder of Viridian and have two seats on Viridian’s board of directors.

As initial consideration for this license, the Company issued 38,707 shares of its common stock to Viridian during the year ended December 31, 2020.

As of March 31, 2026, Viridian held 0.1 % of the shares of the Company’s outstanding common stock.

Prior to May 2026, the Company concluded that Viridian was a related party because although Fairmount Funds Management LLC owns less than 10 % of shares of the Company’s outstanding common stock, they held a seat on the Board and are also a 10 % or greater stockholder of Viridian and have two seats on Viridian’s board of directors.

Effective May 2026, Fairmount Funds Management LLC no longer holds a seat on the Board and thus, the Company has determined that Viridian is no longer a related party.

Zai Lab (Hong Kong) Limited

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Though InnoCare does not hold any direct controlling interest in the Company, the Company has concluded that InnoCare is a related party, due to the 5,000,000 shares of common stock issued and the 2,000,000 shares of common stock to be issued pursuant to the InnoCare License Agreement.

As of March 31, 2026, InnoCare held less than 10 % of the shares of the Company’s outstanding common stock.

As of June 30, 2026, InnoCare held less than 10 % of the shares of the Company’s outstanding common stock.

For additional information on these arrangements, please see Note 7, License and Collaboration Revenue and Note 8, License Agreements, to these unaudited condensed consolidated financial statements.

6 unchanged sentences

Revenue is primarily attributed to individual countries based on the entity owning the license.

During the three months ended March 31, 2026, the Company did no t recognize revenue and for the three months ended March 31, 2025, $ 10.0 million was recognized as revenue which was attributed to Zenas HK.

The following table presents certain financial data for the Company’s reportable segment for the three months ended March 31, 2026 and 2025 (in thousands):

During the three and six months ended June 30, 2026, the Company recognized $ 1.0 million of revenue, which was attributed to Zenas HK.

During the three months ended June 30, 2025, the Company did no t recognize any revenue and for the six months ended June 30, 2025, the Company recognized $ 10.0 million of revenue which was attributed to Zenas HK.

The following table presents certain financial data for the Company’s reportable segment for the three and six months ended June 30, 2026 and 2025 (in thousands):

For the three months ended

For the six months ended

Direct research and development expenses:

4 unchanged sentences

General and administrative 3

Acquired in-process research and development 4

Stock-based compensation

4 unchanged sentences

3 General and administrative expenses primarily consist of professional fees, depreciation expense, facilities expenses as well as all other personnel costs, excluding stock-based compensation.

4 Acquired -in- process research and development expenses consist of milestones achieved pursuant to the Xencor and InnoCare license agreements, for additional details see Note 8, License Agreements to these condensed consolidated financial statements.

5 Other segment items consist of other (income) expense, net, and income tax (benefit) provision.

Other (income) expense, net consists of interest income, interest expense related to the royalty obligation and the senior secured term loan and convertible senior note as well as realized and unrealized gains and losses on foreign currency transactions .

Other (income) expense, net consists of interest income, interest expense related to the royalty obligation, the senior secured term loan and convertible senior note as well as realized and unrealized gains and losses on foreign currency transactions .

Subsequent Events

Convertible Senior Notes and Follow-on Public Equity Offering

In April 2026, the underwriters of the Company’s offering of the Convertible Notes and follow-on public equity offering exercised their overallotment option in full, pursuant to which the Company received aggregate principal amount of $ 30.0 million, before deducting commission costs of $ 0.9 million for the Convertible Notes and issued 750,000 shares of common stock, at $ 20.00 per share, for gross proceeds of $ 15.0 million before deducting commission costs of $ 0.9 million for the follow-on public equity offering.

ZB021 Milestone

On May 13, 2026, the Company announced the achievement of the Regulatory Milestone for ZB021 under the InnoCare License Agreement and is required to pay InnoCare $ 20.0 million related to this event.

In July 2026, the Company completed the sale of 1,818,181 shares of common stock under the 2025 ATM Program, with an average gross sales price of $ 27.50 per share, resulting in proceeds of $ 48.7 million, net of commissions.

As of the issuance date of these financial statements, $ 46.8 million remained available under the 2025 ATM Program.

Achievement of specified regulatory milestone pursuant to the BMS Agreement

In August 2026, BMS announced the achievement of a specified regulatory milestone under the BMS Agreement, which requires BMS to make a milestone payment of $ 10.0 million to the Company.

Due to the achievement of the specified regulatory milestone by BMS, the Company is obligated to make a milestone payment of $ 2.5 million to Xencor pursuant to the 2021 Xencor Agreement.

Amendment to 2026 Inducement Plan

In August 2026, the 2026 Inducement Plan was amended to increase the number of equity awards available for grant by 600,000 .

Achievement of Near-term Milestone pursuant to the InnoCare Agreement

In August 2026, the Company achieved the Near-term Milestone and is obligated to make a milestone payment of $ 25.0 million and issue 2,000,000 shares of common stock to InnoCare.

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